05/05/2001 08:49 PM Senate JUD

                                                                                                                                
         HB 181-COMMUNITY PROPERTY/OBLIGATIONS OF SPOUSES                                                                   
                                                                                                                                
REPRESENTATIVE  LISA MURKOWSKI,  sponsor of  HB 181, explained  that                                                            
the bill fills  in gaps in Alaska's  Community Property Act,  passed                                                            
in 1998.  HB 181  is the result of discussions with  and suggestions                                                            
from one of  her constituents, Dave  Chafftel, a trust attorney  who                                                            
is  very  involved  with  the  trust  section   of  the  Alaska  Bar                                                            
Association.  Four areas  are at  issue.   The first  is a  creditor                                                            
rights  issue  with regard  to  obligations  incurred  by a  spouse.                                                            
Those  obligations  can only  be satisfied  from  the spouse's  non-                                                            
community property.  The  creditor of a debtor spouse can only reach                                                            
the  separate  property  of  the debtor  spouse  and  that  spouse's                                                            
jointly held property.   Two other issues pertain  to life insurance                                                            
and specify that one can  designate a trust itself as a beneficiary.                                                            
HB 181 clarifies  the sources of funds that can be  used to purchase                                                            
the life  insurance and  expand the  category.   At present  it only                                                            
pertains  to family  members but  often one  wants to  extend it  to                                                            
grandchildren.  The final  area relates to the division of property.                                                            
When community property  was discussed in 1998, division of property                                                            
upon  death was  not covered.   HB  181 specifies  that  if one  has                                                            
different property items,  they can be allocated differently as long                                                            
as the surviving spouse receives half of the total value.                                                                       
                                                                                                                                
MR. DAVE CHAFFTEL, an Anchorage  attorney, said he is one of a group                                                            
of  estate planning  attorneys  who  have helped  with  some of  the                                                            
technical  matters of  drafting estate  planning  legislation.   The                                                            
group  has   found  that  the  community   property  act   that  the                                                            
legislature  passed in  1998 has  been very  popular.   Most of  his                                                            
clients opt to designate  some or all of their property as community                                                            
property  so the bill  has been  very successful  and beneficial  to                                                            
Alaskans.  He said:                                                                                                             
                                                                                                                                
     We originally  adopted the Uniform  Marital Property  Act,                                                                 
     which  was a uniform act that  provided a basic framework                                                                  
     for community property but  has a number of gaps, as a lot                                                                 
     of these model  acts do, and they need to be designed  for                                                                 
     each  state.   That's  what  this  bill  is doing  -  it's                                                                 
     filling in  some of the gaps in a number of areas  that we                                                                 
     have noticed  either are ambiguous or need resolution  for                                                                 
     Alaskans.                                                                                                                  
                                                                                                                                
CHAIRMAN  TAYLOR  thanked  Mr.  Chafftel  for his  efforts  on  this                                                            
legislation.   He said that he plans to hold a hearing  next session                                                            
for the  specific purpose  of learning  what has  happened with  the                                                            
trust modifications made  by the legislature.  He pointed out that a                                                            
lot of  local people  owned large  pieces of land,  homes and  other                                                            
things and would have been  wiped out by taxes if it hadn't been for                                                            
some unique  properties provided by  Alaska that other states  don't                                                            
have.                                                                                                                           
                                                                                                                                
SENATOR  DONLEY   moved  HB  181  from  committee  with   individual                                                            
recommendations and its accompanying zero fiscal note.                                                                          
                                                                                                                                
CHAIRMAN TAYLOR announced  that with no objection, HB 181 moved from                                                            
committee.