Revocable trusts; allow trustees of to file affidavit and proof of publication to settle assets.

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To: Judiciary A
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Lamar

HOUSE BILL NO. 1384

AN ACT TO AMEND SECTION 91-8-504, MISSISSIPPI CODE OF 1972, 1
TO AUTHORIZE A TRUSTEE OF A REVOCABLE TRUST TO PUBLISH NOTICE TO 2
POTENTIAL CLAIMANTS IN A NEWSPAPER IN ANY COUNTY WHERE THE 3
DECEDENT OWNED REAL PROPERTY IN MISSISSIPPI IF THE DECEDENT WAS 4
NOT A RESIDENT OF THE STATE; TO PROVIDE THAT AN AFFIDAVIT AND 5
PROOF OF PUBLICATION OF NOTICE FILED WITH THE CHANCERY CLERK IN 6
THE COUNTY OF THE DECEDENT'S LAST RESIDENCE OR WHERE THE DECEDENT 7
OWNED REAL PROPERTY IF THE DECEDENT WAS NOT A RESIDENT OF 8
MISSISSIPPI SHALL BE AS CONCLUSIVE AS IF THE TRUST ASSETS HAD BEEN 9
PROBATED AND AN ORDER OF THE COURT ENTERED DISCHARGING AN EXECUTOR 10
OR ADMINISTRATOR; AND FOR RELATED PURPOSES. 11
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 12
SECTION 1. Section 91-8-504, Mississippi Code of 1972, is 13
amended as follows: 14
91-8-504. Creditors' claims against settlor. (a) Whether 15
or not the terms of a trust contain a spendthrift provision, the 16
following rules apply: 17
(1) During the lifetime of the settlor, the property of 18
a revocable trust is subject to claims of the settlor's creditors. 19
(2) Except as provided in the Mississippi Qualified 20
Disposition in Trust Act and subsections (a)(3) through (5) 21
regarding an irrevocable special needs trust, a creditor or 22
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assignee of the settlor of an irrevocable trust may reach the 23
maximum amount that can be distributed to or for the settlor's 24
benefit. If a trust has more than one (1) settlor, the amount the 25
creditor or assignee of a particular settlor may reach may not 26
exceed the settlor's interest in the portion of the trust 27
attributable to that settlor's contribution. 28
(3) For the purposes of this section, "irrevocable 29
special needs trust" means an irrevocable trust established for 30
the benefit of one or more disabled persons, which includes, but 31
is not limited to, an individual who is disabled as defined in 42 32
U.S.C. Section 1382c(a), as well as an individual who is disabled 33
as defined in any similar federal, state or other jurisdictional 34
law or regulation, or has a condition that is substantially 35
equivalent to one that qualifies the person as disabled under such 36
a provision, even if not officially found to be disabled by a 37
governmental body, if one (1) of the purposes of the trust, 38
expressed in the trust instrument or implied from the trust 39
instrument, is to allow the disabled person to qualify or continue 40
to qualify for public, charitable or private benefits that might 41
otherwise be available to the disabled person. The existence of 42
one or more nondisabled remainder beneficiaries of the trust does 43
not disqualify it as an irrevocable special needs trust for the 44
purposes of this section. 45
(4) A creditor or assignee of the settlor of an 46
irrevocable special needs trust, as defined in subsection (a)(3), 47
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may not reach or compel distributions from the special needs 48
trust, to or for the benefit of the settlor of the special needs 49
trust, or otherwise, whether or not the irrevocable special needs 50
trust complies with, and irrespective of the requirements of, the 51
Mississippi Qualified Disposition in Trust Act. 52
(5) Notwithstanding any law to the contrary, neither a 53
creditor nor any other person shall have any claim or cause of 54
action against the trustee or other fiduciary, or an advisor of an 55
irrevocable special needs trust. For purposes of this subsection 56
(a)(5), an advisor of an irrevocable special needs trust includes 57
any person involved in the counseling, drafting, preparation, 58
execution or funding of an irrevocable special needs trust. 59
(6) After the death of a settlor, and subject to the 60
settlor's right to direct the source from which liabilities will 61
be paid, the property of a trust that was revocable immediately 62
preceding the settlor's death is subject to claims of the 63
settlor's creditors, costs of administration of the settlor's 64
estate, and the expenses of the settlor's funeral and disposal of 65
remains subject to the following: 66
(A) With respect to claims, expenses, and taxes in 67
connection with the settlement of the settlor's estate, any claim 68
of a creditor that would be barred against the fiduciary of a 69
settlor's estate, the estate of the settlor, or any creditor or 70
beneficiary of the settlor's estate shall be barred against the 71
trust property of a trust that was revocable at the settlor's 72
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death, the trustee of the revocable trust, and the creditors and 73
beneficiaries of the trust. 74
(B) Unless a personal representative of the 75
settlor's estate has been appointed or an application or petition 76
for appointment of a personal representative of the settlor's 77
estate is pending, the trustee at any time may give notice to any 78
person the trustee has reason to believe may have a claim against 79
the settlor at death, at the claimant's last known address. The 80
notice shall contain the name and address of the trustee to whom 81
the claim must be presented and provide information that failure 82
to present the claim to the trustee within ninety (90) days of the 83
date of the notice will forever bar the claim. If the person 84
fails to present the claim in writing within ninety (90) days from 85
the date of the notice, then the person is forever barred from 86
asserting or recovering on the claim from the trustee, the trust 87
property and the creditors and beneficiaries of the trust. A 88
person who presents a claim on or before the date specified in the 89
notice may not later increase the claim following the expiration 90
of the ninety-day period. 91
(C) Unless a personal representative of the 92
settlor's estate has been appointed or an application or petition 93
for appointment of a personal representative of the settlor's 94
estate is pending, a trustee may also publish in some newspaper in 95
the county of the decedent's last residence or, if the decedent 96
was not a resident of Mississippi, any county where the decedent 97
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owned real property in Mississippi, a notice requiring all persons 98
having unknown claims against the settlor to present their claims 99
to the trustee, which notice shall state that failure to present 100
the claim to the trustee within ninety (90) days of the date after 101
the first publication of the notice will forever bar the claim. 102
The notice must be published for three (3) consecutive weeks, and 103
proof of publication must be maintained with the books and records 104
of the trust. If a person fails to present a claim in writing 105
within ninety (90) days from the date of first publication, that 106
person shall be forever barred from asserting or recovering on the 107
claim from the trustee, the trust property and the creditors and 108
beneficiaries of the trust. A person who presents a claim on or 109
before ninety (90) days from first publication may not later 110
increase the claim following the expiration of the ninety-day 111
period. 112
(D) In addition to subsection (a)(6)(B) and 113
(a)(6)(C), if a claim is not presented in writing to the personal 114
representative of the settlor's estate or to the trustee: (i) 115
within six (6) months from the date of the appointment of the 116
initial personal representative of the settlor's estate; or (ii) 117
if no personal representative is appointed within six (6) months 118
from the settlor's date of death and a claim is not presented in 119
writing to the trustee within six (6) months from the settlor's 120
date of death, a trustee is not chargeable for any assets that the 121
trustee may pay or distribute in good faith in satisfaction of any 122
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lawful claims, expenses, or taxes or to any beneficiary before the 123
claim was presented. A payment or distribution of assets by a 124
trustee is deemed to have been made in good faith unless the 125
creditor can prove that the trustee had actual knowledge of the 126
claim at the time of the payment or distribution. The six-month 127
period shall not be interrupted or affected by the death, 128
resignation, or removal of a trustee, except that the time during 129
which there is no trustee in office shall not be counted as part 130
of the period. 131
(E) A claim presented to the trustee under 132
subsection (a)(6)(B) * * *, (a)(6)(C) or (a)(6)(D) must contain 133
substantially the same information as required in Section 134
91-7-149. The trustee may file with the chancery clerk in the 135
county of the decedent's last residence or, if the decedent was 136
not a resident of Mississippi, any county where the decedent owned 137
real property in Mississippi, an affidavit and proof of 138
publication substantially the same as described in Section 139
91-7-145. The filing of such affidavit and proof of publication 140
shall be as conclusive as if the trust assets had been probated in 141
conformity with the requirements of Section 91-7-1 et seq. and an 142
order of the court entered discharging an executor or 143
administrator. 144
(F) The provisions of Section 91-7-261 detailing 145
the priority of payment of claims, expenses, and taxes from the 146
probate estate of a decedent apply to a revocable trust to the 147
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extent the assets of the settlor's probate estate are inadequate 148
and the personal representative or creditor or taxing authority of 149
the settlor's estate has perfected its right to collect from the 150
settlor's revocable trust. 151
(G) If a personal representative has been 152
appointed for the settlor's estate, assets of the trust shall 153
abate pari passu with assets of the settlor's estate. If no 154
personal representative has been appointed for the settlor's 155
estate, assets of the trust shall abate in the same order of 156
preference as would apply to a decedent's estate. 157
(H) Nothing in this paragraph (6) obligates a 158
trustee to seek appointment of a personal representative of a 159
settlor's estate, and a trustee is not liable to any beneficiary 160
or other third party for failure to do so. 161
(b) For purposes of this section during the period a power 162
of withdrawal may be exercised or upon the lapse, release, or 163
waiver of the power, the holder is treated as the settlor of the 164
trust only to the extent the value of the property affected by the 165
lapse, release, or waiver exceeds the greater of: 166
(1) The amount specified in Section 2041(b)(2) or 167
2514(e) of the Internal Revenue Code of 1986 (26 U.S.C. Section 168
2041(b)(2) and Section 2514(e)); 169
(2) If the donor of the property subject to holder's 170
power of withdrawal is not married at the time of the transfer of 171
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property to the trust, the amount specified in Section 2503(b) of 172
the Internal Revenue Code of 1986 (26 U.S.C. Section 2503(b)); or 173
(3) If the donor of the property subject to holder's 174
power of withdrawal is married at the time of the transfer of 175
property to the trust, twice the amount specified in Section 176
2503(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 177
2503(b)). 178
(4) A power to withdraw is not considered to exceed the 179
greater of the amounts specified in subsection (b)(1) through (3) 180
if the amount subject to a withdrawal right granted to the holder 181
in any calendar year does not exceed the greater of such amounts 182
even if the total amount subject to the holder's power to withdraw 183
exceeds the greater of such amounts in any subsequent calendar 184
year. 185
(5) Except to the extent provided in this subsection 186
(b), a person who is the holder of a power of withdrawal is not 187
considered a settlor of the trust by failing to exercise the power 188
of withdrawal, releasing the power of withdrawal, or waiving the 189
power of withdrawal. 190
(c) For purposes of subsection (a)(2), the following are not 191
considered an amount that may be distributed to or for the 192
settlor's benefit: 193
(1) The power of a trustee of an irrevocable trust, 194
whether arising under the trust agreement or any other provision 195
of law, to make a distribution to or for the benefit of a settlor 196
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for the purpose of reimbursing the settlor in an amount equal to 197
any income taxes payable on any portion of the trust principal and 198
income that are includable in the settlor's personal income under 199
applicable law, as well as distributions made by the trustee under 200
such authority; and 201
(2) The power of the settlor to exercise any of the 202
powers described in Section 675 of the Internal Revenue Code of 203
1986 (26 U.S.C. Section 675). 204
(d) Property contributed to the following trusts is not 205
considered to have been contributed by the settlor, and a person 206
who would otherwise be treated as a settlor or deemed settlor of 207
the following trusts may not be treated as a settlor: 208
(1) An irrevocable inter vivos marital trust if: 209
(A) The settlor is a beneficiary of the trust 210
after the death of the settlor's spouse; and 211
(B) The trust is treated as: 212
(i) Qualified terminable interest property 213
under Section 2523(f), Internal Revenue Code of 1986; or 214
(ii) A general power of appointment trust 215
under Section 2523(e), Internal Revenue Code of 1986; 216
(2) An irrevocable inter vivos trust of which the 217
settlor's spouse is a beneficiary if the settlor is a beneficiary 218
of the trust after the death of the settlor's spouse; or 219
(3) An irrevocable trust for the benefit of any person 220
to the extent that the property of the trust was subject to a 221
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power of appointment in another person, whether the settlor's 222
interest was created by the lapse or exercise of such power. 223
The effect of this subsection (d) shall be that the power of 224
a trustee, and any benefit resulting to the settlor, whether 225
arising under the trust agreement or any other provision of the 226
law, to make a distribution to or for the benefit of a settlor or 227
to otherwise permit the settlor to use or benefit from trust 228
property following the death of the settlor's spouse, shall not be 229
considered an amount that may be distributed to or for the 230
settlor's benefit for purposes of subsection (a)(2). 231
(e) A beneficiary is not considered to be a settlor, to have 232
made a voluntary or involuntary transfer of the beneficiary's 233
interest in the trust, or to have the power to make a voluntary or 234
involuntary transfer of the beneficiary's interest in the trust, 235
merely because the beneficiary holds, exercises, waives, releases, 236
or allows to lapse: 237
(1) A presently exercisable power to: 238
(A) Consume, invade, appropriate, or distribute 239
property to or for the benefit of the beneficiary, if the power 240
is: 241
(i) Exercisable only on consent of another 242
person holding an interest adverse to the beneficiary's interest; 243
or 244
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(ii) Limited by an ascertainable standard, 245
including health, education, support, or maintenance of the 246
beneficiary; or 247
(B) Appoint any property of the trust to or for 248
the benefit of a person other than the beneficiary, a creditor of 249
the beneficiary, the beneficiary's estate, or a creditor of the 250
beneficiary's estate; 251
(2) A testamentary power of appointment; or 252
(3) A presently exercisable right described by 253
subsection (b). 254
(f) For purposes of subsection (a)(2) and subsection (g), a 255
person who becomes a beneficiary of a trust due to the exercise of 256
a power of appointment by someone other than such person shall not 257
be considered a settlor of the trust. 258
(g) (1) Notwithstanding Section 15-3-115, no person shall 259
bring an action with respect to a transfer of property to a 260
spendthrift trust if the person is a creditor when the transfer is 261
made, unless the action is commenced within the later of two (2) 262
years after the transfer is made or six (6) months after the 263
person discovers or reasonably should have discovered the 264
transfer; and 265
(2) If subsection (g)(1) applies: 266
(A) A person is deemed to have discovered the 267
existence of a transfer at the time any public record is made of 268
the transfer, including, but not limited to, a conveyance of real 269
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property that is recorded in the office of the county register of 270
deeds of the county in which the property is located or the filing 271
of a * * * Uniform Commercial Code financing statement, or the 272
equivalent recording or filing of either with the appropriate 273
person or official under the laws of a jurisdiction other than 274
this state; 275
(B) A creditor cannot bring an action with respect 276
to a transfer of property to a spendthrift trust unless that 277
creditor proves by clear and convincing evidence that the 278
settlor's transfer to the trust was made with the intent to 279
defraud that specific creditor; and 280
(i) Notwithstanding any law to the contrary, 281
a creditor or any other person does not have a claim or cause of 282
action against the trustee, other fiduciary, or an advisor of a 283
spendthrift trust if that claim or cause of action is based in any 284
way on any person making use of the benefits of this subsection 285
(g); 286
(ii) For purposes of subsection (g)(2)(B), an 287
advisor of a spendthrift trust includes, but is not limited to, 288
any person involved in the counseling, drafting, preparation, 289
execution or funding of a spendthrift trust; 290
(iii) For purposes of subsection 291
(g)(2)(B)(i), counseling, drafting, preparation, execution or 292
funding of a spendthrift trust includes the counseling, drafting, 293
preparation, execution and funding of a limited partnership, a 294
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limited liability company or any other type of entity if interests 295
in the limited partnership, limited liability company or other 296
entity are subsequently transferred to a spendthrift trust; 297
(3) Notwithstanding subsection (g)(2)(B), in the same 298
manner as provided other than by this section to trusts in 299
general, a beneficiary, settlor, cotrustee, trust advisor or trust 300
protector retains the right to bring a claim against a trustee or 301
against another cotrustee, trust advisor, trust protector or any 302
of their predecessors; however, no such claim shall arise solely 303
because a person used, or attempted to use, the benefits of this 304
subsection (g); 305
(4) If more than one (1) transfer of property is made 306
to a spendthrift trust, the subsequent transfer of property to the 307
spendthrift trust shall be disregarded for the purpose of 308
determining whether a person may bring an action under this 309
subsection (g) with respect to a prior transfer of property to the 310
spendthrift trust; any distribution to a beneficiary from the 311
spendthrift trust shall be deemed to have been made from the most 312
recent transfer made to the spendthrift trust; 313
(5) With the exception of a claim brought under 314
subsection (g)(3), notwithstanding any other law, no action of any 315
kind, including, without limitation, an action to enforce a 316
judgment entered by a court or other body having adjudicative 317
authority, shall be brought at law or in equity against the 318
trustee, other fiduciary or advisor of a spendthrift trust if, as 319
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ST: Revocable trusts; allow trustees of to file
affidavit and proof of publication to settle
assets.
of the date the action is brought, an action by a creditor with 320
respect to a transfer of property to the spendthrift trust would 321
be barred under this subsection (g); and 322
(6) This subsection (g) shall not abridge the rights of 323
a creditor, to the extent otherwise provided by this section, to 324
reach the maximum amount that can be distributed to or for the 325
settlor's benefit under a spendthrift trust. 326
SECTION 2. This act shall take effect and be in force from 327
and after July 1, 2026. 328