GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 101
Short Title: Protect Certain Tax-Advantaged Accounts. (Public)
Sponsors: Senators Jones, P. Newton, and Lee (Primary Sponsors).
Referred to: Rules and Operations of the Senate
February 17, 2025
*S101 -v-1*
A BILL TO BE ENTITLED 1
AN ACT TO INCREASE PROTECTIONS FOR FUNDS HELD IN EDUCATION SAVINGS 2
AND INVESTMENT ACCOU NTS AND ABLE ACCOUNT S FROM CLAIMS OF 3
CREDITORS AND OTHER JUDGMENTS. 4
The General Assembly of North Carolina enacts: 5
SECTION 1.(a) Article 16 of Chapter 1C of the General Statutes is amended by 6
adding the following new section to read: 7
"§ 1C-1601.5. Certain tax-advantaged accounts exempt. 8
(a) For purposes of this section, the following definitions shall apply: 9
(1) Qualifying account. – Any of the following: 10
a. An education savings and investment plan account qualified under 11
section 529 of the Internal Revenue Code. 12
b. An ABLE account qualified under section 529A of the Internal 13
Revenue Code. 14
(2) Qualifying purpose. – Any of the following: 15
a. For education savings and investment plan accounts, any purpose 16
permitted under section 529 of the Internal Revenue Code. 17
b. For ABLE accounts, any purpose permitted under section 529A of the 18
Internal Revenue Code. 19
(b) Notwithstanding any other provision of law, including G.S. 1C-1601(e), funds 20
located in a qualifying account or withdrawn from the account and used for a qualifying purpose 21
shall not be subject to liens, attachment, garnishment, levy, seizure, any involuntary sale or 22
assignment by operation or execution of law, or the enforcement of any other judgment or claim 23
to pay any debt or liability of any account owner, beneficiary, or contributor to an account. 24
(c) Nothing in this section shall be construed to do any of the following: 25
(1) Prohibit the distribution of funds from an ABLE account following the death 26
of the account owner under G.S. 147-86.73(e) or section 529A of the Internal 27
Revenue Code. 28
(2) Limit the enforcement of judgments or claims on funds that meet any of the 29
following criteria: 30
a. Were not used for a qualifying purpose. 31
b. Were deposited into a qualifying account as a result of fraud, 32
intentional wrongdoing, or other violation of law." 33
SECTION 1.(b) G.S. 1C-1601(a)(10) is repealed. 34
SECTION 2. This act becomes effective September 1, 2025, and applies to actions 35
filed on or after that date. 36