House refines 'Utah trust' law, narrows asset‑protection scope and approves amendments 69–2

SALT LAKE CITY — Lawmakers spent the bulk of the Nov. 19 special session debating amendments to Utah’s trust law aimed at clarifying the state's "Utah trust" product, limiting protections for certain claims, and specifying taxation treatment for Utah‑source income.

Representative David Clark, sponsor of the trust-law package, said HB 2,003 (sometimes referred to during floor remarks in relation to HB 299 from the regular session) was intended to "facilitate the development of trust services and give Utah trust companies a competitive advantage," while also adding refinements to protect state values. Clark outlined a list of exceptions to asset-protection that would not be shielded by trust treatment, including child support, recovery of public assistance, tax claims by governmental entities and liabilities resulting from fraud or intentional wrongdoing.

The House considered multiple floor amendments. Representative Ferry presented an amendment enumerating exceptions and reach-back provisions; Representative Christiansen and others asked whether the proposal’s three‑year reach‑back provision conflicted with Utah’s fraudulent‑conveyance statute. Members worked through drafting and a compromise to reference the state fraudulent-transfer statute (Title 25, Chapter 6) in the amendment language and to adjust the reach‑back language so it would not create an unintended conflict with existing law.

Representative Clark and other supporters emphasized that the trust tax treatment applies at the state level: income inside the trust is not taxable to Utah until distribution, although "Utah source income," such as gains from Utah real estate, remains taxable at the time of sale. Clark told colleagues the law as amended would preserve existing protections for priority obligations (for example, family support) while allowing Utah to maintain a trust product attractive to national financial firms that had signaled interest in locating trust operations in the state.

After adopting amendments addressing exceptions and aligning reach-back language with the fraudulent-transfer statute, the House voted to pass HB 2,003 by a recorded vote: 69 yes, 2 no. The bill was then referred to the Senate for consideration. Supporters cited urgency because businesses were making location decisions and because the statute already existed; opponents cautioned that last‑minute floor tweaks may have unclear, technical consequences and urged careful review.

Next step: HB 2,003 was transmitted to the Senate following the House's recorded vote.