Settlement of trust

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  1. (a) A qualified spousal trust may include a trust term that is not inconsistent with the provisions of this subchapter, including without limitation a discretionary power to distribute trust property to a person other than a settlor.

  2. (b)

    1. (1) Unless otherwise provided in writing by each settlor who transfers property to a qualified spousal trust, property that is held at any time in a qualified spousal trust, without regard to how the property was titled before the property was held:

      1. (A) Has the same immunity from the claim of a separate creditor of either settlor as if the property were held outside the qualified spousal trust by both settlors as tenants by the entirety; and

      2. (B) Shall be treated as tenants by entirety property for the purpose of immunity from federal and state bankruptcy laws.

    2. (2) Property that is held in a qualified spousal trust is not immune from the claim of a creditor if the marriage of the settlors dissolves.


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