Alaska State Legislature

News From The House Majority

Ken Freeman, Press Secretary
State Capitol
Juneau, AK 99801
Phone: (907) 465-3804
Actuality line: 1-800-478-6540
web site: http://www.akrepublicans.org

House Passes Measure To Strengthen Family Trust Bill

Promotes Development of Financial Service Industry in Alaska

For Immediate Release: February 21, 1997 Contact: Rep. Al Vezey (907) 465-3719

JUNEAU - The House of Representatives Friday passed legislation to strengthen Alaska's Family Trust Law by a vote of 27-8. HB 101, sponsored by Representative Al Vezey, is intended to make Alaska a national and international center for administering trusts.

"The changes we are making to current law will cost nothing, yet they have the potential of creating a vibrant financial services industry in Alaska. The market is telling us that there is a demand for a strong family trust law and we are seeking to meet this demand," said Vezey.

Vezey said HB 101 provides for a strong trust that is protected from future creditors and that can go on for an indefinite period of time.

"This type of trust is difficult to invade and yet we took great care to provide for protection against fraudulent transfers. You cannot create a trust for the purpose of avoiding current or future creditors if they are reasonably anticipated. We have set a four year window that creditors who come along four years after the trust is created still have the right to go in and petition for funds from the trust," said Vezey.

Vezey said that throughout the United States, there is strong demand for a means of preserving assets for future generations. The vehicle for doing this is called a trust.

He noted that there is a lack of strong trust laws across the United States.

"As a result, we are seeing literally billions of dollars being transferred off shore to foreign countries where laws provide for strong trusts that can preserve assets for future generations," said Vezey.

Vezey said Alaska is in a unique position of having a relatively simple trust law that has not been amended numerous times and augmented by confusing case law. Alaska also has a unique advantage in that there is no personal income tax or state sales tax.

"Alaska is in an enviable position of being able to meet the demands of a huge worldwide financial market. In the process, Alaska has the opportunity to establish itself as a major financial market for the U.S. and even the world," said Vezey.

"To attract this potential industry and its accompanying investments, certain changes need to be made to Alaska's trust laws. These changes have the effect of strengthening Alaska's trust laws while maintaining strict liability for fraudulent transfers," said Vezey.

The bill will be up for reconsideration before the House on Monday.

Broadcast Note: An audio actuality is available by calling 1-800-478-6540.

###