Section 28-72-703 - Creation - Third-party spendthrift trusts and domestic asset protection trusts - Ability of settlor to hold other powers(a) A person competent to execute a will or deed may, only by a document that is duly executed, create a spendthrift trust in real, personal, or mixed property for the benefit of:(1) A person other than the settlor; or(2) For a domestic asset protection trust, the settlor or both the settlor and another person, if the document:(B) Does not require that any part of the income or principal of the trust be distributed to the settlor; and(C) Is not intended to hinder, delay, or defraud known creditors.(b) A document meets the requirements of subsection (a) of this section even if under the terms of the document the settlor:(1) May prevent a distribution from the trust;(2) Holds a special lifetime or testamentary power of appointment that cannot be exercised in favor of the settlor, the settlor's estate, a creditor of the settlor, or a creditor of the settlor's estate;(3) Is a beneficiary of a trust that qualifies as a charitable remainder trust pursuant to 26 U.S.C. § 664, as it existed on January 1, 2023, even if the settlor has the right to release the settlor's retained interest in the trust, in whole or in part, in favor of one (1) or more of the remainder beneficiaries of the trust;(4) Is authorized or entitled to:(A) Receive a percentage of the value of the trust each year as specified in the trust instrument of the initial value of the trust assets or their value determined from time to time pursuant to the trust instrument, but not exceeding: (i) The amount that may be defined as income pursuant to 26 U.S.C. § 643(b), as it existed on January 1, 2023; or(ii) With respect to the benefits from any qualified retirement plan or any eligible deferred compensation plan, the minimum required distribution as defined in 26 U.S.C. § 4974(b), as it existed on January 1, 2023;(B) Receive income or principal from a grantor-retained annuity trust paying out a qualified annuity interest within the meaning of 26 C.F.R. § 25.2702-3(b), as it existed on January 1, 2023, or a grantor retained unitrust paying out a qualified unitrust interest within the meaning of 26 C.F.R. § 25.2702-3(c); or(C) Use real property held under a qualified personal residence trust as described in 26 C.F.R. § 25.2702-5(c), as it existed on January 1, 2023; or(5) Is authorized to: (A) Receive income or principal from the trust, but only subject to the discretion of another person; or(B) Use real or personal property owned by the trust.(c) Except for the power of the settlor to make distributions to himself or herself without the consent of another person, the provisions of this section shall not be construed to prohibit the settlor of a spendthrift trust or domestic asset protection trust from holding other powers under the trust, regardless of whether the settlor is a cotrustee, including without limitation the power to: (1) Remove and replace a trustee;(2) Direct trust investments; and(3) Execute other management powers.(d)(1) No specific language is necessary for the creation of a spendthrift trust or domestic asset protection trust.(2) It is sufficient if, by the terms of the document, the creator manifests an intention to create a spendthrift trust or domestic asset protection trust.Added by Act 2023, No. 291,§ 1, eff. 8/1/2023.