00 CS FOR HOUSE BILL NO. 181(JUD) 01 "An Act relating to the obligations of spouses, to insurance policies of spouses, to the 02 nonprobate transfer of property on death to a community property trust, to the division 03 of the community property of spouses at death, and to the Alaska Community Property 04 Act; amending Rule 301, Alaska Rules of Evidence; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06  * Section 1. AS 34.77.070 is amended by adding new subsections to read: 07 (j) An obligation incurred by only one spouse before or during marriage may 08 be satisfied only from the property of that spouse that is not community property and 09 from that spouse's interest in community property. This subsection does not apply to 10 an obligation described in (b) of this section. 11 (k) An obligation incurred during marriage by both spouses may be satisfied 12 from property of each spouse that is not community property and from the community 13 property. 14  * Sec. 2. AS 34.77.100 is amended by adding a new subsection to read: 01 (i) In addition to other transfers of property to a community property trust, 02 property will be considered transferred to a community property trust if the property is 03 subject to a nonprobate transfer on death under AS 13.33.101 and the community 04 property trust is designated as the beneficiary to receive the property under the 05 transfer. 06  * Sec. 3. AS 34.77.120(b) is amended to read: 07 (b) Except as provided in (c) - (e) of this section, 08 (1) the ownership interest in and proceeds of a policy that insures the 09 life of one of the spouses and that has been classified by a community property 10 agreement or a community property trust as community property are community 11 property without regard to the classification of property used to pay premiums on the 12 policy; 13 (2) the ownership interest in and proceeds of a policy that is owned by 14 one spouse and that has not been classified by a community property agreement or a 15 community property trust as community property are mixed property if all or part of a 16 premium on the policy is paid from community property after the determination date; 17 the community property component of the ownership interest and proceeds is the part 18 resulting from multiplying the entire ownership interest and proceeds by a fraction that 19 consists of a numerator that is the sum of the net premiums and portions of net 20 premiums paid from community property and a denominator that is the sum of the net 21 premiums paid; 22 (3) the ownership interest in and proceeds of a policy issued during 23 marriage that designates the spouse of the insured as the owner are the individual 24 property of the owner without regard to the classification of property used to pay 25 premiums on the policy; 26 (4) the ownership interest in and proceeds of a policy that designates a 27 person other than either of the spouses as the owner are not affected by this chapter if 28 a premium on the policy is not paid from community property after the determination 29 date; if all or part of a premium on the policy is paid from community property after 30 the determination date, the ownership interest and proceeds of the policy are in part 31 property of the designated owner of the policy and in part community property of the 01 spouses without regard to the classification of property used to pay premiums on the 02 policy after the initial payment of a premium on the policy from community property; 03 the community property component of the ownership interest and proceeds is the part 04 resulting from multiplying the entire ownership interest and proceeds by a fraction that 05 consists of a numerator that is the sum of the net premiums and portions of net 06 premiums paid from community property and a denominator that is the sum of the net 07 premiums paid; 08 (5) written consent by a spouse to the designation of another person as 09 the beneficiary of the proceeds of a policy is effective to relinquish that spouse's 10 interest in the ownership interest and proceeds of the policy without regard to the 11 classification of property used by a spouse or another person to pay premiums on the 12 policy; a designation of any of the following persons or trusts as the beneficiary of  13 a policy is presumed to have been made with the consent of the other [BY 14 EITHER] spouse:  15 (A) [OF A PARENT OR CHILD OF EITHER OF THE 16 SPOUSES AS THE BENEFICIARY OF THE PROCEEDS OF A POLICY IS 17 PRESUMED TO HAVE BEEN MADE WITH THE CONSENT OF] the other 18 spouse or an ancestor or descendant of either spouse; or  19 (B) a trust, to the extent that its beneficiaries consist of one  20 or more of the persons named in (A) of this paragraph; 21 (6) unless the spouses provide otherwise in a community property 22 agreement or community property trust, designation of a trust as the beneficiary of the 23 proceeds of a policy with a community property component does not reclassify the 24 component;  25 (7) unless the spouses provide otherwise, if an irrevocable trust  26 owns a life insurance policy insuring the life of one spouse and the spouse whose  27 life is not insured by the policy is provided a beneficial interest in the trust, then,  28 before a contribution of assets to the trust, the spouse whose life is not insured by  29 the policy is presumed to have relinquished any community property interest  30 that the spouse whose life is not insured by the policy may have had in the assets  31 contributed to the trust; the presumption in this paragraph applies only to the  01 extent that the beneficiaries of the trust consist of one or more of the following  02 persons:  03 (A) the spouse whose life is not insured;  04 (B) an ancestor of either spouse;  05 (C) a descendant of either spouse;  06 (8) the testimony of the spouse whose life is not insured is sufficient  07 to rebut a presumption in (5) or (7) of this subsection. 08  * Sec. 4. AS 34.77.120(e) is amended to read: 09 (e) This section does not affect the ownership interest or proceeds of a policy 10 unless a spouse or a trust described in (b)(7) of this section is designated as an 11 owner in the policy or on the records of the policy issuer and community property is 12 used to pay a premium on the policy. 13  * Sec. 5. AS 34.77 is amended by adding a new section to read: 14 Sec. 34.77.155. Division of community property at death. (a) Upon the 15 death of a spouse, one-half of the aggregate value of the community property owned 16 by the spouses and by any community property trust established by the spouses 17 reflects the share of the surviving spouse and the other one-half reflects the share of 18 the decedent. 19 (b) Upon the death of a spouse, the deceased spouse's personal representative 20 and the trustee of a community property trust each have the power to distribute 21 community property in divided or undivided interests and to adjust resulting 22 differences in valuation. A distribution of community property in kind may be made 23 on the basis of a non pro rata division of the aggregate value of the community 24 property, on the basis of a pro rata division of each individual item or asset of 25 community property, or by using both methods. 26 (c) Notwithstanding (a) and (b) of this section, spouses may agree in writing to 27 divide their community property on the basis of a non pro rata division of the 28 aggregate value of the community property or on the basis of a pro rata division of 29 each individual item or asset of community property, or by using both methods. 30  * Sec. 6. AS 34.77.070(a), 34.77.070(c), 34.77.070(d), and 34.77.070(e) are repealed. 31  * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 01 read: 02 INDIRECT COURT RULE AMENDMENT. AS 34.77.120(b)(8), enacted by sec. 3 03 of this Act, amends Rule 301, Alaska Rules of Evidence, by changing the rule's general 04 criteria for the evidence that must be introduced to satisfy the burden of proof to rebut the 05 presumptions established by AS 34.77.120(b)(5) or (7). AS 34.77.120(b)(8) provides that the 06 testimony of a spouse is sufficient to satisfy the burden without having to apply the rule's 07 requirement that the evidence be sufficient to permit reasonable minds to conclude that the 08 presumed fact does not exist. 09  * Sec. 8. This Act takes effect immediately under AS 01.10.070(c).