CSSB 163(RLS): "An Act relating to trusts, to a trustee's duties to notify and inform beneficiaries, and to the revocation, modification, termination, reformation, construction, and trustees of trusts."
00CS FOR SENATE BILL NO. 163(RLS) 01 "An Act relating to trusts, to a trustee's duties to notify and inform beneficiaries, 02 and to the revocation, modification, termination, reformation, construction, and 03 trustees of trusts." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 13.36.080 is amended by adding new subsections to read: 06 (b) The settlor of a trust may exempt a trustee from the duties under (a) of this 07 section to provide notification or information regarding the trust to a beneficiary who 08 is not entitled to a mandatory distribution of income or principal from the trust on an 09 annual or more frequent basis. The settlor may provide the exemption by provision 10 in the instrument creating the trust if the trust is created by a writing, by oral statement 11 to the trustee at the time of the creation of the trust if the trust is created orally, by an 12 amendment of the trust if the settlor reserved the power to amend the trust, or by a 13 written document after the trust is created. The exemption may not exceed in duration 14 the shorter of the settlor's lifetime or a judicial determination of the settlor's incapacity.
01 (c) If a settlor provides for an exemption under (b) of this section and a 02 beneficiary with a future interest 03 (1) who is not a beneficiary entitled to a mandatory distribution of 04 income or principal from the trust on an annual or more frequent basis receives a 05 distribution, the trustee shall provide notification or information limited to the 06 accounting period during which the distribution was made; 07 (2) becomes a beneficiary entitled to a mandatory distribution of 08 income or principal from the trust on an annual or more frequent basis, the trustee 09 shall provide notification and information as required under AS 13.16 and (a) of this 10 section. 11 * Sec. 2. AS 13.36 is amended by adding new sections to read: 12 Sec. 13.36.335. Presumption of revocability. (a) Unless a trust is expressly 13 made irrevocable, a trust executed on or after the effective date of this Act is revocable 14 by the settlor. 15 (b) Notwithstanding AS 13.36.035 - 13.36.050, this section applies only if the 16 (1) settlor is domiciled in this state when the trust is created; 17 (2) trust instrument is executed in this state; or 18 (3) trust provides that the law of this state governs the trust. 19 Sec. 13.36.340. Modification and revocation of revocable trusts. (a) A 20 trust that is revocable by the settlor may be modified or revoked in whole or in part 21 by 22 (1) substantial compliance with a method of modification or revocation 23 provided in the trust instrument; or 24 (2) a writing, other than a will, signed by the settlor and delivered to 25 the trustee during the lifetime of the settlor, except that, if the trust instrument 26 expressly makes the method of revocation provided in the trust instrument the 27 exclusive method of revocation, the trust may not be revoked under this paragraph. 28 (b) Unless otherwise provided in the trust instrument, if a trust that is 29 revocable by the settlor is created by or funded by more than one settlor, 30 (1) the trust may be modified or revoked as provided in AS 34.77.100 31 to the extent the trust consists of community property under AS 34.77 (Alaska
01 Community Property Act); 02 (2) each settlor may modify or revoke the trust as to the portion of the 03 trust property contributed by that settlor that is not community property under 04 AS 34.77. 05 (c) A revocable trust may not be modified or revoked by an attorney-in-fact 06 under a power of attorney unless the modification or revocation is expressly permitted 07 by the trust instrument. 08 Sec. 13.36.345. Modification or termination of irrevocable trusts because 09 of unanticipated circumstances. (a) On petition by a trustee, settlor, or beneficiary, 10 a court may modify the administrative or dispositive terms of an irrevocable trust or 11 terminate an irrevocable trust if, because of circumstances not anticipated by the 12 settlor, modification or termination would substantially further the settlor's purposes 13 in creating the trust. 14 (b) Upon termination of a trust under this section, the trust property shall be 15 distributed in accordance with the settlor's probable intention. 16 Sec. 13.36.350. Reformation to correct mistakes in irrevocable trusts. (a) 17 On petition by a trustee, settlor, or beneficiary, a court may reform the terms of an 18 irrevocable trust, even if the trust instrument is not ambiguous, to conform to the 19 settlor's intention if the failure to conform was due to a mistake of fact or law, 20 whether in expression in the trust or inducement to create the trust, and if the settlor's 21 intent can be established by clear and convincing evidence. 22 (b) A court may consider evidence, including direct evidence contradicting the 23 plain meaning of the text, when determining the settlor's intent or for any other 24 purpose under this section. 25 Sec. 13.36.355. Construction of trust to achieve settlor's tax objectives. (a) 26 The terms of a trust shall be construed to achieve the settlor's tax objectives. 27 (b) On petition by a trustee, settlor, or beneficiary, a court may modify the 28 terms of an irrevocable trust to achieve the settlor's tax objectives in a manner that 29 does not violate the settlor's probable intent. The court may order that the 30 modification operate retroactively. 31 Sec. 13.36.360. Modification or termination of irrevocable trust by consent.
01 (a) Except as otherwise provided by this section, on petition by a trustee, settlor, or 02 beneficiary, a court may modify or terminate an irrevocable trust if all of the 03 beneficiaries consent and if continuation of the trust on the existing terms of the trust 04 is not necessary to further a material purpose of the trust. However, the court, in its 05 discretion, may determine that the reason for modifying or terminating the trust under 06 the circumstances outweighs the interest in accomplishing the material purposes of the 07 trust. The inclusion of a restriction on the voluntary or involuntary transfer of trust 08 interests under AS 34.40.110 may constitute a material purpose of the trust under this 09 subsection, but is not presumed to constitute a material purpose of the trust under this 10 subsection. 11 (b) Unless otherwise provided in the trust instrument, an irrevocable trust may 12 not be modified or terminated under this section while a settlor is also a discretionary 13 beneficiary of the trust. 14 (c) If a beneficiary other than a qualified beneficiary does not consent to a 15 modification or termination of an irrevocable trust that is proposed by the trustee, 16 settlor, or other beneficiaries, a court may approve the proposed modification or 17 termination if the court determines 18 (1) if all the beneficiaries had consented, the trust could have been 19 modified or terminated under this section; and 20 (2) the rights of a beneficiary who does not consent will be adequately 21 protected or not significantly impaired. 22 (d) In (c) of this section, "qualified beneficiary" means a beneficiary who 23 (1) on the date the beneficiary's qualification is determined, is entitled 24 or eligible to receive a distribution of trust income or principal; or 25 (2) would be entitled to receive a distribution of trust income or 26 principal if the event causing the trust's termination occurs. 27 Sec. 13.36.365. Uneconomical irrevocable trust. (a) Notwithstanding the 28 other provisions of AS 13.36.335 - 13.36.365, if the value of the property of an 29 irrevocable trust is less than $50,000, the trustee may terminate the trust unless the 30 trust instrument provides otherwise. 31 (b) Notwithstanding the other provisions of AS 13.36.335 - 13.36.365 and the
01 terms of the trust, on petition to the superior court by a trustee, settlor, or beneficiary, 02 the court may modify or terminate an irrevocable noncharitable trust, or remove the 03 trustee and appoint a different trustee, if the court determines that the value of the trust 04 property is insufficient to justify the cost of administration. 05 (c) Upon termination of a trust under this section, the trustee shall distribute 06 the trust property in accordance with the settlor's probable intent.