Legislature(1993 - 1994)

03/09/1994 01:53 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 SENATOR TAYLOR brought  HB 280  (UNIFORM CUSTODIAL TRUST ACT) before     e    
 the committee as the next order of business.                                  
                                                                               
 KAREN BRAND, staff to Representative Carl Moses, explained that               
 currently, through state law, an individual can create a trust, but           
 it is very expensive and time consuming for an attorney to do such.           
 However, there is no reference to trusts in Alaska statute now, and           
 HB 280 creates a guideline that can either be filled out by an                
 owner or put together by an attorney with minimal time.                       
                                                                               
 The Uniform Custodial Trust Act (UCTA) covers all personal                    
 property, financial assets, tangibles, etc.  Control remains with             
 the individual until that individual becomes incompacitated, at               
 which time the property would be cared for in the manner set out in           
 the trust by that individual.                                                 
                                                                               
 Number 520                                                                    
                                                                               
 SENATOR LITTLE asked if this legislation would change any of the              
 inheritence tax policies.  ART PETERSON, a Uniform Tax Law                    
 Commissioner, responded that it shouldn't.  There is the potential            
 for a person with a large or complicated estate, but the liklihood            
 of that situation occuring is extremely slim.  One of the effects             
 of the use of this kind of trust would be probate avoidance,                  
 because the owner can create this trust and designate the                     
 beneficiary.                                                                  
                                                                               
 SENATOR TAYLOR disagreed, saying the liklihood of it occuring with            
 anyone that has a very large estate is very great; that they are              
 going to utilize some form of trust mechanism for probate or estate           
 avoidance.  He asked what the effect would be on marital estates.             
 ART PETERSON said a married person could create one of these trusts           
 and have the effect of precluding the spouse's share.  It doesn't             
 change the law, but it does add an option that will have a fairly             
 broad range of uses.                                                          
                                                                               
 ART PETERSON then outlined provisions in the bill, and noted that             
 nine states have now adopted a Uniform Custodial Trust Act.  He               
 said he doesn't know of any downside to the Act, and it does                  
 provide something that would put into the statute a simple,                   
 inexpensive option for people to use.  He also pointed out that               
 there are numerous protections built into the Act, both for the               
 grantor/beneficiary or for the grantee/beneficiary, and for the               
 trustee.                                                                      
                                                                               
 Number 325                                                                    
                                                                               
 SENATOR TAYLOR stated it was his intention to move HB 280 out of              
 committee, once a quorum was reestablished in the committee.                  

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