CSHB 196(JUD): "An Act relating to wills, intestacy, nonprobate transfers, and trusts; and amending Rule 24, Alaska Rules of Civil Procedure."
00CS FOR HOUSE BILL NO. 196(JUD) 01 "An Act relating to wills, intestacy, nonprobate transfers, and trusts; and 02 amending Rule 24, Alaska Rules of Civil Procedure." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 13.06 is amended by adding a new section to read: 05 Sec. 13.06.068. Choice of law; validity. (a) Subject to the other provisions 06 of this section, the formal validity, intrinsic validity, effect, interpretation, revocation, 07 or alteration of a testamentary disposition of real property and the manner in which the 08 property descends at death when not disposed of by will are determined by the law of 09 the jurisdiction in which the land is situated. 10 (b) Subject to the other provisions of this section, the intrinsic validity, effect, 11 revocation, or alteration of a testamentary disposition of personal property and the 12 manner in which the property devolves at death when not disposed of by will are 13 determined by the law of the jurisdiction in which the decedent was domiciled at 14 death.
01 (c) A will disposing of personal property, wherever situated, or real property 02 situated in this state made within or outside this state by a domiciliary or 03 nondomiciliary of the state where the property is situated, is formally valid and 04 admissible to probate in this state if the will is in writing and signed by the testator 05 and otherwise executed and attested to under the local law of 06 (1) this state; 07 (2) the jurisdiction where the will was executed at the time of 08 execution; or 09 (3) the jurisdiction where the testator was domiciled, either at the time 10 of execution or at death. 11 (d) A testamentary disposition of personal property intrinsically valid under 12 the law of the jurisdiction where the testator was domiciled when the will was 13 executed is not affected by a subsequent change in the domicile of the testator to a 14 jurisdiction under the law of which the disposition is intrinsically invalid. 15 (e) The interpretation of a testamentary disposition of personal property shall 16 be made under the local law of the jurisdiction where the testator was domiciled when 17 the will was executed. 18 (f) Whether a testamentary disposition of personal property is effectively 19 revoked or altered by a subsequent testamentary instrument or by a physical act to or 20 on the will by which the testamentary disposition was made is determined by the local 21 law of the jurisdiction where the testator was domiciled when the subsequent 22 instrument was executed or the physical act performed. 23 (g) Subject to (d) - (f) of this section, the intrinsic validity, effect, revocation 24 or alteration of a testamentary disposition by which a power of appointment over 25 personal property is exercised and the question of whether the power has been 26 exercised at all are determined by 27 (1) in the case of a presently exercisable general power of appointment, 28 the local law of the jurisdiction where the donee of the power was domiciled at the 29 time of death; 30 (2) in the case of a general power of appointment exercisable by will 31 alone or a special power of appointment, the local law of the jurisdiction
01 (A) that the donor of the power expressly selected in the 02 governing instrument to govern the disposition; or 03 (B) where the donor of the power was domiciled at the time of 04 death if the donor did not expressly select in the governing instrument a 05 jurisdiction to govern the disposition. 06 (h) The formal validity of a will by which a power of appointment over 07 personal property is exercised is determined under (b) of this section on the basis that 08 the testator referred to in (b) of this section is the donee of the power. 09 (i) When a testator, who is not domiciled in this state at the time of death, 10 provides in the testator's will that the testator elects to have the disposition of the 11 testator's property situated in this state governed by the local law of this state, the 12 intrinsic validity, including the testator's general capacity, effect, interpretation, 13 revocation, or alteration of the provision, is determined by the local law of this state. 14 The formal validity of the will is determined under (b) of this section. 15 (j) Notwithstanding the definition of "real property", as set out in (l) of this 16 section, whether an estate in, leasehold of, fixture, mortgage, or other lien on land is 17 real property governed by (a) of this section or personal property governed by (b) of 18 this section is determined by the local law of the jurisdiction where the land is 19 situated. 20 (k) Notwithstanding the other provisions of AS 13.06 - AS 13.36, the 21 provisions of this section govern in AS 13.06 - AS 13.36. 22 (l) In this section, 23 (1) "effect" means the legal consequences attributed under the local law 24 of a jurisdiction to a valid testamentary disposition; 25 (2) "formal validity" means the formalities established by the local law 26 of a jurisdiction for the execution and attestation of a will; 27 (3) "interpretation" means the procedure of applying the law of a 28 jurisdiction to determine the meaning of language employed by the testator if the 29 testator's intention is not otherwise ascertainable; 30 (4) "intrinsic validity" means the rules of substantive local law by 31 which a jurisdiction determines the legality of a testamentary disposition, including the
01 general capacity of the testator; 02 (5) "local law" means the law that the courts of a jurisdiction apply 03 when adjudicating legal questions that are not related to another jurisdiction; 04 (6) "personal property" means property other than real property, and 05 includes tangible and intangible property; 06 (7) "real property" means land or an estate in land, and includes 07 leaseholds, fixtures, and mortgages or other liens on land; 08 (8) "testamentary disposition" means disposition under a will. 09 * Sec. 2. AS 13.12.401 is amended to read: 10 Sec. 13.12.401. Applicable law. Except as provided in AS 13.06.068, 11 AS 13.12.401 - 13.12.405 [AS 12.13.401 - 12.13.405] apply to the estate of a decedent 12 who dies domiciled in this state , and rights [. RIGHTS] to homestead allowance, 13 exempt property, and family allowance for a decedent who dies not domiciled in this 14 state are governed by the law of the decedent's domicile at death. 15 * Sec. 3. AS 13.12.502 is amended to read: 16 Sec. 13.12.502. Execution; witnessed wills; holographic wills. (a) Except 17 as provided in (b) of this section , AS 13.06.068, [AND IN] AS 13.12.506 , and 18 13.12.513, a will must be 19 (1) in writing; 20 (2) signed by the testator or in the testator's name by another individual 21 in the testator's conscious presence and by the testator's direction; and 22 (3) signed by at least two individuals, each of whom signs within a 23 reasonable time after the witness witnesses either the signing of the will as described 24 in (2) of this subsection or the testator's acknowledgment of that signature or the will. 25 (b) Except as provided in AS 13.06.068, a [A] will that does not comply with 26 (a) of this section is valid as a holographic will, whether or not witnessed, if the 27 signature and material portions of the document are in the testator's handwriting. 28 * Sec. 4. AS 13.12.506 is amended to read: 29 Sec. 13.12.506. Choice of law as to execution. Except as provided by 30 AS 13.06.068, a [A] written will is valid if executed in compliance with AS 13.12.502 31 or if its execution complies with the law at the time of execution of the place where
01 the will is executed [,] or of the law of the place where , at the time of execution or 02 at the time of death , the testator is domiciled, has a place of abode, or is a national. 03 * Sec. 5. AS 13.12.601 is amended to read: 04 Sec. 13.12.601. Scope. Except as provided in AS 13.06.068, in [IN] the 05 absence of a finding of a contrary intention, the rules of construction in AS 13.12.601 06 - 13.12.609 control the construction of a will. 07 * Sec. 6. AS 13.12.703 is amended by adding a new subsection to read: 08 (b) The provisions of (a) of this section are subject to AS 13.06.068. 09 * Sec. 7. AS 13.12.912(a) is amended to read: 10 (a) Except as provided by AS 13.06.068, a [A] will is valid as regards form, 11 irrespective of the place where the will is made, of the location of the assets , and of 12 the nationality, domicile, or residence of the testator, if the will is made in the form 13 of an international will complying with the requirements of AS 13.12.912 - 13.12.921. 14 * Sec. 8. AS 13.16.175 is amended to read: 15 Sec. 13.16.175. Formal testacy proceedings; will construction; effect of 16 final order in another jurisdiction. Subject to AS 13.06.068, a [A] final order of 17 a court of another state determining testacy, the validity , or construction of a will [,] 18 made in a proceeding involving notice to and an opportunity for contest by all 19 interested persons must be accepted as determinative by the courts of this state if it 20 includes, or is based upon, a finding that the decedent was domiciled at death in the 21 state where the order was made. 22 * Sec. 9. AS 13.36 is amended by adding a new section to read: 23 Sec. 13.36.043. Change of situs to Alaska. (a) The situs of a foreign trust 24 is moved to this state when the trust satisfies AS 13.36.035(c) and a qualified person 25 serving as trustee registers the trust under AS 13.36.010. 26 (b) If the situs of a foreign trust is moved to this state as provided in this 27 section, a provision in the trust that restricts the transfer of trust assets in a manner 28 similar to AS 34.40.110, that allows the trust to be perpetual, or that is not expressly 29 prohibited by the law of this state is effective and enforceable under the laws of this 30 state. 31 (c) A foreign trust that moves its situs to this state is valid whether or not the
01 trust complied with the laws of this state at the time of its creation or after its creation. 02 (d) In this section, "foreign trust" means a trust that is created in another state 03 or country and that is valid in that state or country. 04 * Sec. 10. AS 13.36.075 is amended to read: 05 Sec. 13.36.075. Trustee's standard of care and performance. Except as 06 otherwise provided by the terms of the trust or by AS 13.36.105 - 13.36.295 , the 07 trustee shall observe the standards in dealing with the trust assets that would be 08 observed by a prudent person [MAN] dealing with the property of another, and , if the 09 trustee has special skills or is named trustee on the basis of representations of special 10 skills or expertise, the trustee is under a duty to use those skills. 11 * Sec. 11. AS 13.36.095(b) is amended to read: 12 (b) Subject to AS 13.36.105 - 13.36.295, a [A] trustee is personally liable for 13 obligations arising from ownership or control of property of the trust estate or for torts 14 committed in the course of administration of the trust estate only if personally at fault. 15 * Sec. 12. AS 13.36 is amended by adding new sections to article 3 to read: 16 Sec. 13.36.105. Powers attached to the office of trustee. Unless otherwise 17 provided by the trust instrument, an amendment of the trust instrument, or a court 18 order, the powers of a trustee are attached to the office and are not personal. 19 Sec. 13.36.107. General powers; fiduciary duties. (a) Without authorization 20 by a court, a trustee may exercise the powers conferred by the terms of the trust and, 21 except as limited by the terms of the trust, the powers conferred by this chapter. 22 (b) This chapter does not affect the power of a court to 23 (1) relieve a trustee from provisions contained in the terms of the trust 24 that restrict the exercise of powers; 25 (2) confer on a trustee additional powers, whether or not the powers 26 are authorized by the terms of the trust; or 27 (3) restrict the exercise of a power otherwise given to the trustee by the 28 terms of the trust or this chapter. 29 (c) The grant of a power to a trustee, whether under the terms of the trust, this 30 chapter, or a court, does not alone govern the exercise of the power. 31 Sec. 13.36.109. Specific powers of trustees. Except as otherwise provided
01 by this chapter, in addition to the powers conferred by the terms of the trust, a trustee 02 may perform all actions necessary to accomplish the proper management, investment, 03 and distribution of the trust property, including the power 04 (1) to collect, hold, and retain trust property received from a settlor or 05 another person; the property may be retained even if it includes property in which the 06 trustee is personally interested; 07 (2) to accept additions to the property of the trust from a settlor or 08 another person; 09 (3) to continue or to participate in the operation of a business or other 10 enterprise that is part of the trust property and to effect an incorporation, dissolution, 11 or other change in the form of the organization of the business or enterprise; 12 (4) to acquire or dispose of property, for cash or on credit, at public or 13 private sale or by exchange; 14 (5) to manage, control, divide, develop, improve, exchange, partition, 15 change the character of, or abandon trust property; 16 (6) to encumber, mortgage, or pledge trust property for a term within 17 or extending beyond the term of the trust in connection with the exercise of a power 18 vested in the trustee; 19 (7) to make ordinary or extraordinary repairs, alterations, or 20 improvements in buildings or other trust property; to demolish improvements; and to 21 raze existing or erect new party walls or buildings; 22 (8) to subdivide or develop land; to dedicate land to public use; to 23 make or obtain the vacation of plats and to adjust boundaries; to adjust differences in 24 valuation on exchange or partition by giving or receiving consideration; and to dedicate 25 easements to public use without consideration; 26 (9) to enter into a lease for any purpose as lessor or lessee with or 27 without the option to purchase or renew and for a term within or extending beyond the 28 term of the trust; 29 (10) to enter into a lease or arrangement for exploration and removal 30 of gas, oil, or other minerals or geothermal energy; and to enter into a community oil 31 lease, a pooling agreement, or a unitization agreement;
01 (11) to grant an option involving disposition of trust property or to take 02 an option for the acquisition of property, including an option that is exercisable beyond 03 the duration of the trust; 04 (12) with respect to shares of stock of a domestic or foreign 05 corporation, a membership in a nonprofit corporation, or other property, to 06 (A) vote in person and to give proxies to exercise any voting 07 rights with respect to the shares, memberships, or property; 08 (B) waive notice of a meeting or to give consent to the holding 09 of a meeting; and 10 (C) authorize, ratify, approve, or confirm an action that could 11 be taken by shareholders, members, or property owners; 12 (13) to pay calls, assessments, and other sums chargeable to or accruing 13 against or on a securities account; 14 (14) to sell or exercise stock subscription or conversion rights; 15 (15) to consent, directly or through a committee or other agent, to the 16 reorganization, consolidation, merger, dissolution, or liquidation of a corporation or 17 other business enterprise; to participate in voting trusts, pooling arrangements, and 18 foreclosures; and, in connection with a reorganization, consolidation, merger, 19 dissolution, liquidation, voting trust, pooling arrangement, or foreclosure, to deposit 20 securities with, transfer title, and delegate discretion to a protective or other committee 21 as the trustee considers advisable; 22 (16) to deposit securities in a securities depository; 23 (17) to insure the property of the trust against damage or loss and to 24 insure the trustee against liability with respect to third persons; 25 (18) to borrow money for a trust purpose to be repaid from trust 26 property; 27 (19) to pay or contest a claim, to settle a claim by or against the trust 28 by compromise, arbitration, or otherwise, and to release, in whole or in part, a claim 29 belonging to the trust; 30 (20) to pay taxes, assessments, reasonable compensation of the trustee, 31 employees, and agents of the trust, and other expenses incurred in the collection, care,
01 administration, and protection of the trust; 02 (21) to make loans out of trust property to a beneficiary on terms and 03 conditions the trustee considers to be fair and reasonable under the circumstances and 04 to guarantee loans to the beneficiary by encumbrances on trust property; 05 (22) to pay an amount distributable to a beneficiary, whether or not the 06 beneficiary is under a legal disability, by paying the amount to the beneficiary or by 07 paying the amount to another person for the use or benefit of the beneficiary; 08 (23) to make a distribution of property and money in divided or 09 undivided interests, pro rata or otherwise, and to adjust resulting differences in 10 valuation; 11 (24) to employ accountants, attorneys, investment advisers, appraisers, 12 or other persons, even if they are associated or affiliated with the trustee, to advise or 13 assist the trustee in the performance of administrative duties; 14 (25) to inspect or investigate property that the trustee has been asked 15 to hold or property owned or operated by an entity in which the trustee holds or has 16 been asked to hold an interest for the purpose of determining the application of 17 environmental law to the property and to take action to prevent, abate, or otherwise 18 remedy an actual or potential violation of an environmental law affecting property held 19 directly or indirectly by the trustee; 20 (26) to establish for an asset a reserve for depreciation, depletion, or 21 obsolescence, and to decide, under law, how and in what proportions a receipt or 22 disbursement is to be credited, charged, or apportioned between principal and income; 23 (27) to execute and deliver instruments that are useful to accomplish 24 or facilitate the exercise of the trustee's powers; and 25 (28) to prosecute or defend an action, claim, or proceeding in order to 26 protect trust property and the trustee in the performance of the trustee's duties. 27 Sec. 13.36.110. Liability of trustee relating to exercise of power. A 28 dissenting trustee who has joined another trustee in exercising a power is not liable to 29 the beneficiaries or to others for the consequences of the exercise of the power if the 30 dissenting trustee joins because of a requirement for unanimous trustee consent to the 31 exercise of the power. The dissenting trustee's dissent must be presented in writing
01 to a co-trustee and a legally competent beneficiary or, if the beneficiary is a minor or 02 an incompetent person, the representative of the beneficiary. A trustee who is not 03 authorized to exercise a power is not liable to the beneficiaries or to others for 04 (1) the exercise by a co-trustee of the power; or 05 (2) the failure to exercise that power. 06 Sec. 13.36.120. Voting of corporate stock owned by trustee. A trustee of 07 a trust owning corporate stock is liable for a loss resulting to the beneficiaries from 08 a failure to use reasonable care in deciding how to vote the stock and in voting the 09 stock only if personally at fault. 10 Sec. 13.36.125. Creation of trust bank account to pay special debts. 11 Whenever a bank account is, by entries made on the books of the depositor and the 12 bank at the time of the deposit, created exclusively for the purpose of paying 13 dividends, interest, interest coupons, salaries, wages, or pensions or other employee 14 benefits, and the depositor at the time of opening the account does not expressly 15 declare otherwise, the depositor is considered a trustee of the account for the creditors 16 to be paid from the account, subject to any power of revocation that the depositor may 17 have reserved by agreement with the bank. 18 Sec. 13.36.130. Failure of beneficiary to present claim for payment. If a 19 beneficiary for whom a trust bank account is created under AS 13.36.125 does not 20 present the beneficiary's claim to the bank for payment within one year after the claim 21 is due, the depositor who created the trust may revoke the trust as to the beneficiary. 22 Sec. 13.36.135. Holding stock in name of nominee. (a) A trustee of a trust 23 owning stocks, bonds, notes, debentures, or other written obligations of a public or 24 private corporation may hold the obligations in the name of a nominee, without 25 mention of the trust in the records of the corporation or in the stock certificate or stock 26 registration book of the corporation, if 27 (1) the trust records and all reports or accounts rendered by the trustee 28 clearly show the ownership of the stocks, bonds, notes, debentures, or other written 29 obligations of the public or private corporation by the trustee and the facts regarding 30 the holding by the trustee; and 31 (2) the nominee deposits with the trustee a signed statement showing
01 the trust ownership, endorses the stock certificate or other title instruments for the 02 obligations in blank, and does not have possession of or access to the stock certificate 03 or other title instruments for the obligations except under the immediate supervision 04 of the trustee. 05 (b) A trustee holding obligations under (a) of this section is personally liable 06 for a loss to the trust resulting from an act of the nominee in connection with the 07 stocks, bonds, notes, debentures, or other written obligations held under (a) of this 08 section. 09 Sec. 13.36.140. Loan of trust funds. Except as provided in AS 13.36.145, 10 a corporate trustee may not lend trust funds to itself or an affiliate, or to a director, an 11 officer, or an employee of itself or an affiliate, and a noncorporate trustee may not 12 lend trust funds to itself or to a relative, an employer, an employee, or a partner or 13 other business associate. 14 Sec. 13.36.145. Corporate trustee depositing trust funds with itself. (a) 15 A corporate trustee that is subject to regulation and supervision by state or federal 16 authorities may deposit with itself trust funds that are being held out of necessity 17 pending investment, distribution, or payment of debts if the corporate trustee 18 (1) pays into the trust for the deposit the interest the corporate trustee 19 is required by state or federal law to pay on uninvested trust funds or, if there is not 20 a state or federal law requiring the payment of interest, at the same rate of interest the 21 corporate trustee pays on similar nontrust deposits; and 22 (2) maintains in its trust department as security for the deposit a 23 separate fund consisting of securities that are legal for trust investments and that are 24 at all times equal in total market value to the amount of the deposit, except that the 25 security is not required to the extent that the deposit is insured or given a preference 26 by state or federal law. 27 (b) The separate fund of securities required by (a)(2) of this section shall be 28 marked as a separate fund for (a)(2) of this section. Withdrawals from or additions 29 to the separate fund may be made from time to time, as long as the required value is 30 maintained. The income of the securities in the separate fund belongs to the corporate 31 trustee. In the statements of its financial condition published or delivered to the
01 division of banking, securities, and corporations in the Department of Commerce and 02 Economic Development, the corporate trustee shall show as separate items the amount 03 of trust funds that it has deposited with itself and the amount of securities that it holds 04 as security for the payment of the deposits. 05 Sec. 13.36.150. Trustee buying from or selling to itself. A trustee, unless 06 expressly authorized by the trust instrument, may not directly or indirectly lease, buy, 07 or sell property for the trust from or to 08 (1) itself or an affiliate; 09 (2) a director, an officer, or an employee of the trustee or an affiliate; 10 or 11 (3) a relative, an employer, or a partner or other business associate. 12 Sec. 13.36.155. Permitted sales between trusts held by same corporate 13 trustee. If the transaction is fair to both trusts and if the transaction is not prohibited 14 by the instruments creating the trustee relationship, a corporate trustee may sell to 15 itself as trustee of a trust the following held by the corporate trustee as trustee for 16 another trust: 17 (1) stocks, bonds, and other securities listed on a securities exchange 18 supervised by the United States Securities and Exchange Commission; and 19 (2) obligations of the United States treasury and obligations of United 20 States government agencies. 21 Sec. 13.36.157. Trustee's special power to appoint to other trust. (a) 22 Unless the terms of the instrument expressly provide otherwise, a trustee who has the 23 absolute discretion under the terms of a testamentary instrument or irrevocable inter 24 vivos agreement to invade the principal of a trust for the benefit of the beneficiary who 25 is eligible or entitled to the income of the trust may exercise without prior court 26 approval the trustee's discretion by appointing part or all of the principal of the trust 27 in favor of a trustee of a trust under an instrument other than that under which the 28 power to invade was created if the exercise of this discretion 29 (1) does not reduce any fixed income interest of an income beneficiary 30 of the trust; 31 (2) is in favor of the beneficiary of the trust; and
01 (3) does not violate the limitations on validity under AS 34.27.050(a). 02 (b) This section applies to a trust governed by the laws of this state, including 03 a trust whose governing jurisdiction is transferred to this state. 04 (c) The exercise of the power to invade the principal of a trust under (a) of 05 this section is considered to be the exercise of a special power of appointment. 06 Sec. 13.36.160. Corporate trustee buying its own stock. A corporate trustee 07 may not purchase for a trust shares of its own stock, or its bonds, or other securities, 08 or the stock, bonds, or other securities of an affiliate. 09 Sec. 13.36.165. Withdrawals from mingled trust funds. If a person who is 10 a trustee of two or more trusts mingles the funds of two or more trusts in the same 11 aggregate of cash or in the same bank or brokerage account or other investment, and 12 if a withdrawal is made from the cash aggregate, account, or investment by the trustee 13 for the trustee's own benefit, for the benefit of a third person who is not a beneficiary 14 or creditor of one or more of the trusts, or for an unknown purpose, the withdrawal 15 must be charged first to the amount of the personal cash, credit, or other property, if 16 any, of the trustee in the mingled fund, and, after the exhaustion of the trustee's cash, 17 credit, or other property, then to the several trusts in proportion to their several 18 interests in the cash, credit, or other property in the cash aggregate, account, or 19 investment at the time of the withdrawal. Nothing in this section is intended to 20 authorize the mingling of trust funds. 21 Sec. 13.36.170. Unenforceable oral trust created by deed. (a) When an 22 interest in real property is conveyed by deed to a person in a trust that is unenforceable 23 under AS 09.25.010 - 09.25.020 and the intended trustee or the trustee's successor in 24 interest holds title but refuses to carry out the trust because of AS 09.25.010 - 25 09.25.020, the intended trustee or the trustee's successor in interest, except to the 26 extent that the successor in interest is a bona fide purchaser of a legal interest in the 27 real property, shall convey the interest in real property to the settlor or the settlor's 28 successor in interest. A court having jurisdiction may prescribe the conditions for 29 conveying the interest to the settlor or the settlor's successor in interest. 30 (b) If the intended trustee of an unenforceable trust under (a) of this section 31 transfers part or all of the trustee's interest and the interest is transferred to a bona fide
01 purchaser, the intended trustee is liable to the settlor or the settlor's successor in 02 interest for the value, at the time of the transfer, of the interest transferred, less any 03 offsets that a court determines to be equitable. 04 Sec. 13.36.175. Action on contract against trustee in representative 05 capacity. (a) When a trustee makes a contract that is within the trustee's powers as 06 trustee or when a predecessor trustee has made a contract within the predecessor 07 trustee's powers as trustee and a cause of action arises on the contract, the party in 08 whose favor the cause of action has accrued may collect the judgment by execution 09 on the trust property. 10 (b) In an action under this section, the plaintiff is not required to prove that 11 the trustee could have been reimbursed from the trust fund if the trustee had paid the 12 plaintiff's claim. 13 (c) A beneficiary or, in the case of a charitable trust, the attorney general and 14 a corporation that is a beneficiary or agent in the performance of the charitable trust, 15 may intervene in an action under this section and contest the right of the plaintiff to 16 recover. 17 (d) A judgment may not be rendered in favor of the plaintiff in an action under 18 this section unless the plaintiff proves that, within 30 days after the beginning of the 19 action or within another period set by the court and more than 30 days before 20 obtaining the judgment, the plaintiff has notified each of the beneficiaries who is 21 known to the trustee and who then has a present interest in the existence and nature 22 of the action, or, in the case of a charitable trust, the attorney general of this state and 23 a corporation that is a beneficiary or agent in the performance of the charitable trust. 24 The notice shall be given by mailing copies of the notice with postage prepaid to the 25 beneficiaries at their last known addresses. The trustee shall furnish the plaintiff with 26 a list of names and addresses of the beneficiaries within 10 days after the plaintiff 27 makes a written demand for the list. Notification of the persons on the list constitutes 28 compliance with the duty placed on the plaintiff by this section. 29 (e) The plaintiff in an action under this section may also hold the trustee who 30 made the contract personally liable on the contract if the contract does not exclude the 31 trustee's personal liability. In a contract action under this section, the addition of the
01 words "as trustee" after the signature of a trustee to a contract creates a presumption, 02 which may only be rebutted by clear and convincing evidence otherwise, of an intent 03 to exclude the trustee from personal liability, and, unless the presumption is rebutted, 04 the trustee is not personally liable under the contract. 05 Sec. 13.36.180. Exoneration or reimbursement for tort. (a) A trustee who 06 has incurred personal liability for a tort committed in the administration of the trust 07 is entitled to exoneration for the liability from the trust property if the trustee has not 08 discharged the claim, or to reimbursement for the liability out of trust funds if the 09 trustee has paid the claim, if the trustee or an officer or employee of the trustee was 10 not guilty of personal fault in incurring the liability. 11 (b) If a trustee has incurred personal liability for a tort committed in the 12 administration of the trust and that tort increases the value of the trust property, the 13 trustee is entitled to exoneration or reimbursement to the extent of the increase in value 14 as a result of the tort even though the trustee would not otherwise be entitled to 15 exoneration or reimbursement. 16 (c) Nothing in this section shall be construed to change the existing law with 17 regard to the liability of trustees of charitable trusts for torts of the trustees or their 18 employees. 19 Sec. 13.36.185. Tort liability of trust. (a) If a trustee or a predecessor of the 20 trustee incurs personal liability for a tort committed in the course of the trustee's 21 administration, the trustee in the trustee's representative capacity may be sued and 22 collection made from the trust property if the court determines in the tort action that 23 (1) the trustee or the trustee's predecessor, or an officer or employee 24 of the trustee or the trustee's predecessor, was not guilty of personal fault in incurring 25 the liability; or 26 (2) although the tort does not fall under (1) of this subsection, the tort 27 increased the value of the trust property. 28 (b) If the tort is within (a)(1) of this section, the full amount of proven 29 damages may be collected from the trust property. 30 (c) If the tort is within (a)(2) of this section, collection may not be made from 31 the trust property except to the extent of the increase in the value of the trust property.
01 (d) A beneficiary may intervene in an action under this section and contest the 02 right of the plaintiff to recover. 03 (e) In an action against the trustee in the trustee's representative capacity under 04 this section, the plaintiff is not required to prove that the trustee could have secured 05 reimbursement from the trust fund if the trustee paid the plaintiff's claim. 06 (f) A judgment may not be rendered in favor of the plaintiff in an action under 07 this section unless the trustee proves that within 30 days after the beginning of the 08 action, or within another period set by the court and more than 30 days before 09 obtaining the judgment, the trustee notifies each of the beneficiaries who is known to 10 the trustee who then has a present interest in the existence and nature of the action. 11 The notice shall be given by mailing copies of the notice with postage prepaid to the 12 beneficiaries at their last known addresses. The trustee shall furnish the plaintiff with 13 a list of names and address of the beneficiaries within 10 days after the plaintiff makes 14 a written demand for the list. Notification of the persons on the list constitutes 15 compliance with the duty placed on the plaintiff by this subsection. 16 (g) Nothing in this section may be construed to change the existing law with 17 regard to the liability of trustees of charitable trusts for torts of the trustees or their 18 employees. 19 Sec. 13.36.190. Personal liability for tort committed by trustee. A trustee 20 may be held personally liable for a tort committed by the trustee, or by the trustee's 21 agents or employees in the course of their agency or employment, subject to the rights 22 of exoneration or reimbursement under AS 13.36.180. 23 Sec. 13.36.195. Power of settlor of trust. (a) The settlor of a trust affected 24 by AS 13.36.105 - 13.36.295 may, by provision in the instrument creating the trust if 25 the trust is created by a writing, by oral statement to the trustee at the time of the 26 creation of the trust if the trust is created orally, or by an amendment of the trust if the 27 settlor reserved the power to amend the trust, 28 (1) relieve the trustee from any or all of the duties, restrictions, and 29 liabilities that would otherwise be imposed on the trustee by AS 13.36.105 - 13.36.295; 30 (2) alter or deny to the trustee any or all of the privileges and powers 31 conferred on the trustee by AS 13.36.105 - 13.36.295; or
01 (3) add duties, restrictions, liabilities, privileges, or powers, to those 02 imposed or granted by AS 13.36.105 - 13.36.295. 03 (b) Notwithstanding (a) of this section, an act of the settlor may not relieve a 04 trustee from the duties, restrictions, and liabilities imposed on the trustee by 05 AS 13.36.140, 13.36.145, or 13.36.150. 06 Sec. 13.36.200. Power of beneficiary of trust. A beneficiary of a trust 07 affected by AS 13.36.105 - 13.36.295 may, if the beneficiary has full legal capacity 08 and acts on full information, by written instrument delivered to the trustee, relieve the 09 trustee, as regards the beneficiary, from any or all of the duties, restrictions, and 10 liabilities that would otherwise be imposed on the trustee by AS 13.36.105 - 13.36.295, 11 except for the duties, restrictions, and liabilities imposed by AS 13.36.140 - 13.36.150. 12 The beneficiary may release the trustee from liability to the beneficiary for past 13 violations of AS 13.36.105 - 13.36.295. 14 Sec. 13.36.205. Relieving trustee of duties; power of the court. A court of 15 competent jurisdiction may, for cause shown and on notice to the beneficiaries, relieve 16 a trustee from any or all of the duties and restrictions that would otherwise be placed 17 on the trustee by AS 13.36.105 - 13.36.295 or wholly or partly excuse a trustee who 18 has acted honestly and reasonably from liability for violations of AS 13.36.105 - 19 13.36.295. 20 Sec. 13.36.210. Liability for violations. If a trustee violates a provision of 21 AS 13.36.105 - 13.36.295, the trustee may be removed as trustee and denied 22 compensation in whole or in part, and a beneficiary, co-trustee, or successor trustee 23 may treat the violation as a breach of trust. 24 Sec. 13.36.290. Definitions. In AS 13.36.105 - 13.36.295, unless the context 25 or subject matter otherwise requires, 26 (1) "affiliate" means a person directly or indirectly controlling or 27 controlled by another person or a person under direct or indirect common control with 28 another person, including a person with whom a trustee has an express or implied 29 agreement regarding the purchase of trust investments by each from the other, directly 30 or indirectly, except a broker or stock exchange; 31 (2) "relative" means a spouse, ancestor, descendant, brother, or sister;
01 (3) "trust" means an express trust only; 02 (4) "trustee" includes a trustee that is a corporation or a natural person 03 and a successor or substitute trustee. 04 Sec. 13.36.295. Short title. AS 13.36.105 - 13.36.295 may be cited as the 05 Alaska Trusts Act. 06 * Sec. 13. AS 13.36.310 is amended to read: 07 Sec. 13.36.310. Challenges to trusts. Except as provided in AS 34.40.110, 08 a trust that is covered by AS 13.36.035(c) or that is otherwise governed by the laws 09 of this state, or a property transfer to a trust that is covered by AS 13.36.035(c) or that 10 is otherwise governed by the laws of this state, is not void, voidable, liable to be set 11 aside, defective in any fashion, or questionable as to the settlor's capacity, on the 12 grounds that the trust or transfer avoids or defeats a right, claim, or interest conferred 13 by law on a person by reason of a personal or business relationship with the settlor or 14 by way of a marital or similar right. [IN THIS SECTION, "SETTLOR" MEANS A 15 PERSON WHO TRANSFERS PROPERTY IN TRUST; "SETTLOR" INCLUDES A 16 PERSON WHO FURNISHES THE PROPERTY TRANSFERRED TO A TRUST 17 EVEN IF THE TRUST IS CREATED BY ANOTHER PERSON.] 18 * Sec. 14. AS 13.36.310 is amended by adding new subsections to read: 19 (b) If a trust or a property transfer to a trust is voided or set aside under (a) 20 of this section, then the trust or property transfer shall be voided or set aside only to 21 the extent necessary to satisfy the settlor's debt to the creditor or other person at whose 22 instance the trust or property transfer is voided or set aside and the costs and attorney 23 fees allowed under the rules of court. 24 (c) If a trust or a property transfer to a trust is voided or set aside under (a) 25 of this section, and if the court is satisfied that the trustee has not acted in bad faith 26 in accepting or administering the property that is the subject of the trust, 27 (1) the trustee has a first and paramount lien against the property that 28 is the subject of the trust in an amount equal to the entire cost, including attorney fees, 29 properly incurred by the trustee in a defense of the action or proceedings to void or 30 set aside the trust or the property transfer; 31 (2) the trust or property transfer that is voided or set aside is subject
01 to the proper fees, costs, preexisting rights, claims, and interest of the trustee and any 02 predecessor trustee that have not acted in bad faith; and 03 (3) the beneficiary, including the settlor, may retain a distribution made 04 by exercising a trust power or discretion vested in the trustee of the trust, if the power 05 or discretion was properly exercised before the commencement of the action or 06 proceeding to void or set aside the trust or property transfer. 07 * Sec. 15. AS 13.36 is amended by adding new sections to read: 08 Sec. 13.36.320. Nonqualified persons serving as trustees. (a) If at least one 09 qualified person serves as trustee of a trust whose state jurisdiction provision is valid, 10 effective, and conclusive under AS 13.36.035(c), then the following persons also may 11 serve as trustees even though they are not qualified persons: 12 (1) individuals who do not reside in Alaska; 13 (2) trust companies that have their principal place of business outside 14 of Alaska and that are not organized under AS 06.25; and 15 (3) banks that have their principal place of business outside of Alaska 16 or that are not organized under AS 06.05. 17 (b) Notwithstanding other provisions of law to the contrary, a trustee who is 18 not a qualified person is not considered to be engaging in business in this state solely 19 by reason of serving as trustee of a trust whose state jurisdiction provision is valid, 20 effective, and conclusive under AS 13.36.035(c). 21 Sec. 13.36.330. Penalty clause. A provision in an inter vivos or testamentary 22 trust purporting to penalize a beneficiary by charging the beneficiary's interest in the 23 trust, or to penalize the beneficiary in another manner, for instituting a proceeding to 24 challenge the acts of the trustee or other fiduciary of a trust, or for instituting other 25 proceedings relating to the trust, is enforceable even if probable cause exists for 26 instituting the proceedings. 27 * Sec. 16. AS 13.36.390 is amended by adding a new paragraph to read: 28 (3) "settlor" means a person who transfers property in trust and includes 29 a person who furnishes the property transferred to a trust even if the trust is created 30 by another person. 31 * Sec. 17. AS 13.38.060 is repealed and reenacted to read:
01 Sec. 13.38.060. Bonds, obligations, and other property; premium and 02 discount. (a) A bond or other obligation for the payment of money is principal at its 03 inventory value except as provided in (b) of this section. The trustee may not make 04 a provision for amortization of a premium or for accumulation for discount. 05 (b) Except to the extent otherwise provided in the governing instrument, an 06 increase in the value of the following above inventory value is distributable as income: 07 (1) a zero coupon bond; 08 (2) an annuity contract before annuitization; 09 (3) a life insurance contract before the death of the insured; 10 (4) an interest in a common trust fund; in this paragraph, "common 11 trust fund" has the meaning given in 26 U.S.C. 584 (Internal Revenue Code); 12 (5) an interest in a limited liability company, limited liability 13 partnership, or a limited partnership; and 14 (6) another obligation for the payment of money if the money is 15 payable at a future time under a fixed, variable, or discretionary schedule of 16 appreciation and if the payment exceeds the price at which the obligation was issued. 17 (c) The increase in value of the obligations described in (b) of this section is 18 distributable to the beneficiary who was the income beneficiary at the time of the 19 increase. The increase is distributable from the first cash available from the principal 20 or, if cash is not available from the principal, when cash is first available from the 21 principal due to a sale, a redemption, or another disposition. When an unrealized 22 increase is distributed as income from principal, the principal shall be reimbursed when 23 the increase is realized. 24 (d) In this section, the increase in value of an obligation described in (b) of 25 this section is not available for distribution unless the trustee receives cash on account 26 of the obligation. 27 (e) Notwithstanding a provision in this section to the contrary, a distribution 28 from a partnership or limited liability company attributable to the cash flow or income 29 derived from operations regularly carried on by the partnership or limited liability 30 company is income, except to the extent otherwise provided in the governing 31 instrument.
01 * Sec. 18. AS 13.41.005 is amended to read: 02 Sec. 13.41.005. Application. Except as provided by AS 13.06.068, this 03 [THIS] chapter applies to the disposition at death of the following property acquired 04 by a married person: 05 (1) all personal property, wherever situated, 06 (A) that was acquired as or became, and remained, community 07 property under the laws of another jurisdiction; or 08 (B) all or the proportionate part of which was acquired with the 09 rents, issues, or income of, or the proceeds from, or in exchange for, that 10 community property; or 11 (C) traceable to that community property; 12 (2) all or the proportionate part of any real property situated in this 13 state that was acquired with the rents, issues, or income of, the proceeds from, or in 14 exchange for, property acquired as or that [WHICH] became, and remained, 15 community property under the laws of another jurisdiction, or property traceable to that 16 community property. 17 * Sec. 19. AS 13.41.010 is amended to read: 18 Sec. 13.41.010. Rebuttable presumptions. Subject to AS 13.06.068, in [IN] 19 determining whether this chapter applies to specific property, the following rebuttable 20 presumptions apply: 21 (1) property acquired during marriage by a spouse of that marriage 22 while domiciled in a jurisdiction under whose laws property could then be acquired as 23 community property is presumed to have been acquired as or to have become, and 24 remained, property to which this chapter applies; and 25 (2) real property situated in this state and personal property wherever 26 situated acquired by a married person while domiciled in a jurisdiction under whose 27 laws property could not then be acquired as community property, title to which was 28 taken in a form that created rights of survivorship, are [IS] presumed not to be 29 property to which this chapter applies. 30 * Sec. 20. AS 34.40.110(d) is amended to read: 31 (d) A cause of action or claim for relief [PERSON MAY NOT BRING AN
01 ACTION] with respect to a fraudulent transfer [CLAIM ALLOWED] under (b)(1) 02 of this section , or under other law, is extinguished unless the action is brought as 03 to a person who [IF THE PERSON] 04 (1) is a creditor when the trust is created , [UNLESS THE ACTION IS 05 BROUGHT] within the later of 06 (A) four years after the transfer is made; or 07 (B) one year after the transfer is or reasonably could have been 08 discovered by the person; or 09 (2) becomes a creditor subsequent to the transfer into trust, [UNLESS 10 THE ACTION IS BROUGHT] within four years after the transfer is made. 11 * Sec. 21. AS 34.40.110 is amended by adding a new subsection to read: 12 (f) If a trust contains a transfer restriction allowed under (a) of this section, the 13 transfer restriction prevents a creditor existing when the trust is created, a person who 14 subsequently becomes a creditor, or another person from asserting any cause of action 15 or claim for relief against a trustee of the trust or against others involved in the 16 preparation or funding of the trust for conspiracy to commit fraudulent conveyance, 17 aiding and abetting a fraudulent conveyance, or participation in the trust transaction. 18 The creditor and other person prevented from asserting a cause of action or claim for 19 relief is limited to recourse against the trust assets and the settlor to the extent allowed 20 under AS 34.40.010. 21 * Sec. 22. AS 13.36.035(e) and 13.36.095(a) are repealed. 22 * Sec. 23. COURT RULES. (a) AS 13.36.175(c), enacted by sec. 12 of this Act, changes 23 Rule 24, Alaska Rules of Civil Procedure, by allowing a beneficiary, or the attorney general 24 and certain corporations under certain circumstances, to intervene in an action on a contract 25 against a trustee without satisfying the criteria in the court rule. 26 (b) AS 13.36.185(d), enacted by sec. 12 of this Act, changes Rule 24, Alaska Rules 27 of Civil Procedure, by allowing a beneficiary to intervene in a tort action against a trust 28 without satisfying the criteria in the court rule. 29 * Sec. 24. AS 13.06.068, enacted by sec. 1 of this Act, does not apply to a will except for 30 the will of a person dying on or after the effective date of this Act. 31 * Sec. 25. AS 13.36.043, enacted by sec. 9 of this Act, AS 13.36.105 - 13.36.295, enacted
01 by sec. 12 of this Act, AS 13.36.310, amended by secs. 13 and 14 of this Act, AS 13.36.320 02 and 13.36.330, enacted by sec. 15 of this Act, and AS 13.36.390(3), enacted by sec. 16 of this 03 Act, apply only to 04 (1) testamentary trusts created by wills, or codicils, of persons dying on or 05 after the effective date of this Act regardless of when the trusts and codicils are executed; 06 (2) nontestamentary trusts created on or after the effective date of this Act; and 07 (3) testamentary or nontestamentary trusts that are registered or reregistered 08 after the effective date of this Act if the registrations state that the trusts will be governed by 09 this Act. 10 * Sec. 26. AS 13.38.060, as amended by sec. 17 of this Act, does not apply to a trust 11 unless the trust is created on or after the effective date of this Act. 12 * Sec. 27. AS 13.36.175(c) and 13.36.185(d), enacted by sec. 12 of this Act, take effect 13 only if sec. 23 of this Act receives the two-thirds majority vote of each house required by art. 14 IV, sec. 15, Constitution of the State of Alaska.