04/20/2001 01:18 PM House JUD

SB 81 - NONADEMPTION OF TRANSFERS IN TRUSTS                                                                                   
                                                                                                                                
Number 0595                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be SENATE  BILL NO. 81, "An  Act relating to the  nonademption of                                                               
property transfers; and providing for an effective date."                                                                       
                                                                                                                                
Number 0585                                                                                                                     
                                                                                                                                
WILDA  RODMAN, Staff  to Senator  Gene  Therriault, Alaska  State                                                               
Legislature, presented  SB 81 on  behalf of the  sponsor, Senator                                                               
Therriault.  She  explained that SB 81 will make  a correction to                                                               
HB 275  [21st Alaska  State Legislature],  which changed  some of                                                               
the  rules   of  construction  applicable  to   wills  and  other                                                               
governing  instruments.   She  noted  that Section  1  of HB  275                                                               
changed a rule of construction  that outlines what happens when a                                                               
request in  a will cannot be  carried out, and that  Section 2 of                                                               
HB 275  was meant  to take  the section  pertaining to  wills and                                                               
apply it  to trusts.   When  HB 275  was drafted,  she explained,                                                               
some intended  changes were  overlooked, and  SB 81  will correct                                                               
these  discrepancies  in  the  language.    She  noted  that  the                                                               
Department of Law (DOL) has  provided a letter confirming that SB
 appears  to accomplish  this, and  that the  sponsor statement                                                               
for HB 275 has also been provided.                                                                                              
                                                                                                                                
Number 0491                                                                                                                     
                                                                                                                                
STEPHEN E.  GREER, Attorney at Law,  testified via teleconference                                                               
and assisted with  the presentation of SB 81.   He concurred that                                                               
SB 81  is merely  a technical  correction of  legislation adopted                                                               
last year.   Specifically, SB 81 is meant to  change the language                                                               
in the  Uniform Probate Code regarding  nonademption [of property                                                               
transfers].  He explained that SB 81 says:                                                                                      
                                                                                                                                
     Nonademption refers  to rule construction  that applies                                                                    
     when a person creating a  trust or will designates that                                                                    
     a  specific person  is to  receive a  specific item  of                                                                    
     property, and  at death  that is  unable to  be carried                                                                    
     out because  the property  no longer  exists.   And the                                                                    
     general rule  is that the  specific request  is adeemed                                                                    
     or extinguished  if the property  doesn't exist  at the                                                                    
     death of the  settlor.  ... This  rule of construction,                                                                    
     which can always  be altered by a will -  or [a] trust,                                                                    
     in this case - is applied if nothing's stated.                                                                             
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked  if the  following interpretation                                                               
of Section 2 is correct:  "If you  sell the property - get rid of                                                               
it - then the beneficiary gets the money?"                                                                                      
                                                                                                                                
MR. GREER responded:                                                                                                            
                                                                                                                                
     If  you  sell the  property  before  you die,  and  the                                                                    
     property no  longer exists,  then the  specific legatee                                                                    
     will  not receive  that  property;  that's the  general                                                                    
     rule.   And in  this particular  section, it  says that                                                                    
     general  rule [will]  be  altered  in certain  specific                                                                    
     situations that are spelled out in the Uniform Probate                                                                     
     Code.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  BERKOWITZ said,  "So, under  these circumstances,                                                               
if someone  gets rid of  the property, then the  beneficiary gets                                                               
compensation."                                                                                                                  
                                                                                                                                
MR. GREER  said yes, under certain  limited circumstances spelled                                                               
out in [this] section.                                                                                                          
                                                                                                                                
REPRESENTATIVE JAMES added, "If there's any left."                                                                              
                                                                                                                                
MR. GREER noted  that the sponsor statements  detail the specific                                                               
circumstances under which Section 2 of SB 81 would apply.                                                                       
                                                                                                                                
Number 0238                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES moved to report  SB 81 out of committee with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.   There being  no objection,  SB 81  was reported  from the                                                               
House Judiciary Standing Committee.