The bill S.3, introduced by Senator Hashim, 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, along with any proceeds from its sale or disposition, will remain immune from the claims of the spouses' separate creditors, maintaining the same level of protection as if the property had not been transferred. This immunity applies under certain conditions, including that the spouses are married, the property is held in the trust, and the trust can be revoked by either spouse acting alone. Additionally, the bill clarifies that property held in a tenants by the entirety trust will retain immunity from creditors unless the marriage is dissolved by a court.

The bill amends current law by inserting new provisions that outline the conditions under which the immunity from creditor claims applies to property held in trust. It specifies that this immunity will continue for all trusts created before, on, or after the effective date of the new subsection, and it will also apply to all judicial proceedings concerning trusts initiated after this date. The act is set to take effect upon passage.

Statutes affected:
As Introduced: 14A-505