(1) Whether or not the terms of a trust contain a spendthrift provision, the following rules apply: (a) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors. (b) With respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. (c) After the death of a settlor, the property of a trust that was revocable at the settlor's death is subject to claims and allowances as provided in section 15-15-103. (1.5) (a) For the purposes of subsection (1)(b) of this section, none of the following shall be considered an amount that can be distributed to or for the benefit of the settlor: (I) Trust property that could be, but has not yet been, distributed to or for the benefit of the settlor only as a result of the exercise of a power of appointment held in a nonfiduciary capacity by any person other than the settlor; (II) Trust property that could be, but has not yet been, distributed to or for the benefit of the settlor of a trust pursuant to the power of the trustee to make distributions or pursuant to the power of another in a fiduciary capacity to direct distributions, if and to the extent that the distributions could be made from trust property the value of which was included in the gross estate of the settlor's spouse for federal estate tax purposes under section 2041 or section 2044 of the "Internal Revenue Code of 1986", as amended, or that was treated as a transfer by the settlor's spouse under section 2514 or section 2519 of the "Internal Revenue Code of 1986", as amended; and (III) Trust property that, pursuant to the exercise of a discretionary power by a person other than the settlor, could be paid to a taxing authority or to reimburse the settlor for any income tax on trust income or principal that is payable by the settlor under the law imposing the tax. (b) Subsection (1)(b) of this section does not apply to an irrevocable special needs trust established for a disabled person as described in 42 U.S.C. sec. 1396p (d)(4) or similar federal law governing the transfer to such a trust. (2) (Reserved)
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