HB47 Alabama 2023 Session

Summary

Primary Sponsor

Cynthia Lee AlmondAlabama Public Service Commission

Republican

Session

Regular Session 2023

Title

Relating to the Alabama Uniform Trust Code; to amend Section 19-3B-414, Code of Alabama 1975, to further provide for the modification or termination of an uneconomic trust.

Summary

HB47 updates the Alabama Uniform Trust Code to let the termination of uneconomic trusts occur at a CPI-adjusted threshold, increasing the minimum from $50,000 to $100,000 and tying future levels to inflation.

What This Bill Does

For the 2023 calendar year, the threshold to terminate an uneconomic trust is $100,000. Beginning January 1, 2024, the threshold will be adjusted annually based on the Consumer Price Index, with increases or decreases rounded to the nearest $100. If the trust’s value remains insufficient to justify administration after adjustment, a court may modify or terminate the trust or remove and replace the trustee, and, upon termination, assets must be distributed consistent with the trust’s purposes. The rule does not apply to conservation or preservation easements, and the State Treasurer will publish the adjusted threshold each year.

Who It Affects

• Trustees and other fiduciaries who administer trusts that fall under the threshold; they gain authority to terminate these trusts if administration costs outweigh the value, and they must provide notice to beneficiaries and distribute assets accordingly.
• Qualified beneficiaries and other interested parties who are notified of termination and stand to receive distributions from terminated trusts, with distributions governed by the trust’s purposes.

Key Provisions

• The termination threshold for uneconomic trusts increases from $50,000 to $100,000; for 2023 this amount applies, with CPI-based adjustments starting in 2024.
• Starting in 2024, the threshold will be adjusted annually based on the CPI changes from the prior year, using CPI-U and a 2022 base index, with rounding rules to the nearest $100 (increases rounded down, decreases rounded up).
• If the trust’s value is insufficient to justify administration after adjustment, the court may modify or terminate the trust or remove and appoint a different trustee.
• Upon termination, assets must be distributed in a manner consistent with the trust’s purposes; the provision does not apply to conservation or preservation easements, and the State Treasurer must publish the updated amounts by February 1 each year.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Alabama Uniform Trust Code; modification or termination of an uneconomic trust, further provided.