SB 179

This act amends Sections 19-3B-505 and 19-3B-816, Code of Alabama 1975, to: (1) remove the treatment of holders of the power of withdrawal from an irrevocable trust as settlors when the power lapses, is released, or waived for purposes of creditors reaching a settlor's interests in the trust; (2) provide a beneficiary of an irrevocable trust holding a power of withdrawal is not a settlor upon the power lapsing; (3) authorize trustees to pay or reimburse a settlor's personal income tax liabilities for a trust's principal and income and provide such payment or reimbursement is not considered amounts distributed to or for the settlor's benefit; and (4) provide that beneficiaries, including previous settlors, who acquire an interest in a trust through the exercise of a power of appointment by another are not deemed settlors.