By Vincent J. Schilleci, III, Brian T. Williams, and Alexandra O. Priester
Historically, grantors of trusts have had little asset protection afforded them where they name themselves as a beneficiary of a trust, even an irrevocable trust. Section 505(a)(2) of the Uniform Trust Code and its Alabama counterpart, § 19-3B-505(a)(2), Code of Alabama (1975), provide that “[w]ith respect to an irrevocable trust, a creditor or assignee of the grantor may reach the maximum amount that can be distributed to or for the grantor’s benefit.” For years, individuals seeking the benefits of asset protection using trusts were forced to seek this protection in foreign jurisdictions. In recent years, however, many states have enacted laws that allow a form of self-settled irrevocable trust that serves as a vehicle for asset protection for the grantor’s assets.
On April 18, 2021, the Alabama Qualified Dispositions in Trust Act (the “Act”) was signed into law by Governor Kay Ivey. With the enactment of the Act, Alabama became the 20th state to allow for the creation of domestic asset protection trusts (“DAPTs”). Although similar in purpose, the requirements for, and level of asset protection granted by, DAPTs vary widely among the states. This article will provide a brief overview of the most important details of the Act and answer some of the more practical questions concerning the use and benefits of an Alabama Qualified Disposition in Trust (“QDIT”).
Exemption from § 19-3B-505
The Act provides a special exemption from the general rule that a trust grantor’s creditors or assignees may reach the maximum amount that can be distributed to or for the grantor’s benefit under § 19-3B-505(a)(2), Code of Alabama (1975). The Act provides:
Except as otherwise provided in this act, the interest of a beneficiary in a trust or portion of a trust that is a qualified disposition is not subject to a process of attachment issued against the beneficiary and may not be taken in execution under any form of legal process directed against the beneficiary, trustee, trust estate, or any part of the income of the trust estate. The whole of the trust estate and the income of the trust estate shall go to and be applied by the trustee solely for the benefit of the beneficiary, free, clear, and discharged of all obligations of the beneficiary
The Act also provides:
If any provision of this act conflicts with any provision of the Alabama Uniform Trust Code, Sections 19-3B-101 to 19-3B-1305, inclusive, Code of Alabama 1975, or the Alabama Uniform Voidable Transactions Act, Sections 8-9B-1 to 8-9B-17, inclusive, Code of Alabama 1975, the provision of this act prevails.
In addition, the Act provides that “[a] trust beneficiary does not have the power or capacity to transfer any of the income from property of a trust or portion of a trust which is the subject of a qualified disposition by his or her order, voluntary or involuntary, or by an order or direction of a court.” The Act requires that a trustee of a QDIT “…disregard and oppose an assignment or other act, voluntary or involuntary, that is attempted contrary to [§ 19-3E-9, Code of Alabama (1975)].” It is important to remember that these special rules apply only in the event there is a Qualified Disposition to a QDIT.
The Act defines a Disposition as:
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 Act specifically excludes from the definition of disposition “…a disclaimer, release, or relinquishment of property that was previously the subject of a qualified disposition.” The Act defines a Qualified Disposition as:
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 [§ 19-3E-5(f), Code of Alabama (1975)], under which the transferor has no more rights, powers, or interests than those permitted by [§ 19-3E-4, Code of Alabama (1975)].
The Act specifically excludes from the definition of qualified disposition any “…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.” The intent of this exclusion is to ensure that a grantor is prohibited from utilizing a QDIT to avoid child support claims. The Act defines a Fiduciary Qualified Disposition as any “…qualified disposition made by a trustee acting in a fiduciary capacity.” As discussed below, this important definition makes clear that a trustee may be able to use the Alabama Uniform Trust Decanting Act to make a Fiduciary Qualified Disposition of assets from a normal trust to a QDIT.
The Act requires that before a Qualified Disposition is made, the transferor must sign a Qualified Affidavit. The Act defines a Qualified Affidavit as an affidavit in which the transferor states that at the time of the transfer of the property to the trust, all the following apply:
- The transferor has full right, title, and authority to transfer the property to the trust;
- The transfer of the property to the trust will not render the transferor insolvent;
- The transferor does not intend to defraud a creditor by transferring the property to the trust;
- 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;
- The transferor is not involved in any administrative proceedings, except for those administrative proceedings identified on an attachment to the affidavit;
- The transferor is not currently in arrears on a child support obligation by more than 30 days;
- The transferor does not contemplate filing for relief under the Bankruptcy Code, 11 U.S.C. §§ 101 to 1532, inclusive;
- The property being transferred to the trust was not derived from unlawful activities.
Though not required in all states with asset protection trust statutes, the Qualified Affidavit can be an important tool for practitioners and grantors to be sure that the grantor is eligible to make a Qualified Distribution.
As noted above, a Disposition is not a Qualified Disposition unless at least one of the trustees of the QDIT is a Qualified Trustee. The Act defines a Qualified Trustee as a person, other than the transferor, who meets all of the following requirements:
- Is an individual who is a resident of Alabama or is an organization that is authorized by the laws of Alabama 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;
- Maintains or arranges for custody in Alabama of some or all of the property that is the subject of the qualified disposition and administers all or part of the trust in Alabama;
- Whose usual place of business, where some of the records pertaining to the trust are kept, is located in Alabama or if the person does not have such a place of business, who is a resident of Alabama.
The Act specifically excludes a transferor from the definition of Qualified Trustee. In determining who should serve as a Qualified Trustee, the practitioner and grantor should first determine the main intent of the QDIT. As discussed below, if the main intent of the QDIT is estate and gift tax planning, the grantor may be limited in who he or she can appoint as the Qualified Trustee.
In the event a Qualified Trustee ceases to meet the Acts requirements of a Qualified Trustee and there is no Qualified Trustee remaining, such Qualified Trustee is deemed to have resigned, and the successor named in the QDIT becomes the Qualified Trustee upon such successor’s acceptance of trusteeship. Section 19-3E-8(a)(2), Code of Alabama (1975), provides that in the event a QDIT does not name a successor Qualified Trustee, a court of jurisdiction shall appoint a successor upon the petition of a Qualified Beneficiary. The Act makes clear that a vacancy in the position of Qualified Trustee will not disqualify a disposition as a qualified disposition if a successor Qualified Trustee is appointed pursuant to the terms of the QDIT or a proceeding for the appointment of a successor Qualified Trustee is commenced in accordance with the Act within a reasonable time.
Permitted Powers of Transferor
Though the Act does not allow a transferor to act as a Qualified Trustee of a QDIT, the Act does allow the transferor to retain a number of rights, powers, and interests over the QDIT without subjecting such assets of the QDIT to the transferor’s creditors. In general, the Act provides that a transferor does not have any power or right with respect to property (or income therefrom) that is the subject of a qualified disposition and any agreement or understanding that purports to grant or permit the retention of any greater powers or rights is void. However, the Act does permit a QDIT to provide one or more of the following rights, powers, or interests to the transferor:
- the power to direct investment decisions of the QDIT;
- the power to veto a distribution from the QDIT;
- a special power of appointment exercisable by will or other written instrument of the transferor effective only on the death of the transferor;
- the right to income of the QDIT;
- the right to income or principal from a charitable remainder unitrust or charitable remainder annuity trust and the right, at any time by written instrument delivered to the trustee, to release the transferor’s interest in the QDIT in favor of a charitable organization that has a succeeding beneficial interest in the trust;
- the right to income or principal from a grantor-retained annuity trust or grantor-retained unitrust, or the receipt each year of a percentage of the value of the trust property, as provided in the trust instrument;
- the receipt or use of principal if such receipt or use of principal would be the result of a trustee acting under a discretionary trust provision, a support provision, or the direction of an advisor acting under a discretionary trust provision or support provision;
- the right to remove and replace a trustee or advisor;
- the right to use of real property held under a qualified personal residence trust or the possession and enjoyment of a qualified annuity interest;
- the right to income or principal to pay income taxes due on income of the QDIT;
- a qualified trustee’s authority to pay a deceased transferor’s debts, the expenses of administering the deceased transferor’s estate, and any estate or inheritance tax imposed on the deceased transferor’s estate;
- the right to minimum required distributions with respect to a retirement benefit.
Though the Act permits the above-referenced powers and rights to transferor, the Act makes clear that a transferor only has such powers and rights actually conferred by the terms of the QDIT.
Fiduciary Qualified Disposition
It is possible that the trustee of trust may use the Alabama Uniform Trust Decanting Act to make a Fiduciary Qualified Disposition of trust assets to a QDIT. In general, the Act deems a Fiduciary Qualified Disposition as made at the time of the original Disposition to the trustee (or any predecessor of that trustee in an unbroken succession of fiduciary ownership of the property) making the Fiduciary Qualified Distribution; provided, however, if the original distribution was transferred to the trustee prior to the effective date of the Act, the Fiduciary Qualified Distribution is deemed to have been made as of the effective date of the Act. In addition, a trustee of a domestic asset protection trust under the laws of another state can use the Alabama Uniform Trust Decanting Act to make a Fiduciary Qualified Disposition of trust assets to a QDIT, provided that (i) the transferor has no more rights, powers, or interests than those permitted under § 19-3E-4, and (ii) at the time of disposition, the transferor was not more than 30 days in arrears on child support. Note that the Act defines “Transferor” with respect to a Fiduciary Qualified Disposition as “…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.”
If a trustee proposes to make a disposition that would not be a Qualified Disposition due to a nonconforming power of appointment of the transferor, the trustee may make an irrevocable written election to modify the nonconforming power of appointment to conform to the requirements of either § 19-3E-4(3) or §19-3E-4(11). Such irrevocable written election by the trustee must include (i) a description of the modified power of appointment and (ii) the transferor’s written consent to the modification. The Act makes clear that a transferor’s consent to the modification is not a Disposition under the Act.
Although the main purpose of a QDIT is to provide asset protection to a grantor that is also a beneficiary under the QDIT, the Act does provide certain rights and remedies to creditors of the grantor found in §§ 19-3E-5 and 19-3E-7, Code of Alabama (1975). A creditor seeking to bring an action for an attachment or other remedy against property that is the subject of a Qualified Disposition or for avoidance of a Qualified Disposition must bring the action under sections five and six of the Alabama Voidable Transactions Act. To the extent the creditor’s claim arose after the Qualified Disposition was made, the action is limited to Qualified Dispositions made with “actual intent to hinder, delay or defraud the creditor.” The Act makes clear that the creditor must prove its allegations by a preponderance of the evidence.
The running of the statute of limitation for claims related to a Qualified Disposition under § 19-3E-5, Code of Alabama (1975), depends on when the claim arises in relation to the Qualified Distribution. A claim related to a Qualified Disposition that arises concurrently with or after a Qualified Disposition is made must be brought within two years after the Qualified Disposition was made. A claim related to a Qualified Disposition that arose prior to a Qualified Disposition must be brought within the latter of (i) two years after the Qualified Disposition or (ii) if the claim is fraudulently concealed, 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 application statute of limitations under § 8-9B-10, Code of Alabama (1975). Where more than one Qualified Distribution is made under the same QDIT, the subsequent Qualified Disposition is disregarded in determining whether a creditor’s claim is timely filed with respect to any prior Qualified Dispositions under the appropriate statute of limitation. It is important to note that the Act explicitly states that a creditor does not have a claim against any trustee, advisor, or person involved in the “…counseling, drafting, preparation, or funding…” of a trust that is the subject of a Qualified Disposition. In addition, a creditor does not have a right against the interest of a trust beneficiary solely because the trust beneficiary has the right to authorize or direct the trustee to pay all or part of the QDIT property in satisfaction of the trust beneficiary’s estate or inheritance taxes, debts, or administration expenses, unless the trust beneficiary actually directs the payment of such taxes, debts, or expenses, and then only to the extent of the direction.
Special rules apply where a beneficiary of a QDIT is a party to an action for annulment of a marriage, divorce, or separate maintenance. Where the beneficiary of the QDIT is also the transferor of the Qualified Disposition, the Act provides that the interest in the Qualified Disposition or the property subject to the Qualified Disposition is not considered the real or personal property of the beneficiary, is not the beneficiary’s marital asset, and may not be awarded to the beneficiary’s spouse in a judgment if (a) the beneficiary made the Qualified Disposition more than 30 days before the marriage, (b) the beneficiary and spouse agree that the subdivision of the Act applies to the Qualified Disposition, or (c) the beneficiary and spouse 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. Where more than one Qualified Distribution is made under the same QDIT, the subsequent Qualified Disposition is disregarded in determining whether the QDIT property with respect to a prior Qualified Disposition is a marital asset of the beneficiary, is the beneficiary’s real or personal property, or whether the QDIT property may be awarded to the beneficiary’s spouse in a divorce proceeding. Where the beneficiary of the QDIT is not the transferor of the Qualified Disposition, the Act provides that the Qualified Disposition is not a marital asset of the beneficiary and may not be awarded to the beneficiary’s spouse.
The Act is clear that a valid lien attaching to property before a Qualified Disposition survives the disposition and that a trustee takes title to the property subject to the valid lien to any agreements that created or perfected the valid lien. A transferor and a creditor may enter into a written agreement that requires: (1) the transferor to disclose to the creditor any Qualified Dispositions; (2) the prior written approval of the creditor of a Qualified Disposition; or (3) any other obligation as the creditor may require with respect to a Qualified Disposition. In addition, the Act provides that:
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.
If a transfer that would otherwise be a Qualified Disposition violates a written agreement described above, then such transfer shall not be considered a Qualified Disposition only as to that creditor.
Trustees’ and Beneficiaries’ Rights as to Avoided Qualified Dispositions
Where a creditor is successful in avoiding a Qualified Disposition, such Disposition may be avoided only to the extent necessary to satisfy the present value of the debt. In determining present value, the court may take “…into consideration any uncertainty of the transferor’s debt to the creditor…” Generally, the sole remedy available to a creditor on the avoidance of a Qualified Disposition 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.”
Where a court avoids a Qualified Disposition, the trustee and beneficiary have special rights if the court finds such trustee or beneficiary acted in good faith. The Act places the burden on the creditor to prove “by a preponderance of evidence” that the trustee or beneficiary failed to act in good faith.” The Act provides that “…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.” Moreover, the Act provides that, “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.” Where the court finds the trustee has acted in good faith in accepting or administering the QDIT property, such trustee has a lien against the QDIT property in an amount equal to the entire cost of defending against the action against the Qualified Disposition (including attorney fees) and such has priority over all other liens against the QDIT property regardless of whether other liens accrued or were recorded prior to accrual of the lien to the trustee. Where the court finds 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. In addition, any avoidance of the Qualified Disposition “…is subject to the fees, costs, preexisting rights, claims, and interests of the trustee who has acted in good faith…”
Jurisdiction, Venue, and Relation to Other Law
The Act grants exclusive jurisdiction to the circuit court over actions addressing QDITs. However, the Act grants concurrent jurisdiction over actions addressing QDITs to any “…probate court granted statutory equitable jurisdiction…” The Act lists the following venue for actions addressing QDITs in the following order of priority:
- In any county where venue is proper for civil actions generally;
- In a county in this state in which the current qualified trustee has its usual place of business or residence;
- In a county in this state in which the immediately preceding qualified trustee had its usual place of business or residence;
- In a county in this state in which any trust property subject to the qualified disposition is located; or
- In a county in this state in which a trust beneficiary resides.
Where the provisions of the Act conflict with the Alabama Uniform Trust Code or the Alabama Uniform Voidable Transaction Act, the provisions of the Act prevail.
Benefits and Uses of QDITs
The QDIT provides practitioners another arrow in their asset protection quiver. As noted above, an individual can now make a Qualified Disposition to a QDIT and name himself or herself as a beneficiary, yet still have the asset protection for the property that is the subject of the Qualified Disposition. Though the Act is not as aggressive as other state domestic asset protection laws, the asset protection afforded by a QDIT is superior to the asset protection afforded under a limited liability company or other similar entity.
For those Alabama residents seeking to create asset protection trusts in states with more aggressive state domestic asset protection laws, the Act should help overcome public policy/choice of law arguments used to defeat asset protection trusts established under another state’s laws. For example, in In re Huber, 493 B.R. 798 (Bankr. WD. Wash. 2013), a Washington real estate developer created an Alaska domestic asset protection trust, transferring nearly all of his assets (mainly interests in numerous LLCs owning Washington real estate) into said trust under which he was also a beneficiary. Eventually, the grantor filed for bankruptcy, and his creditors filed suit to enforce their judgement against the Alaska trust’s assets. In holding that Washington law should apply rather than Alaska law in determining the validity of the trust, the Bankruptcy Court noted that Washington did not have a domestic asset protection trust law and that the state had strong public policy “…that a debtor should not be able to escape the claims of his creditors by utilizing a spendthrift trust.”
In addition to asset protection, the Act provides estate and gift tax planning opportunities to Alabama residents who have not otherwise been available. Using a QDIT, it may be possible for an Alabama grantor to make a completed gift of assets to a trust that is excluded from the grantor’s gross estate for estate tax purposes, but allowing the grantor access to the income and principal as a beneficiary of the trust. While a complete discussion of transfer tax treatment of self-settled asset protections trusts is beyond the scope of this article, Private Letter Ruling 200944002, P.L.R. 2009-44-002 (October 30, 2009), is an example of how a QDIT can be used for estate and gift tax planning. In Private Letter Ruling 200944002, an Alaska resident proposed to create an Alaska asset protection trust (the “AAPT”) and sought guidance from the Internal Revenue Service on a host of estate and gift tax issues. Under the terms of the AAPT, the independent trustee had sole discretion to pay out so much of the income or principal to the grantor, the grantor’s spouse, or the grantor’s descendants. At the death of the grantor and the grantor’s spouse, the trust principal was divided among the then living descendants. The Internal Revenue Service ruled that the gift of assets to the AAPT was a completed gift and that the independent trustee’s “…discretionary authority to distribute income/or principal to Grantor, does not, by itself, cause the [AAPT] corpus to be includible in Grantor’s gross estate under § 2036.”
In addition, many grantors may find the QDIT to be a more appealing estate and gift tax planning tool over a spousal lifetime access trust (“SLAT”). A SLAT is a trust where a donor-spouse gifts assets to a trust for the benefit of the non-donor spouse. During the donor-spouse’s and non-donor spouse’s lifetime, the donor spouse may indirectly benefit from the SLAT property due to his or her relationship with the non-donor spouse. However, in the event of a divorce or if the non-donor spouse predeceases, the donor-spouse loses that “indirect” benefit from the non-donor spouse. A QDIT solves this problem due to the fact that the grantor may have “direct” access to QDIT assets as a beneficiary as opposed to only “indirect” access to a SLAT through his or her spouse if grantor’s spouse predeceases the grantor.
The Act is a significant development in the evolution of Alabama asset protection law and estate and gift tax planning for Alabama residents. When designed correctly, a QDIT provides Alabama grantors the ability to protect their assets through the use of a trust while accomplishing beneficial estate and gift tax planning strategies. The Act should also allow Alabama residents to use other jurisdictions’ more aggressive asset protection trust laws without the risk transfers under such other laws being avoided under a choice of law/public policy argument. Though the Act provides many benefits, it is imperative that a practitioner pay close attention to the many requirements of the Act as a mistake could be very costly to the grantor.
 While offshore asset protection is still a viable option, it may be too costly and overly complicated for many individuals. Foreign asset protection trusts utilize foreign trustees and trust laws of other foreign nations. Many individuals do not feel comfortable expending the time, effort, and expense in setting up foreign asset protections trusts.
 Alaska was the first state to enact a domestic asset protection trust statute. Other states to pass similar statutes include Connecticut, Delaware, Hawaii, Indiana, Michigan, Mississippi, Missouri, Nevada, New Hampshire, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.
 For purposes of this article, the authors will refer to any trust that is the subject of a qualified disposition as a QDIT.
 Ala. Code § 19-3E-9(b) (1975).
 Id. at § 19-3E-10(b).
 Id. at § 19-3E-9(a).
 Id. at § 19-3E-9(c).
 Id. at §19-3E-2(7).
 The Act defines transferor as (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; or (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. Section 19-3E-2(26), Code of Alabama (1975).
 Section 19-3E-2(18), Code of Alabama (1975).
 Id. at § 19-3E-2(10).
 Id. at § 19-3E-6(b).
 Id. at § 19-3E-6(a). Note that pursuant to § 19-3E-6(c), Code of Alabama (1975), “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) Non-substantive variances from the language provided in [§ 19-3E-6(a)]; (2) Statements or representations in addition to those provided in subsection (a) if the statements or representations do not contradict those required by [§ 19-3E-6(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.
 See § 19-3E-2(18).
 Id. at § 19-3E-2(19)(a).
 Id. at § 19-3E-2(19)(b).
 Id. at § 19-3E-2(19)(c).
 See Id.
 Id. at § 19-3E-8(a)(1).
 Section 19-3E-2(7) defines Qualified Beneficiary as, “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.”
 Id. at § 19-3E-8(b).
 Id. at § 19-3E-4(a).
 Id. at § 19-3E-4(b)(1).
 Id. at § 19-3E-4(b)(2).
 Id. at § 19-3E-4(b)(3).
 Id. at § 19-3E-4(b)(4).
 Id. at § 19-3E-4(b)(5).
 Id. at § 19-3E-4(b)(6). The amount may be described 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.
 Id. at § 19-3E-4(b)(7).
 Id. at § 19-3E-4(b)(8).
 Id. at § 19-3E-4(b)(9).
 Id. at § 19-3E-4(b)(10). Note that the QDIT must expressly provide for the payment of taxes, and the receipt of income or principal is the result of a qualified trustee acting in the trustee’s discretion or under a mandatory direction in the trust instrument or at the direction of an advisor who is acting in the advisor’s discretion.
 Id. at § 19-3E-4(b)(11).
 Id. at § 19-3E-4(b)912).
 Id. at § 19-3E-4(a).
 Id. at § 19-3E-5(e)(1).
 Id. at § 19-3E-5(e)(2).
 Id. at § 19-3E-2(26)(b).
 Id. at § 19-3E-5(f)(2).
 Id. at § 19-3E-5(b)(1).
 Id. at § 19-3E-5(b)(2).
 Id. at § 19-3E-5(b)(3).
 Id. at § 19-3E-5(c)(2).
 Id. at § 19-3E-5(c)(1).
 Id. at § 19-3E-5(h)(1)(a).
 Id. at § 19-3E-5(g).
 Id. at § 19-3E-7(e).
 Id. at § 19-3E-5(d)(2).
 Id. at § 19-3E-5(h)(1)(b).
 Id. at § 19-3E-5(d)(1).
 Id. at § 19-3E-5(j).
 Id. at § 19-3E-5(k).
 Id. at § 19-3E-5(k)(4).
 Id. at § 19-3E-5(l).
 Id. at § 19-3E-7(a).
 Id. at § 19-3E-7(g).
 Note § 19-3E-11, which provides that “[u]nless otherwise displaced by the provisions of this act, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, and other validating or invalidating clauses, supplement its provisions.”
 Id. at § 19-3E-7(c).
 Id. at § 19-3E-7(b)(3).
 Id. at § 19-3E-7(b)(2).
 Id. at § 19-3E-7(b)(1)(a).
 Id. at § 19-3E-7(b)(2).
 Id. at § 19-3E-7(b)(1)(b).
 Id. at § 19-3E-3(a).
 Id. at § 19-3E-3(b).
 Id. at § 19-3E-3(c).
 Id. at § 19-3E-10(b).
 See Huber.
 Id. at 809.
 P.L.R. 2009-44-002 (October 30, 2009).
 See Id. Pursuant to the terms of the AAPT, the following persons could not serve as trustee of the AAPT: (i) grantor, (ii) grantor’s spouse or former spouse, (iii) any beneficiary of the AAPT, (iv) any spouse or former spouse of any beneficiary of the AAPT, or (v) anyone who is related or subordinate to grantor pursuant to IRC §672(c). In addition, the AAPT provided that grantor could not remove any trustee of the AAPT.
 See Id.
 See Id.
 See Id. Note that the IRS cautioned that, “We are specifically not ruling whether Trustee’s discretion to distribute income and principal of Trust to Grantor combined with other facts (such as, but not limited to, an understanding or pre-existing arrangement between Grantor and trustee regarding the exercise of this discretion) may cause inclusion of Trust’s assets in Grantor’s gross estate for federal estate tax purposes under § 2036.”
 With the uncertainty surrounding the long-term availability of historically high estate and gift tax exemption amounts under the 2017 Tax Cuts and Jobs Act, many donor spouses use SLATs to use up their entire exemption amount (currently $11.8 million) while excluding such assets from their gross estate at their death. One drawback of a SLAT is that if the non-donor spouse predeceases, the donor spouse loses the indirect benefit of the SLAT property.