All Roll Calls
Yes: 149 • No: 0
South CarolinaH 3432126th General Assembly (2025-2026)HouseWALLET
AN ACT TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 27-6-20, RELATING TO NONVESTED PROPERTY INTEREST OR POWER OF APPOINTMENT, SO AS TO INCREASE THE TIME AN INTEREST CAN VEST FROM NINETY YEARS TO THREE HUNDRED SIXTY YEARS; BY AMENDING SECTION 27-6-40, RELATING TO REFORMATION OF PROPERTY DISPOSITIONS, SO AS TO INCREASE THE TIME LIMIT FROM NINETY YEARS TO THREE HUNDRED SIXTY YEARS; BY AMENDING SECTION 62-7-504, RELATING TO DISCRETIONARY TRUSTS, SO AS TO PROVIDE CERTAIN SITUATIONS IN WHICH A BENEFICIARY OF A TRUST MAY NOT BE CONSIDERED A SETTLOR; BY AMENDING SECTION 62-7-505, RELATING TO CREDITORS' CLAIMS AGAINST A SETTLOR, SO AS TO PROVIDE THAT CERTAIN AMOUNTS PAID TO TAXING AUTHORITIES MAY NOT BE CONSIDERED AN AMOUNT THAT MAY BE DISTRIBUTED FOR THE SETTLOR'S BENEFIT; AND BY ADDING SECTION 62-7-508 SO AS TO PROVIDE FOR CERTAIN GRANTOR TRUST REIMBURSEMENTS.
Sponsored By: Wm. Weston J. Newton (Republican)
Signed by Governor
Summary
Grantor Trust Reimbursement
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
Longer trust duration and court fixes
Beginning May 8, 2025, South Carolina lets certain trust interests last up to 360 years. An interest is valid if it must vest within 21 years after a living person’s death or within 360 years of creation. If a gift or power would break these rules, a court can reform it to match the maker’s plan and fit the 360‑year limit.
Trusts can reimburse grantor taxes
Beginning May 8, 2025, if you are taxed as the trust’s owner under federal rules, the trustee can pay or reimburse your personal income taxes tied to the trust. This applies to trusts governed by South Carolina law or run from South Carolina, whether created before or after January 1, 2025. Exceptions apply if the trust forbids it, the trustee opted out with 90 days’ written notice, or doing so would reduce listed federal tax benefits. The trustee cannot use a life insurance policy in the trust to reimburse an insured owner, and conflicted trustees cannot use this power. If a trust uses an advisor or protector to direct the trustee, that person can hold this reimbursement power, with the same limits. Getting a reimbursement does not make you a beneficiary, and normal trust notice rules apply.
Creditor reach and settlor rules
Beginning May 8, 2025, a creditor of a settlor of an irrevocable trust can reach up to the maximum the trust can pay to or for that settlor. If more than one person funded the trust, a creditor can only reach the share tied to the debtor‑settlor’s contributions. Trustee authority to pay taxes or reimburse the settlor for taxes does not count as a distribution for creditor claims. A beneficiary who holds or uses a testamentary power is not treated as the settlor. A beneficiary‑trustee limited by a HEMS standard (health, education, maintenance, support) is not treated as the settlor. Assets from certain marital‑deduction trusts count as coming from the spouse, and amounts tied solely to a spouse’s or third party’s creation are attributed to that person. These rules apply to irrevocable trusts set up on, before, or after January 1, 2025.
Sponsors & Cosponsors
Sponsor
Wm. Weston J. Newton
Republican • House
Cosponsors
Cody T. Mitchell
Republican • House
Travis A. Moore
Republican • House
Richard L. "Richie" Yow
Republican • House
Roll Call Votes
Senate vote • 4/29/2025
(Grantor Trust Reimbursement)2nd Reading
Yes: 42 • No: 0
House vote • 2/12/2025
(Grantor Trust Reimbursement)Passage of Bill
Yes: 107 • No: 0 • Other: 1
Actions Timeline
Act No. 25
5/16/2025legislatureEffective date 05/08/25
5/16/2025legislatureSigned By Governor
5/8/2025GovernorRatified R 43
5/6/2025legislatureRead third time and enrolled
4/30/2025SenateRoll call Ayes-42 Nays-0
4/29/2025SenateRead second time
4/29/2025SenateCommittee report: Favorable Judiciary
4/16/2025SenateReferred to Committee on Judiciary
2/13/2025SenateIntroduced and read first time
2/13/2025SenateRead third time and sent to Senate
2/13/2025HouseRoll call Yeas-107 Nays-0
2/12/2025HouseRead second time
2/12/2025HouseAmended
2/12/2025HouseMember(s) request name added as sponsor: Yow, T.Moore
2/12/2025HouseCommittee report: Favorable with amendment Judiciary
2/6/2025HouseMember(s) request name added as sponsor: C.Mitchell
2/6/2025HouseReferred to Committee on Judiciary
1/14/2025HouseIntroduced and read first time
1/14/2025HouseReferred to Committee on Judiciary
12/5/2024HousePrefiled
12/5/2024House
Bill Text
Introduced
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