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HB 275: "An Act relating to the Uniform Probate Code, including trusts and governing instruments; relating to a trustee's duties to inform and account to beneficiaries; relating to the revocation, modification, termination, reformation, construction, and trustees of trusts; relating to transfer restrictions in trusts; relating to underproductive trust property; relating to conveyances of real property and interests in real property by or to trusts; and providing for an effective date."

00HOUSE BILL NO. 275 01 "An Act relating to the Uniform Probate Code, including trusts and governing 02 instruments; relating to a trustee's duties to inform and account to beneficiaries; 03 relating to the revocation, modification, termination, reformation, construction, and 04 trustees of trusts; relating to transfer restrictions in trusts; relating to 05 underproductive trust property; relating to conveyances of real property and 06 interests in real property by or to trusts; and providing for an effective date." 07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 08 * Section 1. AS 13.12.606(a) is amended to read: 09  (a) A specific devisee has a right to the specifically devised property in the 10 testator's estate at death and 11  (1) [ANY BALANCE OF THE PURCHASE PRICE, TOGETHER 12 WITH ANY SECURITY AGREEMENT, OWING FROM A PURCHASER TO THE 13 TESTATOR AT DEATH BY REASON OF SALE OF THE PROPERTY; 14  (2)] any amount of a condemnation award for the taking of the property

01 unpaid at death; 02  (2) [(3)] any proceeds unpaid at death on fire or casualty insurance on 03 or other recovery for injury to the property; and 04  (3) [(4)] property owned by the testator at death and acquired as a 05 result of foreclosure, or obtained in lieu of foreclosure, of the security interest for the 06 specifically devised obligation. 07 * Sec. 2. AS 13.12.701 is amended to read: 08  Sec. 13.12.701. Scope. In the absence of a finding of a contrary intention, the 09 rules of construction in AS 13.12.701 - 13.12.712 [AS 13.12.701 - 13.12.711 10 CONTROL THE CONSTRUCTION OF A GOVERNING INSTRUMENT. THE 11 RULES OF CONSTRUCTION IN AS 13.12.701 - 13.12.711] apply to a governing 12 instrument of any type, except as the application of a particular section is limited [BY 13 ITS TERMS] to a specific type of provision or governing instrument. 14 * Sec. 3. AS 13.12 is amended by adding a new section to article 7 to read: 15  Sec. 13.12.712. Nonademption of specific transfers in trust; unpaid 16 proceeds of sale, condemnation, or insurance; sale by conservator or agent. (a) 17 A person to whom specific property is transferred in trust as a beneficiary has a right 18 to the specific property transferred by the trust and 19  (1) any amount of a condemnation award for the taking of the property 20 unpaid at the time of the transfer; 21  (2) any proceeds unpaid at the time of the transfer on fire or casualty 22 insurance on or other recovery for injury to the property; and 23  (3) property owned by the settlor at the time of the transfer and 24 acquired as a result of foreclosure, or obtained in lieu of foreclosure, of the security 25 interest for the specifically transferred obligation. 26  (b) If property that is specifically transferred to a person in trust as a 27 beneficiary is sold or mortgaged by a conservator or by an agent acting within the 28 authority of a durable power of attorney for an incapacitated principal, or if a 29 condemnation award, insurance proceeds, or recovery for injury to the property are 30 paid to a conservator or to an agent acting within the authority of a durable power of 31 attorney for an incapacitated principal, the beneficiary has the right to a general

01 pecuniary property transfer that is equal to the net sale price, the amount of the unpaid 02 loan, the condemnation award, the insurance proceeds, or the recovery. 03  (c) The right of a beneficiary under (b) of this section is reduced by any right 04 the beneficiary has under (a) of this section. 05  (d) For the purposes of the references in (b) of this section to a conservator, 06 (b) of this section does not apply if, after the sale, mortgage, condemnation, casualty, 07 or recovery, it was adjudicated that the settlor's incapacity ceased and the settlor 08 survived the adjudication by one year. 09  (e) For the purposes of the references in (b) of this section to an agent acting 10 within the authority of a durable power of attorney for an incapacitated principal, 11  (1) "incapacitated principal" means a principal who is an incapacitated 12 person; 13  (2) adjudication of incapacity before death is not necessary; and 14  (3) the acts of an agent within the authority of a durable power of 15 attorney are presumed to be for an incapacitated principal. 16 * Sec. 4. AS 13.16.550 is amended to read: 17  Sec. 13.16.550. Interest on general pecuniary devise. General pecuniary 18 devises , whether made outright or in trust, bear interest at the stated [LEGAL] rate 19 beginning two years [ONE YEAR] after the decedent's death [FIRST 20 APPOINTMENT OF A PERSONAL REPRESENTATIVE] until payment, unless a 21 contrary intent is indicated by the governing instrument [WILL]. In this subsection, 22 "stated rate" means the annual rate charged member banks for advances by the 23 12th Federal Reserve District in effect on the first day of the month that is the 24 23rd month following the decedent's death, not counting the month of the 25 decedent's death. 26 * Sec. 5. AS 13.16.550 is amended by adding a new subsection to read: 27  (b) The provisions of (a) of this section do not apply to a marital pecuniary 28 devise, whether stated as a formula or otherwise and whether made outright to the 29 decedent's spouse or in trust for the benefit of the spouse, if the devise is intended to 30 qualify for the marital deduction under 26 U.S.C. (Internal Revenue Code). A marital 31 pecuniary devise to which this subsection applies shares ratably with the residue of the

01 estate in the income earned by the estate during the period of administration, unless 02 a contrary intention is expressed by the governing instrument. 03 * Sec. 6. AS 13.16.560(a) is amended to read: 04  (a) Unless a contrary intention is indicated by the will, the distributable assets 05 of a decedent's estate shall be distributed in kind to the extent possible through 06 application of the following provisions: 07  (1) a specific devisee is entitled to distribution of the thing devised, and 08 a spouse or child who has selected particular assets of an estate as provided in 09 AS 13.12.402 - 13.12.405 shall receive the items selected; 10  (2) a homestead or family allowance or devise payable in money may 11 be satisfied by value in kind if 12  (A) the person entitled to the payment has not demanded 13 payment in cash; 14  (B) the property distributed in kind is valued at fair market 15 value as of the date of its distribution; and 16  (C) no residuary devisee has requested that the asset in question 17 remain a part of the residue of the estate; 18  (3) for the purpose of valuation under (2) of this subsection, securities 19 regularly traded on recognized exchanges, if distributed in kind, are valued at the price 20 for the last sale of like securities traded on the business day before distribution [,] or , 21 if there was no sale on that day, at the median between amounts bid and offered at the 22 close of that day; assets consisting of sums owed the decedent or the estate by solvent 23 debtors as to which there is no known dispute or defense are valued at the sum due 24 with accrued interest or discounted to the date of distribution; for assets that do not 25 have readily ascertainable values, a valuation as of a date not more than 30 days 26 before the date of distribution, if otherwise reasonable, controls; for purposes of 27 facilitating distribution, the personal representative may ascertain the value of the 28 assets as of the time of the proposed distribution in any reasonable way, including the 29 employment of qualified appraisers, even if the assets may have been previously 30 appraised; 31  (4) the residuary estate shall be distributed in any equitable manner ,

01 including distribution in kind, in cash, partially in kind, partially in cash, in 02 divided interests, in undivided interests, pro rata among all the distributees, or 03 by a method other than pro rata among all distributees; distribution under this 04 paragraph may be made without regard to the income tax basis or other special 05 tax attributes of the assets; a distribution under this paragraph may be made in 06 whatever manner the personal representative finds to be the most practicable and 07 in the best interests of the distributees . 08 * Sec. 7. AS 13.16.595(a) is amended to read: 09  (a) Before distributing to a trustee, the personal representative may require that 10 the trust be registered if the state in which it is to be administered provides for 11 registration and that the trustee inform the current beneficiaries as provided in 12 AS 13.36.080. 13 * Sec. 8. AS 13.36.080 is amended to read: 14  Sec. 13.36.080. Duty to inform and account to current beneficiaries. The 15 trustee shall keep the current beneficiaries of the trust reasonably informed of the trust 16 and its administration. In addition , [:] 17  (1) within 30 days after acceptance of the trust, the trustee shall inform 18 in writing the current beneficiaries and , if possible, one or more persons who under 19 AS 13.06.120 may represent current beneficiaries [WITH FUTURE INTERESTS], of 20 the court in which the trust is registered and of the trustee's name and address; 21  (2) upon reasonable request, the trustee shall provide the current 22 beneficiary with a copy of the terms of the trust that [WHICH] describe or affect the 23 beneficiary's interest and with relevant information about the assets of the trust and the 24 particulars relating to the administration; 25  (3) upon reasonable request, a current beneficiary is entitled to a 26 statement of the accounts of the trust annually and on termination of the trust or 27 change of the trustee. 28 * Sec. 9. AS 13.36.080 is amended by adding new subsections to read: 29  (b) The trust agreement may modify the trustee's duties under this section and 30 may prohibit the trustee from providing any notification or information to a current 31 beneficiary regarding the trust unless that beneficiary receives a distribution from the

01 trust, and then the notification or information may be limited to the accounting period 02 during which the distribution was made. 03  (c) In this section, "current beneficiary" means a beneficiary who is entitled 04 to a mandatory distribution of income or principal from the trust on an annual or more 05 frequent basis. 06 * Sec. 10. AS 13.36 is amended by adding a new section to read: 07  Sec. 13.36.153. Restrictions on exercising certain trustee powers. (a) 08 Notwithstanding AS 13.36.107, a person who is both a trustee and a beneficiary of a 09 trust may not exercise a power to make or cause to be made a discretionary 10 distribution of either principal or income 11  (1) to or for the direct or indirect benefit of the trustee, except to the 12 extent that the trustee exercises the power to provide for the trustee's health, education, 13 maintenance, or support; or 14  (2) to satisfy legal obligations of the trustee. 15  (b) A trustee who is not an independent trustee may not make a discretionary 16 distribution of either principal or income to or for the direct or indirect benefit of a 17 person who has the right to remove or replace the trustee, unless the distribution is for 18 the person's health, education, maintenance, or support. 19  (c) The prohibitions of (a) of this section apply to a trustee even if the 20 governing instrument states that the trustee may make distributions in the trustee's 21 uncontrolled, absolute, or total discretion, or that distributions are not subject to review 22 by a court, or the governing instrument otherwise indicates that distributions by the 23 trustee are not subject to reasonableness when the trustee exercises discretion. 24  (d) If a trustee is prohibited by (a) and (b) of this section from exercising a 25 power and if one or more other trustees are not prohibited by (a) or (b) of this section 26 from exercising the power, the other trustees may exercise the power. If there is not 27 a trustee who can exercise a power prohibited under (a) or (b) of this section, a party 28 in interest may apply to the superior court to appoint an independent trustee to exercise 29 the power, and the independent trustee appointed by the court may exercise the power. 30  (e) The provisions of (a) and (b) of this section do not prohibit a trustee from 31 making payments, including reimbursement of and compensation of an independent

01 trustee appointed under (d) of this section, for the protection of the trust or the assets 02 of the trust, or for the expenses, losses, or liabilities incurred in the collection, care, 03 administration, or protection of the trust or the assets of the trust. 04  (f) Except as provided in (g) of this section, this section applies to 05  (1) a trust that is created on or after the effective date of this Act; and 06  (2) the decisions and actions of a trust that is in existence when this 07 Act takes effect if the decisions are made, or the actions occur, on or after the effective 08 date of this Act. 09  (g) The application provisions of (f) of this section do not apply if 10  (1) the terms of the trust, including the terms as amended, expressly 11 provide that this section does not apply and either specifically refer to this section or 12 otherwise clearly demonstrate the intent that this section does not apply; or 13  (2) for an irrevocable trust, all parties in interest elect under (h) of this 14 section not to be subject to the application of this section; an election under this 15 paragraph must be made on or before January 1, 2001, or three years after the date on 16 which the trust becomes irrevocable, whichever date is later. 17  (h) The election allowed under (g) of this section shall be made by a written 18 declaration that is delivered to the trustee. 19  (i) A person who has the right to remove or replace a trustee does not possess, 20 and may not be considered to possess, a power that the trustee may not exercise under 21 (a) of this section. 22  (j) The prohibitions of (a) of this section do not apply to a trustee with respect 23 to trust property, including income from the trust property, if the trust property would, 24 upon the death of the trustee, be included, for any reason other than the exercise of a 25 power prohibited by (a) of this section, in the gross estate of the trustee for federal 26 estate tax purposes. 27  (k) The prohibitions of (a) of this section do not apply to a trustee who may 28 be appointed or removed by a person for whose benefit a power may not be exercised 29 under (a) of this section if the property would, upon the death of the person, be 30 included in the gross estate of the person for federal estate tax purposes for any reason 31 other than the exercise of a power to appoint or remove the trustee.

01  (l) This section does not create a new cause of action, or impair a cause of 02 action existing before the effective date of this Act, if the new or existing cause of 03 action relates to the exercise of a power prohibited by (a) of this section that was 04 exercised before the effective date of this Act. 05  (m) In this section, 06  (1) "entity" means a person that is not an individual; 07  (2) "independent trustee" means a trustee that is not 08  (A) the settlor's spouse, if the settlor's spouse is living with the 09 settlor; 10  (B) the settlor's father, mother, issue, brother, or sister; 11  (C) an employee of the settlor; 12  (D) an entity in which the equity holdings of the settlor and the 13 trust are significant as to voting control, or the trustee is not an employee of 14 such an entity; or 15  (E) a subordinate employee of an entity if the settlor is an 16 executive officer of the entity. 17 * Sec. 11. AS 13.36 is amended by adding a new section to read: 18  Sec. 13.36.169. Elections to qualify property for marital deduction and 19 generation-skipping transfer tax allocations. (a) Unless a governing instrument 20 specifically refers to this section and provides otherwise, a trustee who makes an 21 election under 26 U.S.C. 2056(b)(7), 2056A, or 2523(f) (Internal Revenue Code), or 22 who makes an allocation under 26 U.S.C. 2632 (Internal Revenue Code), may benefit 23 personally from the election or allocation and is not required to reimburse another 24 person interested in the election or allocation, to make an equitable adjustment, or to 25 treat interested persons impartially with respect to the election or allocation. 26  (b) Unless a governing instrument specifically refers to this section and 27 provides otherwise, if an election is made under 26 U.S.C. 2056(b)(7), 2056A, or 28 2523(f) (Internal Revenue Code), if an allocation is made under 26 U.S.C. 2632 29 (Internal Revenue Code), or if division of a trust benefits the persons interested in the 30 trust, the trustee may divide the trust into two or more separate trusts of equal or 31 unequal value if the terms of the separate resulting trusts are substantially identical to

01 the terms of the trust before the division. The allocation of assets must be based on 02 the fair market value of the assets at the time of the division. 03  (c) Except as provided in (d) of this section, this section applies to 04  (1) a trust that is created on or after the effective date of this Act; and 05  (2) the decisions and actions of a trust that is in existence when this 06 Act takes effect if the decisions are made or actions occur on or after the effective date 07 of this Act. 08  (d) The application provisions of (c) of this section do not apply if 09  (1) the terms of the trust, including the terms as amended, expressly 10 provide that this section does not apply and either specifically refer to this section or 11 otherwise clearly demonstrate the intent that this section does not apply; or 12  (2) for an irrevocable trust, all parties in interest elect under this 13 paragraph not to be subject to the application of this section; an election under this 14 paragraph must be made on or before January 1, 2001, or three years after the date on 15 which the trust becomes irrevocable, whichever date is later; the election allowed 16 under this paragraph must be made by a written declaration delivered to the trustee. 17 * Sec. 12. AS 13.36 is amended by adding new sections to read: 18  Sec. 13.36.335. Presumption of revocability. (a) Unless a trust is expressly 19 made irrevocable, a trust executed on or after the effective date of this Act is revocable 20 by the settlor. 21  (b) Notwithstanding AS 13.36.035 - 13.36.050, this section applies only if the 22  (1) settlor is domiciled in this state when the trust is created; 23  (2) trust instrument is executed in this state; or 24  (3) trust provides that the law of this state governs the trust. 25  Sec. 13.36.340. Modification and revocation of revocable trusts. (a) A 26 trust that is revocable by the settlor may be modified or revoked in whole or in part 27 by 28  (1) substantial compliance with a method of modification or revocation 29 provided in the trust instrument; or 30  (2) a writing, other than a will, signed by the settlor and delivered to 31 the trustee during the lifetime of the settlor, except that, if the trust instrument

01 expressly makes the method of revocation provided in the trust instrument the 02 exclusive method of revocation, the trust may not be revoked under this paragraph. 03  (b) Unless otherwise provided in the trust instrument, if a trust that is 04 revocable by the settlor is created by or funded by more than one settlor, 05  (1) the trust may be modified or revoked as provided in AS 34.77.100 06 to the extent the trust consists of community property under AS 34.77 (Alaska 07 Community Property Act); 08  (2) each settlor may modify or revoke the trust as to the portion of the 09 trust property contributed by that settlor that is not community property under 10 AS 34.77. 11  (c) A revocable trust may not be modified or revoked by an attorney-in-fact 12 under a power of attorney unless the modification or revocation is expressly permitted 13 by the trust instrument. 14  Sec. 13.36.345. Modification or termination of irrevocable trusts because 15 of unanticipated circumstances. (a) On petition by a trustee, settlor, or beneficiary, 16 a court may modify the administrative or dispositive terms of an irrevocable trust or 17 terminate an irrevocable trust if, because of circumstances not anticipated by the 18 settlor, modification or termination would substantially further the settlor's purposes 19 in creating the trust. 20  (b) Upon termination of a trust under this section, the trust property shall be 21 distributed in accordance with the settlor's probable intention. 22  Sec. 13.36.350. Reformation to correct mistakes in irrevocable trusts. (a) 23 On petition by a trustee, settlor, or beneficiary, a court may reform the terms of an 24 irrevocable trust, even if the trust instrument is not ambiguous, to conform to the 25 settlor's intention if the failure to conform was due to a mistake of fact or law, 26 whether in expression in the trust or inducement to create the trust, and if the settlor's 27 intent can be established by clear and convincing evidence. 28  (b) A court may consider evidence, including direct evidence contradicting the 29 plain meaning of the text, when determining the settlor's intent or for any other 30 purpose under this section. 31  Sec. 13.36.355. Construction of trust to achieve settlor's tax objectives. (a)

01 The terms of a trust shall be construed to achieve the settlor's tax objectives. 02  (b) On petition by a trustee, settlor, or beneficiary, a court may modify the 03 terms of an irrevocable trust to achieve the settlor's tax objectives in a manner that 04 does not violate the settlor's probable intent. The court may order that the 05 modification operate retroactively. 06  Sec. 13.36.360. Modification or termination of irrevocable trust by consent. 07 (a) Except as otherwise provided by this section, on petition by a trustee, settlor, or 08 beneficiary, a court may modify or terminate an irrevocable trust if all of the 09 beneficiaries consent and if continuation of the trust on the existing terms of the trust 10 is not necessary to further a material purpose of the trust. However, the court, in its 11 discretion, may determine that the reason for modifying or terminating the trust under 12 the circumstances outweighs the interest in accomplishing the material purposes of the 13 trust. The inclusion of a restriction on the voluntary or involuntary transfer of trust 14 interests under AS 34.40.110 may constitute a material purpose of the trust under this 15 subsection, but is not presumed to constitute a material purpose of the trust under this 16 subsection. 17  (b) Unless otherwise provided in the trust instrument, an irrevocable trust may 18 not be modified or terminated under this section while a settlor is also a discretionary 19 beneficiary of the trust. 20  (c) If a beneficiary other than a qualified beneficiary does not consent to a 21 modification or termination of an irrevocable trust that is proposed by the trustee, 22 settlor, or other beneficiaries, a court may approve the proposed modification or 23 termination if the court determines 24  (1) if all the beneficiaries had consented, the trust could have been 25 modified or terminated under this section; and 26  (2) the rights of a beneficiary who does not consent will be adequately 27 protected or not significantly impaired. 28  (d) In (c) of this section, "qualified beneficiary" means a beneficiary who 29  (1) on the date the beneficiary's qualification is determined, is entitled 30 or eligible to receive a distribution of trust income or principal; or 31  (2) would be entitled to receive a distribution of trust income or

01 principal if the event causing the trust's termination occurs. 02  Sec. 13.36.365. Uneconomical irrevocable trust. (a) Notwithstanding the 03 other provisions of AS 13.36.335 - 13.36.370, if the value of the property of an 04 irrevocable trust is less than $50,000, the trustee may terminate the trust unless the 05 trust instrument provides otherwise. 06  (b) Notwithstanding the other provisions of AS 13.36.335 - 13.36.370 and the 07 terms of the trust, on petition to the superior court by a trustee, settlor, or beneficiary, 08 the court may modify or terminate an irrevocable noncharitable trust, or remove the 09 trustee and appoint a different trustee, if the court determines that the value of the trust 10 property is insufficient to justify the cost of administration. 11  (c) Upon termination of a trust under this section, the trustee shall distribute 12 the trust property in accordance with the settlor's probable intent. 13  Sec. 13.36.370. Exclusive procedure. Unless otherwise provided in the trust 14 instrument, except as provided by AS 13.12.212(c), 13.12.803, 13.12.804, 13.12.907, 15 AS 13.33.205, AS 13.36.130, 13.36.169, and AS 13.60.010, AS 13.36.335 - 13.36.365 16 provide the exclusive procedures for modifying, terminating, or revoking trusts. 17  AS 13.36.380. Application of special distribution provisions. The asset 18 distribution provisions of AS 13.16.540 - 13.16.560 and AS 13.38.030(a) apply to the 19 administration of a revocable trust following the death of the settlor of the trust, unless 20 the terms of the trust indicate a different intention. 21 * Sec. 13. AS 13.36.390 is amended by adding a new paragraph to read: 22  (4) "party in interest" means, if the trust is 23  (A) revocable and if the settlor is incapacitated, the settlor's 24 legal representative under applicable law or the settlor's agent under a durable 25 power of attorney; or 26  (B) irrevocable, 27  (i) each trustee serving at the time; 28  (ii) each income beneficiary in existence at the time or, 29 if an income beneficiary is not 18 years of age or is incapacitated, the 30 income beneficiary's legal representative under applicable law or the 31 income beneficiary's agent under a durable power of attorney; and

01  (iii) each remainder beneficiary in existence at the time 02 or, if a remainder beneficiary is not 18 years of age or is incapacitated, 03 the remainder beneficiary's legal representative under applicable law or 04 the remainder beneficiary's agent under a durable power of attorney. 05 * Sec. 14. AS 13.38.110 is amended by adding a new subsection to read: 06  (e) Notwithstanding (a) - (d) of this section, if a trust, except a trust that 07 provides for the payment of the entire remaining trust estate to the estate of the spouse 08 when the income interest terminates, is created under a will or trust for the benefit of 09 the spouse of the testator or the grantor of the trust, if the trust requires that all income 10 of the trust be paid at least annually to the spouse, and if a federal estate or gift tax 11 marital deduction is claimed with respect to the trust, then, unless the will or trust 12 specifically refers to this subsection and provides otherwise, an investment in or 13 retention of unproductive property as an asset of the trust is subject to the power of 14 the spouse to require that, within a reasonable time, the asset produce income or be 15 converted to assets that produce income. 16 * Sec. 15. AS 34.25 is amended by adding a new section to read: 17  Sec. 34.25.055. Conveyances to or from trusts. (a) A person may convey 18 or devise real property to or from a trust whether or not the trustee of the trust is 19 named as a grantee or grantor in the instrument of conveyance. 20  (b) In a conveyance or devise under (a) of this section, notice of the existence 21 of the trust does not affect the status of a purchaser as a bona fide purchaser. 22  (c) Real property that is owned by a trust and that is purchased by a bona fide 23 purchaser from a person in the person's capacity as trustee of the trust is acquired free 24 of any claim of the beneficiaries of the trust. 25  (d) Notwithstanding other provisions of law, a trust instrument may not change 26 the effect of (c) of this section. 27  (e) In this section, 28  (1) "bona fide purchaser" means a person who purchases real property 29 for value from a trust and who 30  (A) has not knowingly been a party to fraud or illegality 31 affecting the interest of persons who are parties to the purchase transaction or

01 beneficiaries of the trust; 02  (B) does not have notice of an adverse claim by a beneficiary 03 of the trust; and 04  (C) has acted in good faith in the purchase transaction; 05  (2) "conveyance" means a conveyance made before, on, or after the 06 effective date of this section; 07  (3) "purchaser" means a person who acquires real property by sale, 08 lease, mortgage, pledge, or lien, or who otherwise deals with real property in a 09 voluntary transaction other than by making a gift; 10  (4) "real property" includes an interest in real property; 11  (5) "value" means acquisition of property 12  (A) in return for a binding commitment to extend credit; 13  (B) as security for or in total or partial satisfaction of a claim 14 that existed before the giving of the security; 15  (C) by accepting delivery of the real property under a contract 16 that is for the purchase of the real property and that existed before the delivery; 17 or 18  (D) in return for other consideration sufficient to support a 19 contract. 20 * Sec. 16. AS 34.40.110 is amended by adding a new subsection to read: 21  (g) If a trust contains a transfer restriction allowed under (a) of this section and 22 effective under (b) of this section, a beneficiary may not transfer an interest in the 23 trust, and a creditor or assignee of a beneficiary may not attach an interest in or a 24 distribution from the trust by the trustee before receipt of the interest or distribution 25 by the beneficiary. In this subsection, "receipt of the interest or distribution by the 26 beneficiary" does not include 27  (1) direct payment of a beneficiary's health, medical, or educational 28 expenses to the provider of the health, medical, or educational goods or services; 29  (2) the use or occupancy of property owned by the trust; or 30  (3) expenditures made for the maintenance or preservation of property 31 owned by the trust.

01 * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section 02 to read: 03 APPLICABILITY. AS 34.40.110(g), added by sec. 16 of this Act, applies to trusts 04 regardless of whether the trusts were created before, on, or after the effective date of this Act. 05 * Sec. 18. This Act takes effect immediately under AS 01.10.070(c).