HB 459: "An Act relating to the jurisdiction governing a trust, to challenges to trusts or property transfers in trust, to the validity of trust interests, and to transfers of certain trust interests."
00HOUSE BILL NO. 459 01 "An Act relating to the jurisdiction governing a trust, to challenges to trusts or 02 property transfers in trust, to the validity of trust interests, and to transfers of 03 certain trust interests." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 13.36.035(a) is amended to read: 06 (a) The court has exclusive jurisdiction of proceedings initiated by interested 07 parties concerning the internal affairs of trusts, including trusts covered by (c) of this 08 section. Except as provided in (c) - (d) of this section, proceedings that [. 09 PROCEEDINGS WHICH] may be maintained under this section are those concerning 10 the administration and distribution of trusts, the declaration of rights and the 11 determination of other matters involving trustees and beneficiaries of trusts. These 12 include [, BUT ARE NOT LIMITED TO,] proceedings to 13 (1) appoint or remove a trustee; 14 (2) review trustees' fees and to review and settle interim or final
01 accounts; 02 (3) ascertain beneficiaries, determine any question arising in the 03 administration or distribution of any trust including questions of construction of trust 04 instruments, instruct trustees, and determine the existence or nonexistence of any 05 immunity, power, privilege, duty or right; and 06 (4) release registration of a trust. 07 * Sec. 2. AS 13.36.035 is amended by adding new subsections to read: 08 (c) A provision that the laws of this state govern the validity, construction, and 09 administration of the trust and that the trust is subject to the jurisdiction of this state 10 is valid, effective, and conclusive for the trust if 11 (1) some or all of the trust assets are deposited in this state or are being 12 managed by a qualified person; or 13 (2) the trustee is a qualified person. 14 (d) The validity, construction, and administration of a trust with a state 15 jurisdiction provision are determined by the laws of this state, including the 16 (1) capacity of the settlor; 17 (2) powers, obligations, liabilities, and rights of the trustees and the 18 appointment and removal of the trustee; and 19 (3) existence and extent of powers, conferred or retained, including a 20 trustee's discretionary powers, the powers retained by a beneficiary of the trust, and 21 the validity of the exercise of a power. 22 * Sec. 3. AS 13.36.045(a) is amended to read: 23 (a) The court will not, over the objection of a party, entertain proceedings 24 under AS 13.36.035 involving a trust registered or having its principal place of 25 administration in another state, unless 26 (1) all appropriate parties could not be bound by litigation in the courts 27 of the state where the trust is registered or has its principal place of administration; 28 [OR] 29 (2) the interests of justice otherwise would seriously be impaired; or 30 (3) the trust contains a state jurisdiction provision; and 31 (A) some or all of the trust assets are deposited in this state
01 or are being managed by a qualified person; or 02 (B) the trustee is a qualified person. 03 * Sec. 4. AS 13.36 is amended by adding new sections to read: 04 Sec. 13.36.310. CHALLENGES TO TRUST. Except as provided in 05 AS 34.40.110, a trust that is covered by AS 13.36.035(c) or that is otherwise governed 06 by the laws of this state, or a property transfer in trust that is covered by 07 AS 13.36.035(c) or that is otherwise governed by the laws of this state, is not void, 08 voidable, liable to be set aside, defective in any fashion, or questionable as to the 09 settlor's capacity, on the grounds that the trust or transfer avoids or defeats a right, 10 claim, or interest, or contravenes a law or a judicial or administrative order or action 11 that recognizes, protects, enforces, or gives effect to the right, claim, or interest. In 12 this subsection, "right, claim, or interest" means a right, claim, or interest conferred by 13 law on a person by reason of a personal or business relationship with the settlor or by 14 way of a marital or similar right. 15 Sec. 13.36.390. DEFINITIONS. In AS 13.36, 16 (1) "qualified person" means 17 (A) an individual who, except for brief intervals, military 18 service, attendance at an educational or training institution, or for absences for 19 good cause shown, resides in this state, whose true and permanent home is in 20 this state, who does not have a present intention of moving from this state, and 21 who has the intention of returning to this state when away; or 22 (B) a trust company that is organized under AS 06.25 and that 23 has its principal place of business in this state; 24 (2) "settlor" means a person who transfers property in trust; "settlor" 25 includes a person who furnishes the property transferred to a trust even if the trust is 26 created by another person; 27 (3) "state jurisdiction provision" means a provision that the laws of this 28 state govern the validity, construction, and administration of a trust and that the trust 29 is subject to the jurisdiction of this state. 30 * Sec. 5. AS 34.27.050(a) is amended to read: 31 (a) A nonvested property interest is invalid unless
01 (1) when the interest is created, it is certain to vest or terminate no later 02 than 21 years after the death of an individual then alive; [OR] 03 (2) the interest either vests or terminates within 90 years after its 04 creation; or 05 (3) the interest is in a trust and all or part of the income or 06 principal of the trust may be distributed, in the discretion of the trustee, to a 07 person who is living when the trust is created. 08 * Sec. 6. AS 34.27.060 is amended to read: 09 Sec. 34.27.060. REFORMATION. Upon the petition of an interested person, 10 a court shall reform a disposition in the manner that most closely approximates the 11 transferor's manifested plan of distribution and is within the 90 years allowed by 12 AS 34.27.050(a)(2), (b)(2), or (c)(2) if 13 (1) a nonvested property interest or a power of appointment becomes 14 invalid under AS 34.27.050; 15 (2) a class gift is not but might become invalid under AS 34.27.050 and 16 the time has arrived when the share of any class member is to take effect in possession 17 or enjoyment; or 18 (3) a nonvested property interest that is not validated by 19 AS 34.27.050(a)(1) or (3) can vest but not within 90 years after its creation. 20 * Sec. 7. AS 34.40.010 is amended to read: 21 Sec. 34.40.010. INVALIDITY GENERALLY. Except as provided in 22 AS 34.40.110, a [A] conveyance or assignment, in writing or otherwise, of an estate 23 or interest in land, or in goods, or things in action, or of rents or profits issuing from 24 them or a charge upon land, goods, or things in action, or upon the rents or profits 25 from them, made with the intent to hinder, delay, or defraud creditors or other persons 26 of their lawful suits, damages, forfeitures, debts, or demands, or a bond or other 27 evidence of debt given, action commenced, decree or judgment suffered, with the like 28 intent, as against the persons so hindered, delayed, or defrauded is void. 29 * Sec. 8. AS 34.40.110 is repealed and reenacted to read: 30 Sec. 34.40.110. RESTRICTING TRANSFERS OF TRUST INTERESTS. (a) 31 A person who in writing transfers property in trust may provide that the interest of a
01 beneficiary of the trust may not be either voluntarily or involuntarily transferred before 02 payment or delivery of the interest to the beneficiary by the trustee. In this subsection, 03 (1) "property" includes real property, personal property, and interests 04 in real or personal property; 05 (2) "transfer" means any form of transfer, including deed, conveyance, 06 or assignment. 07 (b) If a trust contains a transfer restriction allowed under (a) of this section, 08 the transfer restriction prevents a creditor existing when the trust is created, a person 09 who subsequently becomes a creditor, or another person from satisfying a claim out 10 of the beneficiary's interest in the trust, unless the 11 (1) transfer was intended in whole or in part to hinder, delay, or 12 defraud creditors or other persons under AS 34.40.010; 13 (2) trust provides that the settlor may revoke or terminate all or part 14 of the trust without the consent of a person who has a substantial beneficial interest 15 in the trust and the interest would be adversely affected by the exercise of the power 16 held by the settlor to revoke or terminate all or part of the trust; in this paragraph, 17 "revoke or terminate" does not include a power to veto a distribution from the trust or 18 a similar power; or 19 (3) trust requires that all or a part of the trust's income or principal, or 20 both, must be distributed to the settlor. 21 (c) The satisfaction of a claim under (b)(1) - (3) of this section is limited to 22 that part of the trust to which (b)(1) - (3) of this section applies. 23 (d) In this section, "settlor" means a person who transfers real property, 24 personal property, or an interest in real or personal property, in trust. 25 * Sec. 9. This Act does not apply to a trust unless the trust is created on or after the 26 effective date of this Act.