Sponsor Statement for SB 354
This bill is a companion bill to House Bill 196. It puts the finishing touches on the Alaska Trust Act passed in 1997 by taking common law and codifying it into statute. In writing the trust document, people who write trusts for Alaska, will be able to include references to the statutes as opposed to having to individually list all the provisions in the trust document.
SB 354 makes a number of important improvements to Alaska's estate and trust laws. Section 1-8, 18, and 19 of the bill change Alaska law to permit a person who is domiciled outside of Alaska to select Alaska as the jurisdiction for the probate of their estate. This provision should bring significant business to our state.
Sections 9 and 10 of the bill allow a person to limit the liability of a trustee in their trust when more than one trustee is serving. The person could provide that only the trustee who excercises a power will be held liable for its actions and that the other trustee who did not participate in the exercise of the power would not be held liable. This provision will encourage trustees in Alaska to work with other trustees of the same trust.
Portions of the Uniform Trusts Act (draft 1997) which clarifies many issues involving the administration of trusts in Alaska is included in Section 11 of the bill.
Section 12 protects an Alaska trustee who in good faith defends an Alaska trust from the claims of a creditor who seeks to set the trust aside. If the trustee acts in good faith, then the trustee gets a first lien on all trust assets for payment of its fees, costs and attorney's fees. Deleware has adopted a similar provision to protect its trustees.
Section 13 allows a trustee who has the power to invade the corpus of a trust to appoint the assets of the trust to another trust for the beneficiaries to postpone estate and similar taxes. This provision would allow a trustee to move a trust to Alaska and to appoint the assets to an Alaska trust.
Section 14 clarifies that a trust created in another state or country can be moved to Alaska even though the trust was settled before the Alaska Trust Act was passed last year.
Alaska does not have a statutory provision that sets out the powers of a trustee. Sections of the Uniform Trustee's Powers Act (draft 1994-1997) is enacted in Section 16 of the bill. These statutory powers would supplement the powers set forth in a trust agreement.
A number of miscellaneous provisions are included elsewhere in the bill. Section 15 allows a person to include a penalty clause in their trust. Section 19 clarifies the accounting of bond premiums and discounts. Section 20 amends AS 34.40.110(d) to be consistent with the Uniform Fraudulent Transfers Act (HB 321 currently in Senate Rules Committee). Section 21 precludes an action by creditors of the grantor of the trust against those who assist in the creation of the trust.
This bill will improve our estate and trust laws and will make Alaska's laws more favorable to our residents. In addition, the bill will make our laws more attractive to people outside of Alaska who are considering Alaska for the administration of their estates and trusts.