Ala. Code § 19-4-1 — Alabama Code / Title 19 / Chapter 4 / Section 19-4-1
Section 19-4-1 Definitions
Status: in_force

When used in this article, the following words and phrases shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) FIDUCIARY. An administrator, an administrator with the will annexed, an administrator de bonis non, an executor, a trustee, a guardian, a conservator, an agent, a custodian or a custodian or agent for another fiduciary or fiduciaries.

(2) FIDUCIARY ACCOUNT. An estate, a trust, a guardianship, a custodianship, an agency or any other fiduciary relationship, including a custodianship or agency for another fiduciary or fiduciaries.

(3) BANK. A bank or trust company organized and existing under the laws of Alabama with authority to act as a fiduciary and a national banking association with its principal office in the State of Alabama and with authority to act as a fiduciary.

(4) SECURITY. Any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in an oil or mining title or lease or in payments out of production under such a title or lease; collateral trust certificate; transferable share; trustees’ share; investment trust debenture, unit, share or bond; voting trust certificate; or, in general, any interest or instrument commonly known as a security or, with respect to any of the foregoing, any certificate (including a temporary or interim certificate) of interest or participation, any receipt or certificate of deposit or any warrant or right to subscribe or purchase.

(5) CERTIFICATE. Any instrument, document or other writing representing a security.

(6) CLEARING CORPORATION. A corporation:

a. at least 90 percent of the capital stock of which is held by or for one or more persons (other than individuals), each of whom:

1. is subject to supervision or regulation pursuant to the provisions of federal or state banking laws or state insurance laws; or

2. is a broker or dealer or investment company registered under the Securities Exchange Act of 1934 or the Investment Company Act of 1940; or

3. is a national securities exchange or association registered under a statute of the United States such as the Securities Exchange Act of 1934;

b. none of whom, other than a national securities exchange or association, holds in excess of 20 percent of the capital stock of such corporation; and

c. any remaining capital stock of which is held by individuals who have purchased such capital stock at or prior to the time of their taking office as directors of such corporation and who have purchased only so much of such capital stock as may be necessary to permit them to qualify as such directors.

(7) DEPOSIT. Physical delivery and also crediting by entry on the books of a clearing corporation without physical delivery.
Ala. Code § 19-3B-404 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-404
Section 19-3B-404 Trust Purposes
Status: in_force

A trust may be created only to the extent its purposes are lawful, not contrary to public policy, and possible to achieve. A trust and its terms must be for the benefit of its beneficiaries.
Ala. Code § 19-3B-1007 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1007
Section 19-3B-1007 Event Affecting Administration or Distribution
Status: in_force

If the happening of an event, including marriage, divorce, performance of educational requirements, or death, affects the administration or distribution of a trust, then a trustee who has exercised reasonable care to ascertain the happening of the event is not liable for a loss resulting from the trustee’s lack of knowledge.
Ala. Code § 19-3B-603 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-603
Section 19-3B-603 Settlor’s Powers; Powers of Withdrawal
Status: in_force

(a) While a trust is revocable, rights of the beneficiaries are subject to the control of, and the duties of the trustee are owed exclusively to, the settlor.

(b) During the period the power may be exercised, the holder of a power of withdrawal has the rights of a settlor of a revocable trust under this section to the extent of the property subject to the power.
Ala. Code § 19-3B-1006 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1006
Section 19-3B-1006 Reliance on Trust Instrument
Status: in_force

A trustee who acts in reasonable reliance on the terms of the trust as expressed in the trust instrument is not liable to a beneficiary for a breach of trust to the extent the breach resulted from the reliance.
Ala. Code § 19-5-3 — Alabama Code / Title 19 / Chapter 5 / Section 19-5-3
Section 19-5-3 Division of Trust to Which Gst Exemption Allocated into Separate Trusts for Exempt and Nonexempt Property
Status: in_force

When property is held or to be held in a trust which is or would otherwise be partially exempted from the GST due to the allocation to such trust of a GST exemption, a fiduciary is authorized, but not required, to divide the trust into two separate trusts, of equal or unequal value, in order to create one trust entirely exempt from the GST and a second trust entirely subject to the GST. Other terms and provisions of both trusts will remain substantially identical in all respects to the original trust.
Ala. Code § 19-1-12 — Alabama Code / Title 19 / Chapter 1 / Section 19-1-12
Section 19-1-12 Cases Not Provided for in Chapter
Status: in_force

In any case not provided for in this chapter the rules of law and equity, including the law merchant and those rules of law and equity relating to trusts, fiduciaries, agency, negotiable instruments and banking, shall continue to apply.
Ala. Code § 19-2-1 — Alabama Code / Title 19 / Chapter 2 / Section 19-2-1
Section 19-2-1 Definitions
Status: in_force

(a) When used in this chapter, unless the context otherwise requires, the following terms shall have the meanings respectively ascribed to them by this section:

(1) WAR SERVICE. Such term shall include the following, during the period that the United States shall be engaged in war with any foreign nation:

a. Active membership in the military, naval or air forces of the United States or any of its allies.

b. Acceptance for membership in the military, naval or air forces of the United States or any of its allies and awaiting induction into that service.

c. Participation in any work abroad in connection with a governmental agency of the United States, with the American Red Cross, or with any other similar service.

d. Internment in any enemy country, or absence from the United States and inability to return.

e. Any service at home or abroad arising out of or in connection with the war, which in the opinion of the court prevents the fiduciary from giving the proper attention to his duties.

(2) FIDUCIARY. A trustee of a testamentary trust or of any express trust, a guardian of the estate of a minor, a guardian, committee or conservator of the estate of an incompetent person, an executor of a will, an administrator of the estate of a decedent or an advisor or consultant exercising control over a testamentary or express trust.

(b) Words importing the masculine gender, as used herein, include the feminine.
Ala. Code § 19-3E-7 — Alabama Code / Title 19 / Chapter 3E / Section 19-3E-7
Section 19-3E-7 Rights of Trustee and Beneficiary in Regard to an Avoided Qualified Disposition
Status: in_force

(a) A qualified disposition may be avoided only to the extent necessary to satisfy or provide for the present value, taking into consideration any uncertainty of the transferor’s debt to the creditor at whose instance the disposition had been avoided.

(b) If all or any portion of a qualified disposition is avoided, the following rules apply:

(1) If the court is satisfied that a trustee has acted in good faith in accepting or administering the property that is the subject of the qualified disposition, both of the following apply:

a. The trustee has a lien against the property that is the subject of the qualified disposition in an amount equal to the entire cost, including attorney fees, incurred in connection with an action dealing with the qualified disposition. The lien has priority over all other liens against the property, whether or not the other liens accrued or were recorded before the accrual of the lien created by this paragraph.

b. The qualified disposition is avoided subject to the fees, costs, preexisting rights, claims, and interests of the trustee who has acted in good faith and of any predecessor trustee who has acted in good faith.

(2) If the court is satisfied that a trust beneficiary acted in good faith, the avoidance of the qualified disposition is subject to the right of the trust beneficiary to retain any distribution received before the creditor’s commencement of an action to avoid the qualified disposition. The mere creation of the trust or acceptance of a distribution made under the terms of the trust by the trust beneficiary, including a trust beneficiary who is also a transferor of the trust, shall not be considered as evidence that the trust beneficiary failed to act in good faith.

(3) For purposes of this subsection, the mere acceptance of property with or without a qualified affidavit, or the making of any distribution under the terms of the trust, shall not be considered as evidence that a trustee failed to act in good faith.

(c) A creditor has the burden of proving by a preponderance of the evidence that a trustee or trust beneficiary failed to act in good faith. This subsection provides substantive, not procedural, rights.

(d) With respect to a qualified disposition, a levy, attachment, garnishment, notice of lien, sequestration, or other legal or equitable process is permitted only in those circumstances permitted by this chapter.

(e) Notwithstanding any other provision of this chapter, a creditor does not have a right against the interest of a trust beneficiary in property in a trust or portion of a trust that was the subject of qualified disposition solely because the trust beneficiary has the right to authorize or direct the trustee to pay all or part of the trust property in satisfaction of estate or inheritance taxes imposed on or with respect to the trust beneficiary’s postdeath estate, the debts of the trust beneficiary’s postdeath estate, or the expenses of administering the trust beneficiary’s postdeath estate, unless the trust beneficiary actually directs the payment of the taxes, debts, or expenses, and then only to the extent of the direction.

(f)(1) Except as otherwise provided in the trust instrument, if a married couple makes a qualified disposition of property and, immediately before the qualified disposition, the property, any part of the property, or any accumulation to the property, under applicable law, was owned by the married couple as tenants in common for life with cross contingent remainder to the survivor in fee, then notwithstanding the qualified disposition, the property, any part of the property, or any accumulation to the property, while held in trust during the lifetime of both spouses, is treated as though it is property held in tenancy in common for life with cross contingent remainder to the survivor in fee.

(2) In an action concerning whether a creditor of either or both spouses may recover the debt from the trust, on avoidance of the qualified disposition, the sole remedy available to the creditor with respect to trust property treated as though it were tenancy in common for life with cross contingent remainder to the survivor in fee property is an order directing the trustee to transfer the property to both spouses as tenants in common for life with cross contingent remainder to the survivor in fee.

(g) Except as otherwise provided in subsection (f), on avoidance of a qualified disposition to the extent permitted under subsection (a), the sole remedy available to the creditor is an order directing the trustee to transfer to the transferor the amount necessary to satisfy the transferor’s debt to the creditor at whose instance the disposition has been avoided.
Ala. Code § 19-3B-1305 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1305
Section 19-3B-1305 Trusts Consisting of Insurance Policies or Proceeds
Status: reserved

Trusts consisting solely of policies of life, health, accident, or disability insurance, or of the proceeds or avails thereof, shall for the purpose of determining whether any law against perpetuities or suspension of the power of alienation of title to property is applicable thereto be regarded as created when the liability of the insurer accrues by reason of the occurrence of the event insured against, whether or not a power to revoke the trust as to the policies was reserved during the life of the insured and whether or not any beneficial interest in the policies is alienable by the beneficiaries and whether or not the beneficiary or beneficiaries were in being at the time of the creation of the trust.
Ala. Code § 19-3B-204 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-204
Section 19-3B-204 Venue
Status: in_force

(a) Except as otherwise provided in subsection (b), venue for actions and proceedings involving a trust is proper (i) in any county where venue is proper for civil actions generally, pursuant to Title 6, Chapter 3; (ii) in the county of this state where the trust has its principal place of administration; or (iii) in the case of a trust whose principal place of administration is in a jurisdiction other than this state, in the county where the settlor resided at the creation of the trust, or in the case of a testamentary trust, where the settlor’s estate was administered.

(b) If a trust has no trustee, then venue for a judicial proceeding for the appointment of a trustee is in a county of this state in which a beneficiary resides, in a county in which any trust property is located, and if the trust is created by will, in the county in which the decedent’s estate was or is being administered.
Ala. Code § 19-3-100 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-100
Section 19-3-100 When Trust Estate May Become Liable
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3-10 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-10
Section 19-3-10 Conversion or Exchange, Etc., of Securities Upon Merger, Consolidation, Etc
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3D-20 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-20
Section 19-3D-20 Duration of Second Trust
Status: in_force

(a) Subject to subsection (b), a second trust may have a duration that is the same as or different from the duration of the first trust.

(b) To the extent that property of a second trust is attributable to property of the first trust, the property of the second trust is subject to any rules governing maximum perpetuity, accumulation, or suspension of the power of alienation which apply to property of the first trust.
Ala. Code § 19-3B-814 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-814
Section 19-3B-814 Discretionary Powers; Tax Savings
Status: in_force

(a) Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of such terms as “absolute,” “sole,” or “uncontrolled,” the trustee shall exercise a discretionary power in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.

(b) Subject to subsection (d), and unless the terms of the trust expressly indicate that a rule in this subsection does not apply:

(1) a person other than a settlor who is a beneficiary and trustee of a trust that confers on the trustee a power to make discretionary distributions to or for the trustee’s personal benefit may exercise the power only in accordance with an ascertainable standard; and

(2) a trustee may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee personally owes another person.

(c) A power whose exercise is limited or prohibited by subsection (b) may be exercised by a majority of the remaining trustees whose exercise of the power is not so limited or prohibited. If the power of all trustees is so limited or prohibited, then the court may appoint a special fiduciary with authority to exercise the power.

(d) Subsection (b) does not apply to:

(1) a power held by the settlor’s spouse who is the trustee of a trust for which a marital deduction, as defined in Section 2056(b)(5) or 2523(e) of the Internal Revenue Code of 1986, as in effect on January 1, 2007, or as later amended, was previously allowed;

(2) any trust during any period that the trust may be revoked or amended by its settlor; or

(3) a trust if contributions to the trust qualify for the annual exclusion under Section 2503(c) of the Internal Revenue Code of 1986, as in effect on January 1, 2007, or as later amended.
Ala. Code § 19-3-151 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-151
Section 19-3-151 Right of Fiduciary to Participate in Partnership; Liability of Fiduciary, Estate and Beneficial Owners
Status: in_force

If permitted by the trust instrument or will under which he serves or by order of a court having jurisdiction of the estate or trust, a fiduciary may enter into a partnership agreement or arrangement with others or accept the assignment of or otherwise acquire, hold and dispose of an interest in a partnership, and in so doing may become either a general or a limited partner. In any such case, as to creditors of or claimants against such partnership and as to the other members of such partnership, the liability, if any, of such fiduciary for the debts and other liabilities of the partnership, whether ex contractu or ex delicto or otherwise, shall be limited to the assets of the trust or estate, or so much thereof as may be necessary to discharge such debts and liabilities, but no personal liability shall attach to the fiduciary or to the beneficial owners of the assets of the trust or estate.
Ala. Code § 19-3B-205 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-205
Section 19-3B-205 Judicial Accountings and Settlements
Status: in_force

(a) A trustee may file an accounting of the trustee’s administration of a trust in court at any time and seek a partial or final settlement thereof or, upon petition of an interested party, a court may order a trustee to render an accounting of the trustee’s administration of a trust and require a partial or final settlement thereof. Notice of such judicial proceeding shall be provided to the trustee and each beneficiary, or representative thereof pursuant to Article 3, as provided by the applicable rules of civil procedure.

(b) A trust accounting must be a reasonably understandable report from the date of the last accounting or, if none, from the date upon which the trustee became accountable, or other such date the court may set, which provides reasonable detail of the transactions affecting the administration of the trust, and which adequately discloses the following information:

(1) The accounting must identify the trust, the trustee furnishing the accounting, and the time period covered by the accounting.

(2) The accounting must show all receipts and disbursements occurring during the accounting period. Gains and losses realized during the accounting period must also be shown.

(3) The accounting, to the extent feasible, must identify and value trust assets on hand at the close of the accounting period. For each asset or class of assets reasonably capable of valuation, the accounting shall contain two values, (i) the asset acquisition value or carrying value, and (ii) the estimated current value, if feasible. The accounting must identify each known noncontingent liability with an estimated current amount of the liability if known.

(4) To the extent feasible, the accounting must show the significant non-cash transactions affecting the assets of the trust, including name changes in investment holdings, adjustments to carrying value, or stock splits.

(5) The accounting must reflect the allocation of receipts and disbursements between income and principal when the allocation affects the interest of any beneficiary of the trust.

(c) Any order or judgment of the court on such accounting and partial or final settlement shall be final and conclusive as to all matters occurring during the accounting period, and appeals therefrom shall and must be taken in the manner provided for from any other final judgment of the court.
Ala. Code § 19-3E-5 — Alabama Code / Title 19 / Chapter 3E / Section 19-3E-5
Section 19-3E-5 Right of Action of Creditor with Respect to a Qualified Disposition
Status: in_force

(a) Notwithstanding any other provision of this chapter, with respect to any qualified disposition, a creditor has only the rights provided in this section and Section 19-3E-7.

(b) In an action brought by a creditor for an attachment or other provisional remedy against property that is the subject of a qualified disposition or for avoidance of a qualified disposition, the following rules apply:

(1) Except for the limitation period provided under subsection (c), the action may be brought only under Section 8-9B-5 or 8-9B-6.

(2) For the claim of a creditor which arose after a qualified disposition, the action may involve only a qualified disposition that was made with actual intent to hinder, delay, or defraud the creditor.

(3) The allegations in the action must be proven by a preponderance of the evidence.

(c) A person may not bring or maintain an action concerning a qualified disposition under subsection (b) unless the action is commenced within either of the following periods:

(1) If the claim arose before the qualified disposition was made, or on the later of the following:

a. Two years after the qualified disposition was made.

b. If the person who is or may be liable for any claim fraudulently concealed the existence of the claim or the identity of any person who is liable for the claim from the knowledge of the person entitled to sue on the claim, the earlier of one year after the qualified disposition was or could reasonably have been discovered by the claimant, and the time allowed under the applicable statute of limitations under Section 8-9B-10.

(2) If the claim arose concurrent with or after the qualified disposition, two years after the qualified disposition was made.

(d) If a trust beneficiary who has an interest in a qualified disposition or in property that is subject to a qualified disposition is a party to an action for annulment of a marriage, divorce, or separate maintenance, the following rules apply:

(1) If the trust beneficiary is not the transferor of the qualified disposition, the interest of the trust beneficiary in the qualified disposition or in property that is the subject of the qualified disposition is not considered marital property, is not considered, directly or indirectly, part of the trust beneficiary’s real or personal estate, and may not be awarded to the trust beneficiary’s spouse in a judgment for annulment of a marriage, divorce, or separate maintenance.

(2) If the trust beneficiary is the transferor of the qualified disposition, the interest of the trust beneficiary in the qualified disposition or in property that is the subject of the qualified disposition is not considered marital property, is not considered, directly or indirectly, part of the trust beneficiary’s real or personal estate, and may not be awarded to the trust beneficiary’s spouse in a judgment for annulment of a marriage, divorce, or separate maintenance if any of the following apply:

a. The trust beneficiary transferred the property that is the subject of the qualified disposition more than 30 days before the commencement of the marriage that is the subject of the action.

b. The parties to the marriage agree that this subdivision applies to the qualified disposition.

c. The parties to the marriage agree that the property is not considered marital property, is not considered, directly or indirectly, part of the trust beneficiary’s real or personal estate, and may not be awarded to the trust beneficiary’s spouse in a judgment for annulment of a marriage, divorce, or separate maintenance.

(3) If neither subdivision (1) nor (2) applies, subsections (b) and (c) do not limit the transferor’s spouse’s property division claims.

(e) Except as otherwise provided in subdivision (1), a fiduciary qualified disposition is deemed made as of the time the property that is subject to the disposition was first transferred to the trustee who is making the disposition, or any predecessor of that trustee in an unbroken succession of fiduciary ownership of the property, in a form that meets either of the following requirements:

(1) If the property that is subject to the qualified disposition was first transferred to the trustee making the disposition or the predecessor trustee before April 20, 2021, in a form that would otherwise meet the requirements of a qualified disposition, the qualified disposition is deemed to have been made as of April 20, 2021.

(2) The requirements to be considered a qualified disposition or its equivalent under the laws of another state; provided, that the transferor has no more rights, powers, or interests than those permitted under Section 19-3E-4, as modified by an irrevocable written election described in subsection (f), and, at the time of the disposition, the transferor was not in arrears on a child support obligation by more than 30 days.

(f) If a trustee of an existing trust proposes to make a disposition that, but for the exercise of authority granted in this subsection, would not be a qualified disposition because of a nonconforming power of appointment of the transferor, the trustee may modify the trust instrument by delivering to the qualified trustee an irrevocable written election to modify the nonconforming power of appointment to conform to the requirements of subdivision (3) or subdivision (11) of subsection (b) of Section 19-3E-4. An irrevocable written election described in this subsection shall include both of the following:

(1) A description of the modified power of appointment.

(2) The transferor’s written consent to the modification. The transferor’s consent is not a disposition.

(g) With respect to a qualified disposition, a creditor does not have a claim or cause of action against any of the following:

(1) The trustee of a trust that is the subject of a qualified disposition.

(2) An advisor of a trust that is the subject of a qualified disposition.

(3) A person involved in the counseling, drafting, preparation, execution, or funding of a trust that is the subject of a qualified disposition.

(h) If more than one qualified disposition is made by means of the same trust instrument, the following rules apply:

(1) With respect to a prior qualified disposition, both of the following apply:

a. The making of a subsequent qualified disposition is disregarded in determining whether a creditor’s claim is commenced within the time requirements specified in subsection (c).

b. The making of a subsequent qualified disposition is disregarded in determining pursuant to subsection (d) whether a trust beneficiary’s interest in a qualified disposition or in property that is the subject of a qualified disposition is considered marital property, is considered part of a trust beneficiary’s real or personal estate, or may be awarded to the trust beneficiary’s spouse in a judgment for annulment of a marriage, divorce, or separate maintenance.

(2) A distribution to a trust beneficiary is considered to have been made from the most recent qualified disposition.

(i) In an action against a trustee who received property in a qualified disposition, if a court takes any action declining to apply the law of this state in determining the validity, construction, or administration of the trust, or the effect of a spendthrift provision in the trust instrument, the trustee, without the further order of any court, shall immediately cease to be trustee of the trust. The former trustee does not have any power described in subsection (b) of Section 19-3E-4 except to convey the trust property to the successor trustee, to petition the court for appointment of a successor trustee, and to collect the former trustee’s attorney fees, costs, and expenses. If the trust instrument does not provide for a successor trustee and the trust would otherwise be without a trustee, the following rules apply:

(1) A court with jurisdiction over the trust under Chapter 3B, on the request of a qualified beneficiary of the trust, shall appoint a successor trustee on the terms and conditions the court determines to be consistent with the purposes of the trust and this chapter.

(2) The former trustee may, but has no duty to, petition the court to appoint a successor trustee if a petition for appointment of a successor trustee is not brought by a qualified beneficiary within 30 days after the date on which the former trustee ceased to be a trustee of the trust. If the former trustee elects to petition for the appointment of a successor trustee, the former trustee shall be entitled to reimbursement for all attorney fees, costs, and expenses associated with the petition, and the amount of the attorney fees, costs, and expenses shall be a lien against the trust’s property.

(j) A valid lien attaching to property before a qualified disposition of the property survives the disposition. The trustee takes title to the property subject to the valid lien and is subject to any agreements that created or perfected the valid lien.

(k) A written agreement between a transferor and a creditor may provide for any of the following:

(1) The transferor will have a continuing or periodic obligation to disclose to the creditor any qualified dispositions.

(2) A qualified disposition requires the prior written approval of the creditor.

(3) The transferor is under any other obligation as the creditor may require with respect to a qualified disposition of the property.

(4) In the event the transferor made an express or implied representation regarding an asset in order to create a debt to a creditor prior to December 31, 2021, the transferor is deemed to have entered into an agreement with the creditor, which as to the debt, a disposition of the asset would not be a qualified disposition as to the creditor, unless the disposition had the written approval of the creditor as to the disposition.

(l) If a transfer that would otherwise be a qualified disposition violates an agreement with a creditor described in subsection (k), with respect to the creditor only, the transfer is not a qualified disposition and this chapter does not affect the rights of the creditor.
Ala. Code § 19-3D-25 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-25
Section 19-3D-25 Settlor
Status: in_force

(a) For purposes of laws of this state other than this chapter and subject to subsection (b), a settlor of a first trust is deemed to be the settlor of the second trust with respect to the portion of the principal of the first trust subject to the exercise of the decanting power.

(b) In determining settlor intent with respect to a second trust, the intent of a settlor of the first trust, a settlor of the second trust, and the authorized fiduciary may be considered.
Ala. Code § 19-3A-407 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-407
Section 19-3A-407 Insurance Policies and Similar Contracts
Status: in_force

(a) Except as otherwise provided in subsection (b), a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its fiduciary is named as beneficiary, including a contract that insures the trust or its fiduciary against loss for damage to, destruction of, or loss of title to a trust asset. The fiduciary shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income, and to principal if the premiums are paid from principal.

(b) A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of occupancy or other use by an income beneficiary, loss of income, or, subject to Section 19-3A-403, loss of profits from a business.

(c) This section does not apply to a contract to which Section 19-3A-409 applies.
Ala. Code § 19-5-12 — Alabama Code / Title 19 / Chapter 5 / Section 19-5-12
Section 19-5-12 Chapter Effective as to Transfers in Trust, Etc., on and After January 1, 1987
Status: in_force

This chapter shall be effective with respect to transfers in trust, and decedents dying, on and after January 1, 1987.
Ala. Code § 19-3A-105 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-105
Section 19-3A-105 Express Unitrusts
Status: in_force

Except to the extent otherwise provided in the governing instrument, the following provisions shall apply to a trust which by its governing instrument requires distribution of a unitrust amount (whether payable in a single sum or in installments), such trust to be referred to as an “express unitrust”:

(1) The income and net income of an express unitrust is the unitrust amount, but only if the unitrust amount is not less than three percent and not more than five percent of the net fair market value of the trust assets. If the unitrust amount is more than five percent of the net fair market value of the trust assets, the income and net income shall be five percent of the net fair market value of the trust assets, and the excess over five percent shall be considered to be principal of the trust.

(2) Expenses which would be deducted from income if the trust were not an express unitrust shall not be deducted from the unitrust amount.

(3) The trustee, from time to time, may determine the following:

a. The frequency of payment of the unitrust amount during the year;

b. Any adjustments to be made to the unitrust amount due to other payments from or contributions to the trust;

c. The valuation dates to use;

d. How nonliquid or hard to value assets shall be valued, how frequently to value them and whether to estimate their value;

e. Whether to omit from the calculations the value of trust property occupied, used, or possessed by a beneficiary; and

f. Any other matters necessary for the proper functioning of the unitrust that are not inconsistent with the governing instrument.
Ala. Code § 19-1A-11 — Alabama Code / Title 19 / Chapter 1A / Section 19-1A-11
Section 19-1A-11 Disclosure of Digital Assets Held in Trust When Trustee Is Original User
Status: in_force

Unless otherwise ordered by the court or provided in a trust, a custodian shall disclose to any trustee of a trust of which any trustee is an original user of an account any digital asset of the account held in trust, including a catalogue of electronic communications of the trustee and the content of electronic communications.
Ala. Code § 19-3D-21 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-21
Section 19-3D-21 Need to Distribute Not Required
Status: in_force

An authorized fiduciary may exercise the decanting power whether or not under the first trust’s discretionary distribution standard the fiduciary would have made or could have been compelled to make a discretionary distribution of principal at the time of the exercise.
Ala. Code § 19-5-1 — Alabama Code / Title 19 / Chapter 5 / Section 19-5-1
Section 19-5-1 Definitions
Status: in_force

For purposes of this chapter unless the context otherwise requires, the following terms mean:

(1) FIDUCIARY. Includes a personal representative or trustee.

(2) PERSONAL REPRESENTATIVE. An executor, administrator, special administrator, or a person who performs substantially the same function under the law governing the person’s status, and a successor to any of the above.

(3) TRUST. Any express trust, with additions thereto, wherever and however created, or any separate share of a trust, and includes any arrangement, other than an estate, which, although not a trust, has substantially the same effect as a trust.

(4) TRUSTEE. An original, additional, or successor trustee, whether or not appointed or confirmed by a court, and, in the case of an arrangement which is not a trust but which is treated as a trust for purposes of the GST, includes the person in actual or constructive possession of the property subject to such arrangement.

(5) INTERNAL REVENUE CODE. The Internal Revenue Code of 1986 as amended from time to time and successor provisions and codifications thereof.

(6) GST. The generation-skipping transfer tax imposed by Chapter 13 of the Internal Revenue Code.
Ala. Code § 19-1A-14 — Alabama Code / Title 19 / Chapter 1A / Section 19-1A-14
Section 19-1A-14 Disclosure of Digital Assets to Conservator of Protected Person
Status: in_force

(a) After an opportunity for a hearing, the court may grant a conservator access to the digital assets of a protected person.

(b) Unless otherwise ordered by the court or directed by the user, a custodian shall disclose to a conservator the catalogue of electronic communications sent or received by a protected person and any digital assets, other than the content of electronic communications, in which the protected person has a right or interest if the conservator gives the custodian:

(1) a written request for disclosure in physical or electronic form;

(2) a copy of the court order that gives the conservator authority over the digital assets of the protected person; and

(3) if requested by the custodian:

(A) a number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the account of the protected person; or

(B) evidence linking the account to the protected person.

(c) A conservator with general authority to manage the assets of a protected person may request a custodian of the digital assets of the protected person to suspend or terminate an account of the protected person for good cause. A request made under this section must be accompanied by a copy of the court order giving the conservator authority over the protected person’s property.
Ala. Code § 19-3B-1008 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1008
Section 19-3B-1008 Exculpation of Trustee
Status: in_force

(a) A term of a trust relieving a trustee of liability for breach of trust is unenforceable to the extent that it:

(1) relieves the trustee of liability for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries; or

(2) was inserted as the result of an abuse by the trustee of a fiduciary or confidential relationship to the settlor.

(b) Except for terms intended to provide protection for carrying out a stated trust purpose, an exculpatory term drafted or caused to be drafted by the trustee is invalid as an abuse of a fiduciary or confidential relationship unless the trustee proves that the exculpatory term is fair under the circumstances and that its existence and contents were adequately communicated to the settlor.
Ala. Code § 19-3B-903 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-903
Section 19-3B-903 Diversification
Status: in_force

(a) A trustee shall diversify the investments of the trust unless the trustee reasonably determines that, because of special circumstances, the purposes of the trust are better served without diversifying.

(b) In the absence of an express provision to the contrary in the terms of the trust, a trustee without liability, may continue to hold property received into the trust at its inception or subsequently added to it or acquired pursuant to proper authority if and so long as the trustee, in the exercise of good faith and of reasonable prudence, considers the retention to be in the best interest of the trust or in furtherance of the purposes of the trust. The property shall include any successor-in-interest to the original property. The property may also include, among other things, stock in the trustee if a corporation and stock in any corporation controlling, controlled by, or under common control with the trustee.
Ala. Code § 19-3D-10 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-10
Section 19-3D-10 Formalities
Status: in_force

An exercise of the decanting power must be made in a record signed by an authorized fiduciary. The signed record must, directly or by reference to the notice required by Section 19-3D-7, identify the first trust and the second trust or trusts and state the property of the first trust being distributed to each second trust and the property, if any, that remains in the first trust.
Ala. Code § 19-3B-1012 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1012
Section 19-3B-1012 Protection of Person Dealing with Trustee
Status: in_force

(a) A person other than a beneficiary who in good faith assists a trustee, or who in good faith and for value deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee’s powers is protected from liability as if the trustee properly exercised the power.

(b) A person other than a beneficiary who in good faith deals with a trustee is not required to inquire into the extent of the trustee’s powers or the propriety of their exercise.

(c) A person who in good faith delivers assets to a trustee need not ensure their proper application.

(d) A person other than a beneficiary who in good faith assists a former trustee, or who in good faith and for value deals with a former trustee, without knowledge that the trusteeship has terminated is protected from liability as if the former trustee were still a trustee.

(e) Comparable protective provisions of other laws relating to commercial transactions or transfer of securities by fiduciaries prevail over the protection provided by this section.
Ala. Code § 19-3-62 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-62
Section 19-3-62 Powers and Liabilities of Trustees; Liability of Trust for Acts of Trustees
Status: in_force

The trustees shall hold the legal title to all property at any time belonging to the business trust. They shall have control over such property as well as the control and management of the business and affairs of the business trust. Liability to third persons for any act, omission or obligation of a trustee of a business trust, when acting in such capacity, shall extend to the whole of the trust estate, or so much thereof as may be necessary to discharge such obligation, but no trustee shall be personally liable for any such act, omission or obligation. The trustees shall have such powers as to the investment of the trust estate as may be set out in the declaration of trust without regard to the type of investments to which trustees generally are restricted by the provisions of Article 6 of this chapter or otherwise.
Ala. Code § 19-3B-112 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-112
Section 19-3B-112 Rules of Construction
Status: in_force

Except as otherwise provided in this chapter, the rules of construction under Title 43, Chapter 8, Article 8, and the miscellaneous provisions of Article 9 that apply in this state to the interpretation of and disposition of property by will also apply as appropriate to the interpretation of the terms of a trust and the disposition of the trust property.
Ala. Code § 19-3D-18 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-18
Section 19-3D-18 Removal or Replacement of Authorized Fiduciary
Status: in_force

An authorized fiduciary may not exercise the decanting power to modify a provision in a first-trust instrument granting another person power to remove or replace the fiduciary unless:

(1) the person holding the power consents to the modification in a signed record and the modification applies only to the person;

(2) the person holding the power and the qualified beneficiaries of the second trust consent to the modification in a signed record and the modification grants a substantially similar power to another person; or

(3) the court approves the modification and the modification grants a substantially similar power to another person.
Ala. Code § 19-3B-408 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-408
Section 19-3B-408 Trust for Care of Animal
Status: in_force

(a) A trust may be created to provide for the care of an animal alive during the settlor’s lifetime. The trust terminates upon the death of the animal or, if the trust was created to provide for the care of more than one animal alive during the settlor’s lifetime, upon the death of the last surviving animal.

(b) A trust authorized by this section may be enforced by a person appointed in the terms of the trust or, if no person is so appointed, by a person appointed by the court. A person having an interest in the welfare of the animal may request the court to appoint a person to enforce the trust or to remove a person appointed.

(c) Property of a trust authorized by this section may be applied only to its intended use, except to the extent the court determines that the value of the trust property exceeds the amount required for the intended use. Except as otherwise provided in the terms of the trust, property not required for the intended use must be distributed to the settlor, if then living, otherwise to the settlor’s successors in interest.
Ala. Code § 19-4A-7 — Alabama Code / Title 19 / Chapter 4A / Section 19-4A-7
Section 19-4A-7 Applicability
Status: in_force

The provisions of this chapter shall apply to all fiduciary accounts now existing or hereafter created, but only to the bank or trust company’s actions or inactions occurring after May 28, 1991.
Ala. Code § 19-3B-801 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-801
Section 19-3B-801 Duty to Administer Trust
Status: in_force

Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with the terms of the trust and its purposes and the interests of the beneficiaries, and in accordance with this chapter.
Ala. Code § 19-3A-405 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-405
Section 19-3A-405 Rental Property
Status: in_force

To the extent the fiduciary does not account for receipts from rental property pursuant to Section 19-3A-403, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods, shall be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the fiduciary’s contractual obligations have been satisfied with respect to that amount.
Ala. Code § 19-3-27 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-27
Section 19-3-27 Submission of Petition to Circuit Judge; Order Designating Time for Presenting Claims
Status: in_force

Upon the filing of such petition the register or clerk must submit the same, together with the inventory and appraisement, upon the original papers, to the circuit judge and the circuit judge must make an order designating a day, not less than two nor more than 12 months from the date thereof, by or on which day all claims against the trust estate must be presented, verified by affidavit.
Ala. Code § 19-3B-704 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-704
Section 19-3B-704 Vacancy in Trusteeship; Appointment of Successor
Status: in_force

(a) A vacancy in a trusteeship occurs if:

(1) a person designated as trustee rejects the trusteeship;

(2) a person designated as trustee cannot be identified or does not exist;

(3) a trustee resigns;

(4) a trustee is disqualified or removed;

(5) a trustee dies; or

(6) a guardian or conservator is appointed for an individual serving as trustee.

(b) If one or more co-trustees remain in office, then a vacancy in a trusteeship need not be filled. A vacancy in a trusteeship must be filled if the trust has no remaining trustee.

(c) A vacancy in a trusteeship of a noncharitable trust that is required to be filled must be filled in the following order of priority:

(1) by a person designated in the terms of the trust to act as successor trustee;

(2) by a person appointed by unanimous agreement of the adult qualified beneficiaries and any entity which is a qualified beneficiary; or

(3) by a person appointed by the court.

(d) A vacancy in a trusteeship of a charitable trust that is required to be filled must be filled in the following order of priority:

(1) by a person designated in the terms of the trust to act as successor trustee;

(2) by a person selected by the charitable organizations expressly designated to receive distributions under the terms of the trust; or

(3) by a person appointed by the court.

(e) A vacancy in a trusteeship of a trust that is both noncharitable and charitable and that is required to be filled must be filled in the following order of priority:

(1) by a person designated in the terms of the trust to act as successor trustee;

(2) by a person appointed by unanimous agreement of the adult qualified beneficiaries, any entity which is a qualified beneficiary and the charitable organizations expressly designated to receive distributions under the terms of the trust; or

(3) by a person appointed by the court.

(f) If a person is acting as the sole trustee of a trust and if there is no provision in the trust for a successor trustee, then the sole trustee and the adult qualified beneficiaries, by unanimous written agreement, may designate a successor trustee, which shall become trustee of the trust upon the vacancy in the trusteeship. The agreement may be recorded in the probate court or filed in the records of the trust.

(g) Whether or not a vacancy in a trusteeship exists or is required to be filled, the court may appoint an additional trustee or special fiduciary whenever the court considers the appointment necessary for the administration of the trust.
Ala. Code § 19-3A-602 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-602
Section 19-3A-602 Severability Clause
Status: in_force

If any provision of this chapter or its application to any person or circumstance is held invalid, then the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.
Ala. Code § 19-1A-12 — Alabama Code / Title 19 / Chapter 1A / Section 19-1A-12
Section 19-1A-12 Disclosure of Contents of Electronic Communications Held in Trust When Trustee Not Original User
Status: in_force

Unless otherwise ordered by the court, directed by the user, or provided in a trust, a custodian shall disclose to a trustee that is not an original user of an account the content of an electronic communication sent or received by an original or successor user and carried, maintained, processed, received, or stored by the custodian in the account of the trust if the trustee gives the custodian:

(1) a written request for disclosure in physical or electronic form;

(2) a copy of the trust instrument or a certification of the trust under Section 19-3B-1013, which includes consent to disclosure of the content of electronic communications to the trustee;

(3) a certification by the trustee, under penalty of perjury, that the trust exists and the trustee is a currently acting trustee of the trust; and

(4) if requested by the custodian:

(A) a number, username, address, or other unique subscriber or account identifier assigned by the custodian to identify the trust’s account; or

(B) evidence linking the account to the trust.
Ala. Code § 19-3-122 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-122
Section 19-3-122 Securities Issued or Insured by Secretary of Housing and Urban Development
Status: in_force

It shall be lawful for trustees, executors, administrators, guardians and other fiduciaries, the State of Alabama and any of its departments, boards, institutions and agencies, and the municipalities, counties and other political subdivisions of the state to invest their funds and the moneys in their custody or possession eligible for investment in notes or bonds secured by mortgage or trust deed insured by the Secretary of Housing and Urban Development or his predecessor officer pursuant to the laws and regulations governing the insurance of such as now constituted or as hereafter amended and in debentures issued by such official.
Ala. Code § 19-3B-817 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-817
Section 19-3B-817 Distribution Upon Termination
Status: in_force

(a) Upon termination or partial termination of a trust, the trustee may send to the beneficiaries a proposal for distribution. The right of any beneficiary to object to the proposed distribution terminates if the beneficiary does not notify the trustee of an objection within 30 days after the proposal was sent but only if the proposal informed the beneficiary of the right to object and of the time allowed for objection.

(b) Upon the occurrence of an event terminating or partially terminating a trust, the trustee shall proceed expeditiously to distribute the trust property to the persons entitled to it, subject to the right of the trustee to retain a reasonable reserve for the payment of debts, expenses, and taxes.

(c) A release by a beneficiary of a trustee from liability for breach of trust is invalid to the extent:

(1) it was induced by improper conduct of the trustee; or

(2) the beneficiary, at the time of the release, did not know of the material facts relating to the alleged breach and the trustee had actual knowledge of the facts relating to the alleged breach.
Ala. Code § 19-3-251 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-251
Section 19-3-251 When Circuit Court Must Appoint New Trustee; Number of New Trustees
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-1A-2 — Alabama Code / Title 19 / Chapter 1A / Section 19-1A-2
Section 19-1A-2 Definitions
Status: in_force

In this chapter, the following terms have the following meanings:

(1) “Account” means an arrangement under a terms-of-service agreement in which a custodian carries, maintains, processes, receives, or stores a digital asset of the user or provides goods or services to the user.

(2) “Agent” means a person granted authority to act for a principal under a power of attorney, whether denoted an agent, attorney-in-fact, or otherwise. The term includes an original agent, co-agent, successor agent, and person to which an agent’s authority is delegated.

(3) “Carries” means engages in the transmission of an electronic communication.

(4) “Catalogue of electronic communications” means information that identifies each person with which a user has had an electronic communication, the time and date of the communication, and the electronic address of the person.

(5) “Conservator” means a person appointed by a court to manage the estate of a living individual. The term includes a limited conservator.

(6) “Content of an electronic communication” means information concerning the substance or meaning of the communication which:

(A) has been sent or received by a user;

(B) is in electronic storage by a custodian providing an electronic-communication service to the public or is carried or maintained by a custodian providing a remote-computing service to the public; and

(C) is not readily accessible to the public.

(7) “Court” means the circuit court or a probate court granted constitutional or statutory equitable jurisdiction.

(8) “Custodian” means a person that carries, maintains, processes, receives, or stores a digital asset of a user.

(9) “Designated recipient” means a person chosen by a user using an online tool to administer digital assets of the user.

(10) “Digital asset” means an electronic record in which an individual has a right or interest. The term does not include an underlying asset or liability unless the asset or liability is itself an electronic record.

(11) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(12) “Electronic communication” has the meaning set forth in 18 U.S.C. Section 2510(12), as amended.

(13) “Electronic-communication service” means a custodian that provides to a user the ability to send or receive an electronic communication.

(14) “Fiduciary” means an original, additional, or successor personal representative, conservator, agent, or trustee.

(15) “Good faith” means honesty in fact and reasonable under the circumstances.

(16) “Information” means data, text, images, videos, sounds, codes, computer programs, software, databases, or the like.

(17) “Online tool” means an electronic service provided by a custodian that allows the user, in an agreement distinct from the terms-of-service agreement between the custodian and user, to provide directions for disclosure or nondisclosure of digital assets to a third person.

(18) “Person” means an individual, estate, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity.

(19) “Personal representative” means an executor, administrator, special administrator, or person that performs substantially the same function under the law of this state other than this chapter.

(20) “Power of attorney” means writing or other record that grants an agent authority to act in the place of a principal, whether or not the term power of attorney is used.

(21) “Principal” means an individual who grants authority to an agent in a power of attorney.

(22) “Protected person” means an individual for whom a conservator has been appointed. The term includes an individual for whom an application for the appointment of a conservator is pending.

(23) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(24) “Remote-computing service” means a custodian that provides to a user computer-processing services or the storage of digital assets by means of an electronic communications system, as defined in 18 U.S.C. Section 2510(14), as amended.

(25) “Terms-of-service agreement” means an agreement that controls the relationship between a user and a custodian.

(26) “Trustee” means a fiduciary with legal title to property under an agreement or declaration that creates a beneficial interest in another. The term includes a successor trustee.

(27) “User” means a person that has an account with a custodian.

(28) “Will” includes a codicil or a testamentary instrument that merely appoints a personal representative or an executor or revokes or revises another will.
Ala. Code § 19-3D-16 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-16
Section 19-3D-16 Change in Compensation
Status: in_force

(a) If a first-trust instrument specifies an authorized fiduciary’s compensation, the fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above the specified compensation unless:

(1) all qualified beneficiaries of the second trust consent to the increase in a signed record; or

(2) the increase is approved by the court.

(b) If a first-trust instrument does not specify an authorized fiduciary’s compensation, the fiduciary may not exercise the decanting power to increase the fiduciary’s compensation above the compensation permitted by Chapter 3B (commencing with Section 19-3B-101) of this title, unless:

(1) all qualified beneficiaries of the second trust consent to the increase in a signed record; or

(2) the increase is approved by the court.

(c) A change in an authorized fiduciary’s compensation which is incidental to other changes made by the exercise of the decanting power is not an increase in the fiduciary’s compensation for purposes of subsections (a) and (b).
Ala. Code § 19-3D-22 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-22
Section 19-3D-22 Saving Provision
Status: in_force

(a) If exercise of the decanting power would be effective under this chapter except that the second-trust instrument in part does not comply with this chapter, the exercise of the power is effective and the following rules apply with respect to the principal of the second trust attributable to the exercise of the power:

(1) A provision in the second-trust instrument which is not permitted under this chapter is void to the extent necessary to comply with this chapter.

(2) A provision required by this chapter to be in the second-trust instrument which is not contained in the instrument is deemed to be included in the instrument to the extent necessary to comply with this chapter.

(b) If a trustee or other fiduciary of a second trust determines that subsection (a) applies to a prior exercise of the decanting power, the fiduciary shall take corrective action consistent with the fiduciary’s duties.
Ala. Code § 19-3A-201 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-201
Section 19-3A-201 Determination and Distribution of Net Income
Status: in_force

After the decedent’s death, in the case of a decedent’s estate, or after an income interest in a trust ends, the following rules apply:

(a) If property is specifically given to a beneficiary by will or by trust, then the fiduciary of the decedent’s estate or of the terminating income interest shall distribute the net income and net principal receipts to the beneficiary who is to receive the specifically given property, subject to the following rules:

(1) The net income and principal receipts from the specifically given property are determined by including all of the amounts the fiduciary receives or pays with respect to the specifically given property, whether such amounts accrued or became due before, on, or after the date of the decedent’s death or the date upon which an income interest in a trust terminates, and by making a reasonable provision for amounts that the fiduciary believes the decedent’s estate or terminating income interest may become obligated to pay after the specifically given property is distributed.

(2) A fiduciary may not reduce principal or income receipts from the specifically given property on account of a payment described in Section 19-3A-501 or Section 19-3A-502 to the extent that the will, the terms of the trust, or applicable law requires the fiduciary to make the payment from property other than the specifically given property or to the extent that the fiduciary recovers or expects to recover the payment from a third party.

(b) If a beneficiary is to receive a pecuniary amount (1) outright, in the case of a decedent’s estate or (2) outright from a trust after an income interest ends, then a fiduciary shall distribute to the beneficiary the interest or other amount provided by the will, the terms of the trust, or applicable law. The interest shall be paid from net income as determined under subsection (c) or from principal, to the extent that net income is insufficient.

(c) A fiduciary shall determine the remaining net income of the decedent’s estate or terminating income interest as provided in Article 3 through Article 5 and by:

(1) Including in net income all income from property used to discharge liabilities;

(2) Paying from income or principal, in the fiduciary’s discretion, a. fees of attorneys, accountants, and fiduciaries; b. court costs and other expenses of administration; and c. interest on death taxes. The fiduciary may pay these expenses from income of property passing to a trust for which the fiduciary claims an estate tax marital or charitable deduction, but only to the extent that the payment of these expenses from income will not cause the reduction or loss of the deduction; and

(3) Paying from principal all other disbursements made or incurred in connection with the settlement of a decedent’s estate or the winding up of a terminating income interest, including debts, funeral expenses, disposition of remains, family allowances, and death taxes and related penalties that are apportioned to the decedent’s estate or terminating income interest by the will, the terms of the trust, or applicable law.

(d) A fiduciary shall distribute the remaining net income in the manner described in Section 19-3A-202 to all other beneficiaries, including a beneficiary who receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.

(e) In calculating the interest pursuant to subsection (b), the fiduciary shall use the interest rate for 180-day U.S. Treasury bills as of (1) the thirtieth day following the date on which the time for filing verified claims against the decedent’s estate expires, or (2) the date upon which an income interest ends.
Ala. Code § 19-3B-702 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-702
Section 19-3B-702 Trustee’s Bond
Status: in_force

(a) A trustee shall give bond to secure performance of the trustee’s duties only if the court finds that a bond is needed to protect the interests of the beneficiaries or is required by the terms of the trust and the court has not dispensed with the requirement.

(b) The court may specify the amount of a bond, its liabilities, and whether sureties are necessary. The court may modify or terminate a bond at any time.
Ala. Code § 19-3-1 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-1
Section 19-3-1 Express Trust for Support, Maintenance and Education of Relative; Qualified Trust Under Internal Revenue Code; Definitions
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3-252 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-252
Section 19-3-252 Survivorship Between Cotrustees
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3-281 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-281
Section 19-3-281 Expenses - Trust Estates
Status: reserved

Repealed by Act 2000-675, § 2, and Act 2001-344, § 1, effective January 1, 2001.
Ala. Code § 19-3A-302 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-302
Section 19-3A-302 Apportionment of Receipts and Disbursements Upon Decedent’s Death or When Income Interest Begins
Status: in_force

(a) A fiduciary shall allocate an income receipt or disbursement, other than one to which Section 19-3A-201(a) applies, to principal in the following instances:

(1) In the case of a decedent’s estate, if its due date occurs before the date of a decedent’s death; or

(2) In the case of a trust or successive income interest, if its due date occurs before an income interest begins.

(b) A fiduciary shall allocate an income receipt or disbursement to income if its due date occurs on or after the date on which a decedent dies or an income interest begins and it is a periodic due date. An income receipt or disbursement shall be treated as accruing from day to day if its due date is not periodic or if it has no due date. The portion of the receipt or disbursement accruing before the date on which a decedent dies or an income interest begins shall be allocated to principal and the balance shall be allocated to income.

(c) An item of income or an obligation is due on the date the payer is required to make a payment. If a payment date is not stated, then there is no due date for the purposes of this chapter. Distributions to shareholders or other owners from an entity to which Section 19-3A-401 applies are deemed to be due on the date fixed by the entity for determining who is entitled to receive the distribution or, if no date is fixed, on the declaration date for the distribution. A due date is periodic (1) for receipts or disbursements that must be paid at regular intervals under a lease or an obligation to pay interest or (2) for distributions customarily made by an entity at regular intervals.
Ala. Code § 19-3-324 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-324
Section 19-3-324 Actions Trustee Who Is Also Beneficiary May Not Perform; Powers of Person Who Has Right to Remove Trustee; Parties in Interest
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3-60 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-60
Section 19-3-60 Definition of “Business Trust.”
Status: in_force

A business trust is an express trust created by a written declaration of trust whereby property is conveyed to one or more trustees, who hold and manage the same for the benefit and profit of such persons as may be or become the holders of transferable certificates evidencing the beneficial interest in the trust estate.
Ala. Code § 19-3-63 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-63
Section 19-3-63 Certificates of Ownership; Liability of Beneficial Owners
Status: in_force

The beneficial ownership in a business trust shall be evidenced by certificates issued by the trustees. These certificates shall be transferable in the same manner as stock certificates of a corporation are transferable. No assessment shall be made against the interest of any beneficial owner, and no beneficial owner shall be personally liable for any debts or liabilities incurred by the trustees or by the business trust.
Ala. Code § 19-3B-818 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-818
Section 19-3B-818 Life Insurance Policies Held by Trustee
Status: in_force

A trustee may retain any life insurance policy contributed to a trust by a settlor, or purchased by the trustee upon the request of the settlor, as an asset of the trust without regard to any lack of diversification caused thereby and without regard to the terms and conditions of the life insurance policy. The trustee shall not be liable for lack of diversification to any beneficiary of a trust for the trustee’s retention of the life insurance policy.
Ala. Code § 19-3B-816 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-816
Section 19-3B-816 Specific Powers of Trustee. (Amended by Act 2026-584)
Status: in_force

AMENDED BY ACT 2026-584, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE.

(a) Without limiting the authority conferred by Section 19-3B-815, a trustee may:

(1) collect trust property and accept or reject additions to the trust property from a settlor or any other person, including, but not being limited to, the authority to receive, collect, hold, and retain common or preferred stock or other interests in the trustee or any related party;

(2) acquire or sell property, for cash or on credit, at public or private sale;

(3) exchange, partition, or otherwise change the character of trust property;

(4) deposit trust money in an account in a regulated financial-service institution;

(5) borrow money, with or without security, and mortgage or pledge trust property for a period within or extending beyond the duration of the trust;

(6) with respect to an interest in a proprietorship, partnership, limited liability company, business trust, corporation, or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members, or property owners, including merging, dissolving, or otherwise changing the form of business organization or contributing additional capital;

(7) with respect to stocks or other securities, exercise the rights of an absolute owner, including the right to:

(A) vote, or give proxies to vote, with or without power of substitution, or enter into or continue a voting trust agreement;

(B) hold a security in the name of a nominee or in other form without disclosure of the trust so that title may pass by delivery;

(C) pay calls, assessments, and other sums chargeable or accruing against the securities, and sell or exercise stock subscription or conversion rights; and

(D) deposit the securities with a depositary or other regulated financial-service institution;

(8) with respect to an interest in real property, construct, or make ordinary or extraordinary repairs to, alterations to, or improvements in, buildings or other structures, demolish improvements, raze existing or erect new party walls or buildings, subdivide or develop land, dedicate land to public use or grant public or private easements, and make or vacate plats and adjust boundaries;

(9) enter into a lease for any purpose as lessor or lessee, including a lease or other arrangement for exploration and removal of natural resources, with or without the option to purchase or renew, for a period within or extending beyond the duration of the trust;

(10) grant an option involving a sale, lease, or other disposition of trust property or acquire an option for the acquisition of property, including an option exercisable beyond the duration of the trust, and exercise an option so acquired;

(11) insure the property of the trust against damage or loss and insure the trustee, the trustee’s agents, and beneficiaries against liability arising from the administration of the trust;

(12) abandon or decline to administer property of no value or of insufficient value to justify its collection or continued administration;

(13) with respect to environmental law, exercise those powers granted a fiduciary by applicable law;

(14) pay or contest any claim, settle a claim by or against the trust, and release, in whole or in part, a claim belonging to the trust;

(15) pay taxes, assessments, compensation of the trustee and of employees and agents of the trust, and other expenses incurred in the administration of the trust;

(16) exercise elections with respect to federal, state, and local taxes;

(17) select a mode of payment under any employee benefit or retirement plan, annuity, or life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds;

(18) make loans out of trust property, including loans to a beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances, and the trustee has a lien on future distributions for repayment of those loans;

(19) pledge trust property to guarantee loans made by others to the beneficiary;

(20) appoint a trustee to act in another jurisdiction with respect to trust property located in the other jurisdiction, confer upon the appointed trustee all of the powers and duties of the appointing trustee, require that the appointed trustee furnish security, and remove any trustee so appointed;

(21)(A) pay an amount distributable to a beneficiary who is under a legal disability or who the trustee reasonably believes is incapacitated, by paying it directly to the beneficiary or applying it for the beneficiary’s benefit, or by:

1. paying it to the beneficiary’s conservator or, if the beneficiary does not have a conservator, the beneficiary’s guardian;

2. paying it to the beneficiary’s custodian under the Uniform Transfers to Minors Act or custodial trustee under the Uniform Custodial Trust Act, and, for that purpose, creating a custodianship or custodial trust;

3. if the trustee does not know of a conservator, guardian, custodian, or custodial trustee, paying it to an adult relative or other person having legal or physical care or custody of the beneficiary, to be expended on the beneficiary’s behalf; or

4. managing it as a separate fund on the beneficiary’s behalf, subject to the beneficiary’s continuing right to withdraw the distribution.

(B) the trustee shall not be under any duty to see to the application of the payment made pursuant to subparagraphs 1. to 4. above, so made if the trustee acted as a prudent person in the selection of the person, including the minor or incompetent, to whom the payments were made; and the receipt of the person shall be full acquittance to the trustee.

(22) on distribution of trust property or the division or termination of a trust, make distributions in divided or undivided interests, allocate particular assets in proportionate or disproportionate shares, value the trust property for those purposes, and adjust for resulting differences in valuation;

(23) resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution and to employ counsel, expert witnesses, or other agents;

(24) prosecute or defend an action, claim, or judicial proceeding in any jurisdiction to protect trust property and the trustee in the performance of the trustee’s duties and to employ counsel, expert witnesses, or other agents;

(25) sign and deliver contracts and other instruments that are useful to achieve or facilitate the exercise of the trustee’s powers;

(26) on termination of the trust, exercise the powers appropriate to wind up the administration of the trust and distribute the trust property to the persons entitled to it;

(27) create or join in the creation of a joint venture, partnership, limited liability company, business trust, corporation, or other form of business or enterprise, continue the business or other enterprise and take any action that may be taken by shareholders, members, or property owners, including merging, dissolving, or otherwise changing the form of business organization or contributing additional capital;

(28) employ and compensate persons deemed by the trustee needful to advise or assist in the proper management and administration of the trust, including, but not limited to, agents, auditors, including public accountants, certified public accountants or internal auditors, brokers, attorneys-at-law, attorneys-in-fact, investment bankers, investment advisors, rental agents, realtors, appraisers, and tax specialists, including any related party, so long as the relationship and the fees charged are reasonable and disclosed in any reasonable manner to the current beneficiaries; and to do so without liability for any neglect, omission, misconduct, or default of the agent or representative, provided the trustee acted as a prudent person in selecting and monitoring the agent or representative. For purposes of the immediately preceding sentence, compensation charged by or paid to an affiliated business entity shall be presumed to be reasonable if the compensation is consistent with the published fee schedule maintained by the affiliated business entity in the ordinary course of business;

(29) pay any and all expenses reasonably necessary for the administration of the trust including interest, taxes, insurance premiums, assessments, agents’ fees or compensation, trustees’ fees or compensation, including additional fees for extraordinary services and fees to related parties, and other expenses incurred in the collection, care, administration, and protection of the trust estate; and

(30) in addition to the investments authorized by the document or any provision of law for the investment of funds held by a trustee, the trustee may invest in and hold (i) interests, however evidenced, in any common trust fund or other collective investment fund maintained by any national or state chartered bank or trust company having trust powers or (ii) securities of or other interests in any open-end or closed-end management type investment company or investment trust so long as the portfolio of such common trust fund, collective investment fund, or investment company or investment trust consists of investments authorized with respect to the trustee.

(b) Nothing contained in this section, insofar as such authorization may be prohibited by the Constitution of Alabama of 1901, shall authorize the investment of trust assets in the stock of any private corporation.
Ala. Code § 19-4-40 — Alabama Code / Title 19 / Chapter 4 / Section 19-4-40
Section 19-4-40 Definitions
Status: in_force

When used in this article, the following words and phrases shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) FIDUCIARY. An administrator, an administrator with the will annexed, an administrator de bonis non, an executor, a trustee, a guardian, a conservator, an agent or a custodian.

(2) FIDUCIARY ACCOUNT. An estate, a trust, a guardianship, a custodianship, an agency or any other fiduciary relationship, including a custodianship or agency for another fiduciary or fiduciaries.

(3) BANK. A bank or trust company organized and existing under the laws of Alabama with authority to act as a fiduciary and a national banking association with its principal office in the State of Alabama and with authority to act as a fiduciary.

(4) TREASURY SECURITY. Any bill, note, bond, certificate of indebtedness or other evidence of indebtedness the principal and interest of which the United States or any department, agency or instrumentality thereof has agreed to pay or has guaranteed payment.

(5) DEPOSIT. Physical delivery and also crediting by entry on the books of the federal reserve bank without physical delivery.
Ala. Code § 19-3-25 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-25
Section 19-3-25 Appointment and Duties of Appraisers
Status: in_force

On the filing of such inventory, the register or clerk must indorse upon each of such copies the fact and date of such filing and must appoint three competent and disinterested persons, who must not be of kin or of counsel to any person interested in the trust estate, appraisers of and in each county in which any part of the trust property may be, and must attach to the commission one of the copies of such inventory, filed by the trustee; and the appraisers must, in writing, appraise at its true value, the property described in such inventory, and set down in figures opposite each item, the appraised value thereof, add each column and carry forward the result so as to show the total valuation placed upon such property, and verify the same by affidavit and make return thereof to the register or clerk who must record the commission to the appraisers and such combined inventory and appraisement, together with the affidavits appended thereto. The other copy of the inventory filed by the trustee must be carefully preserved by the register or clerk, free to examination of all persons, but must not be recorded. The appraisers are severally entitled to $2.00 for each day’s service in making such appraisement, to be taxed as costs and collected and paid over by the register or clerk.
Ala. Code § 19-3-39 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-39
Section 19-3-39 Compromise or Sale of Bad Debts
Status: in_force

Upon the application of the trustee, the court may authorize the compromise of any bad and doubtful debts or choses in action belonging to the trust estate, or the sale thereof to the highest bidder, on such terms and notice as the court may prescribe.
Ala. Code § 19-3B-301 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-301
Section 19-3B-301 Representation: Basic Effect
Status: in_force

(a) Notice to a person who may represent and bind another person under this article has the same effect as if notice were given directly to the other person.

(b) The consent of a person who may represent and bind another person under this article is binding on the person represented unless the person represented objects to the representation before the consent would otherwise have become effective.

(c) Except as otherwise provided in Sections 19-3B-411 and 19-3B-602, a person who under this article may represent a settlor who lacks capacity may receive notice and give a binding consent on the settlor’s behalf.

(d) A settlor may not represent and bind a beneficiary under this article with respect to the termination or modification of a trust under Section 19-3B-411(a).
Ala. Code § 19-3B-502 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-502
Section 19-3B-502 Spendthrift Provision
Status: in_force

(a) A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a beneficiary’s interest.

(b) A term of a trust providing that the interest of a beneficiary is held subject to a “spendthrift trust,” or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary’s interest.

(c) A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision and, except as otherwise provided in this article, a creditor or assignee of the beneficiary may not reach the interest or a distribution by the trustee before its receipt by the beneficiary.
Ala. Code § 19-3A-409 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-409
Section 19-3A-409 Deferred Compensation, Annuities, and Similar Payments
Status: in_force

(a) In this section:

(1) “Payment” means a payment that a fiduciary may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payer in exchange for future payments. The term includes a payment made in money or property from the payer’s general assets or from a separate fund created by the payer. For purposes of subsections (d), (e), (f), and (g), the term also includes any payment from any separate fund, regardless of the reason for the payment.

(2) “Separate fund” includes a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock-bonus, or stock-ownership plan.

(b) To the extent that a payment or portion thereof is characterized by other sections of this chapter as income in the hands of the payer, a fiduciary shall allocate such payment or portion thereof to income. The fiduciary shall allocate to principal the balance of the payment and any other payment received in the same accounting period that is not characterized as income to the payer by other sections of this chapter.

(c) To the extent that a payment is not allocated between income and principal pursuant to subsection (b), a fiduciary shall allocate to income ten percent (10%) of the part that is required to be made during the accounting period and the balance to principal. If no part of a payment is required to be made or if the payment received by the fiduciary is the entire amount to which the fiduciary is entitled, then the fiduciary shall allocate the entire payment to principal. For purposes of this subsection, a payment is not “required to be made” to the extent that it is made because the fiduciary exercises a right of withdrawal.

(d) Except as otherwise provided in subsection (e), subsections (f) and (g) apply and subsections (b) and (c) do not apply in determining the allocation of a payment made from a separate fund to:

(1) A trust to which an election to qualify for a marital deduction under Section 2056(b)(7) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. Section 2056(b)(7), as amended, has been made; or

(2) A trust that qualifies for the marital deduction under Section 2056(b)(5) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. Section 2056(b)(5), as amended.

(e) Subsections (d), (f), and (g) do not apply if and to the extent that the series of payments would, without the application of subsection (d), qualify for the marital deduction under Section 2056(b)(7)(C) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. Section 2056(b)(7)(C), as amended.

(f) A fiduciary shall make a reasonable effort to determine the internal income of each separate fund for the accounting period as if the separate fund were a trust subject to this chapter. Upon request of the surviving spouse, the fiduciary shall make a demand on the person administering the separate fund to distribute the internal income to the trust. The fiduciary shall allocate a payment from the separate fund to income to the extent of the internal income of the separate fund and distribute that amount to the surviving spouse. The fiduciary shall allocate the balance of the payment to principal. Upon request of the surviving spouse, the fiduciary shall allocate principal to income to the extent the internal income of the separate fund exceeds payments made from the separate fund to the trust during the accounting period.

(g) If a fiduciary cannot determine the internal income of a separate fund pursuant to subsection (f) but can determine the value of the separate fund, the internal income of the separate fund for the accounting period is deemed to equal four percent of the fund’s value, according to the most recent statement of value preceding the beginning of the accounting period. If the fiduciary can determine neither the internal income of the separate fund nor the fund’s value, the internal income of the fund for the accounting period is deemed to equal the product of the interest rate and the present value of the expected future payments, as determined under Section 7520 of the Internal Revenue Code of 1986, as amended, 26 U.S.C. Section 7520, as amended, for the month preceding the accounting period for which the computation is made.

(h) This section does not apply to a payment to which Section 19-3A-410 applies.

(i) If a trust holds one or more separate funds and is an express unitrust under Section 19-3A-105, or is a unitrust by reason of conversion under Section 19-3A-106 (relating to power to convert to unitrust), the following rules shall apply:

(1) Income or net income from the separate funds shall be determined as provided in the governing instrument in the case of an express unitrust under Section 19-3A-105, or the written notice referenced in Section 19-3A-106(a), the written instrument referenced in Section 19-3A-106(b), or the order of the court referenced in Section 19-3A-106(c) in the case of a trust converted to a unitrust.

(2) If subdivision (1) does not apply and the fiduciary can determine the value of the separate fund, income or net income with respect to such separate fund shall be an amount equal to the unitrust percentage multiplied by the value in the manner applied pursuant to Section 19-3A-105 or Section 19-3A-106, as the case may be.

(3) If subdivision (1) does not apply and the fiduciary cannot determine the value of the separate fund, income or net income with respect to such separate fund shall be determined in the manner provided in the foregoing provisions of this section.
Ala. Code § 19-3-127 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-127
Section 19-3-127 Bonds of Tennessee Valley Authority
Status: in_force

Bonds issued by the Tennessee Valley Authority under the provisions of the Tennessee Valley Authority Act of 1933, as amended or as the same may be hereafter amended, shall be legal investments for fiduciaries investing trust funds and for investments by savings banks and insurance companies organized under the laws of the state, and shall be eligible to be used as security for the deposit of funds of the state and its instrumentalities.
Ala. Code § 19-3D-29 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-29
Section 19-3D-29 Relation to Electronic Signatures in Global and National Commerce Act
Status: in_force

This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).
Ala. Code § 19-3C-2 — Alabama Code / Title 19 / Chapter 3C / Section 19-3C-2
Section 19-3C-2 Definitions
Status: in_force

In this chapter:

(1) CHARITABLE PURPOSE means the relief of poverty, the advancement of education or religion, the promotion of health, governmental or municipal purposes, or other purposes the achievement of which is beneficial to the community.

(2) ENDOWMENT FUND means an institutional fund or part thereof that, under the terms of a gift instrument, is not wholly expendable by the institution on a current basis. The term does not include assets that an institution designates as an endowment fund for its own use.

(3) GIFT INSTRUMENT means a record or records, including an institutional solicitation, under which property is granted to, transferred to, or held by an institution as an institutional fund.

(4) INSTITUTION means:

(A) a person, other than an individual, organized and operated exclusively for charitable purposes;

(B) a government or governmental subdivision, agency, or instrumentality, to the extent that it holds funds exclusively for a charitable purpose; and

(C) a trust that had both charitable and noncharitable interests, after all noncharitable interests have terminated.

The term institution shall not include any bank, trust company, or other regulated financial institution.

(5) INSTITUTIONAL FUND means a fund held by an institution exclusively for charitable purposes. The term does not include:

(A) program-related assets;

(B) a fund held for an institution by a trustee that is not an institution; or

(C) a fund in which a beneficiary that is not an institution has an interest, other than an interest that could arise upon violation or failure of the purposes of the fund.

(6) PERSON means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

(7) PROGRAM-RELATED ASSET means an asset held by an institution primarily to accomplish a charitable purpose of the institution and not primarily for investment.

(8) RECORD means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
Ala. Code § 19-3A-412 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-412
Section 19-3A-412 Timber
Status: in_force

(a) To the extent that a fiduciary accounts for receipts from the sale of timber and related products pursuant to this section, the fiduciary shall allocate the net receipts first to principal, based upon the volume of the timber at the time of transfer to the trust or decedent’s estate. The balance shall be allocated eighty percent (80%) to income and the balance to principal.

(b) In determining net receipts as provided for in subsection (a), a fiduciary shall deduct the following expenses related to the sale of timber and related products from gross receipts:

(1) Management expenses;

(2) Legal and accounting expenses and fees;

(3) Sales commissions;

(4) Reforestation expenses; and

(5) Any necessary timber stand improvement expense that is recognized and accepted as good forest management practice at the time of sale.

(c) This chapter applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust or decedent’s estate.

(d) If a trust owns an interest in timberland on January 1, 2001, then the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this chapter or in the manner used by the fiduciary before January 1, 2001. If the trust acquires an interest in timberland after January 1, 2001, then the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.
Ala. Code § 19-3B-504 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-504
Section 19-3B-504 Discretionary Trusts; Effect of Standard
Status: in_force

(a) In this section, the terms “child”, “spouse”, or “former spouse” include any person for whom an order or judgment for child or spousal support has been entered in this or another state.

(b) Except as otherwise provided in subsection (c), whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee’s discretion, even if:

(1) the discretion is expressed in the form of a standard of distribution; or

(2) the trustee has abused the discretion.

(c) To the extent a trustee has not complied with a standard of distribution or has abused a discretion:

(1) a distribution may be ordered by the court to satisfy a judgment or court order against the beneficiary for support or maintenance of the beneficiary’s child, spouse, or former spouse; and

(2) the court shall direct the trustee to pay to the child, spouse, or former spouse such amount as is equitable under the circumstances but not more than the amount the trustee would have been required to distribute to or for the benefit of the beneficiary had the trustee complied with the standard or not abused the discretion.

(d) This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution.

(e) A creditor may not reach the interest of a beneficiary who is also a trustee or co-trustee, or otherwise compel a distribution, if the trustee’s discretion to make distributions for the trustee’s own benefit is limited by an ascertainable standard.
Ala. Code § 19-3-67 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-67
Section 19-3-67 Taxation
Status: reserved

Repealed by Act 2006-114, p. 173, §5, effective for tax years beginning on or after January 1, 2005.
Ala. Code § 19-3B-1204 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1204
Section 19-3B-1204 Application to Existing Relationships
Status: reserved

(a) Except as otherwise provided in this chapter, on January 1, 2007:

(1) this chapter applies to all trusts created before, on, or after January 1, 2007;

(2) this chapter applies to all judicial proceedings concerning trusts commenced on or after January 1, 2007;

(3) this chapter applies to judicial proceedings concerning trusts commenced before January 1, 2007, unless the court finds that application of a particular provision of this chapter would substantially interfere with the effective conduct of the judicial proceedings or prejudice the rights of the parties, in which case the particular provision of this chapter does not apply and the superseded law applies;

(4) any rule of construction or presumption provided in this chapter applies to trust instruments executed before January 1, 2007, unless there is a clear indication of a contrary intent in the terms of the trust; and

(5) an act done before January 1, 2007, is not affected by this chapter.

(b) If a right is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run under any other statute before January 1, 2007, then that statute continues to apply to the right even if it has been repealed or superseded.
Ala. Code § 19-3E-2 — Alabama Code / Title 19 / Chapter 3E / Section 19-3E-2
Section 19-3E-2 Definitions
Status: in_force

As used in this chapter, the following terms shall have the following meanings:

(1) ADVISOR. A person who is given authority by the terms of a trust instrument to remove or appoint, or both, one or more trustees or to direct, consent to, approve, or veto a trustee’s actual or proposed investment or distribution decisions. A person is considered an advisor even if the person is denominated by another title, such as trust protector. Any person may serve as an advisor.

(2) ASCERTAINABLE STANDARD. A standard relating to an individual’s health, education, support, or maintenance within the meaning of 26 U.S.C. § 2041(b)(1)(A), as amended, or 26 U.S.C. § 2514(c)(1), as amended, and any applicable regulations.

(3) CLAIM. A right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.

(4) CREDITOR. With respect to a transferor, a person who has a claim, whether directly or indirectly.

(5) DEBT. Liability on a claim.

(6) DISCRETIONARY TRUST PROVISION. A provision in a trust, regardless of whether the terms of the trust provide a standard for the exercise of the trustee’s discretion and regardless of whether the trust contains a spendthrift provision, which provides that the trustee has discretion, or words of similar import, to determine one or more of the following:

a. Whether to distribute to or for the benefit of an individual or a class of beneficiaries the income or principal, or both, of the trust.

b. The amount, if any, of the income or principal, or both, of the trust to distribute to or for the benefit of an individual or a class of beneficiaries.

c. Who, if any, among a class of beneficiaries will receive income or principal, or both, of the trust.

d. Whether the distribution of trust property is from income or principal, or both, of the trust.

e. When to pay income or principal, except that a power to determine when to distribute income or principal within or with respect to a calendar or taxable year of the trust is not a discretionary trust provision if the distribution is required to be made.

(7) DISPOSITION. A transfer of property that either creates a new fiduciary relationship between at least one trustee and a trust beneficiary or subjects property to a preexisting fiduciary relationship between at least one trustee and a trust beneficiary. The term includes a transfer by conveyance or assignment; by exercise of a power of appointment, including a power to substitute a trustee for another or to add one or more new trustees; by exercise of a power of revocation or amendment; or, except as provided in this subdivision, by disclaimer, release, or relinquishment. The term does not include a disclaimer, release, or relinquishment of property that was previously the subject of a qualified disposition. For purposes of this subdivision, as between a given trustee and a given beneficiary, a new fiduciary relationship is created whenever the terms of the governing trust instrument are materially altered, including alteration by an irrevocable written election as described in subsection (f) of Section 19-3E-5 with respect to the trust beneficiary in question.

(8) DISTRIBUTION DECISION. A decision regarding the distribution of trust property to or for the benefit of a trust beneficiary. The term includes a decision whether to make or guarantee a loan to or for the benefit of a trust beneficiary.

(9) FIDUCIARY DISPOSITION. A disposition made by a trustee acting in a fiduciary capacity.

(10) FIDUCIARY QUALIFIED DISPOSITION. A qualified disposition made by a trustee acting in a fiduciary capacity.

(11) GENERAL POWER OF APPOINTMENT. A power to appoint trust property, the permissible appointees of which include the power holder, his or her estate, his or her creditors, or the creditors of his or her estate. The term includes a power that is not expressly restricted as to appointees. A power may be general as to some property and special as to other property. The term does not include a power exercisable in favor of the power holder, his or her estate, his or her creditors, or the creditors of his or her estate that is limited by an ascertainable standard.

(12) INVESTMENT DECISION. A decision regarding whether to purchase, sell, exchange, tender, or pledge any trust property. The term includes decisions regarding other transactions affecting the ownership of or rights in any trust property, other than distribution decisions. Unless otherwise provided in the trust instrument, the term also includes a decision regarding whether to make or guarantee a loan to or on behalf of an entity in which the trust owns an interest, directly or indirectly, in the entity’s debt or equity.

(13) LIEN. A charge against or an interest in property to secure payment of a debt or performance of an obligation. The term includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common law lien, or a statutory lien.

(14) ORGANIZATION. A person other than an individual.

(15) PERSON. An individual, estate, partnership, association, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal or commercial entity.

(16) PROPERTY. Anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein. The term includes choses in action, claims, and interests created by a beneficiary designation under policies of insurance, financial instruments, deferred compensation, and other retirement arrangements, whether revocable or irrevocable.

(17) QUALIFIED BENEFICIARY. A living trust beneficiary to whom any of the following apply on the date of the beneficiary’s qualification:

a. The beneficiary is a distributee or permissible distributee of trust income or principal.

b. The beneficiary would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in paragraph a. terminated on that date, but the termination of those interests would not cause the trust to terminate.

c. The beneficiary would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.

(18) QUALIFIED DISPOSITION. A disposition of property to one or more trustees, at least one of whom is a qualified trustee, which is governed by a trust instrument, including, but not limited to, a trust instrument as modified by an irrevocable written election described in subsection (f) of Section 19-3E-5, under which the transferor has no more rights, powers, or interests than those permitted by Section 19-3E-4. The term does not include a disposition to the extent that, at the time of the disposition, the transferor is in arrears on a child support obligation by more than 30 days.

(19) QUALIFIED TRUSTEE. A person, other than the transferor, who meets all of the following conditions:

a. Is an individual who is a resident of this state, or is an organization that is authorized by the law of this state to act as a trustee and whose activities are subject to supervision by the Alabama State Banking Department, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, or the Office of Thrift Supervision.

b. Maintains or arranges for custody in this state of some or all of the property that is the subject of the qualified disposition and administers all or part of the trust in this state.

c. Whose usual place of business, where some of the records pertaining to the trust are kept, is located in this state or, if the person does not have such a place of business, who is a resident of this state. For a corporate trustee, the usual place of business is the business location of the primary trust officer.

(20) RETIREMENT BENEFIT. An interest in one of the following types of assets if payable to a trust as a beneficiary or owned by the trust:

a. A qualified or nonqualified annuity.

b. A benefit under a qualified or nonqualified plan of deferred compensation.

c. Any account in, or benefit payable under, any pension, profit-sharing, stock bonus, or other qualified retirement plan.

d. Any individual retirement account or trust.

e. Any benefit under a plan or arrangement established under 26 U.S.C §§ 401, 403, 408, 408A, or 457, or a similar provision of the Internal Revenue Code of 1986.

(21) SETTLOR. A person, including a testator or trustee, who creates a trust. If more than one person creates a trust, each person is a settlor of the portion of the trust property attributable to that person’s contribution. The lapse, release, or waiver of a power of appointment does not cause the holder of the power to be treated as a settlor of the trust.

(22) SPECIAL POWER OF APPOINTMENT. A power to appoint trust property, the permissible appointees of which do not include the power holder, his or her estate, his or her creditors, or the creditors of his or her estate.

(23) SPENDTHRIFT PROVISION. A term of a trust which restrains both voluntary and involuntary transfers of a beneficiary’s interest.

(24) SPOUSE or FORMER SPOUSE. An individual to whom the transferor was married at or before the time a qualified disposition is made.

(25) SUPPORT PROVISION. A provision in a trust that requires the trustee to distribute income or principal, or both, for the health, education, support, or maintenance of a trust beneficiary, or language of similar meaning. The term does not include a provision that provides that a trustee has discretion whether to distribute income or principal, or both, for these purposes or to select from among a class of beneficiaries to receive distributions under the trust provision.

(26) TRANSFEROR. Either of the following, as applicable:

a. A person or, for more than one owner of undivided interests, each of several persons who, as a beneficial owner of certain property or as the holder of a general power of appointment over certain property, directly or indirectly makes a disposition of the property or causes a disposition to be made.

b. For a fiduciary disposition, the person or persons who, as of the time of the fiduciary disposition, most recently fit the description in paragraph a. with respect to the property subject to the fiduciary disposition.

(27) TRUST BENEFICIARY. The same meaning as the term “beneficiary”, as that term is defined in Section 19-3B-103.

(28) TRUST INSTRUMENT. An instrument appointing a qualified trustee or qualified trustees for the property that is the subject of a disposition to which all of the following apply:

a. The instrument expressly incorporates the law of this state to govern the validity, construction, and administration of the trust.

b. The instrument is irrevocable.

c. The instrument provides that the interest of the transferor or other trust beneficiary in trust property may not be transferred, assigned, pledged, or mortgaged, whether voluntarily or involuntarily, before the qualified trustee or qualified trustees actually distribute trust property to the trust beneficiary. Such a provision in a trust instrument is considered a restriction on the transfer of the transferor’s beneficial interest in the trust that is enforceable under applicable nonbankruptcy law within the meaning of 11 U.S.C. § 541(c)(2).

(29) VALID LIEN. A lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.
Ala. Code § 19-3D-11 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-11
Section 19-3D-11 Decanting Power Under Expanded Distributive Dicretion
Status: in_force

(a) In this section the following terms have the following meanings:

(1) NONCONTINGENT RIGHT. A right that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur. The term does not include a right held by a beneficiary if any person has discretion to distribute property subject to the right to any person other than the beneficiary or the beneficiary’s estate.

(2) PRESUMPTIVE REMAINDER BENEFICIARY. A qualified beneficiary other than a current beneficiary.

(3) SUCCESSOR BENEFICIARY. A beneficiary that is not a qualified beneficiary on the date the beneficiary’s qualification is determined. The term does not include a person that is a beneficiary only because the person holds a nongeneral power of appointment.

(4) VESTED INTEREST. (A) A right to a mandatory distribution that is a noncontingent right as of the date of the exercise of the decanting power;

(B) a current and noncontingent right, annually or more frequently, to a mandatory distribution of income, a specified dollar amount, or a percentage of value of some or all of the trust property;

(C) a current and noncontingent right, annually or more frequently, to withdraw income, a specified dollar amount, or a percentage of value of some or all of the trust property;

(D) a presently exercisable general power of appointment; or

(E) a right to receive an ascertainable part of the trust property on the trust’s termination which is not subject to the exercise of discretion or to the occurrence of a specified event that is not certain to occur.

(b) Subject to subsection (c) and Section 19-3D-14:

(1) an authorized fiduciary that has expanded distributive discretion over the entire principal of a first trust for the benefit of one or more current beneficiaries may exercise the decanting power over the entire principal of the first trust; and

(2) an authorized fiduciary that has expanded distributive discretion over part but not all of the principal of a first trust may exercise the decanting power over that part of the principal over which the authorized fiduciary has expanded distributive discretion.

(c) Subject to Section 19-3D-13, in an exercise of the decanting power under this section, a second trust may not:

(1) include as a current beneficiary a person that is not a current beneficiary of the first trust, except as otherwise provided in subsection (d);

(2) include as a presumptive remainder beneficiary or successor beneficiary a person that is not a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the first trust, except as otherwise provided in subsection (d); or

(3) reduce or eliminate a vested interest.

(d) Subject to subsection (c)(3) and Section 19-3D-14, in an exercise of the decanting power under this section, a second trust may be a trust created or administered under the law of any jurisdiction and may:

(1) retain a power of appointment granted in the first trust;

(2) omit a power of appointment granted in the first trust, other than a presently exercisable general power of appointment;

(3) create or modify a power of appointment if the powerholder is a current beneficiary of the first trust and the authorized fiduciary has expanded distributive discretion to distribute principal to the beneficiary; and

(4) create or modify a power of appointment if the powerholder is a presumptive remainder beneficiary or successor beneficiary of the first trust, but the exercise of the power may take effect only after the powerholder becomes, or would have become if then living, a current beneficiary.

(e) A power of appointment described in subsection (d) may be general or nongeneral. The class of permissible appointees in favor of which the power may be exercised may be broader than or different from the beneficiaries of the first trust.
Ala. Code § 19-4-2 — Alabama Code / Title 19 / Chapter 4 / Section 19-4-2
Section 19-4-2 Deposit of Securities Authorized; Merger, Etc., of Certificates Representing Securities; Transfer of Ownership, Etc., of Securities; Maintenance of Records by Fiduciary; Rules and Regulations Governing Banks Acting as Fiduciaries; Certification by Fiduciary of Securities Deposited
Status: in_force

(a) Notwithstanding any other provision of law to the contrary, any fiduciary holding securities in a fiduciary capacity is authorized, in the absence of specific provision to the contrary in the governing instrument or court order under which the fiduciary is acting, to deposit or arrange for the deposit of such securities in a clearing corporation.

(b) When such securities are so deposited, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of such clearing corporation with any other such securities deposited in such clearing corporation by any person regardless of the ownership of securities and certificates of smaller denomination may be merged into one or more certificates of larger denomination.

(c) Ownership of and other interests in such securities may be transferred by entries on the books of said clearing corporation without physical delivery of certificates representing such securities.

(d) The records of the fiduciary shall at all times show the fiduciary accounts for which such securities are deposited and the ownership of such securities in each fiduciary account.

(e) Securities held in the name of a bank’s nominee may be deposited under the authority contained in this section.

(f) A bank, when acting under the authority contained in this section, shall be subject to such rules and regulations as, in the case of banks or trust companies organized and existing under the laws of Alabama, the Superintendent of Banks and, in the case of national banking associations, the Comptroller of the Currency may from time to time issue.

(g) A fiduciary shall, upon demand by any person to whom it has a duty to account with respect to a fiduciary account, certify in writing the securities deposited by it with the clearing corporation for that fiduciary account.
Ala. Code § 19-3E-6 — Alabama Code / Title 19 / Chapter 3E / Section 19-3E-6
Section 19-3E-6 Qualified Affidavit
Status: in_force

(a) Except as provided in subsection (f), for purposes of this section, a “qualified affidavit” means an affidavit in which the transferor states that at the time of the transfer of the property to the trust, all of the following apply:

(1) The transferor has full right, title, and authority to transfer the property to the trust.

(2) The transfer of the property to the trust will not render the transferor insolvent.

(3) The transferor does not intend to defraud a creditor by transferring the property to the trust.

(4) The transferor does not know of or have reason to know of any pending or threatened court actions against the transferor, except for those court actions identified by the transferor on an attachment to the affidavit.

(5) The transferor is not involved in any administrative proceedings, except for those administrative proceedings identified on an attachment to the affidavit.

(6) The transferor is not currently in arrears on a child support obligation by more than 30 days.

(7) The transferor does not contemplate filing for relief under the Bankruptcy Code, 11 U.S.C. §§ 101 to 1532, inclusive.

(8) The property being transferred to the trust was not derived from unlawful activities.

(b) The transferor shall sign a qualified affidavit before a qualified disposition is made.

(c) A qualified affidavit is defective if it materially fails to meet the criteria provided in subsection (a), except that a qualified affidavit is not defective because of any of the following:

(1) Nonsubstantive variances from the language provided in subsection (a).

(2) Statements or representations in addition to those provided in subsection (a) if the statements or representations do not contradict those required by subsection (a).

(3) Technical errors in administering an oath if the errors were not the fault of the transferor and the transferor reasonably relied on another person to prepare or administer the oath.

(d) A qualified affidavit is not required in any of the following circumstances:

(1) From the settlor for a fiduciary qualified disposition.

(2) From a transferor who is not the settlor of the qualified disposition, except to the extent the transferor is a beneficiary of the qualified disposition and the property subject to the qualified disposition was not previously subject to a qualified disposition with respect to which the transferor signed a qualified affidavit.

(3) In connection with a disposition that is part of, required by, or the direct result of, a prior qualified disposition supported by a qualified affidavit that otherwise complies with the requirements of subsection (a).

(e) If a qualified affidavit is required by this section and a transferor fails to sign timely a qualified affidavit or signs a defective affidavit, the failure or defect may be considered as evidence in an action described in subsection (b) of Section 19-3E-5 to the extent permitted by the Alabama Rules of Evidence, but the validity of the qualified disposition is not affected in any other way because of the failure or defect.

(f) If subdivision (d)(2) applies, the required affidavit shall omit the statements described in subdivisions (1) and (3) of subsection (a) and include a statement that the qualified disposition is not intended to defraud any creditor.
Ala. Code § 19-3B-1201 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1201
Section 19-3B-1201 Uniformity of Application and Construction
Status: in_force

In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
Ala. Code § 19-4-3 — Alabama Code / Title 19 / Chapter 4 / Section 19-4-3
Section 19-4-3 Applicability of Provisions of Article
Status: in_force

This article shall apply to all fiduciary accounts now in existence or hereafter established regardless of the date of the governing instrument or court order under which the fiduciary is acting.
Ala. Code § 19-3E-4 — Alabama Code / Title 19 / Chapter 3E / Section 19-3E-4
Section 19-3E-4 Permitted Trust Powers of Transferor
Status: in_force

(a) A transferor has only the powers and rights that are conferred by the trust instrument. Except as otherwise provided in this chapter, a transferor does not have any power or right with respect to property that is the subject of a qualified disposition or income from the property and any agreement or understanding that purports to grant or permit the retention of any greater powers or rights is void.

(b) A trust instrument may provide for one or more of the following rights, powers, or interests of a transferor:

(1) The power to direct the investment decisions of the trust.

(2) The power to veto a distribution from the trust.

(3) A special power of appointment exercisable by will or other written instrument of the transferor effective only on the death of the transferor.

(4) The right to the potential or actual receipt of income, including rights to income retained in the trust instrument.

(5) The right to the potential or actual receipt of income or principal from a charitable remainder unitrust or charitable remainder annuity trust, as those terms are defined in 26 U.S.C § 664; and the right, at any time by written instrument delivered to the trustee, to release the transferor’s interest in the trust, in whole or in part, in favor of a charitable organization that has a succeeding beneficial interest in the trust.

(6) The right to the potential or actual receipt of income or principal from a grantor-retained annuity trust or grantor-retained unitrust as those terms are described in 26 U.S.C. § 2702, or the receipt each year of a percentage of the value of the trust property, as provided in the trust instrument. The amount may be described either as a percentage, a fixed amount, or an amount determined from time to time under the governing instrument and may not exceed five percent of the value of the trust.

(7) The potential or actual receipt or use of principal if the potential or actual receipt or use of principal would be the result of a trustee acting under any of the following:

a. A discretionary trust provision.

b. A support provision.

c. The direction of an advisor acting under a discretionary trust provision or support provision.

(8) The right to remove a trustee or advisor and to appoint a new trustee or advisor.

(9) The right to the potential or actual use of real property held under a qualified personal residence trust within the meaning of that term as described in 26 U.S.C. § 2702(c), or the possession and enjoyment of a qualified annuity interest within the meaning of that term as described in 26 C.F.R. § 25.2702-5(c)(8).

(10) The right to the potential or actual receipt of income or principal to pay, in whole or in part, income taxes due on income of the trust if the potential or actual receipt of income or principal is under a provision in the trust instrument that expressly provides for the payment of those taxes and if the potential or actual receipt of income or principal would be the result of a qualified trustee acting in either of the following ways:

a. In the trustee’s discretion or under a mandatory direction in the trust instrument.

b. At the direction of an advisor who is acting in the advisor’s discretion.

(11) A trust instrument may authorize a qualified trustee, after the death of the transferor, to pay the transferor’s debts, the expenses of administering the transferor’s estate, and any estate or inheritance tax imposed on or with respect to the transferor’s estate, without regard to the source of the payment.

(12) The right to the actual or potential receipt of a minimum required distribution, as defined in 26 U.S.C. § 4974(b), with respect to a retirement benefit.

(c) None of the powers described in subsection (b), alone or in any combination, shall be deemed a power to revoke.
Ala. Code § 19-3B-405 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-405
Section 19-3B-405 Charitable Purposes; Enforcement
Status: in_force

(a) A charitable trust may be created for the relief of poverty, the advancement of education or religion, the promotion of health, governmental or municipal purposes, or other purposes the achievement of which is beneficial to the community.

(b) If the terms of a charitable trust do not indicate a particular charitable purpose or beneficiary, then the court may select one or more charitable purposes or beneficiaries. The selection must be consistent with the settlor’s intention to the extent it can be ascertained.

(c) The settlor of a charitable trust, among others, may maintain a proceeding to enforce the trust.
Ala. Code § 19-3-83 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-83
Section 19-3-83 Filing of Sheriff’s Report
Status: in_force

The sheriff shall file, at the first session held after the first day of January of each court under whose processes he holds any money, the report required by this article.
Ala. Code § 19-3A-406 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-406
Section 19-3A-406 Bonds and Other Obligations
Status: in_force

(a) An amount received as interest, whether determined at a fixed, variable, or floating rate, on a bond or an obligation to pay money to the fiduciary shall be allocated to income.

(b) Except as provided for in subsection (c) and subsection (d), a fiduciary shall allocate to principal any gain or loss realized upon the sale or maturity of any bond or obligation to pay money to the fiduciary, regardless of how such bond or other obligation was acquired.

(c) A fiduciary shall allocate to income the difference between inventory value or cost, and the amount realized upon sale or maturity, if greater, for bonds or other obligations that do not bear interest, regardless of how or when such bond or other obligation was acquired.

(d) For bonds or other obligations that are acquired by a fiduciary subsequent to the time the principal was established and whose cost is greater than their par or maturity value, the fiduciary shall amortize periodically out of income the premium paid, and upon sale or maturity, shall allocate to principal any gain or loss realized thereon.

(e) This section does not apply to a bond or other obligation to which Section 19-3A-409, Section 19-3A-410, Section 19-3A-411, Section 19-3A-412, Section 19-3A-414, or Section 19-3A-415 applies.
Ala. Code § 19-3-303 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-303
Section 19-3-303 Future Provisions of Federal Internal Revenue Laws Included
Status: in_force

All references to sections of the Internal Revenue Code of 1954 shall include future amendments to such sections and corresponding provisions of future internal revenue laws.
Ala. Code § 19-3-6 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-6
Section 19-3-6 Allowance of Fees
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-4-42 — Alabama Code / Title 19 / Chapter 4 / Section 19-4-42
Section 19-4-42 Applicability of Provisions of Article
Status: in_force

This article shall apply to all fiduciary accounts now in existence or hereafter established regardless of the date of the governing instrument or court order under which the bank is acting.
Ala. Code § 19-4A-5 — Alabama Code / Title 19 / Chapter 4A / Section 19-4A-5
Section 19-4A-5 Investment in Timely Manner; No Obligation to Invest Funds Less Than $1,000
Status: in_force

In the absence of specific instructions in the governing document, the fiduciary shall invest idle funds in each fiduciary account in a timely manner consistent with the technology employed by the fiduciary but not to exceed 10 business days after the receipt of collected funds; provided, however, that there shall be no obligation or requirement to invest idle funds in an amount less than $1,000.00 per each fiduciary account.
Ala. Code § 19-3B-807 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-807
Section 19-3B-807 Delegation by Trustee
Status: in_force

(a) A trustee may delegate duties and powers that a prudent trustee could properly delegate under the circumstances. The trustee shall exercise reasonable care, skill, and caution in:

(1) selecting an agent;

(2) establishing the scope and terms of the delegation, consistent with the purposes and terms of the trust; and

(3) periodically reviewing the agent’s actions in order to monitor the agent’s performance and compliance with the terms of the delegation.

(b) In performing a delegated function, an agent owes a duty to the trust to exercise reasonable care, skill, and caution to comply with the terms of the delegation.

(c) A trustee who complies with subsection (a) is not liable to the beneficiaries or to the trust for an action of the agent to whom the function was delegated.

(d) By accepting a delegation of powers or duties from the trustee of a trust that is subject to the law of this state, an agent submits to the jurisdiction of the courts of this state.
Ala. Code § 19-3-124 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-124
Section 19-3-124 Mortgages Insured by Secretary of Housing and Urban Development - Sale, Etc
Status: in_force

It shall be lawful for trustees, executors, administrators, guardians and other fiduciaries, upon the termination of their fiduciary relationships, whether by revocation or otherwise, to make distribution of assets consisting of mortgages insured by the Secretary of Housing and Urban Development or his predecessor officer in cash rather than in kind, and in order to carry out the foregoing provision, such trustees, executors, administrators, guardians, and other fiduciaries, upon the termination of such fiduciary relationships, are hereby granted full power and authority to sell, transfer and deliver all such mortgages to other mortgagees approved by the Secretary of Housing and Urban Development or his predecessor officer, and the delivery of the proceeds of a bona fide sale of any such mortgage to the beneficial owner shall constitute full acquittance to such fiduciary as to such mortgage.
Ala. Code § 19-3-33 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-33
Section 19-3-33 Objections to Claims - Time for Hearing; Notice
Status: in_force

Within 30 days after the expiration of the time allowed for filing objections to claims, the register or clerk must appoint a time, not less than 20 nor more than 60 days thereafter, for the hearing of such objections as have been filed; and of the nature of the objections and the time appointed for such hearing, he must give notice to each person whose claim is contested, by citation to be served upon him, his agent or attorney, or, if he be a nonresident and have no resident agent or attorney, such citation must be sent by mail, postage prepaid, to such claimant at his post office address.
Ala. Code § 19-3B-417 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-417
Section 19-3B-417 Combination and Division of Trusts
Status: in_force

After notice to the qualified beneficiaries, a trustee may combine two or more trusts into a single trust or divide a trust into two or more separate trusts, if the result does not impair rights of any beneficiary or adversely affect achievement of the purposes of the trust.
Ala. Code § 19-3-80 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-80
Section 19-3-80 “Fiduciary Funds” Defined
Status: in_force

“Fiduciary funds,” as used in this article, shall include any sums whatsoever which have come into the hands of such officer and of which he is not the absolute and unqualified owner, including witness fees and other fees or funds to which any person other than himself is entitled.
Ala. Code § 19-3D-17 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-17
Section 19-3D-17 Relief from Liability and Indemnification
Status: in_force

(a) Except as otherwise provided in this section, a second-trust instrument may not relieve an authorized fiduciary from liability for breach of trust to a greater extent than the first-trust instrument.

(b) A second-trust instrument may provide for indemnification of an authorized fiduciary of the first trust or another person acting in a fiduciary capacity under the first trust for any liability or claim that would have been payable from the first trust if the decanting power had not been exercised.

(c) A second-trust instrument may not reduce fiduciary liability in the aggregate.

(d) Subject to subsection (c), a second-trust instrument may divide and reallocate fiduciary powers among fiduciaries, including one or more trustees, distribution advisors, investment advisors, trust protectors, or other persons, and relieve a fiduciary from liability for an act or failure to act of another fiduciary as permitted by laws of this state other than this chapter.
Ala. Code § 19-3-4 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-4
Section 19-3-4 Indemnification of Trustee
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3B-601 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-601
Section 19-3B-601 Capacity of Settlor of Revocable Trust
Status: in_force

The capacity required to create, amend, revoke, or add property to a revocable trust, or to direct the actions of the trustee of a revocable trust, is the same as that required to make a will.
Ala. Code § 19-1-6 — Alabama Code / Title 19 / Chapter 1 / Section 19-1-6
Section 19-1-6 Check Drawn by and Payable to Fiduciary
Status: in_force

If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal, payable to the fiduciary personally, or payable to a third person and by him transferred to the fiduciary, and is thereafter transferred by the fiduciary, whether in payment of a personal debt of the fiduciary or otherwise, the transferee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in transferring the instrument, and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith.
Ala. Code § 19-1-1 — Alabama Code / Title 19 / Chapter 1 / Section 19-1-1
Section 19-1-1 Short Title
Status: in_force

This chapter may be cited as the Uniform Fiduciaries Act.
Ala. Code § 19-1A-1 — Alabama Code / Title 19 / Chapter 1A / Section 19-1A-1
Section 19-1A-1 Short Title
Status: in_force

This chapter may be cited as the Revised Uniform Fiduciary Access to Digital Assets Act.
Ala. Code § 19-1-3 — Alabama Code / Title 19 / Chapter 1 / Section 19-1-3
Section 19-1-3 Application of Payments Made to Fiduciaries
Status: in_force

A person who in good faith pays or transfers to a fiduciary any money or other property which the fiduciary as such is authorized to receive, is not responsible for the proper application thereof by the fiduciary; and any right or title acquired from the fiduciary in consideration of such payment or transfer is not invalid in consequence of a misapplication by the fiduciary.
Ala. Code § 19-3B-706 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-706
Section 19-3B-706 Removal of Trustee
Status: in_force

(a) The settlor, a co-trustee, or a beneficiary may request the court to remove a trustee, or a trustee may be removed by the court on its own initiative.

(b) The court may remove a trustee if:

(1) the trustee has committed a serious breach of trust;

(2) lack of cooperation among co-trustees substantially impairs the administration of the trust;

(3) because of unfitness, unwillingness, or persistent failure of the trustee to administer the trust effectively, the court determines that removal of the trustee best serves the interests of the beneficiaries; or

(4)(A) there has been a substantial change of circumstances or removal is requested by all of the qualified beneficiaries;

(B) the court finds that removal of the trustee best serves the interests of all of the beneficiaries and is not inconsistent with a material purpose of the trust; and

(C) a suitable co-trustee or successor trustee is available.

(c) Pending a final decision on a request to remove a trustee, or in lieu of or in addition to removing a trustee, the court may order such appropriate relief under Section 19-3B-1001(b) as may be necessary to protect the trust property or the interests of the beneficiaries.
Ala. Code § 19-3A-414 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-414
Section 19-3A-414 Derivative Instruments and Options
Status: in_force

(a) In this section, “derivative instrument” means a contract, a financial instrument, or a combination of contracts and financial instruments which gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets, or changes in a rate, an index of prices or rates, or other market indicator for an asset or a group of assets.

(b) To the extent that a fiduciary does not account under Section 19-3A-403 for transactions in derivative instruments, the fiduciary shall allocate to principal receipts from and disbursements made in connection with those transactions.

(c) If a fiduciary grants an option to buy property from the trust, whether or not the trust owns the property when the option is granted, grants an option that permits another person to sell property to the trust, or acquires an option to buy property for the trust or an option to sell an asset owned by the trust, and the fiduciary or other owner of the asset is required to deliver the asset if the option is exercised, then an amount received for granting the option shall be allocated to principal. An amount paid to acquire the option shall be paid from principal. A gain or loss realized upon the exercise of an option, including an option granted to a settlor of the trust for services rendered, shall be allocated to principal.
Ala. Code § 19-3C-3 — Alabama Code / Title 19 / Chapter 3C / Section 19-3C-3
Section 19-3C-3 Standard of Conduct in Managing and Investing Institutional Funds
Status: in_force

(a) Subject to the intent of a donor expressed in a gift instrument, an institution, in managing and investing an institutional fund, shall consider the charitable purposes of the institution and the purposes of the institutional fund.

(b) In addition to complying with the duty of loyalty imposed by law other than this chapter, each person responsible for managing and investing an institutional fund shall manage and invest the fund in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.

(c) In managing and investing an institutional fund, an institution:

(1) may incur costs that are appropriate and reasonable in relation to the assets, the purposes of the institution, and the skills available to the institution; and

(2) shall make a reasonable effort to verify facts relevant to the management and investment of the fund.

(d) An institution may pool two or more institutional funds for purposes of management and investment.

(e) Except as otherwise provided by a gift instrument, the following rules apply:

(1) In managing and investing an institutional fund, the following factors, if relevant, may be considered:

(A) general economic conditions;

(B) the possible effect of inflation or deflation;

(C) the expected tax consequences, if any, of investment decisions or strategies;

(D) the role that each investment or course of action plays within the overall investment portfolio of the fund;

(E) the expected total return from income and the appreciation of investments;

(F) other resources of the institution;

(G) the needs of the institution and the fund to make distributions and to preserve capital;

(H) an asset’s special relationship or special value, if any, to the charitable purposes of the institution; and

(I) the size of the fund.

(2) Management and investment decisions about an individual asset must be made not in isolation but rather in the context of the institutional fund’s portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the fund and to the institution.

(3) Except as otherwise provided by law other than this chapter, an institution may invest in any kind of property or type of investment consistent with this section.

(4) An institution shall diversify the investments of an institutional fund unless the institution reasonably determines that, because of special circumstances, the purposes of the fund are better served without diversification.

(5) Within a reasonable time after receiving property, an institution shall make and carry out decisions concerning the retention or disposition of the property or to rebalance a portfolio, in order to bring the institutional fund into compliance with the purposes, terms, and distribution requirements of the institution as necessary to meet other circumstances of the institution and the requirements of this chapter.

(6) A person that has special skills or expertise, or is selected in reliance upon the person’s representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing institutional funds.
Ala. Code § 19-3B-403 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-403
Section 19-3B-403 Trusts Created in Other Jurisdictions
Status: in_force

A trust not created by will is validly created if its creation complies with the law of the jurisdiction in which the trust instrument was executed, or the law of the jurisdiction in which, at the time of creation:

(1) the settlor was domiciled, had a place of abode, or was a national;

(2) a trustee was domiciled or had a place of business; or

(3) any trust property was located.
Ala. Code § 19-3-191 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-191
Section 19-3-191 Petition to Obtain Removal; Notice
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3D-1 — Alabama Code / Title 19 / Chapter 3D / Section 19-3D-1
Section 19-3D-1 Short Title
Status: in_force

This chapter may be cited as the Alabama Uniform Trust Decanting Act.
Ala. Code § 19-3-230 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-230
Section 19-3-230 Application to Appoint Trustee
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3B-813 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-813
Section 19-3B-813 Duty to Inform and Report
Status: in_force

(a) Except as otherwise provided in Section 19-3B-603, the following rules apply:

(1) A trustee shall keep the current permissible distributees of income or principal of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests.

(2) Unless unreasonable under the circumstances, a trustee shall promptly respond to a qualified beneficiary’s request for information related to the administration of the trust.

(b) A trustee:

(1) upon request of a beneficiary, shall promptly furnish to the beneficiary a copy of the trust instrument;

(2) within 60 days after accepting a trusteeship, shall notify the qualified beneficiaries of the acceptance and of the trustee’s name, address, and telephone number;

(3) within 60 days after accepting the trusteeship of an irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the settlor or otherwise, shall notify the qualified beneficiaries of the trust’s existence, of the identity of the settlor or settlors, of the right to request a copy of the trust instrument, and of the right to a trustee’s most recent report as provided in subsection (c), except no notice shall be required to be given to any beneficiary of a split interest charitable trust whose interest is not irrevocable until that beneficiary’s interest becomes that of a current permissible distributee; and

(4) shall notify the current permissible distributees of income or principal of the trust in advance of any change in the method or rate of the trustee’s compensation.

(c) A trustee shall send to the distributees or permissible distributees of trust income or principal, and to other qualified or nonqualified beneficiaries who request it, at least annually, a report of the trust property, liabilities, receipts, and disbursements, including the source and amount of the trustee’s compensation, a listing of the trust assets and, if feasible, their respective market values, and, upon termination of the trust, a final report commencing with the date of the most recent annual report through the last transaction of the trust. Upon a vacancy in a trusteeship, unless a co-trustee remains in office, a report must be sent to the qualified beneficiaries by the former trustee. A personal representative, conservator, or guardian may send the qualified beneficiaries a report on behalf of a deceased or incapacitated trustee.

(d) A beneficiary may waive the right to a trustee’s report or other information otherwise required to be furnished under this section. A beneficiary, with respect to future reports and other information, may withdraw a waiver previously given.

(e) Subsection (b)(2) and subsection (b)(3) shall apply only to trustees who accept a trusteeship on or after January 1, 2007, to irrevocable trusts created on or after January 1, 2007, and to revocable trusts which become irrevocable on or after January 1, 2007.
Ala. Code § 19-4A-3 — Alabama Code / Title 19 / Chapter 4A / Section 19-4A-3
Section 19-4A-3 Short-Term Investment Vehicle
Status: in_force

In the absence of specific instructions in the governing document, the fiduciary shall invest idle funds in each fiduciary account in a short-term investment vehicle, which may include a deposit in an interest-bearing account, a money market mutual fund, or any other generally accepted investment vehicle for the investment of idle funds. Such deposit in an interest-bearing account may be in the fiduciary’s own commercial bank or any affiliate thereof. Such investment in a money market mutual fund or any other generally accepted investment vehicle may include: (1) a mutual fund or investment vehicle provided by a third party vendor, even if the bank or trust company or any affiliate thereof receives separate compensation from the vendor, or (2) a mutual fund or investment vehicle provided by the bank or trust company or any affiliate thereof for which the bank or trust company or any affiliate thereof may receive compensation as the mutual fund or investment vehicle’s investment advisor, administrator, trustee, transfer agent, or other similar capacity.
Ala. Code § 19-3B-505 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-505
Section 19-3B-505 Creditor’s Claim Against Settlor. (Amended by Act 2026-584)
Status: in_force

AMENDED BY ACT 2026-584, EFFECTIVE OCTOBER 1, 2026. SEE ACT FOR REVISED LANGUAGE. (a) Whether or not the terms of a trust contain a spendthrift provision, the following rules apply:

(1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors.

(2) With respect to an irrevocable trust, 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, then 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.

(3) After the death of a settlor, and subject to the settlor’s right to direct the source from which liabilities will be paid, the property of a trust that was revocable immediately prior to the settlor’s death is subject to claims of the settlor’s creditors, costs of administration of the settlor’s estate, the expenses of the settlor’s funeral and disposal of remains, and homestead allowance, exempt property and family allowance to a surviving spouse and children to the extent the settlor’s probate estate is inadequate to satisfy those claims, costs, expenses, and homestead allowance, exempt property and family allowance.

(b) With respect to claims, expenses, and taxes in connection with the settlement of a trust that was revocable at the settlor’s death:

(1) Any claim of a creditor which would be barred against the fiduciary of a decedent’s estate, the estate of the decedent, or any creditor or beneficiary of the decedent’s estate, shall be barred against the trustee, the trust property, and the creditors and beneficiaries of the trust.

(2) A trustee at any time may give notice to any person the trustee has reason to believe may have a claim against the settlor at death. The notice shall contain the name and address of the trustee to whom the claim must be presented. If the person fails to present the claim in writing within 90 days from the date of the notice, then the person shall be forever barred from asserting or recovering on the claim from the trustee, the trust property and the creditors and beneficiaries of the trust. Any person who presents a claim on or before the date specified in the notice may not later increase the claim following the expiration of the 90-day period.

(3) If a claim is not presented in writing to the personal representative of the settlor’s estate or to the trustee (i) within six months from the date of the appointment of the initial personal representative of the settlor’s estate, or (ii) if no personal representative is appointed within six months from the settlor’s date of death and a claim is not presented in writing to the trustee within six months from the settlor’s date of death, then no trustee shall be chargeable for any assets that the trustee may pay or distribute in good faith in satisfaction of any lawful claims, expenses, or taxes or to any beneficiary before the claim was presented. A payment or distribution of assets by a trustee shall be deemed to have been made in good faith unless the creditor can prove that the trustee had actual knowledge of the claim at the time of the payment or distribution. The six-month period shall not be interrupted or affected by the death, resignation, or removal of a trustee, except that the time during which there is no trustee in office shall not be counted as part of the period.

(4) The provisions of Section 43-2-371 dealing with the priority of payment of claims, expenses, and taxes from the probate estate of a decedent shall apply to a revocable trust to the extent the assets of the decedent’s probate estate are inadequate.

(c) For purposes of this section:

(1) during the period the power may be exercised, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power; and

(2) upon the lapse, release, or waiver of the power, the holder is treated as the settlor of the trust only to the extent the value of the property affected by the lapse, release, or waiver exceeds the greater of the amount specified in Section 2041(b)(2), 2503(b), or 2514(e) of the Internal Revenue Code of 1986, in each case as in effect on January 1, 2007, or as later amended.
Ala. Code § 19-2-3 — Alabama Code / Title 19 / Chapter 2 / Section 19-2-3
Section 19-2-3 Reappointment of Removed Fiduciary
Status: in_force

If any fiduciary in war service be removed from office and is a competent and suitable person to again serve as such fiduciary at any time after the termination of his war service, the fiduciary appointed to fill the vacancy caused by such removal, or his successor, shall be removed from office by the court upon petition filed by the former fiduciary in war service so removed or by any person interested in the trust fund or the estate being administered or by any co-fiduciary, and if the trust has not been fully executed or the administration of the estate has not been fully completed the court, upon such removal, shall appoint the fiduciary theretofore removed because of his war service to fill the vacancy caused by the removal of his successor in office if there is no trust instrument providing a practicable method of appointment.
Ala. Code § 19-3B-1013 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1013
Section 19-3B-1013 Certification of Trust
Status: in_force

(a) Instead of furnishing a copy of the trust instrument to a person other than a beneficiary, the trustee may furnish to the person a certification of trust containing the following information:

(1) that the trust exists and the date the trust instrument was executed;

(2) the identity of the settlor;

(3) the identity and address of the currently acting trustee;

(4) the powers of the trustee in a pending transaction or relevant to the request;

(5) the revocability or irrevocability of the trust and the identity of any person holding a power to revoke the trust;

(6) the authority of co-trustees to sign or otherwise authenticate and whether all or less than all are required in order to exercise powers of the trustee;

(7) the trust’s taxpayer identification number; and

(8) the name in which title to trust property may be taken.

(b) A certification of trust may be signed or otherwise authenticated by any trustee.

(c) A certification of trust must state that the trust has not been revoked, modified, or amended in any manner that would cause the representations contained in the certification of trust to be incorrect.

(d) A certification of trust need not contain the dispositive terms of a trust.

(e) A recipient of a certification of trust may require the trustee to furnish copies of those excerpts from the original trust instrument and later amendments which designate the trustee and confer upon the trustee the power to act in the pending transaction.

(f) A person who acts in reliance upon a certification of trust without knowledge that the representations contained therein are incorrect is not liable to any person for so acting and may assume without inquiry the existence of the facts contained in the certification. Knowledge of the terms of the trust may not be inferred solely from the fact that a copy of all or part of the trust instrument is held by the person relying upon the certification.

(g) A person who in good faith enters into a transaction in reliance upon a certification of trust may enforce the transaction against the trust property as if the representations contained in the certification were correct.

(h) A person making a demand for the trust instrument in addition to a certification of trust or excerpts is liable for damages if the court determines that the person did not act in good faith in demanding the trust instrument.

(i) This section does not limit the right of a person to obtain a copy of the trust instrument in a judicial proceeding concerning the trust.
Ala. Code § 19-4A-6 — Alabama Code / Title 19 / Chapter 4A / Section 19-4A-6
Section 19-4A-6 Compensation
Status: in_force

In the absence of specific instructions in the governing document, the fiduciary may receive compensation for the investment of idle funds by netting said compensation from the yield of the investment; provided, however, that disclosure of the compensation (expressed as a percentage of asset value or otherwise) is made to the current income beneficiary by mailing separate notice (by prospectus, statement, letter or otherwise) to the current income beneficiary’s last known address.
Ala. Code § 19-3A-106 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-106
Section 19-3A-106 Conversion to Unitrust
Status: in_force

(a) Unless expressly prohibited by the governing instrument, a trustee may convert a trust into a unitrust as described in this section if all of the following apply:

(1) The trustee has concluded that the conversion will enable the trustee to better carry out the intent of the settlor or testator and the purposes of the trust.

(2) The trustee gives written notice of the trustee’s intention to convert the trust into a unitrust, including the trustee’s initial decisions as set forth below, to all the qualified beneficiaries. The written notice shall include the following:

a. An explanation of how the unitrust will operate;

b. The effective date of the conversion to a unitrust;

c. The unitrust percentage to be used;

d. The provisions for prorating a unitrust distribution for a short year in which a beneficiary’s right to payments commences or ceases;

e. Whether the net fair market value of the trust assets will be determined annually or averaged over a designated multiple year smoothing period; and

f. Such other matters as the trustee deems appropriate for the proper functioning of the unitrust, which may include such matters as:

1. Whether to omit from the calculations trust property occupied, used, or possessed by a beneficiary;

2. How nonliquid or hard to value assets shall be valued, how frequently to value them, and whether to estimate their value; or

3. Whether the trust assets will be valued annually or more frequently.

(3) There is at least one sui juris income beneficiary and at least one sui juris presumptive remainder beneficiary.

(4) No beneficiary, or a person who may represent and bind a beneficiary who is not sui juris, objects to the conversion to a unitrust in a writing delivered to the trustee within 60 days of the mailing of the notice under subdivision (2).

(5) If the trustee requests, the trustee receives consents from such beneficiaries as determined by the trustee.

(b)(1) Unless expressly prohibited by the governing instrument, the qualified beneficiaries of a trust may convert the trust into a unitrust as described in this section by a written instrument delivered to the trustee that sets forth all of the following:

a. A representation by the qualified beneficiaries that they have concluded that the conversion will enable the trustee to better carry out the intent of the settlor or testator and the purposes of the trust;

b. The effective date of the conversion to a unitrust, which shall not be earlier than 60 days after the date the written instrument is delivered to the trustee, unless the trustee consents to an earlier date, provided that such earlier date is not earlier than the date the written instrument is delivered to the trustee;

c. The unitrust percentage to be used;

d. The provisions for prorating a unitrust distribution for a short year in which a beneficiary’s right to payments commences or ceases;

e. Whether the net fair market value of the trust assets will be determined annually or averaged over a designated multiple year smoothing period; and

f. Such other matters as the beneficiaries deem appropriate for the proper functioning of the unitrust, which may include such matters as:

1. Whether to omit from the calculations trust property occupied, used, or possessed by a beneficiary,

2. How nonliquid or hard to value assets shall be valued, how frequently to value them, and whether to estimate their value, or

3. Whether the trust’s assets will be valued annually or more frequently.

(2) A trust may not convert into a unitrust unless the written instrument is executed by all qualified beneficiaries and the trustee(s), whether directly or by representation.

(3) Notwithstanding the foregoing, a trustee, prior to the effective date of the conversion, may seek court confirmation that the foregoing representations and requirements have been satisfied, in which case the conversion will not be effective before the conversion is confirmed by the court.

(c)(1) The trustee or a qualified beneficiary may petition the court to review the conversion to a unitrust, even if any of the following apply:

a. A beneficiary timely objects to the conversion to a unitrust;

b. There are no sui juris income beneficiaries or sui juris presumptive remainder beneficiaries; or

c. The trustee does not consent.

(2) Unless expressly prohibited by the governing instrument, the court shall order the conversion if the court concludes:

a. that the conversion will enable the trustee to better carry out the intent of the settlor or testator and the purposes of the trust; or

b. all qualified beneficiaries have consented to the conversion.

(3) The court shall make the following decisions which shall be set forth in the order of the court approving the conversion:

a. The effective date of the conversion to a unitrust;

b. The unitrust percentage to be used;

c. The provisions for prorating a unitrust distribution for a short year in which a beneficiary’s right to payments commences or ceases;

d. Whether the net fair market value of the trust assets will be determined annually or averaged over a designated multiple year smoothing period; and

e. Such other matters as the court deems appropriate for the proper functioning of the unitrust, which may include such matters as:

1. Whether to omit from the calculations trust property occupied, used, or possessed by a beneficiary;

2. How nonliquid or hard to value assets shall be valued, how frequently to value them, and whether to estimate their value; or

3. Whether the trust assets will be valued annually or more frequently.

(4) Court costs shall be charged to the trust or as otherwise determined by the court.

(d) The unitrust percentage with respect to a converted unitrust to be used in determining the unitrust amount shall be not less than three percent nor more than five percent, unless otherwise ordered by the court.

(e) During the period of time that the trust is a converted unitrust, all of the following apply:

(1) Notwithstanding any provision of this chapter to the contrary, the term “income” or “net income” in the governing instrument shall mean the unitrust amount.

(2) The frequency of distributions shall be determined in accordance with the governing instrument.

(3) If the written notice referenced in subsection (a), the written instrument referenced in subsection (b), or the order of the court referenced in subsection (c) provides that the net fair market value of the trust assets will be averaged over a designated smoothing period, the net fair market value of the trust assets for purposes of determining the unitrust amount shall be the average of the net fair market value of the trust assets over the designated smoothing period.

(4) Any distribution in excess of the unitrust amount shall be deemed to have been paid out of the principal of the trust.

(5) Expenses which would be deducted from income if the trust were not a unitrust may not be deducted from the unitrust amount.

(f) A conversion to a unitrust does not affect a provision in the governing instrument directing or authorizing the trustee to distribute principal or authorizing a beneficiary to withdraw a portion or all of the principal.

(g) Except to the extent otherwise provided in the governing instrument, the written notice referenced in subsection (a), the written agreement referenced in subsection (b), or the order of the court referenced in subsection (c), the trustee, from time to time, may determine the following:

(1) The frequency of payment of the unitrust amount during the year;

(2) Any adjustments to be made to the unitrust amount due to other payments from or contributions to the trust;

(3) The valuation dates to use;

(4) How nonliquid or hard to value assets shall be valued, how frequently to value them, and whether to estimate their value;

(5) Whether to omit from the calculations the value of trust property occupied, used, or possessed by a beneficiary; and

(6) Any other matters necessary for the proper functioning of the unitrust that are not inconsistent with the written notice referenced in subsection (a), the written agreement referenced in subsection (b), or the order of the court referenced in subsection (c).

(h) Modification of the unitrust provisions of a converted unitrust may be implemented by the trustee following the same procedures as in subsection (a) for converting a trust into a unitrust with the exception that the written notice shall state the modifications, by the qualified beneficiaries following the same procedures as in subsection (b) for converting a trust into a unitrust with the exception that the written instrument shall state the modifications, or by the court pursuant to the petition of a beneficiary or the trustee. Modifications shall be set forth in the notice, written instrument, or court order, as the case may be, that makes the modification. Modification may include any of the following:

(1) Changes or additions to any of the matters set forth in, or that could have been set forth in, the original notice, written instrument or court order, as the case may be, or any subsequent modifications thereto;

(2) Provisions for a distribution of net income, as would be determined if the trust were not a unitrust, in excess of the unitrust distribution if such distribution is necessary to preserve a tax benefit; or

(3) Reversions from a unitrust, in which case the trust shall be administered in accordance with its provisions prior to its conversion to a unitrust. Upon reconversion, the power to adjust under Section 19-3A-104, if any, shall be revived.

(i) A trust may not be converted into a unitrust in any of the following circumstances:

(1) If payment of the unitrust amount would change the aggregate annual amount payable to a beneficiary as a fixed annuity;

(2) If the trust is an “Institutional Fund” governed by the provisions of Section 19-3C-1, et seq.;

(3) If the conversion would reduce any amount permanently set aside for charitable purposes under the governing instrument which is not expressed under the governing instrument as “income” or “net income” or determined pursuant to the terms of the governing instrument by reference to “income” or “net income”;

(4) If the conversion would reduce the value of any interest for which a federal estate or gift tax charitable deduction has been taken, or would cause the reduction of an amount being disbursed or to be disbursed to a charity for which an income, estate, or gift tax deduction has been taken;

(5) If possessing or exercising the power to convert would cause an individual to be treated as the owner of all or part of the trust for federal income tax purposes, and the individual would not be treated as the owner if the trustee did not possess the power to convert;

(6) If possessing or exercising the power to convert would cause all or part of the trust assets to be subject to federal estate or gift tax with respect to an individual, and the assets would not be subject to federal estate or gift tax with respect to the individual if the trustee did not possess the power to convert; or

(7) If the conversion would result in the disallowance of a federal estate or gift tax marital or charitable deduction which would be allowed if the trustee did not have the power to convert.

(j)(1) If subsection (i)(5) or subsection (i)(6) applies because a trustee is a beneficiary and there is more than one trustee, a co-trustee to whom the provision does not apply may convert the trust unless the exercise of the power by the remaining trustee or trustees is prohibited by the governing instrument.

(2) If subsection (i)(5) or subsection (i)(6) applies to all the trustees, the trustees may petition the court to direct a conversion or the beneficiaries may convert under subsection (b).

(k) (1) A trustee may release the power conferred by subsection (a) to convert to a unitrust if any of the following apply:

a. The trustee is uncertain about whether possessing or exercising the power will cause a result described in subsection (i)(5), subsection (i)(6), or subsection (i)(7).

b. The trustee determines that possessing or exercising the power will or may deprive the trust of a tax benefit or impose a tax burden not described in subsection (i).

(2) The release may be permanent or for a specified period, including a period measured by the life of an individual.
Ala. Code § 19-1A-4 — Alabama Code / Title 19 / Chapter 1A / Section 19-1A-4
Section 19-1A-4 User Direction for Disclosure of Digital Assets
Status: in_force

(a) A user may use an online tool to direct the custodian to disclose to the designated recipient or not to disclose some or all of the user’s digital assets, including the content of electronic communications. If the online tool allows the user to modify or delete a direction at all times, a direction regarding disclosure using an online tool overrides a contrary direction by the user in a will, trust, power of attorney, or other record.

(b) If a user has not used an online tool to give direction under subsection (a) or if the custodian has not provided an online tool, the user may allow or prohibit in a will, trust, power of attorney, or other record, disclosure to a fiduciary of some or all of the user’s digital assets, including the content of electronic communications sent or received by the user.

(c) A user’s direction under subsection (a) or (b) overrides a contrary provision in a terms-of-service agreement.
Ala. Code § 19-3B-802 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-802
Section 19-3B-802 Duty of Loyalty
Status: in_force

(a) A trustee shall administer the trust solely in the interests of the beneficiaries.

(b) Subject to the rights of persons dealing with or assisting the trustee as provided in Section 19-3B-1012, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee’s own personal account or which is otherwise affected by a conflict between the trustee’s fiduciary and personal interests is voidable by a beneficiary affected by the transaction unless:

(1) the transaction was authorized by the terms of the trust;

(2) the transaction was approved by the court;

(3) the beneficiary did not commence a judicial proceeding within the time allowed by Section 19-3B-1005;

(4) the beneficiary consented to the trustee’s conduct, ratified the transaction, or released the trustee in compliance with Section 19-3B-1009; or

(5) the transaction involves a contract entered into or claim acquired by the trustee before the person became or contemplated becoming trustee.

(c) A sale, encumbrance, or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if it is entered into by the trustee with:

(1) the trustee’s spouse;

(2) the trustee’s descendants, siblings, parents, or their spouses;

(3) an agent or attorney of the trustee; or

(4) a corporation or other person or enterprise in which the trustee, or a person that owns a significant interest in the trustee, has an interest that might affect the trustee’s best judgment.

(d) A transaction not concerning trust property in which the trustee engages in the trustee’s individual capacity involves a conflict between personal and fiduciary interests if the transaction concerns an opportunity properly belonging to the trust.

(e) A trustee that is a regulated financial institution may engage in transactions with departments of the institution, with related affiliates of the institution, or other business entities of the institution. Transactions are not presumed to be affected by a conflict of interest between a trustee’s personal and fiduciary interests provided that the transaction and any investment made pursuant to the transaction otherwise complies with the Prudent Investor Rule of Article 9. Transactions may include, but not be limited to, the following:

(1) investment by a trustee in securities of, or other interests in, any entity to which the trustee, or its affiliates, provides services, including, without limitation, any common trust fund or other collective investment fund maintained by any regulated financial institution, any open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, as from time to time amended, (the “Investment Company Act”), or any entity that is exempt from the definition of investment company by Section 3(c) of the Investment Company Act;

(2) an investment by a trustee in an insurance contract purchased from an insurance agency owned by or affiliated with the trustee or its affiliate;

(3) the placing of securities transactions by a trustee through a securities broker-dealer that is a part of the same company as the trustee, is owned by the trustee, or is affiliated with the trustee;

(4) the borrowing of funds or entering into any lending relationship by a trustee with a related department or its affiliate company; and

(5) the purchase of bonds for which the trustee in another capacity performed services as underwriter of the bonds or participates in the distribution of the bonds. If the trustee receives compensation for any transaction described in this subsection in addition to fees charged to the trust, or from the affiliate business entity, then the trustee must at least annually notify the persons entitled under Section 19-3B-813(a) to receive a copy of the trustee’s annual report, prospectus, or other report, of the rate and method by which the compensation was determined.

(f) In other forms of enterprise, the trustee shall act in the best interests of the beneficiaries. If the trust is the sole owner of a corporation or other form of enterprise, then the trustee shall elect or appoint directors or other managers who will manage the corporation or enterprise in the best interests of the beneficiaries.

(g) This section does not preclude the following transactions, if fair to the beneficiaries:

(1) an agreement between a trustee and a beneficiary relating to the appointment or compensation of the trustee;

(2) payment of reasonable compensation to the trustee;

(3) a transaction between a trust and another trust, decedent’s estate, or conservatorship of which the trustee is a fiduciary or in which a beneficiary has an interest;

(4) a deposit of trust money in a regulated financial-service institution operated by the trustee; or

(5) an advance by the trustee of money for the protection of the trust and for any or all expenses, losses, and liabilities sustained in the administration of the trust or as a result of the holding or ownership of any asset by the trust.

(h) The court may appoint a special fiduciary to make a decision with respect to any proposed transaction that might violate this section if entered into by the trustee.
Ala. Code § 19-3-23 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-23
Section 19-3-23 Failure of Trustee to Give Bond; Appointment of Successor
Status: in_force

If the trustee fails for five days from and after the making of such order, to give such bond, the register or clerk must make and enter an order removing him as a trustee, and may make and enter an order appointing a successor, of whom bond, with sureties, payable and conditioned as provided in Section 19-3-22 must be required.
Ala. Code § 19-3B-1002 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1002
Section 19-3B-1002 Damages for Breach of Trust
Status: in_force

(a) A trustee who commits a breach of trust is liable to the beneficiaries affected for:

(1) the greater of:

(i) the amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred; or

(ii) the profit the trustee made by reason of the breach;

(2) any measure of damage otherwise provided by law.

(b) Except as otherwise provided in this subsection, if more than one trustee is liable to the beneficiaries for a breach of trust, a trustee is entitled to contribution from the other trustee or trustees. A trustee is not entitled to contribution if the trustee was substantially more at fault than another trustee or if the trustee committed the breach of trust in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. A trustee who received a benefit from the breach of trust is not entitled to contribution from another trustee to the extent of the benefit received.
Ala. Code § 19-3-31 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-31
Section 19-3-31 Claims Presented and Not Objected to Stand Allowed
Status: in_force

All claims to which no objection is made in the manner provided in Sections 19-3-32 and 19-3-33, within three months after the expiration of the time prescribed for the presentation of claims, stand allowed without further proof.
Ala. Code § 19-3B-701 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-701
Section 19-3B-701 Accepting or Declining Trusteeship
Status: in_force

(a) Except as otherwise provided in subsection (c), a person designated as trustee accepts the trusteeship:

(1) by substantially complying with a method of acceptance provided in the terms of the trust; or

(2) if the terms of the trust do not provide a method or the method provided in the terms is not expressly made exclusive, by accepting delivery of the trust property, exercising powers or performing duties as trustee, or otherwise indicating acceptance of the trusteeship.

(b) A person designated as trustee who has not yet accepted the trusteeship may reject the trusteeship. A designated trustee who does not accept the trusteeship within a reasonable time after knowing of the designation is deemed to have rejected the trusteeship.

(c) A person designated as trustee, without accepting the trusteeship, may:

(1) act to preserve the trust property if, within a reasonable time after acting, the person sends a rejection of the trusteeship to the settlor or, if the settlor is dead or lacks capacity, to a qualified beneficiary; and

(2) inspect or investigate trust property to determine potential liability under environmental or other law or for any other purpose.
Ala. Code § 19-5-4 — Alabama Code / Title 19 / Chapter 5 / Section 19-5-4
Section 19-5-4 Separate Trusts for Property Transferred, Etc., from Another Trust in Order to Preclude or Minimize Gst
Status: in_force

If under the provisions of the governing instrument, property which is held in one trust (the “first trust”) is to be transferred or poured over to, merged with, or otherwise combined with property in another trust (the “second trust”) and property in the first trust is subject to different treatment for purposes of the GST from the property in the second trust, the fiduciary of the second trust is authorized, but not required, to retain the property in separate trusts in order to preclude or minimize the imposition of the GST upon transfers from either or both trusts, with other terms of each separate trust being substantially identical in all respects.
Ala. Code § 19-3-3 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-3
Section 19-3-3 Estate of Trustee; Termination of Trust Estate
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3-28 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-28
Section 19-3-28 Notice to Creditors
Status: in_force

Upon the making of such order the register or clerk must give notice thereof by mail, postage prepaid, to each creditor whose name and address he may, by diligent inquiry and investigation, ascertain from the trustee, or assignor, or the record of the deed of assignment in the office of the judge of probate, or any other available source of information, and must also give notice by publication once a week for three successive weeks in a newspaper published in the county, or if there be no such paper, by posting the notice at the courthouse door for the same length of time. Such notice may be substantially in the following form:

“To the creditors of A.B., of _____:

“The said A.B., having made an assignment for the benefit of creditors, and C.D. having filed his petition for the administration of such trust by the circuit court, and the circuit judge having made an order designating the _____ day of _____, as a day by or on which all claims of creditors must be presented; all parties in interest are hereby notified of the filing of such petition, and all persons having claims against the trust estate are required to file the same, or a statement thereof, verified by affidavit, in the office of the register or clerk at _____, by or on the day above specified, or the same will be barred.

“This the ____ day of ______.
Ala. Code § 19-3-323 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-323
Section 19-3-323 Termination of Small Trusts Where Continued Administration Too Costly; Actions by Trustee to Carry Out Trust Purpose
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3B-1011 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1011
Section 19-3B-1011 Interest as General Partner
Status: in_force

(a) Except as otherwise provided in subsection (c) or unless personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust’s acquisition of the interest if the fiduciary capacity was disclosed in the contract or in a statement previously filed pursuant to Chapter 8A or Chapter 9B of Title 10.

(b) Except as otherwise provided in subsection (c), a trustee who holds an interest as a general partner is not personally liable for torts committed by the partnership or for obligations arising from ownership or control of the interest unless the trustee is personally at fault.

(c) The immunity provided by this section does not apply if an interest in the partnership is held by the trustee in a capacity other than that of trustee or is held by the trustee’s spouse or one or more of the trustee’s descendants, siblings, or parents, or the spouse of any of them.

(d) If the trustee of a revocable trust holds an interest as a general partner, then the settlor is personally liable for contracts and other obligations of the partnership as if the settlor were a general partner.
Ala. Code § 19-3B-806 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-806
Section 19-3B-806 Trustee’s Skills
Status: in_force

A trustee who has special skills or expertise, or is named trustee in reliance upon the trustee’s representation that the trustee has special skills or expertise, shall use those special skills or expertise.
Ala. Code § 19-3B-1005 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1005
Section 19-3B-1005 Limitation of Action Against Trustee
Status: in_force

(a) A beneficiary may not commence a proceeding against a trustee for breach of trust more than two years after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust. For purposes of this section, a report is an account statement or other form of written disclosure made by the trustee to the beneficiary.

(b) A report adequately discloses the existence of a potential claim for breach of trust if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence.

(c) If subsection (a) does not apply, then a judicial proceeding by a beneficiary against a trustee for breach of trust must be commenced within two years after the first to occur of the following:

(1) The removal, resignation, or death of the trustee;

(2) The termination of the beneficiary’s interest in the trust; or

(3) The termination of the trust.
Ala. Code § 19-3-87 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-87
Section 19-3-87 Unclaimed Funds
Status: in_force

(a) If at any time it appears to the court, or is made known to the court, that any balance has been in the hands of any officer for a period of five years and the same remains unclaimed, the court may make an order directing the same to be paid into the county treasury, and a separate account shall be kept of all the payments identifying each transaction.

(b) Any person entitled to recover all or part of any unclaimed amount paid into the county treasury may recover the amount, without interest, before the date that is 10 years after the payment was made into the county treasury by obtaining an order from the court that had ordered the payment into the county treasury. The order may be made by the court on summary motion against the judge of probate of the county after five days’ written notice unless the court continues the hearing to a further time for sufficient reasons.

(c)(1) Subject to subdivision (2), with respect to any unclaimed amount currently held in the county treasury or paid into the county treasury on or following August 1, 2023, which remain in the county treasury on the date that is 10 years after the date it was paid into the county treasury, the following shall occur:

a. Any person’s right, title, or interest in or to all unclaimed funds shall be forfeited.

b. All right, title, and interest in or to the unclaimed funds shall be vested in the county treasury to be set aside solely for the maintenance, repair, and construction of roads and bridges located within the county.

(2) Before any unclaimed funds may be forfeited under subdivision (1), the county shall provide notice of the intended forfeiture, including, at a minimum, a description of the funds, the date the forfeiture is scheduled to occur, and a description of how a person entitled to recover all or part of the unclaimed funds may make a claim. Notice shall be published on the Alabama Press Association’s website or other website used by the county for a minimum of 90 days before the date of forfeiture and in addition, in a newspaper of general circulation in the county, if one exists, at least once a week for four consecutive weeks before the date of forfeiture.

(d) This section shall not apply to the following:

(1)Unclaimed funds held by municipal courts.

(2)Unclaimed restitution payments under Section 15-18-115.

(3) Interest on unclaimed funds.
Ala. Code § 19-1A-3 — Alabama Code / Title 19 / Chapter 1A / Section 19-1A-3
Section 19-1A-3 Applicability
Status: in_force

(a) This chapter applies to:

(1) a fiduciary acting under a will or power of attorney executed before, on, or after October 1, 2016;

(2) a personal representative acting for a decedent who died before, on, or after October 1, 2016;

(3) a conservatorship proceeding commenced before, on, or after October 1, 2016; and

(4) a trustee acting under a trust created before, on, or after October 1, 2016.

(b) This chapter applies to a custodian if the user resides in this state or resided in this state at the time of the user’s death.

(c) This chapter does not apply to a digital asset of an employer used by an employee in the ordinary course of the employer’s business. Neither does this chapter apply to a digital asset, whether employer owned or otherwise, that an employee or contractor has stored on, housed on, maintained on, or transmitted to any software, program, hardware, system, account, drive, tape, media, or other storage device leased, licensed, or owned by the employer.
Ala. Code § 19-3-192 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-192
Section 19-3-192 Judgment on Hearing
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3B-406 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-406
Section 19-3B-406 Creation of Trust Induced by Fraud, Duress, or Undue Influence
Status: in_force

A trust is void to the extent its creation was induced by fraud, duress, or undue influence.
Ala. Code § 19-3A-506 — Alabama Code / Title 19 / Chapter 3A / Section 19-3A-506
Section 19-3A-506 Adjustments Between Principal and Income Because of Taxes
Status: in_force

(a) A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries which arise from any of the following:

(1) Elections and decisions, other than those described in subsection (b), that the fiduciary makes from time to time regarding tax matters;

(2) An income tax or any other tax that is imposed upon the fiduciary or a beneficiary as a result of a transaction involving a decedent’s estate, a trust, or a distribution from a decedent’s estate or a trust; or

(3) The ownership by a decedent’s estate or trust of an interest in an entity whose taxable income, whether or not distributed, is includable in the taxable income of the decedent’s estate, trust, or a beneficiary.

(b) If the amount of an estate tax marital deduction or charitable contribution deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes, and as a result estate taxes paid from principal are increased and income taxes paid by a decedent’s estate, trust, or beneficiary are decreased, then each decedent’s estate, trust, or beneficiary that benefits from the decrease in income tax shall reimburse the principal from which the increase in estate tax is paid. The total reimbursement shall equal the increase in the estate tax to the extent that the principal used to pay the increase would have qualified for a marital deduction or charitable contribution deduction but for the payment. The proportionate share of the reimbursement for each decedent’s estate, trust, or beneficiary whose income taxes are reduced shall be the same as its proportionate share of the total decrease in income tax. A decedent’s estate or a trust shall reimburse principal from income.
Ala. Code § 19-3B-1306 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1306
Section 19-3B-1306 Procedures for Release of Trustee from Duties
Status: in_force

(a) A trustee may obtain a settlement of its accounts in accordance with subsection (b) when any of the following occur:

(1) A trust terminates pursuant to the terms of the trust.

(2) A trust terminates early pursuant to Section 19-3B-414.

(3) A trustee resigns or is removed.

(4) A trustee seeks discharge of an interim accounting period when the trust is continuing.

(b)(1) A trustee who elects to proceed under this section shall provide all of the following to the qualified beneficiaries of the trust and the successor trustee, if applicable, within a reasonable time after termination of the trust pursuant to its terms, the resignation or removal of the trustee, or the end of the period for which the trustee is seeking discharge:

a. A statement showing the fair market value of the new assets to be distributed from a terminating trust or to a successor trustee.

b. A trust accounting for the prior two years showing all receipts and disbursements and inventory value of the net assets.

c. An estimate for any items reasonably anticipated to be received or disbursed.

d. The amount of any fees, including trustee fees, remaining to be paid.

e. Notice that the trust is terminating, or that the trustee has resigned or been removed, the time period for which the trustee seeks discharge of its accounts, and a statement providing that claims against a trustee under Section 19-3B-604 and Section 19-3B-1005, if applicable, shall be barred if no objections are received within the time period described in subsection (c).

f. The name and mailing address of the trustee.

g. The name and telephone number of a person who may be contacted for additional information.

(2) The trustee may also provide the statement and notice described in this subsection to any other person who the trustee reasonably believes may have an interest in the trust.

(3) The statement and notice described in this subsection shall be provided in accordance with Section 19-3B-109.

(c)(1) If, after receiving the notice and trust information described in subsection (b), a qualified beneficiary or any other party that received the notice and trust information objects to a disclosed act or omission, the qualified beneficiary shall provide written notice of the objection to the trustee not later than 45 days after the notice was sent by the trustee. If no written objection is provided in the 45-day time period, the information provided under subsection (b) shall be considered approved by the recipient. The trustee, in the case of a trust terminating pursuant to the terms of the trust or the trustee’s resignation or removal, within a reasonable period of time following the expiration of the 45-day time period, shall distribute the assets as provided in the trust or to the successor trustee. If a qualified beneficiary gives the trustee a written objection within the applicable 45-day time period, the trustee or the qualified beneficiary may do either of the following:

a. Submit the written objection to the court for resolution and charge the expense of commencing a proceeding to the trust.

b. Resolve the objection by a nonjudicial settlement agreement or other written agreement.

(2) Any agreement entered into pursuant to paragraph (1)b. may include a release, an indemnity clause, or both, on the part of the beneficiary against the trustee relating to the trust. If the parties agree to a nonjudicial settlement agreement or other written agreement, any related expenses shall be charged to the trust. Upon a resolution of an objection under this subsection, within a reasonable period of time, the trustee shall distribute the remaining trust assets as provided in the trust or to the successor trustee.

(d) The trustee may rely upon the written statement of a person receiving notice that the person does not object.

(e) When a trustee distributes assets of a terminating trust or to the successor trustee after complying with this article and having received no objections, each person who received notice and either consented or failed to object pursuant to this section is barred from doing either of the following:

(1) Bringing a claim against the trustee or challenging the validity of the trust to the same extent and with the same preclusive effect as if the court had entered a final order approving the trustee’s final account.

(2) Bringing a claim against the trustee for the period of such interim accounts to the same extent and with the same preclusive effect as if the court had entered a final order approving the trustee’s interim accounts.

(f) The court, as determined under Section 19-3B-203, shall have exclusive jurisdiction over matters under this section.

(g) Sections 19-3B-301 through 19-3B-304 shall apply to this section.

(h) Nothing in this section shall preclude a trustee from proceeding under Section 19-3B-201 to have the trustee’s accounts reviewed and settled by the court.
Ala. Code § 19-3B-905 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-905
Section 19-3B-905 Reviewing Compliance
Status: in_force

Compliance with the prudent investor rule is determined in light of the facts and circumstances existing at the time of a trustee’s decision or action and not by hindsight. The prudent investor rule does not guarantee a specific outcome or performance, but is a standard of conduct.
Ala. Code § 19-3-190 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-190
Section 19-3-190 Power of Circuit Court to Authorize Removal of Trust Estate
Status: reserved

Repealed by Act 2006-216, p. 314, §5, effective January 1, 2007.
Ala. Code § 19-3B-1010 — Alabama Code / Title 19 / Chapter 3B / Section 19-3B-1010
Section 19-3B-1010 Limitation on Personal Liability of Trustee
Status: in_force

(a) Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee’s fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.

(b) A trustee is personally liable for torts committed in the course of administering a trust, or for obligations arising from ownership or control of trust property, including liability for violation of environmental law, but only if the trustee, the trustee’s employee, or the trustee’s agent is personally at fault.

(c) A claim based on a contract entered into by a trustee in the trustee’s fiduciary capacity, on an obligation arising from ownership or control of trust property, or on a tort committed in the course of administering a trust, may be asserted in a judicial proceeding against the trustee in the trustee’s fiduciary capacity, whether or not the trustee is personally liable for the claim.
Ala. Code § 19-3-128 — Alabama Code / Title 19 / Chapter 3 / Section 19-3-128
Section 19-3-128 Debts Incurred Under National Housing Act and Under Acts of Congress Relating to Veterans’ Benefits
Status: in_force

All debts or extensions of credit incurred pursuant to any provision of the act of Congress known as the National Housing Act, as the same now exists or may hereafter be amended or supplemented, and all debts or extensions of credit incurred pursuant to any act of Congress relating to veterans’ benefits, as the same now exists or may hereafter be amended or supplemented, shall be legal investments for banks, insurance companies, savings and loan associations, trustees, fiduciaries of all types and for any other person, firm or corporation, and shall be free from any restrictions of this state as to the nature, forms, or amounts of any loans or investments.

The provisions of this section supersede the provisions of any act defining legal investments in any way contrary to the provisions hereof.