SB343 Alabama 2013 Session

Summary

Primary Sponsor

Tammy Irons

Democrat

Session

Regular Session 2013

Title

Trusts, Principal and Income Act, apportionment between income and remainder beneficiaries, conversions of trust to unitrust provided for, Secs. 19-3A-102, 19-3A-103, 19-3A-104, 19-3A-409 am'd.; Secs. 19-3A-105, 19-3A-106, 19-3A-608 added

Description

Under federal Treasury Regulations Section 1.643(b)-1, a state law is allowed to provide that a trust may provide for an alternative for reasonable apportionment between the income and remainder beneficiaries of the total return of the trust. It offers as an example "a state statute providing that income is a unitrust amount of no less than 3 percent and no more than 5 percent of the fair market value of the trust assets, whether determined annually or averaged on a multiple year basis. . . ." This type of provisions is commonly referred to as a "unitrust." Under existing law in this state, the Alabama Principal and Income Act does not specifically define a "unitrust amount," provide that an express trust has the power to convert to a unitrust, or provide that the Alabama Trust Code applies to the Principal and Income Act.

This bill would amend the Alabama Principal and Income Act to acknowledge trusts that are established initially as unitrusts and also to provide procedures for existing trusts to be converted into unitrusts. An additional provision is added to make clear that the Alabama Trust Code applies to the Alabama Principal and Income Act.

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Subjects

Property, Real and Personal