The bill H.23, introduced by Representative LaLonde, aims to protect property owned by spouses as tenants by the entirety when it is transferred into a trust. Specifically, it stipulates that such property, once conveyed to either revocable or irrevocable trusts, will retain immunity from the claims of the spouses' separate creditors, similar to the protection it had before the transfer. The bill outlines specific conditions under which this immunity applies, including that both spouses must be married, the property must be held in the trust or returned to them as tenants by the entirety, and that both spouses must have the ability to revoke the trust jointly.

Additionally, the bill clarifies that property held in a tenants by the entirety trust will maintain the same immunity from creditors as if it were held outside the trust, unless otherwise specified by the settlors. However, this immunity will cease upon the dissolution of the marriage by a court. The provisions of this bill will apply to all trusts created before, on, or after its effective date, and it will take effect upon passage.

Statutes affected:
As Introduced: 14A-505