04/02/2012 01:30 PM House FINANCE

HOUSE BILL NO. 292                                                                                                            
                                                                                                                                
     "An Act relating to  property exemptions for retirement                                                                    
     plans;  relating to  pleadings, orders,  liability, and                                                                    
     notices  under the  Uniform Probate  Code; relating  to                                                                    
     the Alaska  Principal and Income  Act; relating  to the                                                                    
     Alaska  Uniform Transfers  to Minors  Act; relating  to                                                                    
     the   disposition  of   human   remains;  relating   to                                                                    
     insurable  interests   for  life   insurance  policies;                                                                    
     relating to  transfers of individual  retirement plans;                                                                    
     relating to the community  property of married persons;                                                                    
     and amending Rule 301(a), Alaska Rules of Evidence."                                                                       
                                                                                                                                
3:14:40 PM                                                                                                                    
                                                                                                                                
Vice-chair Fairclough MOVED CSHB  292(L&C), 27-LS1232/I as a                                                                    
working  document  before  the  committee.  There  being  NO                                                                    
OBJECTION it was so ordered.                                                                                                    
                                                                                                                                
JANE   PIERSON,   STAFF,  REPRESENTATIVE   STEVE   THOMPSON,                                                                    
explained  the  legislation.  She   read  from  the  sponsor                                                                    
statement:                                                                                                                      
                                                                                                                                
     House Bill 292 provides for amendments to statute in                                                                       
     the following areas:                                                                                                       
                                                                                                                                
        · Extends protection  for retirement plan  assets to                                                                    
          the beneficiaries of retirement plans (often the                                                                      
          surviving spouse).                                                                                                    
        · Provides  means of  representation for  minors and                                                                    
          incapacitated persons in dealing with settlements                                                                     
          of accounts or settlement agreements.                                                                                 
        · Amends the  2003 Alaska  Principal and  Income Act                                                                    
          to conform to current IRS regulations.                                                                                
        · Provides  rules  concerning  who may  control  the                                                                    
          disposition of decedents' remains.                                                                                    
        · Makes  conforming  amendments   to  Alaska's  laws                                                                    
          regarding insurable interests to align with                                                                           
          changes to the Uniform Trust Code.                                                                                    
        · Provides  that IRA  interests  can be  voluntarily                                                                    
         transferred to a family member or trust.                                                                               
        · Makes  amendments to  Alaska's community  property                                                                    
          provisions to update and clarify the ownership of                                                                     
          community property.                                                                                                   
        · Allows  a beneficiary  to  extend  the time  funds                                                                    
          will be held in a Uniform Transfer to Minors                                                                          
          Account.                                                                                                              
                                                                                                                                
3:17:08 PM                                                                                                                    
                                                                                                                                
DAVID    SHAFTEL,   PRIVATE    ATTORNEY,   ANCHORAGE    (via                                                                    
teleconference),  detailed the  sectional analysis  (copy on                                                                    
file).                                                                                                                          
                                                                                                                                
Representative Edgmon asked for the highlights of the bill.                                                                     
Mr. Shaftel  pointed to  Section 4 and  5, which  dealt with                                                                    
extending virtual  representation from agreements  that were                                                                    
reached in court to agreements  that were reached outside of                                                                    
court,  such   as  settlements  or  trust   accountings.  He                                                                    
furthered that  Sections 6 through  8 spoke to a  method for                                                                    
modifying  trust, and  had  been adopted  by  13 states.  He                                                                    
continued  to  explain that  Sections  9-25  dealt with  the                                                                    
Alaska  Principal  and  Income  Act,  and  incorporated  new                                                                    
federal  regulations   and  recommendations   from  national                                                                    
experts to  improve the income  act. Sections 26  through 28                                                                    
detailed  the  amendments  to Alaska  Uniform  Transfers  to                                                                    
Minors  Act; the  change allowed,  with the  minors consent,                                                                    
the  extension of  the accounts  beyond  the age  of 25.  He                                                                    
concluded that Section 29 related to decedents remains.                                                                         
                                                                                                                                
3:22:19 PM                                                                                                                    
                                                                                                                                
Representative  Costello asked  whether Sections  26 through                                                                    
28 provided  a ceiling of 25  years of age, or  extended the                                                                    
age.                                                                                                                            
                                                                                                                                
Mr. Shaftel replied  that the extension could  be applied to                                                                    
any age that was agreeable to the minor and the custodian.                                                                      
                                                                                                                                
Representative  Costello asked  about the  priority list  in                                                                    
Section 29 related to the decision of disposing of remains.                                                                     
                                                                                                                                
Mr. Shaftel answered  that the list could be  found on Pages                                                                    
24 and  25 of the  bill. He  continued to Section  30, which                                                                    
spoke to insurable interests and  clarified the law and made                                                                    
it clear  that trusts and  business entities could  own life                                                                    
insurance if the beneficiaries were  those with an insurable                                                                    
interest. He stated that Section  31 dealt with transfers of                                                                    
IRA interests and allowed for  the voluntary transfer of IRA                                                                    
interests for estate planning  purposes. Sections 32 through                                                                    
36 spoke to  the state community property  act and clarified                                                                    
survivorship questions and beneficiary designations.                                                                            
                                                                                                                                
3:25:23 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg asked about  sections 6 through 8;                                                                    
particularly  the  last  paragraph. He  wondered  about  the                                                                    
level of flexibility that would  be allowed for adjusting to                                                                    
changing circumstances.                                                                                                         
                                                                                                                                
Mr.  Shaftel  replied  that  the statute  was  a  result  of                                                                    
hearing  in New  York concerning  the balance  of correcting                                                                    
administrative types  of errors and dispositive  changes. He                                                                    
said that when making a  change to the trust the dispositive                                                                    
plan  in place  would  need  to be  followed.  He said  that                                                                    
increasingly he had  seen plans where the  trustee was given                                                                    
absolute  discretion to  make  distributions, which  allowed                                                                    
for more  leeway. He  relayed that there  was no  such thing                                                                    
anymore as a completely  irrevocable trust. He stressed that                                                                    
the provision had been carefully vetted.                                                                                        
                                                                                                                                
3:27:58 PM                                                                                                                    
DOUGLAS    BLATTMACHR,    ALASKA    TRUST    COMPANY    (via                                                                    
teleconference), spoke in strong support of the bill.                                                                           
                                                                                                                                
BETH CHAPMAN,  PRIVATE ATTORNEY, JUNEAU,  strongly supported                                                                    
the legislation.                                                                                                                
                                                                                                                                
Representative Gara asked whether  there was any language in                                                                    
the bill  that would weaken  the rights of  beneficiaries or                                                                    
victims of fraud.                                                                                                               
                                                                                                                                
Ms. Chapman responded in the negative.                                                                                          
                                                                                                                                
Co-Chair Thomas CLOSED public testimony.                                                                                        
                                                                                                                                
Vice-chair  Fairclough discussed  the one  zero fiscal  note                                                                    
from   Department  of   Commerce,  Community   and  Economic                                                                    
Development.                                                                                                                    
                                                                                                                                
Vice-chair Fairclough  MOVED to report CSHB  292(L&C) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  292(L&C) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with  one previously published zero                                                                    
fiscal note: FN1 (CED).