SB 481 - Current law provides that property held by a husband and wife as tenants by the entirety, joint tenants, or other form of joint ownership with right of survivorship shall be deemed to be held as tenants by the entirety upon its transfer to a qualified spousal trust and shall retain immunity from the claims of the separate creditors of the settlors.
This act provides that regardless of how the property was titled prior to being transferred to a qualified spousal trust, all property held in a qualified spousal trust shall have the same immunity from the claims of the separate creditors of the settlors as if the property were held by the settlors as tenants by the entirety. Property held in a qualified spousal trust shall no longer receive immunity from creditors' claims upon the dissolution of marriage of the settlors.
The act defines "property" as used in the sections of law regarding qualified spousal trusts and states that property transferred to a qualified spousal trust is still subject to fraudulent conveyance laws.
Additionally, the transfer of an asset to a trustee of any type of trust or to the trust itself subjects that asset to the terms of such trust.
This act is substantially similar to HB 807 (2015).