456.5-505.  Creditor's claim against settlor. — 1.  Whether or not the terms of a trust contain a spendthrift provision, during the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors.

  2.  With respect to an irrevocable trust without a spendthrift provision, 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.

  3.  With respect to an irrevocable trust with a spendthrift provision, a spendthrift provision will prevent the settlor's creditors from satisfying claims from the trust assets except:

  (1)  Where the conveyance of assets to the trust was fraudulent as to creditors pursuant to the provisions of chapter 428; or

  (2)  To the extent of the settlor's beneficial interest in the trust assets, if at the time the trust became irrevocable:

  (a)  The settlor was the sole beneficiary of either the income or principal of the trust or retained the power to amend the trust; or

  (b)  The settlor was one of a class of beneficiaries and retained a right to receive a specific portion of the income or principal of the trust that was determinable solely from the provisions of the trust instrument.

  4.  In the event that a trust meets the requirements set forth in subsection 3 of this section, a settlor's creditors may not reach the settlor's beneficial interest in that trust, regardless of:

  (1)  Any testamentary power of appointment  that is exercisable by the settlor, by a will or other written instrument, in favor of any appointees other than the settlor, the settlor's estate, the settlor's creditors, or the creditors of the settlor's estate; or

  (2)  The settlor's power to veto distributions from the trust.

  5.  Any trustee who has a duty or power to pay the debts of a deceased settlor may publish a notice in a newspaper published in the county designated in subdivision (3) of this subsection once a week for four consecutive weeks in substantially the following form:

  (1)  If such publication is duly made by the trustee, any debts not presented to the trustee within six months from the date of the first publication of the preceding notice shall be forever barred as against the trustee and the trust property.

  (2)  A trustee shall not be liable to account to the decedent's personal representative under the provisions of section 461.300 by reason of any debt barred under the provisions of this subsection.

  (3)  Such publication shall be in a newspaper published in:

  (a)  The county in which the domicile of the settlor at the time of his or her death is situated;

  (b)  If the settlor had no domicile in this state at the time of his or her death, any county wherein trust assets are located; except that, when the major part of the trust assets in this state consist of real estate, the notice shall be published in the county in which the real estate or the major part thereof is located; or

  (c)  If the settlor had no domicile in this state at the time of his or her death and no trust assets are located therein, the county wherein the principal place of administration of the trust is located.

  (4)  For purposes of this subsection, the term "domicile" means the place in which the settlor voluntarily fixed his or her abode, not for a mere special or temporary purpose, but with a present intention of remaining there permanently or for an indefinite term.

  6.  For purposes of this section:

  (1)  During the period the power may be exercised, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power; and

  (2)  Upon the lapse, release, or waiver of the power, the holder is treated as the settlor of the trust only to the extent the value of the property affected by the lapse, release, or waiver exceeds the greater of the amount specified in Sections 2041(b)(2), 2514(e) or 2503(b) of the Internal Revenue Code.

  7.  For all purposes of sections^* 456.5-501 to 456.5-508, the settlor of any of the following trusts, known as the "first trust" in this subsection, shall not be treated as the settlor of any other trust, known as the "second trust" in this subsection, that is created pursuant to the exercise of a power of appointment over the first trust if the settlor is a beneficiary of the second trust:

  (1)  An irrevocable inter vivos trust for the benefit of the settlor's spouse that qualifies for the marital deduction from the federal gift tax under Section 2523(e) of the Internal Revenue Code;

  (2)  An irrevocable inter vivos trust for the benefit of the settlor's spouse that qualifies for the marital deduction from the federal gift tax under Section 2523(f) of the Internal Revenue Code;

  (3)  An irrevocable inter vivos trust for the benefit of the settlor's spouse, or the settlor's spouse and other beneficiaries, where the settlor's spouse is the beneficiary who exercises the power of appointment to create the second trust; and

  (4)  An irrevocable inter vivos trust where any beneficiary exercises a general power of appointment to create the second trust.

  8.  This section shall not apply to a spendthrift trust described, defined, or established in section 456.014.