HB94 Alabama 2012 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Ron Johnson
Republican
Session: Regular Session 2012
Title: Retirement accounts, Uniform Probate Code, Roth Individual Retirement Accounts, included as qualified trust for purposes of limitation on assignment and alienation, Sec. 19-3B-508 am'd.
Summary: HB94 adds Roth IRAs to Alabama's qualified-trust protections, preventing assignment or alienation of Roth IRA benefits and extending related bankruptcy exemptions.
What This Bill Does
It amends Section 19-3B-508 to include Roth IRAs in the definition of 'qualified trusts,' so Roth IRA benefits may not be assigned or alienated and are exempt from certain bankruptcy rules. It allows loans to participants that are secured by accrued nonforfeitable benefits to avoid being treated as assignments if they meet tax-exemption requirements. It also covers domestic relations orders, requiring them to be treated as qualified orders under federal law to maintain protections. It sets the protections as a state spendthrift-like shield and notes some Alabama retirement systems are not covered; the law takes effect immediately after governor approval.

Who It Affects
Plan participants and beneficiaries with qualified trusts that include Roth IRAs, who gain protection against assignment/alienation and bankruptcy exposure.
Creditors and bankruptcy proceedings, which face limitations in accessing these protected benefits.
Spouses or other parties involved in domestic relations orders, with protections applying only if the order is a qualified domestic relations order under federal law.
Employees' Retirement System of Alabama, Teachers' Retirement System of Alabama, and the Judicial Retirement Fund of Alabama, which are not covered by this act.

Key Provisions
Adds Roth IRA to the definition of 'qualified trust' under Section 19-3B-508.
Benefits under a qualified trust may not be assigned or alienated and are exempt from certain bankruptcy provisions under 11 U.S.C. 522(b).
Loans to participants or beneficiaries secured by accrued nonforfeitable benefits are not considered assignments if the loan is tax-exempt under 4975.
Domestic relations orders are governed by qualified domestic relations order procedures under Section 414(p) of the code to maintain protections.
The section is interpreted as a state spendthrift trust law and provides creditor exemptions under federal bankruptcy law; it includes a broad definition of assignment/alienation.
Not applicable to the Employees' Retirement System of Alabama, Teachers' Retirement System of Alabama, and the Judicial Retirement Fund of Alabama.
Effective immediately after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Property, Real and Personal