SB 178 Alabama Senate · 2026 Regular Session

Trusts; amend Uniform Principal and Income Act, permit trustee to adjust between principal and income

SB 178 would allow trustees in Alabama to shift money between trust principal and income without needing explicit permission in the trust document, aligning state law with the Uniform Principal and Income Act. This change directly affects trustees managing trusts under Alabama law, giving them more flexibility to adjust distributions based on trust needs. However, trustees must still follow specific restrictions, such as avoiding actions that harm beneficiaries' tax benefits or alter fixed payments. The bill also includes minor technical updates to modernize the legal language.

Bill status signed all 5 stages cleared

Introduction

Jan 2026

Committee Review

Apr 2026

Senate Passage

Mar 2026

House Passage

Apr 2026

Signed into Law

Apr 2026

Introduced Jan 20, 2026 Signed Apr 15, 2026

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What changed between versions

Introduced → Enrolled · 3 edits · Apr 15, 2026

MINOR

This bill updates Alabama's trust laws to allow trustees to adjust income and principal without needing explicit permission in the trust document, aligning the state with modern Uniform Trust standards. It expands the list of factors trustees must consider when making these adjustments and clarifies specific situations where such adjustments are prohibited to protect tax benefits and beneficiary rights.

Scope change

The bill expands the scope of trustee authority by removing the previous requirement for express authorization in the trust instrument to adjust receipts and disbursements between principal and income.

REQUIREMENT

Added a comprehensive list of 14 factors trustees must consider when deciding whether to adjust trust assets, including asset types, beneficiary needs, and tax consequences.

ELIGIBILITY

Modified the conditions under which trustees can adjust trust assets, removing the requirement for explicit trust language while adding specific exceptions to prevent tax penalties.

DEFINITION

Added new subsections clarifying rules for co-trustees and the ability for trustees to release their adjustment powers if uncertain about tax implications.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Apr 8, 2026

Lower · Passed

Motion to Read a Third Time and Pass - Adopted Roll Call 1299

lower

Apr 1, 2026

Lower · Passed

Reported Out of Committee Second House

lower

Mar 19, 2026

Lower · Passed

Pending Committee Action in Second House (Judiciary)

lower

Mar 17, 2026

Upper · Passed

Motion to Read a Third Time and Pass - Adopted Roll Call 934

upper

Feb 25, 2026

Upper · Passed

Reported Out of Committee House of Origin

upper

Jan 20, 2026

Upper · Passed

Pending Committee Action in House of Origin (Judiciary)

upper

1 primary · 0 co-sponsors