The Committee on Judiciary proposes the following amendment (LC-3432.SA0001H):

Amend the bill, as and if amended, by deleting SECTION 3.

Amend the bill further, SECTION 4, by striking Section 62-7-504(g) and inserting:

 (g) With respect to an irrevocable trust, whether created on, before, or after June January 1, 2025, a beneficiary of a trust may not be considered to be a settlor, to have made a voluntary or involuntary transfer of the beneficiary's interest in the trust, or to have the power to make a voluntary or involuntary transfer of the beneficiary's interest in the trust merely because the beneficiary, in any capacity, holds or exercises a testamentary power of appointment.

Amend the bill further, SECTION 5, by striking Section 62-7-505(a)(2) and inserting:

  (2) With respect to an irrevocable trust, whether created on, before, or after June January 1, 2025:
   (A) except as otherwise provided in this section, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution.; and
   (B) notwithstanding subitem (A), the trustee's discretionary authority to pay directly to the taxing authorities or to reimburse the settlor for any tax on trust income or trust principal that is payable by the settlor under the law imposing the tax may not be considered to be an amount that can be distributed to or for the settlor's benefit.

Amend the bill further, SECTION 5, by striking Section 62-7-505(b)(3) and inserting:

  (3) that portion of a trust, whether created on, before, or after June January 1, 2025, that can be distributed to or for the settlor's benefit solely because the settlor's interest in the trust was created by the settlor's spouse or by any third party, whether through the exercise of a power of appointment or otherwise is considered to have been contributed to the trust by the person exercising the power of appointment or otherwise creating the interest and not by the settlor.

Amend the bill further, SECTION 6, by striking Section 62-7-508(B) and inserting:

 (B) This section applies to all trusts that are governed by the laws of this State or that have a principal place of administration within this State, whether created on, before, or after June January 1, 2025, unless:
  (1) the trust contains a provision prohibiting the trustee from reimbursing the grantor or paying taxes on behalf of the grantor;
  (2) the trustee provides written notification that the trustee intends to irrevocably elect out of the application of this section at least ninety days before the effective date of such election which notice period may be waived by the persons to whom notice is required to the person treated as the owner of all or a portion of the trust under Section 671 of the Internal Revenue Code or any similar federal, state, or other tax law and to all persons who have the ability to remove and replace the trustee; or
  (3) applying this section would prevent a contribution to the trust from qualifying for, or would reduce, a federal tax benefit, including a federal tax exclusion or deduction, which was originally claimed or could have been claimed for the contribution, including:
   (a) an exclusion under Sections 2503(b) or 2503(c) of the Internal Revenue Code;
   (b) a marital deduction under Sections 2056, 2056A, or 2523 of the Internal Revenue Code;
   (c) a charitable deduction under Sections 170(a), 642(c), 2055(a), or 2522(a) of the Internal Revenue Code; or
   (d) direct skip treatment under Section 2642(c) of the Internal Revenue Code.

Renumber sections to conform.

Amend title to conform.