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Bill > H3432


SC H3432

SC H3432
Grantor Trust Reimbursement


summary

Introduced
01/14/2025
In Committee
02/13/2025
Crossed Over
02/13/2025
Passed
04/30/2025
Dead
Signed/Enacted/Adopted
05/16/2025

Introduced Session

126th General Assembly

Bill Summary

Amend The South Carolina Code Of Laws By Amending Section 27-6-20, Relating To Nonvested Property Interest Or Power Of Appointment, So As To Increase The Time An Interest Can Vest From Ninety Years To Three Hundred Sixty Years; By Amending Section 27-6-40, Relating To Reformation Of Property Dispositions, So As To Increase The Time Limit From Ninety Years To Three Hundred Sixty Years; By Amending Section 62-7-504, Relating To Discretionary Trusts, So As To Provide Certain Situations In Which A Beneficiary Of A Trust May Not Be Considered A Settlor; By Amending Section 62-7-505, Relating To Creditors' Claims Against A Settlor, So As To Provide That Certain Amounts Paid To Taxing Authorities May Not Be Considered An Amount That May Be Distributed For The Settlor's Benefit; And By Adding Section 62-7-508 So As To Provide For Certain Grantor Trust Reimbursements. - Ratified Title

AI Summary

This bill updates several sections of South Carolina law related to trusts and property interests, primarily extending the time limit for certain property interests from 90 to 360 years. Specifically, the bill modifies rules about nonvested property interests and powers of appointment, allowing these interests to potentially last up to 360 years instead of the previous 90-year limit. The bill also adds provisions regarding grantor trust reimbursements, which allow trustees to reimburse trust grantors for income tax liabilities arising from the trust's income. Key protections are included, such as prohibiting the use of life insurance policies for tax reimbursements and preventing trustees from exercising these powers if they have a direct financial interest in the trust. The bill clarifies that a beneficiary cannot be considered a settlor merely for holding a testamentary power of appointment, and it provides rules about how creditors can access trust assets. The changes apply to trusts created before, on, or after January 1, 2025, and the bill will take effect upon the Governor's approval, offering more flexibility in trust and property law while maintaining important safeguards for trustees, grantors, and beneficiaries.

Committee Categories

Justice

Sponsors (4)

Last Action

Act No. 25 (on 05/16/2025)

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