00 HOUSE BILL NO. 459
01 "An Act relating to the jurisdiction governing a trust, to challenges to trusts or
02 property transfers in trust, to the validity of trust interests, and to transfers of
03 certain trust interests."
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:
05 * Section 1. AS 13.36.035(a) is amended to read:
06 (a) The court has exclusive jurisdiction of proceedings initiated by interested
07 parties concerning the internal affairs of trusts, including trusts covered by (c) of this
08 section. Except as provided in (c) - (d) of this section, proceedings that [.
09 PROCEEDINGS WHICH] may be maintained under this section are those concerning
10 the administration and distribution of trusts, the declaration of rights and the
11 determination of other matters involving trustees and beneficiaries of trusts. These
12 include [, BUT ARE NOT LIMITED TO,] proceedings to
13 (1) appoint or remove a trustee;
14 (2) review trustees' fees and to review and settle interim or final
02 (3) ascertain beneficiaries, determine any question arising in the
03 administration or distribution of any trust including questions of construction of trust
04 instruments, instruct trustees, and determine the existence or nonexistence of any
05 immunity, power, privilege, duty or right; and
06 (4) release registration of a trust.
07 * Sec. 2. AS 13.36.035 is amended by adding new subsections to read:
08 (c) A provision that the laws of this state govern the validity, construction, and
09 administration of the trust and that the trust is subject to the jurisdiction of this state
10 is valid, effective, and conclusive for the trust if
11 (1) some or all of the trust assets are deposited in this state or are being
12 managed by a qualified person; or
13 (2) the trustee is a qualified person.
14 (d) The validity, construction, and administration of a trust with a state
15 jurisdiction provision are determined by the laws of this state, including the
16 (1) capacity of the settlor;
17 (2) powers, obligations, liabilities, and rights of the trustees and the
18 appointment and removal of the trustee; and
19 (3) existence and extent of powers, conferred or retained, including a
20 trustee's discretionary powers, the powers retained by a beneficiary of the trust, and
21 the validity of the exercise of a power.
22 * Sec. 3. AS 13.36.045(a) is amended to read:
23 (a) The court will not, over the objection of a party, entertain proceedings
24 under AS 13.36.035 involving a trust registered or having its principal place of
25 administration in another state, unless
26 (1) all appropriate parties could not be bound by litigation in the courts
27 of the state where the trust is registered or has its principal place of administration;
29 (2) the interests of justice otherwise would seriously be impaired; or
30 (3) the trust contains a state jurisdiction provision; and
31 (A) some or all of the trust assets are deposited in this state
01 or are being managed by a qualified person; or
02 (B) the trustee is a qualified person.
03 * Sec. 4. AS 13.36 is amended by adding new sections to read:
04 Sec. 13.36.310. CHALLENGES TO TRUST. Except as provided in
05 AS 34.40.110, a trust that is covered by AS 13.36.035(c) or that is otherwise governed
06 by the laws of this state, or a property transfer in trust that is covered by
07 AS 13.36.035(c) or that is otherwise governed by the laws of this state, is not void,
08 voidable, liable to be set aside, defective in any fashion, or questionable as to the
09 settlor's capacity, on the grounds that the trust or transfer avoids or defeats a right,
10 claim, or interest, or contravenes a law or a judicial or administrative order or action
11 that recognizes, protects, enforces, or gives effect to the right, claim, or interest. In
12 this subsection, "right, claim, or interest" means a right, claim, or interest conferred by
13 law on a person by reason of a personal or business relationship with the settlor or by
14 way of a marital or similar right.
15 Sec. 13.36.390. DEFINITIONS. In AS 13.36,
16 (1) "qualified person" means
17 (A) an individual who, except for brief intervals, military
18 service, attendance at an educational or training institution, or for absences for
19 good cause shown, resides in this state, whose true and permanent home is in
20 this state, who does not have a present intention of moving from this state, and
21 who has the intention of returning to this state when away; or
22 (B) a trust company that is organized under AS 06.25 and that
23 has its principal place of business in this state;
24 (2) "settlor" means a person who transfers property in trust; "settlor"
25 includes a person who furnishes the property transferred to a trust even if the trust is
26 created by another person;
27 (3) "state jurisdiction provision" means a provision that the laws of this
28 state govern the validity, construction, and administration of a trust and that the trust
29 is subject to the jurisdiction of this state.
30 * Sec. 5. AS 34.27.050(a) is amended to read:
31 (a) A nonvested property interest is invalid unless
01 (1) when the interest is created, it is certain to vest or terminate no later
02 than 21 years after the death of an individual then alive; [OR]
03 (2) the interest either vests or terminates within 90 years after its
04 creation; or
05 (3) the interest is in a trust and all or part of the income or
06 principal of the trust may be distributed, in the discretion of the trustee, to a
07 person who is living when the trust is created.
08 * Sec. 6. AS 34.27.060 is amended to read:
09 Sec. 34.27.060. REFORMATION. Upon the petition of an interested person,
10 a court shall reform a disposition in the manner that most closely approximates the
11 transferor's manifested plan of distribution and is within the 90 years allowed by
12 AS 34.27.050(a)(2), (b)(2), or (c)(2) if
13 (1) a nonvested property interest or a power of appointment becomes
14 invalid under AS 34.27.050;
15 (2) a class gift is not but might become invalid under AS 34.27.050 and
16 the time has arrived when the share of any class member is to take effect in possession
17 or enjoyment; or
18 (3) a nonvested property interest that is not validated by
19 AS 34.27.050(a)(1) or (3) can vest but not within 90 years after its creation.
20 * Sec. 7. AS 34.40.010 is amended to read:
21 Sec. 34.40.010. INVALIDITY GENERALLY. Except as provided in
22 AS 34.40.110, a [A] conveyance or assignment, in writing or otherwise, of an estate
23 or interest in land, or in goods, or things in action, or of rents or profits issuing from
24 them or a charge upon land, goods, or things in action, or upon the rents or profits
25 from them, made with the intent to hinder, delay, or defraud creditors or other persons
26 of their lawful suits, damages, forfeitures, debts, or demands, or a bond or other
27 evidence of debt given, action commenced, decree or judgment suffered, with the like
28 intent, as against the persons so hindered, delayed, or defrauded is void.
29 * Sec. 8. AS 34.40.110 is repealed and reenacted to read:
30 Sec. 34.40.110. RESTRICTING TRANSFERS OF TRUST INTERESTS. (a)
31 A person who in writing transfers property in trust may provide that the interest of a
01 beneficiary of the trust may not be either voluntarily or involuntarily transferred before
02 payment or delivery of the interest to the beneficiary by the trustee. In this subsection,
03 (1) "property" includes real property, personal property, and interests
04 in real or personal property;
05 (2) "transfer" means any form of transfer, including deed, conveyance,
06 or assignment.
07 (b) If a trust contains a transfer restriction allowed under (a) of this section,
08 the transfer restriction prevents a creditor existing when the trust is created, a person
09 who subsequently becomes a creditor, or another person from satisfying a claim out
10 of the beneficiary's interest in the trust, unless the
11 (1) transfer was intended in whole or in part to hinder, delay, or
12 defraud creditors or other persons under AS 34.40.010;
13 (2) trust provides that the settlor may revoke or terminate all or part
14 of the trust without the consent of a person who has a substantial beneficial interest
15 in the trust and the interest would be adversely affected by the exercise of the power
16 held by the settlor to revoke or terminate all or part of the trust; in this paragraph,
17 "revoke or terminate" does not include a power to veto a distribution from the trust or
18 a similar power; or
19 (3) trust requires that all or a part of the trust's income or principal, or
20 both, must be distributed to the settlor.
21 (c) The satisfaction of a claim under (b)(1) - (3) of this section is limited to
22 that part of the trust to which (b)(1) - (3) of this section applies.
23 (d) In this section, "settlor" means a person who transfers real property,
24 personal property, or an interest in real or personal property, in trust.
25 * Sec. 9. This Act does not apply to a trust unless the trust is created on or after the
26 effective date of this Act.