HB 846 Summary

• Creates the Mississippi Qualified Disposition in Trust Act, establishing a new framework for asset protection trusts where transferors can place property with qualified trustees while maintaining limited powers and protections from creditor claims.

• Requires transferors to execute a qualified affidavit before making a qualified disposition, attesting to solvency, absence of fraudulent intent, absence of pending litigation, and maintenance of at least $1,000,000 in general and professional liability insurance coverage.

• Limits creditor claims against qualified dispositions to two years after the disposition (or six months after discovery) for existing creditors, and two years for creditors whose claims arise after the disposition, unless the creditor proves by clear and convincing evidence actual intent to defraud that specific creditor.

• Carves out exceptions allowing creditors to pursue claims for spousal support, alimony, child support, tortious injury occurring before the disposition, state restitution, and claims up to $1,500,000 if the transferor failed to maintain required insurance.

• Effective July 1, 2014, the act applies to qualified dispositions made on or after that date and repeals conflicting provisions in existing trust law regarding settlors who are beneficiaries of their own trusts.