HB 292: "An Act relating to property exemptions for retirement plans; relating to pleadings, orders, liability, and notices under the Uniform Probate Code; relating to the Alaska Principal and Income Act; relating to the Alaska Uniform Transfers to Minors Act; relating to the disposition of human remains; relating to insurable interests for life insurance policies; relating to transfers of individual retirement plans; relating to the community property of married persons; and amending Rule 301(a), Alaska Rules of Evidence."
00 HOUSE BILL NO. 292 01 "An Act relating to property exemptions for retirement plans; relating to pleadings, 02 orders, liability, and notices under the Uniform Probate Code; relating to the Alaska 03 Principal and Income Act; relating to the Alaska Uniform Transfers to Minors Act; 04 relating to the disposition of human remains; relating to insurable interests for life 05 insurance policies; relating to transfers of individual retirement plans; relating to the 06 community property of married persons; and amending Rule 301(a), Alaska Rules of 07 Evidence." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09 * Section 1. AS 09.38.017(a) is amended to read: 10 (a) In addition to the exemption under AS 09.38.015(b), the following are 11 exempt from a claim of an individual's or beneficiary's creditor: 12 (1) the interest of the individual or beneficiary in a retirement plan; 13 [AND]
01 (2) the money or other assets payable to the individual from a 02 retirement plan; 03 (3) the interest of a beneficiary in a retirement plan that the 04 beneficiary acquired as a result of the death of an individual; the amount of an 05 exemption under this paragraph is the same as the amount of the individual's 06 interest in the plan when 07 (A) the individual died, if the beneficiary received the 08 interest after the individual's death; or 09 (B) the interest was transferred to the beneficiary by the 10 individual during the individual's life; and 11 (4) the money or other assets payable to a beneficiary from a 12 retirement plan if the beneficiary acquired the money or other assets as a result 13 of the death of an individual who would have had an exemption in the money or 14 other assets payable from the retirement plan during the individual's life. 15 * Sec. 2. AS 09.38.017(d) is amended to read: 16 (d) A retirement plan exempt from claims under (a) of this section is 17 conclusively presumed to be a spendthrift trust under this section, except for 18 transfers or assignments under AS 34.40.113. 19 * Sec. 3. AS 09.38.017(e) is amended to read: 20 (e) In this section, 21 (1) "alternate payee" has the meaning given in 26 U.S.C. 414(p)(8); 22 (2) "beneficiary" includes a person, trust, or trustee who has, 23 before or after the death of the participant, owner, or alternate payee, a direct or 24 indirect beneficial interest in a retirement plan; in this paragraph, "beneficial 25 interest" includes an interest acquired as a designated beneficiary, survivor, 26 co-annuitant, heir, or legatee; 27 (3) "individual" means [AN INDIVIDUAL WHO IS] a participant in, 28 an owner [A BENEFICIARY] of, or an alternate payee of a retirement plan; 29 (4) [(3)] "retirement plan" means 30 (A) a retirement plan that is qualified under 26 U.S.C. 401(a), 31 26 U.S.C. 403(a), 26 U.S.C. 403(b), 26 U.S.C. 408, 26 U.S.C. 408A, [OR] 26
01 U.S.C. 409, 26 U.S.C. 414(d), 26 U.S.C. 414(e), or 26 U.S.C. 457 (Internal 02 Revenue Code); and 03 (B) the teachers' retirement system under AS 14.25, the 04 judicial retirement system under AS 22.25, the public employees' 05 retirement system under AS 39.25, and the elected public officers' 06 retirement system under former AS 39.37. 07 * Sec. 4. AS 13.06.120 is amended to read: 08 Sec. 13.06.120. Pleadings; when parties bound by orders; notice. In any 09 proceedings involving trusts, nonprobate assets, or estates of decedents, minors, 10 protected persons, or incapacitated persons brought under AS 13.06 - AS 13.36 or 11 AS 13.38, [INCLUDING ANY JUDICIALLY SUPERVISED SETTLEMENTS AND 12 ANY NONJUDICIAL PROCEEDINGS AND SETTLEMENTS,] the following 13 apply: 14 (1) interests to be affected shall be described in pleadings that give 15 reasonable information to owners by name or class, by reference to the instrument 16 creating the interests, or in other appropriate manner; 17 (2) persons are bound by orders binding others in the following cases: 18 (A) orders binding the sole holder or all co-holders of a power 19 of revocation or a general or nongeneral power of appointment, including one 20 in the form of a power of amendment, bind other persons to the extent their 21 interests, as objects, takers in default, or otherwise, are subject to the power; 22 (B) to the extent there is no conflict of interest between them or 23 among persons represented, orders binding a conservator bind the person 24 whose estate the conservator controls; orders binding a guardian bind the ward 25 if no conservator of the estate has been appointed; orders binding a trustee bind 26 beneficiaries of the trust in proceedings to probate a will establishing or adding 27 to a trust, to review the acts or accounts of a prior fiduciary, and in proceedings 28 involving creditors or other third parties; orders binding a personal 29 representative bind persons interested in the undistributed assets of a 30 decedent's estate in actions or proceedings by or against the estate; and orders 31 binding an agent having authority to act with respect to the particular questions
01 or dispute bind the principal; if there is no conflict of interest and no 02 conservator or guardian has been appointed, a parent may represent the minor 03 child; 04 (C) an unborn person, a minor, an incapacitated person, or a 05 person whose identity or location is unknown or not reasonably ascertainable 06 who is not otherwise represented is bound by an order to the extent the interest 07 is adequately represented by another party having a substantially identical 08 interest in the proceeding; 09 (D) with regard to interests given upon the happening of a 10 certain event to persons who comprise a certain class, orders binding the living 11 persons who would constitute the class, if the event had happened immediately 12 before the commencement of the proceeding, bind all members of the class; 13 (E) with regard to an interest given to a living person when the 14 same interest or a share of the interest is to pass to the surviving spouse or to 15 persons who are or might be the distributees, devisees, heirs, or issue of the 16 living person upon the happening of a future event, orders binding the living 17 person bind the surviving spouse, distributees, devisees, heirs, or issue of the 18 living person; 19 (F) with regard to interests given to a person or a class of 20 persons, or to both, upon the happening of a future event, if the same interest 21 or a share of the interest is to pass to another person or class of persons, or to 22 both, upon the happening of an additional future event, orders binding the 23 living person or class of persons who would take the interest upon the 24 happening of the first event bind the persons and classes of persons who might 25 take on the happening of the additional future event; 26 (G) if a person is designated by a trust instrument to represent 27 and bind a born or unborn beneficiary of the trust and receive a notice, 28 information, accounting, or report for the beneficiary, then the beneficiary is 29 bound by an order binding the designated person; in this subparagraph, 30 (i) the settlor may make the designation in the trust 31 instrument, in a separate document, or by a trust protector authorized in
01 the trust instrument to make the designation; 02 (ii) except as otherwise provided in this subparagraph, a 03 person designated under (i) of this subparagraph may not represent and 04 bind a beneficiary while the designated person is serving as trustee; 05 (iii) except as otherwise provided in this subparagraph, 06 a person designated under (i) of this subparagraph may not represent 07 and bind another beneficiary if the designated person also is a 08 beneficiary, unless the designated person was named by the settlor, is 09 the beneficiary's spouse, or is a grandparent or descendant of a 10 grandparent of the beneficiary or the beneficiary's spouse; in this sub- 11 subparagraph, "spouse" means the individual to whom the beneficiary 12 is married and with whom the beneficiary is living, and a physical 13 separation primarily for education, business, health, and similar reasons 14 does not prevent the individual from being considered to be living with 15 the beneficiary; 16 (3) a person representing another person under (2)(A) - (F) of this 17 section and a person designated under (2)(G)(i) of this section are not liable to the 18 beneficiary whose interests are represented, or to a person claiming through that 19 beneficiary, for an action or omission to act made in good faith; 20 (4) notice is required as follows: 21 (A) notice as prescribed by AS 13.06.110 shall be given to 22 every interested person or to one person who can bind an interested person as 23 described in (2)(A), (B), or (D) - (G) of this section; notice may be given both 24 to a person and to another person who may bind the person; 25 (B) notice is given to unborn persons, a minor, an incapacitated 26 person, or a person whose identity or location is unknown or not reasonably 27 ascertainable, and persons who are not represented under (2)(A), (B), or (D) - 28 (G) of this section, by giving notice to all known persons whose interests in the 29 proceedings are substantially identical to those of the unborn persons, the 30 minor, the incapacitated person, or the person whose identity or location is 31 unknown or not reasonably ascertainable;
01 (5) at any point in a proceeding, a court may appoint a guardian ad 02 litem to represent the interest of an unborn person, a minor, an incapacitated person, or 03 a person whose identity or address is unknown or not reasonably ascertainable, if the 04 court determines that representation of the interest otherwise would be inadequate; if 05 not precluded by conflict of interests, a guardian ad litem may be appointed to 06 represent several persons or interests; the court shall set out its reasons for appointing 07 a guardian ad litem as a part of the record of the proceeding. 08 * Sec. 5. AS 13.06.120 is amended by adding a new subsection to read: 09 (b) In this section, 10 (1) "order" means a judicial order, nonjudicial order, the result of the 11 settlement of an account of a fiduciary under a procedure authorized by AS 13.06 - 12 13.36 or AS 13.38, and a settlement agreement resulting from a proceeding; 13 (2) "proceeding" means a judicial proceeding, nonjudicial proceeding, 14 the settlement of an account of a fiduciary under a procedure authorized by AS 13.06 - 15 13.36 or AS 13.38, and a settlement negotiation, even if the settlement negotiation 16 does not involve a judicial or nonjudicial third party who decides or facilitates a 17 settlement. 18 * Sec. 6. AS 13.38.200(b) is amended to read: 19 (b) In exercising a discretionary power of administration regarding a matter 20 within the scope of this chapter, whether granted by the governing instrument or this 21 chapter, including AS 13.38.210 and 13.38.300 - 13.38.490 [13.38.300 - 13.38.410], a 22 fiduciary shall administer a trust or estate impartially based on what is fair and 23 reasonable to all of the beneficiaries, except to the extent that the governing 24 instrument clearly manifests an intention that the fiduciary shall or may favor one or 25 more of the beneficiaries. A determination in accordance with this chapter is presumed 26 to be fair and reasonable to all of the beneficiaries. 27 * Sec. 7. AS 13.38.210(c) is amended to read: 28 (c) A trustee may not make an adjustment under this section if 29 (1) the adjustment would diminish the income interest in a trust that 30 requires all of the income to be paid at least annually to a spouse and for which a 31 federal estate tax or gift tax marital deduction would be allowed, in whole or in part, if
01 the trustee did not have the power to make the adjustment; the prohibition in this 02 paragraph does not apply to a trust after the trustee determines that the marital 03 deduction has not been claimed or has not been allowed; 04 (2) the adjustment would reduce the actuarial value of the income 05 interest in a trust to which a person transfers property with the intent to qualify for a 06 federal gift tax exclusion; 07 (3) the adjustment would change the amount payable to a beneficiary 08 as a fixed annuity or a fixed fraction of the value of the trust assets; 09 (4) the adjustment is from any amount that is permanently set aside for 10 charitable purposes under the governing instrument and for which a federal estate or 11 gift tax charitable deduction has been taken, unless both income and principal are 12 permanently set aside for charitable purposes under the governing instrument; 13 (5) possessing or exercising the power to make an adjustment would 14 cause an individual to be treated as the owner of all or part of the trust for federal 15 income tax purposes, and the individual would not be treated as the owner if the 16 trustee did not possess the power to make an adjustment; 17 (6) possessing or exercising the power to make an adjustment would 18 cause all or part of the trust assets to be subject to federal estate or gift tax with respect 19 to an individual, and the assets would not be subject to federal estate or gift tax with 20 respect to the individual if the trustee did not possess the power to make an 21 adjustment; 22 (7) the trustee is a beneficiary of the trust; or 23 (8) the trust has been converted to a unitrust under AS 13.38.300 - 24 13.38.435 [AS 13.38.300 - 13.38.410]. 25 * Sec. 8. AS 13.38.300 is amended to read: 26 Sec. 13.38.300. Power to convert to unitrust. Unless expressly prohibited by 27 the governing instrument, a trustee may release the power to adjust under 28 AS 13.38.210 and may convert a trust into a unitrust as described in AS 13.38.300 - 29 13.38.435 [AS 13.38.300 - 13.38.410] if 30 (1) the trustee determines that the conversion will enable the trustee to 31 better carry out the intent of the settlor or testator and the purposes of the trust;
01 (2) the trustee gives written notice of the trustee's intention to release 02 the power to adjust, of the trustee's intention to convert the trust into a unitrust, of the 03 unitrust percentage selected, of the smoothing period selected, and of how the 04 unitrust will operate, including what initial decisions the trustee intends to [WILL] 05 make under AS 13.38.340 [THIS SECTION], to all the sui juris beneficiaries who 06 (A) are currently eligible to receive income from the trust; 07 (B) would be eligible, if a power of appointment were not 08 exercised, to receive income from the trust if the interest of all of the 09 beneficiaries eligible to receive income under (A) of this paragraph were to 10 terminate immediately before the giving of the notice; and 11 (C) would, if a power of appointment were not exercised, 12 receive a distribution of principal if the trust were to terminate immediately 13 before the giving of the notice; 14 (3) there are at least one sui juris beneficiary under (2)(A) of this 15 section and at least one sui juris beneficiary under (2)(B) or (C) of this section; and 16 (4) a sui juris beneficiary does not object to the conversion to a unitrust 17 in a writing delivered to the trustee within 60 days after the mailing of the notice under 18 (2) of this section. 19 * Sec. 9. AS 13.38.310(a) is amended to read: 20 (a) A trustee may petition the court to approve the conversion to a unitrust if 21 (1) a beneficiary timely objects to the conversion to a unitrust; [OR] 22 (2) there is not a sui juris beneficiary who is eligible under 23 AS 13.38.300(2); or 24 (3) the trustee is a beneficiary [AS 13.38.300(2)(A), AND THERE 25 IS NOT A SUI JURIS BENEFICIARY WHO IS ELIGIBLE UNDER 26 AS 13.38.300(2)(B) OR (C)]. 27 * Sec. 10. AS 13.38.330(b) is amended to read: 28 (b) After a trust has been converted to a unitrust, "income" in the governing 29 instrument means an annual distribution equal to the amount produced by the 30 application of a fixed unitrust percentage established under (d) of this section to 31 [FOUR PERCENT OF] the net fair market value, as determined annually, of the trust's
01 assets, whether the assets would be considered income or principal under other 02 provisions of this chapter, averaged over the lesser of 03 (1) the preceding years in the smoothing period selected by the 04 trustee; or 05 (2) the period during which the trust has been in existence. 06 * Sec. 11. AS 13.38.330 is amended by adding a new subsection to read: 07 (d) The unitrust percentage to be used in determining the unitrust amount must 08 be a reasonable current return from the unitrust of at least three percent and not more 09 than five percent, taking into account the intentions of the trustor of the unitrust as 10 expressed in the governing instrument, the needs of the beneficiaries, general 11 economic conditions, projected current earnings for the unitrust, projected 12 appreciation for the unitrust, and the effect of projected inflation on the unitrust. 13 * Sec. 12. AS 13.38.340 is amended to read: 14 Sec. 13.38.340. Trustee's discretionary powers regarding unitrust. The 15 trustee may, in the trustee's discretion, from time to time, determine 16 (1) the effective date of a conversion to a unitrust; 17 (2) the provisions for prorating a unitrust distribution for a short year 18 in which a beneficiary's right to payments commences or ceases; 19 (3) the frequency of unitrust distributions during the year; 20 (4) the effect of other payments from or contributions to the trust on 21 the trust's valuation; 22 (5) whether to value the trust's assets annually or more frequently; 23 (6) whether to use a smoothing period of three, four, or five years; 24 (7) what valuation dates to use; 25 (8) [(7)] how frequently to value nonliquid assets and whether to 26 estimate their value; 27 (9) [(8)] whether to omit trust property occupied or possessed by a 28 beneficiary from the calculations; and 29 (10) [(9)] other matters necessary for the proper functioning of the 30 unitrust. 31 * Sec. 13. AS 13.38.350(b) is amended to read:
01 (b) Unless otherwise provided by the governing instrument, a unitrust 02 distribution shall be considered to have been paid from net income as net income 03 would be determined if the trust were not a unitrust. To the extent net income is 04 insufficient, the unitrust distribution shall be considered to have been paid from 05 ordinary income that is allocable under federal income tax rules to net income as 06 determined for a unitrust. To the extent that the ordinary income is insufficient, 07 the unitrust distribution is considered to have been paid from net realized short- 08 term capital gains. To the extent net income, ordinary income, and net realized short- 09 term capital gains are insufficient, the unitrust distribution shall be considered to have 10 been paid from net realized long-term capital gains. To the extent net income, 11 ordinary income, and net realized short-term and long-term capital gains are 12 insufficient, the unitrust distribution shall be paid from the principal of the trust. 13 * Sec. 14. AS 13.38.360 is amended to read: 14 Sec. 13.38.360. Court orders regarding unitrust. The trustee or, if the trustee 15 declines to petition the court, a beneficiary may petition the court to 16 [(1) SELECT A PAYOUT PERCENTAGE DIFFERENT THAN 17 FOUR PERCENT; 18 (2)] provide for a distribution of net income, as would be determined if 19 the unitrust [TRUST] were not a unitrust, in excess of the unitrust distribution if the 20 distribution is necessary to preserve a tax benefit [; 21 (3) AVERAGE THE VALUATION OF THE TRUST'S NET ASSETS 22 OVER A PERIOD OTHER THAN THREE YEARS]. 23 * Sec. 15. AS 13.38.390(b) is amended to read: 24 (b) If AS 13.38.380(a)(3), (4), or (6) applies to all the trustees, the trustees 25 may petition the court to direct a conversion. In the alternative, the trustees may 26 appoint an independent person who shall be granted the authority, while acting 27 in a fiduciary capacity, to make decisions in place of the trustees relating to a 28 conversion, reconversion, and the exercise of discretionary powers under 29 AS 13.38.340. 30 * Sec. 16. AS 13.38.400 is amended to read: 31 Sec. 13.38.400. Reconversion from a unitrust. A trustee may reconvert a
01 trust that has been converted into a unitrust under AS 13.38.300 by following the same 02 procedures provided in AS 13.38.300 - 13.38.435 [AS 13.38.300 - 13.38.410] for 03 converting a trust into a unitrust. If a unitrust is reconverted under this section, the 04 trustee's power to adjust under AS 13.38.210 applies to the trustee after the 05 reconversion. 06 * Sec. 17. AS 13.38 is amended by adding new sections to article 2 to read: 07 Sec. 13.38.420. Additional unitrust provisions. (a) The unitrust amount may 08 be determined by reference to the net fair market value of the unitrust's assets in one or 09 more years. 10 (b) Distribution of a unitrust amount is considered a distribution of all of the 11 income of a unitrust and is considered to be an income interest. 12 (c) Distribution of a unitrust amount is considered to be a reasonable 13 apportionment of the total return of a unitrust. 14 (d) A unitrust that provides for a distribution based on a unitrust percentage in 15 excess of five percent of the net fair market value of the unitrust assets a year is 16 considered to have paid out all of the income of the unitrust and to have paid out 17 principal of the unitrust to the extent that the distribution exceeds five percent a year. 18 (e) The governing instrument of a unitrust may grant discretion to the trustee 19 to adopt a consistent practice of treating capital gains as part of the unitrust amount to 20 the extent that the unitrust amount exceeds the income determined as if the trust were 21 not a unitrust, or the governing instrument may specify the ordering of classes of 22 income. 23 (f) Unless the terms of the unitrust specifically provide otherwise, a unitrust 24 amount is considered to have been made from the following sources, which are listed 25 in order of priority: 26 (1) net income determined as if the trust were not a unitrust; 27 (2) ordinary income not allocable to net income; 28 (3) net realized short-term capital gains; 29 (4) net realized long-term capital gains; and 30 (5) the principal of the trust estate. 31 (g) The unitrust governing instrument may provide that the trustee may
01 exclude assets used by the unitrust beneficiary, such as a residence property or 02 tangible personal property, from the net fair market value of the unitrust assets for the 03 purposes of computing the unitrust amount. These assets may be considered 04 equivalent to income or to the unitrust amount. 05 Sec. 13.38.430. Power to treat gains as part of distribution of principal. 06 Unless prohibited by the unitrust's governing instrument or specifically addressed by 07 AS 13.38.350 or 13.38.420, the trustee of a unitrust may treat gains from the sale of 08 capital assets of the unitrust to be part of a distribution of principal to a beneficiary, 09 and, if the trustee treats these gains as part of a distribution of principal to a 10 beneficiary, the trustee shall treat these gains consistently on the unitrust's books, 11 records, and tax returns as part of a distribution to a beneficiary. 12 Sec. 13.38.435. Definitions. In AS 13.38.300 - 13.38.435, 13 (1) "smoothing period" means the period of years over which the fair 14 market value of the assets of a unitrust are averaged; 15 (2) "unitrust amount" means the amount that is distributed from a 16 unitrust to a beneficiary; 17 (3) "unitrust percentage" means the unitrust percentage established 18 under AS 13.38.330(d). 19 * Sec. 18. AS 13.38.690(a) is repealed and reenacted to read: 20 (a) A trustee shall allocate 21 (1) to income that portion of a payment that equals the greater of the 22 following: 23 (A) the portion that the payor characterizes as interest, a 24 dividend, a remittance in place of interest, or a remittance in place of a 25 dividend; or 26 (B) the portion that is characterized as imputed interest for 27 federal income purposes; 28 (2) to principal that portion of a payment that remains after the 29 allocation is made under (1) of this subsection. 30 * Sec. 19. AS 13.38.690(b) is amended to read: 31 (b) If no [A] part of a payment under a contract calling for equal installments
01 over a fixed period of time is [NOT] allocable to income under the provisions of (a) of 02 this section, the difference between the trust's acquisition value of the contract and the 03 total expected return is [SHALL BE] considered to be interest. The trustee shall 04 allocate to income the portion of each payment equivalent to interest on the then 05 unpaid principal balance at the rate specified in the contract or at a rate necessary to 06 amortize the difference between the expected return and the acquisition value, where 07 that rate is readily ascertainable by the trustee. 08 * Sec. 20. AS 13.38.690(c) is amended to read: 09 (c) If no [THERE IS NOT A] portion of a payment from a separate fund held 10 exclusively for the benefit of the trust [THAT] is allocable to income under (a) or (b) 11 of this section, but the internal net income of the fund determined as if the fund were a 12 separate trust subject to AS 13.38.200 - 13.38.410, 13.38.500 - 13.38.690, or 13 13.38.710 - 13.38.860 [AS 13.38.500 - 13.38.860] is readily ascertainable by the 14 trustee, the internal net income of the fund is considered to be the income earned 15 by the fund, and the portion of the payment equal to the then undistributed net 16 income of the fund realized since the trust acquired its interest in the fund is 17 considered to be a distribution of that internal net income of the fund and shall be 18 allocated to the trust income account. The balance of the payment described in this 19 subsection shall be allocated to principal. The power to adjust under AS 13.38.210, 20 the power to convert to a unitrust under AS 13.38.300, and the provisions of 21 AS 13.38.420 apply to retirement benefits covered by this subsection that are 22 payable to a trust. These powers and provisions may be exercised by the payee 23 trustee or in the governing instrument for the retirement benefits separately and 24 independently from the exercise by the payee trustee or in the governing 25 instrument of these powers and provisions for the trust, as if the retirement 26 benefits and the trust were separate trusts subject to this chapter. 27 * Sec. 21. AS 13.38.690(d) is amended to read: 28 (d) A trustee shall allocate 10 percent of the part of the payment that is 29 required to be made during the accounting period to income and the balance to 30 principal if there is no [NOT A] part of the payment that is allocable to income under 31 (a) - (c) of this section and all or part of the payment is required to be made. The
01 trustee shall allocate the entire payment to principal if no [A] part of a payment is 02 [NOT] required to be made or the payment received is the entire amount to which the 03 trustee is entitled. In this subsection, a payment is not "required to be made" to the 04 extent that it is made because the trustee exercises a right of withdrawal. 05 * Sec. 22. AS 13.38.690(e) is amended to read: 06 (e) If, to obtain a federal estate or gift tax marital deduction for a trust, the 07 trustee must allocate more of a payment to income than provided for by this section, 08 the trustee shall allocate to income the additional amount necessary to obtain the 09 marital deduction [TO INCOME]. 10 * Sec. 23. AS 13.46.195(d) is amended to read: 11 (d) The time for transfer to the minor of custodial property transferred under 12 AS 13.46.040 may be changed under this section if the governing will or trust or 13 nomination provides in substance that the custodianship is to continue until the time 14 the minor attains a specified age. That time may not be earlier than the time the minor 15 attains 18 years of age [OR LATER THAN THE TIME THE MINOR ATTAINS 25 16 YEARS OF AGE], and, in that case, the governing will or trust or nomination shall 17 determine the time to be specified in the transfer under AS 13.46.080. 18 * Sec. 24. AS 13.46.195(e) is amended to read: 19 (e) The time for transfer to the minor of custodial property transferred under 20 AS 13.46.030 may be changed under this section if the transfer under AS 13.46.080 21 provides in substance that the custodianship is to continue until the time the minor 22 attains a specified age. That time may not be earlier than the time the minor attains 18 23 years of age [OR LATER THAN THE TIME THE MINOR ATTAINS 25 YEARS 24 OF AGE]. 25 * Sec. 25. AS 13.46.195 is amended by adding new subsections to read: 26 (h) Notwithstanding (b) - (f) of this section, a custodian may extend the time 27 for transfer to the minor of custodial property to an age older than the age that is 28 specified in the transfer document or that is specified otherwise by this chapter. To 29 extend the time for transfer, the custodian shall give the minor written notice of the 30 minor's right to compel immediate distribution under (i) of this section. The custodian 31 shall give the notice during the later of the following periods:
01 (1) the six-month period that precedes the age for distribution specified 02 in the transfer document or specified otherwise by this chapter; or 03 (2) the six-month period that begins on the minor's 18th birthday. 04 (i) Notwithstanding (h) of this section, a minor may compel immediate 05 distribution of custodial property by giving written notice to the custodian. To compel 06 immediate distribution, the minor shall give the notice during the six-month period 07 that begins on the date that is the later of 08 (1) the age for distribution specified in the transfer document or 09 specified otherwise by this chapter; or 10 (2) the minor's 18th birthday. 11 * Sec. 26. AS 13 is amended by adding a new chapter to read: 12 Chapter 75. Disposition of Human Remains. 13 Sec. 13.75.010. Directions by decedent. (a) A person may provide directions 14 for the disposition of the person's remains by placing the directions in a disposition 15 document. The directions may include or be limited to designating an agent to control 16 the disposition of the person's remains. 17 (b) A disposition document must be signed by the person and acknowledged 18 before a notary public, and contain the form and contents required by AS 13.75.030. A 19 disposition document may be a separate document or it may be contained in another 20 document, including a will or prepaid funeral or burial contract. The disposition 21 document may be modified or revoked only by a subsequent disposition document that 22 complies with this subsection. 23 Sec. 13.75.020. Persons authorized to control disposition. (a) The following 24 persons, in the priority listed, may control disposition of a decedent's remains: 25 (1) a person designated in a disposition document as the disposition 26 agent for the decedent; 27 (2) a person serving, or nominated by the decedent in the decedent's 28 will to serve, as the personal representative of the decedent's estate, if the person is 29 acting according to the decedent's written instructions contained in the decedent's will; 30 (3) the individual who was the spouse of the decedent at the time of the 31 decedent's death;
01 (4) the sole surviving competent adult child of the decedent, or, if there 02 is more than one surviving competent adult child of the decedent, the majority of the 03 surviving competent adult children; fewer than one-half of the surviving competent 04 adult children may exercise the rights and duties of this section if these surviving adult 05 children use reasonable efforts to notify all other surviving competent adult children 06 that they are exercising these rights and duties and are not aware of any opposition by 07 one-half or more of all of the surviving competent adult children; 08 (5) the surviving competent parents of the decedent; if one of the 09 surviving competent parents is absent, the remaining competent parent may exercise 10 the rights and duties of this section after reasonable efforts have been unsuccessful in 11 locating the absent surviving competent parent; in this paragraph, "absent" means a 12 person who is unable to communicate decisions or participate in making decisions 13 regarding the disposition of a decedent's remains personally, telephonically, or through 14 electronic communication; 15 (6) the surviving competent adult person in the next degrees of 16 kindred, the two surviving competent adult persons of the same degree of kindred if 17 there are two, or, if there are more than two surviving competent adult persons of the 18 same degree of kindred, the majority of those persons; fewer than the majority of 19 surviving competent adult persons of the same degree of kindred may exercise the 20 rights and duties of this section if those persons use reasonable efforts to notify all 21 other surviving competent adult persons of the same degree of kindred that they are 22 exercising these rights and duties and are not aware of any opposition by one-half or 23 more of all surviving competent adult persons of the same degree of kindred; 24 (7) in the case of an indigent or another individual whose final 25 disposition is the responsibility of the state or a municipality, a public administrator, 26 medical examiner, coroner, or another public official charged with arranging the final 27 disposition of the decedent; or 28 (8) another person who is willing to assume legal and financial 29 responsibility. 30 (b) If a person takes control of the disposition under (a) of this section, the 31 person is liable for the reasonable costs of the disposition.
01 (c) In this section, 02 (1) "adult" means a person who is 18 years of age or older; 03 (2) "competent" means a person who does not suffer from disabilities 04 that prevent the person from managing the person's property or affairs. 05 Sec. 13.75.030. Form of disposition document. A disposition document must 06 be in substantially the following form: 07 DISPOSITION DOCUMENT 08 You can select Part 1, Part 2, or both, by completing the part(s) 09 you select, including providing any signatures indicated. Part 3 contains 10 general statements and a place for your signature. You must sign in 11 front of a notary. 12 PART 1. APPOINTMENT OF AGENT TO CONTROL 13 DISPOSITION OF REMAINS. If you appoint an agent, you and your 14 agent must complete this part as indicated, and the agent must sign this 15 part. 16 I, ______________, being of sound mind, wilfully and 17 voluntarily make known my desire that, on my death, the disposition of 18 my remains shall be controlled by _____________ (name of agent first 19 named below), and, with respect to that subject only, I appoint that 20 person as my agent. All decisions made by my agent with respect to the 21 disposition of my remains, including cremation, are binding. 22 ACCEPTANCE BY AGENT OF APPOINTMENT. 23 THE AGENT, AND EACH SUCCESSOR AGENT, BY 24 ACCEPTING THIS APPOINTMENT, AGREES TO AND ASSUMES 25 THE OBLIGATIONS PROVIDED IN THIS DOCUMENT. AN 26 AGENT MAY SIGN AT ANY TIME, BUT AN AGENT'S 27 AUTHORITY TO ACT IS NOT EFFECTIVE UNTIL THE AGENT 28 SIGNS BELOW TO INDICATE THE ACCEPTANCE OF 29 APPOINTMENT. ANY NUMBER OF AGENTS MAY SIGN, BUT 30 ONLY THE SIGNATURE OF THE AGENT ACTING AT ANY 31 TIME IS REQUIRED.
01 AGENT: 02 Name: ___________________________________________________ 03 Address: _________________________________________________ 04 Telephone Number: _________________________________________ 05 Signature Indicating Acceptance of Appointment: 06 _________________________________________________________ 07 Date of Signature: __________________________________________ 08 SUCCESSORS: 09 If my agent dies, becomes legally disabled, resigns, or refuses to 10 act, I appoint the following persons (each to act alone and successively, 11 in the order named) to serve as my agent to control the disposition of 12 my remains as authorized by this document: 13 (1) First Successor 14 Name: ___________________________________________________ 15 Address: _________________________________________________ 16 Telephone Number: _________________________________________ 17 Signature of First Successor Indicating Acceptance of Appointment: 18 _________________________________________________________ 19 Date of Signature: __________________________________________ 20 (2) Second Successor 21 Name: ___________________________________________________ 22 Address: _________________________________________________ 23 Telephone Number: _________________________________________ 24 Signature of Second Successor Indicating Acceptance of Appointment: 25 _________________________________________________________ 26 Date of Signature: __________________________________________ 27 PART 2. DIRECTIONS FOR THE DISPOSITION OF MY 28 REMAINS. 29 Stated below are my directions for the disposition of my remains: 30 _________________________________________________________ 31 _________________________________________________________
01 _________________________________________________________ 02 _________________________________________________________ 03 If the disposition of my remains is by cremation, then (pick one): 04 ( ) I do not wish to allow any of my survivors the option of 05 canceling my cremation and selecting alternative arrangements, 06 regardless of whether my survivors consider a change to be appropriate. 07 ( ) I wish to allow only the survivors I have designated below to 08 have the option of canceling my cremation and selecting alternative 09 arrangements, if they consider that a change to be appropriate: 10 _________________________________________________________ 11 _________________________________________________________ 12 _________________________________________________________ 13 _________________________________________________________ 14 PART 3. GENERAL PROVISIONS AND SIGNATURE. 15 WHEN DIRECTIONS BECOME EFFECTIVE. The directions, 16 including any appointment of an agent, in this disposition document 17 become effective on my death. 18 REVOCATION OF PRIOR APPOINTMENTS. I revoke any 19 prior appointment of any person to control the disposition of my 20 remains. 21 SIGNATURE OF PERSON MAKING DISPOSITION DOCUMENT 22 Signature: ________________________________________________ 23 Date of signature: __________________________________________ 24 (Notary acknowledgment of signature) 25 Sec. 13.75.040. Agent's appointment. The person appointed as an agent in a 26 disposition document may sign the disposition document at any time, but the agent's 27 authority to act is not effective until the agent signs the instrument. 28 Sec. 13.75.050. Exercise of authority. If a person fails to exercise the person's 29 authority to control disposition under AS 13.75.020 within 48 hours after receiving 30 notification of the decedent's death or within 48 hours after the decedent's death, 31 whichever is earlier, the person may not control the disposition of the decedent's
01 remains, and the right to control the disposition of the decedent's remains passes to the 02 person who is next listed in priority under AS 13.75.020. If the person to whom the 03 right to control the disposition passes under this section fails to exercise the person's 04 authority to control the disposition within 48 hours after being notified that the 05 authority to control the disposition has passed to the person, the authority to control 06 the disposition passes to the person who is next listed in priority under AS 13.75.020. 07 Sec. 13.75.060. Certain persons prohibited from control. If a person is 08 charged with a felonious killing in connection with a decedent's death and if the 09 funeral director or the cemetery knows about the charge, then the person may not 10 control disposition, and the right to control disposition passes to the person who is 11 next listed in priority under AS 13.75.020. 12 Sec. 13.75.070. Prohibition of cremation; written instructions. A person 13 may not authorize cremation for a decedent's remains if a decedent has left directions 14 in a disposition document that the decedent does not wish to be cremated. 15 Sec. 13.75.080. Implementation of directions. (a) The person authorized to 16 control the disposition shall carry out the directions of the decedent to the extent that 17 the decedent's estate or the person is financially able to carry out the directions. 18 (b) Notwithstanding any other provision in AS 13.06 - 13.36 (Uniform Probate 19 Code), if a person provides directions in a disposition document that is contained in a 20 will, the directions shall be carried out immediately without the necessity of probate. If 21 the will is not probated or is declared invalid for testamentary purposes, the directions 22 are valid to the extent to which they have been acted on in good faith. 23 Sec. 13.75.090. Misrepresentation; liability. If a person represents that the 24 person knows the identity of a decedent, and, with the intent to procure the disposition 25 of the decedent's remains, signs a statement, other than a death certificate, that 26 identifies the decedent, the person guarantees the identity of the decedent and is liable 27 for any damages that result, directly or indirectly, from that guarantee. 28 Sec. 13.75.100. Liability. (a) A disposition organization is not liable for 29 carrying out the directions of a decedent if the disposition organization carries out the 30 directions of a decedent or a person who establishes that the person is entitled to 31 control the disposition.
01 (b) This section may not be construed to reduce or eliminate the liability of a 02 disposition organization for its negligence or reckless acts. 03 Sec. 13.75.110. Disputes. (a) A person listed in AS 13.75.020 who is involved 04 in a dispute with one or more persons listed in AS 13.75.020 about which of the 05 persons has the authority to control disposition may bring an action in the superior 06 court to resolve the dispute. 07 (b) If there is a dispute with one or more persons listed in AS 13.75.020 about 08 which person has the authority to control disposition, a cemetery organization or 09 funeral establishment is not liable for refusing to accept, to inter, or otherwise to 10 dispose of the decedent's remains until the cemetery organization or funeral 11 establishment receives a court order or another suitable confirmation that the dispute 12 has been resolved. 13 Sec. 13.75.120. Exemptions. The disposition of the remains of a member of 14 the organized militia under AS 26.05.262, the disposition of the remains of a member 15 of the armed forces under AS 26.10.065(a), and the disposition of the remains of a 16 member of the United States Coast Guard under AS 26.10.065(b) are exempt from this 17 chapter. 18 Sec. 13.75.190. Definitions. In this chapter, 19 (1) "control" means the authority to control disposition; 20 (2) "directions" means 21 (A) instructions for the disposition of a person's remains; 22 (B) the appointment of an agent to handle the disposition of a 23 person's remains; or 24 (C) both (A) and (B) of this paragraph; 25 (3) "disposition" means disposition of a decedent's remains, including 26 cremation, but does not include an anatomical gift; in this paragraph, "anatomical gift" 27 has the meaning given in AS 13.52.390; 28 (4) "disposition document" means a disposition document authorized 29 by AS 13.75.010 30 (A) in which a person provides directions regarding the 31 disposition of the person's remains; and
01 (B) that complies with AS 13.75.030; 02 (5) "disposition organization" means 03 (A) a cemetery association formed under AS 10.30.010; 04 (B) a nonprofit cemetery corporation authorized by 05 AS 10.30.055; 06 (C) a person operating a crematory; 07 (D) a person operating a columbarium; 08 (E) a funeral home or other type of funeral establishment; 09 (F) a funeral director or an embalmer. 10 Sec. 13.75.195. Short title. This chapter may be cited as the Disposition of 11 Human Remains Act. 12 * Sec. 27. AS 21.42.020 is amended by adding new subsections to read: 13 (e) Notwithstanding (a) of this section, a trustee, acting in a fiduciary capacity, 14 may procure or cause to be procured an insurance contract that is on the life or body of 15 an individual and under which the proceeds of the insurance contract are payable to 16 the trustee, acting in a fiduciary capacity, if 17 (1) the trustee, acting in a fiduciary capacity, owns the insurance 18 contract or the trust itself owns the insurance contract; 19 (2) on the date the contract is made, a settlor of the trust is the 20 individual insured, has an insurable interest in the individual insured, or would have 21 had an insurable interest in the individual insured if the settlor were living at the time 22 the contract was made; in this paragraph, "settlor" has the meaning given in 23 AS 13.36.390; and 24 (3) the proceeds of the contract are primarily for the benefit of a trust 25 beneficiary who has an insurable interest in the individual insured, except that, if the 26 determination of the trust beneficiary's insurable interest is based on (d)(1) of this 27 section, the trust beneficiary's relation by blood or law must be within the third degree. 28 (f) A person who has an insurable interest in the life or body of an individual 29 may form a business firm that is substantially or solely for the purpose of purchasing, 30 holding, or administering an insurance contract on the life or body of the individual. In 31 this subsection, "firm" has the meaning given in AS 21.97.900, but also includes a
01 business trust and a joint venture. 02 * Sec. 28. AS 34.40 is amended by adding a new section to read: 03 Sec. 34.40.113. Transfers of individual retirement plans. Notwithstanding a 04 provision in AS 09.38.017(d), AS 34.40.110, or another law to the contrary, a person 05 may voluntarily transfer or assign the person's interest in an individual retirement plan 06 established under 26 U.S.C. 408 or 26 U.S.C. 408A if the person 07 (1) is the owner of or a participant in the individual retirement plan; or 08 (2) has inherited the proceeds of the individual retirement plan from an 09 employee who is a participant in the individual retirement plan. 10 * Sec. 29. AS 34.77.030(g) is amended to read: 11 (g) Whether or not the community property agreement provides that all 12 property acquired by either or both spouses during the marriage is community 13 property, and except to the extent otherwise expressly provided by the spouses in the 14 community property agreement or by the settlors in a community property trust, 15 property acquired by a spouse during marriage and after the determination date is 16 individual property if acquired 17 (1) by gift or a disposition at death made by a third person to the 18 spouse and not to both spouses; 19 (2) in exchange for or with the proceeds of other individual property of 20 the spouse; 21 (3) from appreciation or income of the spouse's individual property 22 except to the extent that the income or appreciation is classified as community 23 property under AS 34.77.130; 24 (4) by a decree, community property agreement, written consent, or 25 reclassification under AS 34.77.060(b) designating it as the individual property of the 26 spouse; 27 (5) as a recovery for damage to property under AS 34.77.140, except 28 as specifically provided otherwise in a decree, community property agreement, 29 community property trust, or written consent; [OR] 30 (6) as a recovery for personal injury, except for the amount of the 31 recovery attributable to expenses paid or otherwise satisfied from community
01 property; or 02 (7) as a transfer to a community property trust and declared by 03 the trust to be the individual property of the spouse. 04 * Sec. 30. AS 34.77.050(b) is amended to read: 05 (b) A gift of community property to a third person that is not allowed under 06 (a) of this section is subject to AS 34.77.140(e) - (h) [(d) OF THIS SECTION] unless 07 both spouses act together in making the gift or the other spouse ratifies the gift. 08 * Sec. 31. AS 34.77.110 is amended by adding new subsections to read: 09 (f) Property that spouses agree in a community property agreement is 10 community property or property that is transferred to a community property trust and 11 expressly declared by the trust to be community property is owned as community 12 property regardless of the form of title to the property, even if the title indicates that 13 the property is owned unequally by the spouses or is only in the name of one spouse. 14 (g) If the title to community property is in a form that provides for ownership 15 by survivorship between the spouses, then ownership by survivorship is presumed to 16 have been made with the consent of both spouses. 17 (h) If a spouse with management and control of community property 18 designates a beneficiary for the property on the death of one or both of the spouses, 19 and if the community property is held in a form of title that permits a beneficiary 20 designation, the beneficiary designation is effective only for the designating spouse's 21 one-half interest in the community property unless the other spouse consents in 22 writing to the designation. A designation of the following as the beneficiary is 23 presumed to have been made with the consent of the other spouse: 24 (1) the other spouse or an ancestor or descendant of either spouse; 25 (2) a charity; or 26 (3) a trust, to the extent that the beneficiaries consist of persons or 27 entities identified in (1) or (2) of this subsection. 28 (i) The testimony of one spouse is sufficient to rebut a presumption 29 established under this section. 30 (j) A disposition of community property contrary to (e) - (h) of this section is 31 voidable. An action in court to void the disposition must be commenced within the
01 time specified by AS 34.77.140(e). 02 * Sec. 32. AS 34.77.140(d) is amended to read: 03 (d) Except as provided otherwise in (e) - (h) of this section 04 [AS 34.77.050(d)], a spouse must begin an action against the other spouse under (a) of 05 this section within three years after acquiring actual knowledge of the facts giving rise 06 to the claim. 07 * Sec. 33. AS 34.77.140 is amended by adding new subsections to read: 08 (e) Except as provided by (f) - (h) of this section, if a gift of community 09 property during marriage by a spouse does not comply with AS 34.77.050(a), the 10 nondonor spouse may bring an action to recover the property or the amount of money 11 by which the gift exceeded the limit under AS 34.77.050(a). The nondonor spouse 12 may bring the action against the donor spouse, the gift recipient, or both. The 13 nondonor spouse must commence the action within the earliest of the following times: 14 (1) one year after the nondonor spouse receives notice of the gift; 15 (2) one year after dissolution of the marriage; or 16 (3) on or before the deadline for filing a claim under AS 13.16.460 17 after the death of the donor spouse. 18 (f) If a recovery under (e) of this section occurs during the marriage of the 19 donor spouse and the nondonor spouse, the property or money that is recovered is 20 considered community property. If the recovery occurs after the dissolution of the 21 marriage of the donor and nondonor spouses or after the death of either the donor or 22 the nondonor spouse, the recovery is limited to 50 percent of the property or money 23 that would have been recovered if the recovery had occurred during the marriage. 24 (g) If a transfer of community property to a third person during marriage by a 25 spouse acting without the other spouse becomes a completed gift on the death of the 26 donor spouse, or if an arrangement involving community property during marriage by 27 a spouse acting without the other spouse is intended to be and becomes a gift to a third 28 person on the death of the donor spouse, the surviving spouse may bring an action in 29 court against the gift recipient to recover one-half of the gift. To bring an action under 30 this subsection, the surviving spouse must commence the action on or before the 31 deadline for filing a claim under AS 13.16.460.
01 (h) If a spouse who would have been entitled to bring an action under (e) - (g) 02 of this section predeceases the donor spouse, the deceased spouse's successor in 03 interest may bring an action for recovery under (e) - (g) of this section, but the action 04 must be commenced within one year after the deceased spouse's death. Recovery in an 05 action under this subsection is the same as if the donor spouse had predeceased the 06 spouse entitled to the recovery, but the amount of the recovery is calculated as of the 07 date of the death of the spouse entitled to the recovery. 08 * Sec. 34. AS 13.38.330(c); AS 13.46.195(g); and AS 34.77.050(d) and 34.77.110(d) are 09 repealed. 10 * Sec. 35. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 INDIRECT COURT RULE CHANGE. AS 34.77.110(i), enacted by sec. 31 of this 13 Act, has the effect of amending Rule 301(a), Alaska Rules of Evidence, by specifying the 14 evidence that is sufficient to rebut a presumption under AS 34.77.110(i), enacted by sec. 31 of 15 this Act. 16 * Sec. 36. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 APPLICABILITY. (a) AS 09.38.017(a), as amended by sec. 1 of this Act, 19 AS 09.38.107(d), as amended by sec. 2 of this Act, and AS 09.38.017(e), as amended by sec. 20 3 of this Act, apply to a retirement plan that exists before, on, or after the effective date of this 21 Act. In this section, "retirement plan" has the meaning given in AS 09.38.017(e), as amended 22 by sec. 3 of this Act. 23 (b) AS 34.40.113, added by sec. 28 of this Act, applies to a retirement plan that exists 24 before, on, or after the effective date of this Act. In this section, "retirement plan" means an 25 individual retirement plan established under 26 U.S.C. 408 or a Roth individual retirement 26 plan established under 26 U.S.C. 408A. 27 * Sec. 37. The uncodified law of the State of Alaska is amended by adding a new section to 28 read: 29 CONDITIONAL EFFECT. AS 34.77.110(i), enacted by sec. 31 of this Act, takes 30 effect only if sec. 35 of this Act receives the two-thirds majority vote of each house required 31 by art. IV, sec. 15, Constitution of the State of Alaska.