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HB 316: "An Act relating to transfers of trust interests and to creditors' claims against property subject to a power of appointment; and providing for an effective date."

00                             HOUSE BILL NO. 316                                                                          
01 "An Act relating to transfers of trust interests and to creditors' claims against property                              
02 subject to a power of appointment; and providing for an effective date."                                                
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  The uncodified law of the State of Alaska is amended by adding a new section                         
05 to read:                                                                                                                
06       PURPOSE.  (a)  The purpose of the amendment made by sec. 2 of this Act is to codify                               
07 a provision that is commonly found in trust instruments.  The provision authorizes a trustee to                         
08 make an asset of a trust available for the use of a beneficiary without having to distribute the                        
09 asset to the beneficiary and without having the action be considered a distribution to the                              
10 beneficiary.                                                                                                            
11       (b)  The principal purpose of sec. 3 of this Act is to codify a provision of the common                           
12 law that provides that assets subject to a power of appointment are not subject to the claims of                        
13 the creditors of the person who holds the power, except to the extent an inter vivos or                                 
14 testamentary general or nongeneral power of appointment is actually exercised to appoint the                            
01 assets to the holder's estate, the holder's creditors, or the creditors of the holder's estate.                         
02    * Sec. 2.  AS 34.40.110(a) is amended to read:                                                                     
03            (a)  A person who in writing transfers property in trust may provide that the                                
04       interest of a beneficiary of the trust may not be either voluntarily or involuntarily                             
05       transferred before payment or delivery of the interest to the beneficiary by the trustee.                         
06       Payment or delivery of the interest to the beneficiary does not include a                                     
07       beneficiary's use or occupancy of property owned by the trust if the use or                                   
08       occupancy is made by the trustee under the exercise of the trustee's discretionary                            
09       authority under the trust instrument.  In this subsection,                                                    
10                 (1)  "property" includes real property, personal property, and interests                                
11       in real or personal property;                                                                                     
12                 (2)  "transfer" means any form of transfer, including deed, conveyance,                                 
13       or assignment.                                                                                                    
14    * Sec. 3.  AS 34.40 is amended by adding a new section to read:                                                    
15            Sec. 34.40.115.  Creditor claims against property subject to a power of                                    
16       appointment.   Except to the extent that the donee of an inter vivos or testamentary                            
17       nongeneral or general power of appointment actually appoints property subject to the                              
18       power to the donee's estate, to the donee's creditors, or to the creditors of the donee's                         
19       estate, the property that the donee is authorized to appoint is not subject to the claims                         
20       of the creditors of the donee.                                                                                  
21    * Sec. 4.  The uncodified law of the State of Alaska is amended by adding a new section to                         
22 read:                                                                                                                   
23       APPLICABILITY.  (a)  AS 34.40.110(a), as amended by sec. 2 of this Act, applies to                                
24 a trust regardless of whether the trust was created before, on, or after the effective date of this                     
25 Act.                                                                                                                    
26       (b)  AS 34.40.115, added by sec. 3 of this Act, applies to a power of appointment                                 
27 regardless of whether the power of appointment was created before, on, or after the effective                           
28 date of this Act.                                                                                                       
29    * Sec. 5.  This Act takes effect immediately under AS 01.10.070(c).