The "Montana Special Spousal Trust Act" establishes a legal framework for creating special spousal trusts in Montana, which will treat property within these trusts as community property. The bill defines key terms such as "bona fide purchaser," "qualified person," and "special spousal property," and sets forth requirements for establishing a trust, including the necessity for at least one trustee to be a qualified person. It also mandates that the trust agreement includes specific language regarding the potential consequences of the trust, particularly concerning rights related to creditors and the other spouse. Additionally, the bill amends existing tax law to adjust the calculation of Montana taxable income for property classified as special spousal property, while ensuring the protection of bona fide purchasers' interests.

Moreover, the bill introduces modifications to the tax code, allowing taxpayers with gains from the sale of Montana special spousal trust property to subtract the difference between the gain calculated under the new provisions and the gain reported as federal taxable income. It also increases the deduction for individuals aged 65 and older by $5,500 and clarifies that contributions to certain education savings accounts can reduce taxable income, with specific limits for individuals and married couples. The legislation sets an effective date of January 1, 2024, for these changes, which will apply to income tax years beginning after December 31, 2023, aiming to provide tax relief and incentives for education savings and support for older taxpayers.

Statutes affected:
Introduced: 15-30-2120