VA HB1513

Amends Virginia Code §§ 64.2-745.1, 64.2-745.2, and 64.2-1065 governing qualified self-settled spendthrift trusts, which allow settlors to transfer assets to trusts while retaining certain beneficial interests protected from creditors.

Removes the requirement that a settlor cannot have the right to disapprove distributions from the trust, expanding settlor control over qualified self-settled spendthrift trusts.

Eliminates detailed statutory procedures for filling vacancies in qualified trustee and independent qualified trustee positions, leaving such matters to be addressed through existing trust law provisions.

Expands trustee authority to reimburse settlors for income tax liabilities arising from grantor trust status, allowing payments from either income or principal directly to the settlor or to tax authorities on the settlor's behalf.

Adds restrictions preventing tax reimbursements when the trustee is related or subordinate to the settlor (for irrevocable trusts) or when reimbursement would jeopardize federal tax benefits such as gift tax exclusions, marital deductions, or charitable deductions.