SB282 Alabama 2021 Session

Summary

Primary Sponsor

Shay ShelnuttSenator

Republican

Session

Regular Session 2021

Title

Trusts, Alabama Uniform Trust Code, reports of breaches of trust, further provided, procedure for release of trustee, provided, Sec. 19-3B-1306 added; Sec. 19-3B-1005 am'd.

Summary

The bill updates Alabama's Uniform Trust Code to clarify claim deadlines after beneficiary reports and to create a formal process for settling and releasing trustees when a trust ends or a trustee leaves.

What This Bill Does

It changes how long a beneficiary has to sue a trustee for breach of trust after receiving a disclosure. It also adds a new procedure that lets a trustee settle accounts and obtain a discharge in certain situations, with required notices, accounts, and the possibility of nonjudicial settlements or court review.

Who It Affects

• Beneficiaries and their representatives of Alabama trusts: their ability to pursue breach-of-trust claims is tied to a report they receive, with a 2-year deadline, and they must object within 45 days if they want to challenge account settlements.
• Trustees and successor trustees: they must provide detailed information and notices when terminating, resigning, or seeking discharge, and they may settle accounts and obtain release/indemnity through nonjudicial settlements if beneficiaries do not object or navigate objections through court.

Key Provisions

• Amends Section 19-3B-1005 to set a two-year deadline for breach-of-trust claims after a beneficiary is given a report disclosing a potential claim; if the two-year window does not apply, another two-year period runs from trustee removal/resignation/death, trust termination, or end of the beneficiary's interest.
• Adds Section 19-3B-1306 to establish a procedure for the settlement of a trustee's accounts when a trust terminates, ends early, the trustee resigns or is removed, or a discharge of an interim accounting period is sought.
• Requires trustees to provide beneficiaries and successor trustees with: fair market value of new assets, a two-year accounting, anticipated receipts/disbursements, remaining trustee fees, notice of termination or discharge period, bar information for claims if no objections are filed, trustee’s name and contact information, and a contact person.
• Allows the trustee to include other interested parties in the notice; requires notices to follow existing rules; objections within 45 days allow either court resolution or a nonjudicial settlement, which may include releases or indemnities.
• If there are no objections, the trustee distributes assets and claims against the trustee may be barred to the same extent as a final court order, while objections lead to court or nonjudicial settlement processes and related expenses charged to the trust.
• The court has exclusive jurisdiction over these matters, and the act does not preclude other court review.
• Effective date: January 1, 2022.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Trusts