Legislature(2009 - 2010)SENATE FINANCE 532
04/07/2010 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB208 | |
| SB235 | |
| SB301 | |
| HB162 | |
| SB63 | |
| SB172 | |
| SB184 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 208 | TELECONFERENCED | |
| += | SB 235 | TELECONFERENCED | |
| += | SB 301 | TELECONFERENCED | |
| += | HB 162 | TELECONFERENCED | |
| + | SB 63 | TELECONFERENCED | |
| + | SB 172 | TELECONFERENCED | |
| + | SB 184 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 63
"An Act relating to transfer restrictions on trust
interests."
9:19:48 AM
ESTHER CHA, STAFF, SENATOR MCGUIRE, commented on the state
trust laws. She explained that the trust business is a
multibillion dollar sector that often crosses state lines
to take advantage of more attractive state trust laws. In
1997, Alaska became the first state to establish a law that
allows a person to form an irrevocable trust via
discretionary beneficiary of the trust. She quoted the
document "What is a Trust" (copy on file). She continued
that SB 63 is part of an ongoing effort to modernize trust
laws. The modernization will create jobs and revenue to
diversify our economy making Alaska attractive to trust
business and investment.
9:24:03 AM
Senator Huggins asked if a loophole would open for
creditors if the creditor must establish by clear and
convincing evidence no intent to defraud.
Ms. Cha believed that the practice is standard among
trustees.
DAVE SHAFTEL, ATTORNEY, CONSULTANT (via teleconference)
stated that there is an exception for a fraudulent
transfer. If an asset is transferred with the intent to
defraud creditors, then the court can set aside that
transfer. The trust provision addressed contains the
specific exception. The issue with our statute is that it
does not include the need for a creditor to establish or
satisfy in order to prove that the transfer was made with
the intent to defraud. The clear and convincing standard is
universally used for fraudulent transfer. This provision
inserts into the statute what was previously an omission
clarifying the standard that the creditor must show by
clear and convincing evidence that the transfer was
performed fraudulently.
9:27:27 AM
Senator Thomas asked about the standards. He asked to know
the next most rigid or difficult to attain burden of proof
required of the person claiming they were intentionally
defrauded.
Mr. Shaftel responded that the standard used in litigation
is a preponderance of the evidence or 51 percent. The
standard is easier than clear and convincing evidence. The
law requires a more stringent standard with clear and
convincing evidence regarding fraudulence.
Senator Olson asked if the bill interferes with the sale of
assets within the trust.
Mr. Shaftel responded no. He stated that the trustee is the
owner of the assets with powers of sale and management and
manages the assets for the beneficiaries of the trust. The
laws in place do not inhibit the powers unless the person
who set up the trust wants to ensure that a particular
asset remain in the trust permanently.
9:30:28 AM
Mr. Shaftel provided testimony. He commented that the bill
allows the state to bring trust laws up to speed. He noted
that the mentioned provisions have been enacted in other
states with similar types of trusts. He opined that the
proposed legislation improves the law in the area of
trusts. He stated that most of his clients are Alaska
residents who use this type of trust frequently. He urged
the approval of the bill.
Senator Thomas asked about the trust and the
diversification of Alaska's economy. He wondered about a
potential study illustrating the impact on the state's
economy.
Mr. Shaftel responded that recent testimony from trust and
bank officers stated a substantial increase in business
with large amounts of funds travelling through financial
institutions. He expressed awareness of million dollar
transactions in Alaska. He stated that the legislation has
helped the economy with other states choosing Alaska
because of our reputation for trust laws
9:33:56 AM
DOUGLAS BLATTMACHR, PRESIDENT OF ALASKA TRUST COMPANY (via
teleconference), testified in support of the legislation.
He explained that the recently passed trust legislation has
proven beneficial to the state while creating a number of
jobs. The state received an additional $3 million in life
insurance premium tax because of outside trusts.
Co-Chair Hoffman commented that the legislation has one
zero fiscal note from the Department of Law.
SB 63 was HEARD and HELD in Committee for further
consideration.