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SB 165: "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                             SENATE BILL NO. 165                                                                         
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.