04/01/2013 01:30 PM Senate JUDICIARY

          SB  65-RETIREMENT PLANS; ROTH IRAS; PROBATE                                                                       
                                                                                                                                
                                                                                                                                
1:56:55 PM                                                                                                                    
CHAIR COGHILL announced the consideration  of SB 65. He described                                                               
the  bill  as a  continuing  update  of  trust doctrine  law  and                                                               
relayed that he was carrying the bill this year.                                                                                
                                                                                                                                
1:57:43 PM                                                                                                                    
CHAD HUTCHINSON, Staff to Senator  Coghill, stated that SB 65 has                                                               
wide  support from  banks. It  updates Alaska  trust laws,  which                                                               
haven't  been updated  since  1997. He  explained  that when  the                                                               
statutes  were  enacted they  put  Alaska  at the  forefront  and                                                               
created  commerce  and jobs  in  a  variety of  fields  including                                                               
insurance, legal,  trust and banking.  However, since  1997 other                                                               
states  have enacted  similar  legislation  and surpasses  Alaska                                                               
law.                                                                                                                            
                                                                                                                                
He  opined  that  SB  65  will  diversify  the  state's  economic                                                               
portfolio  and  make  it  highly  competitive  in  the  financial                                                               
planning  sector.  It will  generate  revenue  for the  state  by                                                               
encouraging residents  and nonresidents  to plan  their financial                                                               
future and  security in  Alaska. The  bill benefits  everyone, he                                                               
said.                                                                                                                           
                                                                                                                                
2:01:15 PM                                                                                                                    
CHAIR  COGHILL  noted  that  Marty  Hester,  David  Shaftel,  and                                                               
Douglas  Blattmachr   were  available   to  testify   and  answer                                                               
questions.                                                                                                                      
                                                                                                                                
2:01:44 PM                                                                                                                    
DAVID SHAFTEL,  Attorney, Anchorage, Alaska, stated  that his law                                                               
office   focuses   on   estate    planning   and   estate   trust                                                               
administration. He  related that  he has worked  with a  group of                                                               
attorneys   and   trust   officers  since   1997   to   recommend                                                               
improvements to Alaska  trust and estate laws.  He explained that                                                               
SB 65 amends  the Uniform Principle and Income Act  to conform to                                                               
final IRS  regulation; it amends  the Alaska Uniform  Transfer to                                                               
Minors Act  to continue management  of the minor's  assets beyond                                                               
the age  of maturity if he/she  desires; it enacts a  majority of                                                               
rule in the retirement account  area that provides protection for                                                               
beneficiaries'  interests;  and it  allows  for  the transfer  of                                                               
IRAs.                                                                                                                           
                                                                                                                                
In the area  of life insurance, SB 65 clarifies  that trustees of                                                               
life  insurance  trusts  can have  insurable  interests,  and  it                                                               
relieves  trustees of  life insurance  trusts  of liability  with                                                               
respect to  insurance policies that  the clients  have purchased.                                                               
The bill  also clarifies  the remedies  in the  limited liability                                                               
company and limited  partnership area. There is  also a provision                                                               
new  to  Alaska  law  that addresses  the  disposition  of  human                                                               
remains. As part  of estate planning, a person  can designate who                                                               
will make those  decisions using the form that  is included under                                                               
that  amendment.  In 1998  Alaska  enacted  a community  property                                                               
regime that minimizes  capital gains taxes when  property is sold                                                               
by  the surviving  spouse. SB  65 contains  provisions under  the                                                               
community property  regime that  clarify title matters  and rules                                                               
for  recovering improper  gifts. The  bill also  enacts decanting                                                               
provisions for modifying trusts.                                                                                                
                                                                                                                                
He described SB 65 as an excellent bill.                                                                                        
                                                                                                                                
CHAIR COGHILL  noted that four  members of the committee  heard a                                                               
substantially similar bill last year.                                                                                           
                                                                                                                                
2:08:17 PM                                                                                                                    
DOUGLAS BLATTNACHR,  President and CEO, Alaska  Trust Corporation                                                               
(ATC),  Anchorage,  Alaska,  stated that  ATC  strongly  supports                                                               
passage of  SB 65,  but would  like Sections  34 and  35 removed.                                                               
They should be in a separate bill.                                                                                              
                                                                                                                                
CHAIR  COGHILL  stated his  intention  to  introduce a  committee                                                               
substitute  (CS)  that  does  not  include  those  sections,  and                                                               
provide an explanation.                                                                                                         
                                                                                                                                
2:09:44 PM                                                                                                                    
BETH  CHAPMAN,  Attorney,  Juneau,  Alaska,  said  she  practices                                                               
primarily  in the  area of  trusts and  estates and  she believes                                                               
that SB  65 is  in the  best interest of  Alaskans. It  will help                                                               
alleviate the  need to  go to court,  particularly to  respond to                                                               
changes in circumstances with families.                                                                                         
                                                                                                                                
SENATOR WIELECHOWSKI  noted that tab 8  of the bill packet  has a                                                               
legal  opinion  that  says  the bill  could  violate  the  single                                                               
subject rule. He suggested the  committee arrange to hear from an                                                               
attorney  to discuss  that  opinion, because  the  bill may  have                                                               
constitutional problems.                                                                                                        
                                                                                                                                
MR. HUTCHINSON said he would provide  a copy of the legal opinion                                                               
that responds to that memorandum.                                                                                               
                                                                                                                                
SENATOR WIELECHOWSKI  said he would  like someone to go  over the                                                               
bill  with him  section  by section  before he  votes  on it.  He                                                               
agreed that  it would  be acceptable  if that  took place  in his                                                               
office.                                                                                                                         
                                                                                                                                
CHAIR  COGHILL  said  he  would make  sure  someone  visited  his                                                               
office, but  his intention  was to introduce  the bill  today and                                                               
delve into it on Wednesday.                                                                                                     
                                                                                                                                
2:12:35 PM                                                                                                                    
CHAIR COGHILL held SB 65 in committee.