Legislature(2025 - 2026)BELTZ 105 (TSBldg)
02/06/2026 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB211 | |
| SB225 | |
| SB198 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 211 | TELECONFERENCED | |
| *+ | SB 225 | TELECONFERENCED | |
| += | SB 198 | TELECONFERENCED | |
SB 225-TRUSTS; TRUST PROCEEDINGS; TRUSTEES
1:54:06 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 225 "An Act relating to trusts;
relating to trust proceedings; relating to nonjudicial
settlement agreements in trust matters; relating to the powers
of trustees; and providing for an effective date."
1:54:32 PM
ANNA LATHAM, Deputy Commissioner, Department of Commerce,
Community and Economic Development (DCCED), Juneau, Alaska,
introduced SB 225 on behalf of the sponsor and read the
following:
[Original punctuation provided.]
This is an act relating to trust proceedings relating
to non-judicial settlement agreements and trust
matters relating to the power of trustees and
providing for an effective date.
The Department of Commerce is committed to making
Alaska a great place to do business and grow our
economy.
Through our Alaska Business Initiative, we're
promoting Alaska as the best place to invest, live,
and work. We're constantly reviewing our processes,
our statutes, and our regulations to make it easier to
start and operate a business in Alaska.
With that goal in mind, Commissioner Sandy and I asked
our banking and securities team to review our trust
statute last summer and make recommendations for
improvement.
While Alaska's already a strong competitor for trust
charters, we currently only have four trust companies,
meaning there's room for growth.
Working together with the Department of Law, the
banking and securities team developed several
recommendations to strengthen Alaska's legal framework
for chartering trusts.
SB 225 strengthens Alaska Trust Law by improving
privacy protections, expanding non-judicial settlement
authority, or the ability for parties to settle
without going to court, clarifying fiduciary powers,
broadening our decanting statutes, or ability to move
assets to a new trust without court approval, and it
provides for stronger asset protection by shortening
creditor look-back periods and strengthening anti-
fraud measures. SB 225 improves Alaska's trust law by
increasing flexibility, efficiency, privacy, and
certainty for settlers, beneficiaries, and
fiduciaries.
And it reduces the administrative and litigation costs
while preserving accountability.
And tying this back to our economy, bringing out a
state wealth into Alaska management increases the
demand in Alaska financial sector and eventual growth.
1:57:00 PM
TRACY RENO, Director, Division of Banking and Securities (DBS),
Department of Commerce, Community and Economic Development
(DCCED), Juneau, Alaska, provided the sectional analysis for SB
225. She stated that a trust is a legal arrangement where a
trustee manages assets on behalf of beneficiaries and is
commonly used for estate planning during life and after death.
SB 226 includes technical language reflecting Alaska's unique
trust laws.
1:58:07 PM
CHAIR BJORKMAN asked if she could provide real-world examples of
how this would apply, to help clarify and make it more
relatable.
1:58:29 PM
MS. RENO replied that the division regulates Alaska-chartered
trust companies but does not handle detailed legal drafting,
which falls to the Department of Law. SB 225 modernizes outdated
trust laws, enhances privacy and competitiveness with other
states, and supports uses such as family trusts to manage and
protect wealth across generations.
1:59:35 PM
MS. RENO paraphrased the sectional analysis for SB 225:
[Original punctuation provided.]
Sectional Analysis, Version A
Section 1 Amends AS 13.36.035 (Court jurisdiction;
choice of law) to add a new subsection (j) that
requires the court to protect the privacy of a settlor
and the beneficiaries of a noncharitable trust in
trust proceedings by sealing all court records upon
the filing of a petition and limiting access to listed
persons.
Section 2 Amends AS 13.36 (Trust Administration) by
adding a new section AS 13.36.057 (Nonjudicial
settlement agreements) to allow "indispensable
parties" to enter into a binding nonjudicial
settlement agreement with respect to any trust
administration matter, explicitly including the
proceedings described in AS 13.36.035(a). A
nonjudicial settlement agreement is valid only to the
extent it does not violate a material purpose of the
trust and includes terms and conditions that could be
properly approved by a court. The section includes a
list of matters that may be resolved by a nonjudicial
settlement agreement including the investment and use
of trust assets, direction to a trustee to perform or
refrain from performing a particular act, termination
of the trust, etc. It includes subsections that allow
indispensable parties to petition the court for
approval of a nonjudicial settlement agreement and to
allow a trustee to give notice under proposed AS
13.36.115 (Section 4).
Section 3 Amends AS 13.36.079 (Certification of
trust; penalty) subsection (j) to clarify that the
right to obtain a copy of the trust instrument in a
judicial proceeding concerning the trust is subject to
AS 13.36.035(j).
Section 4 Amends AS 13.36 (Trust Administration) by
adding a new section AS 13.36.115 (Notice of proposed
action; fiduciary liability). The proposed section
creates a procedure wherein a "fiduciary" may provide
notice to specific beneficiaries (as described in
subsection (b)) of a proposed trust administration
action that is contemplated under the terms of the
governing instrument of a trust or AS 13.36. The
section creates requirements for the contents of a
notice of proposed action, which must include a
description of the proposed action and the time period
for a beneficiary to provide written objection.
Importantly, it limits the liability of a fiduciary
that takes action in accordance with the notice, if
the notice is issued in compliance with the section,
if no beneficiary objects, and if the action is not a
breach of fiduciary duty. It defines "fiduciary" to
mean a trustee or a trust protector or trust adviser
acting within the scope of authority granted to the
trust protector or trust adviser in the governing
instrument.
2:01:40 PM
MS. RENO continued with the sectional analysis for SB 225:
[Original punctuation provided.]
Section 5 Amends AS 13.36.157 (Exercise of power of
appointment) subsection (a) to provide that an
authorized trustee with discretionary power to
distribute all or part of the trust principal to or
for a current beneficiary, which power is not limited
by an "ascertainable standard," may appoint part or
all of that principal to a trustee of an appointed
trust for the benefit of a beneficiary of the invaded
trust. "Ascertainable standard" is defined in section
20. SB 225 Sectional Analysis (Version A) 1.28.26 2
Section 6 Amends AS 13.36.157 (Exercise of power of
appointment) subsection (b) to clarify that a
permissible appointee may include (1) a person that is
not a beneficiary of the invaded trust; (2) a holder
of a power of appointment; or (3) the estate or a
creditor of a holder of a power of appointment.
Section 7 Amends AS 13.36.157 (Exercise of power of
appointment) subsection (c) to clarify that under (a)
and (b) of this section, if the beneficiaries of the
invaded trust are described by a class, the
beneficiaries of the appointed trust may include
present or future members of that class except that a
person may not become a beneficiary sooner than as
provided in or authorized by the invaded trust.
2:02:39 PM
MS. RENO continued with the sectional analysis for SB 225:
[Original punctuation provided.]
Section 8 Amends AS 13.36.157 (Exercise of power of
appointment) subsection (d) to provide that an
authorized trustee with discretionary power to
distribute all or part of the trust principal to or
for a current beneficiary, which power is limited by
an "ascertainable standard," including a beneficiary
trustee, may appoint part or all of the principal of
the trust to a trustee of an appointed trust if the
current beneficiaries of the appointed trust are the
same as the current beneficiaries of the invaded trust
and the successor and remainder beneficiaries of the
appointed trust are the same as the successor and
remainder beneficiaries of the invaded trust.
Section 9 Makes a conforming amendment to AS
13.36.157 (Exercise of power of appointment)
subsection (e) by inserting the word "ascertainable"
before the word "standard" and clarifies that an
authorized trustee may change the distribution
standard if the trustee appoints to an appointed trust
that is a special needs trust, a pooled trust, or a
third-party trust.
Section 10 Amends AS 13.36.157 (Exercise of power of
appointment) subsection (g) to update the subsection
citations to conform with the repeal of AS
13.36.157(f) in Section 24 of the bill.
Section 11 Amends AS 13.36.157 (Exercise of power of
appointment) subsection (h) to provide accurate
subsection citations and to clarify that the appointed
trust must grant the same power of appointment as in
the invaded trust while repealing language requiring
the class of permissible appointees to remain the
same.
Section 12 Amends AS 13.36.157 (Exercise of power of
appointment) by adding a new subsection (i) that
states an authorized trustee exercising the power
under (a) of this section which is not limited by an
ascertainable standard may (1) establish an
ascertainable standard for the distribution of income
that is a different standard from the standard in the
invaded trust, (2) appoint the principal of the
invaded trust to an appointed trust that is a special
needs trust, pooled trust, or third-party trust, and
(3) subject to restrictions in AS 13.36.158(i)(1),
reduce a beneficiary's right to a mandatory
distribution of income or principal.
2:03:52 PM
MS. RENO continued with the sectional analysis for SB 225:
[Original punctuation provided.]
Section 13 Repeals and reenacts AS 13.36.158
(Additional provisions relating to exercise of a power
of appointment) subsection (c) to state if more than
one authorized trustee has discretionary power to
distribute all or part of the trust principal, an
authorized trustee with discretionary power that is
not limited by an ascertainable standard may exercise
the power under AS 13.36.157(a) (c) and (i).
Section 14 Amends AS 13.36.158 (Additional
provisions relating to exercise of a power of
appointment) subsection (e) by deleting requirements
related to ascertaining a settlor's intent and
retaining the best interests and prudent person
requirements applicable to a fiduciary that exercises
an appointment power.
Section 15 Amends AS 13.36.158 (Additional
provisions relating to exercise of a power of
appointment) subsection (i)(1) to simplify limitations
on an authorized trustee's exercise of an appointment
power by clarifying that an authorized trustee may not
exercise a power authorized by AS 13.36.157 to reduce,
limit, SB 225 Sectional Analysis (Version A) 1.28.26
3 or modify a beneficiary's current right to a
mandatory distribution of income, annuity, or unitrust
interest for which a marital deduction has been taken
for federal tax purposes under 26 U.S.C. 2056 or 26
U.S.C. 2523 (Internal Revenue Code) or for state tax
purposes under a comparable provision of state law.
The amendment would also repeal other specific
prohibitions and repetitive language related to
appointment to a special needs trust, pooled trust, or
third-party trust.
Section 16 Amends AS 13.36.159 (Implementation of
power of appointment) subsection (c) by clarifying
that when an authorized trustee seeks court approval
to exercise a power of appointment, the trustee has
the option to send the required notice to all
qualified beneficiaries to a person who can represent
and bind a qualified beneficiary under AS 13.06.120.
2:05:32 PM
MS. RENO continued with the sectional analysis for SB 225:
[Original punctuation provided.]
Section 17 Amends AS 13.36.159 (Implementation of
power of appointment) subsection (d) by adding the
word "executed" before the reference to "the appointed
trust" and "the instrument exercising the power."
Section 18 Amends AS 13.36.215 (Definitions)
subsection (b)(1) by clarifying that an "appointed
trust" may include a new irrevocable trust created by
the settlor of the invaded trust, by another person,
or by an authorized trustee acting in that capacity,
of the invaded trust or a restatement or modification
of the invaded trust.
Section 19 Amends AS 13.36.215 (Definitions)
subsection (b)(2) to clarify that the definition of
"authorized trustee" means a trustee or fiduciary,
other than the settlor, with the power to distribute
all or part of the trust principal to or for a current
beneficiary. Language repealed from the definition
allows a beneficiary to be an authorized trustee.
Section 20 Amends AS 13.36.215 (Definitions)
subsection (b) by adding definitions for
"ascertainable standard" and "beneficiary."
Section 21 Amends AS 13.36.370 (Trust protector)
subsection (b) to provide that a trust protector's
powers, as conferred by the trust instrument, may
include the power to issue a notice of proposed action
under AS 13.36.115.
Section 22 Amends AS 34.40.110 (Restricting
transfers of trust interests) subsection (d) to reduce
the amount of time for creditors of a settlor to bring
a cause of action or claim for relief alleging
fraudulent transfer of assets to a trust. Subsection
(d)(1) applies to creditors of a settlor existing
before assets are transferred into trust and reduces
the time to bring an action from four years to one
year after the transfer is made and from one year to
six months after the creditor discovered or reasonably
could have discovered the transfer. Subsection (d)(2)
applies to a person who becomes a creditor of the
settlor after assets are transferred into trust and
reduces the time frame to bring an action from four
years to one year after the transfer is made.
Section 23 Amends AS 34.40.110 (Restricting
transfers of trust interests) subsection (i) to
clarify that the settlor's solvency affidavit is
required at the time of initial funding of the trust.
It additionally clarifies that after initial funding,
the settlor may periodically renew the affidavit to
include additional transfers of assets to the trust,
however the settlor is presumed to be solvent with
respect to these transfers.
Section 24 Repeals AS 13.36.157(f), AS 13.36.159(i),
and AS 13.36.215(b)(10). SB 225 Sectional Analysis
(Version A) 1.28.26 4
Section 25 States the uncodified law of the State of
Alaska is amended by adding a new section to clarify
that AS 13.36.157, AS 13.36.158, AS 13.36.159, and AS
13.36.215, as amended by this Act, apply to a trust
that is created on or after the effective date of this
Act.
Section 26 Provides an immediate effective date for
this Act.
2:09:38 PM
SENATOR DUNBAR asked what ascertainable means in the context of
SB 225, Section 9.
2:09:56 PM
MS. LATHAM deferred the question to Amy Robinson, with the
Department of Law.
2:10:17 PM
AMY ROBINSON, Senior Assistant Attorney General, Department of
Law, Anchorage, Alaska, answered questions regarding SB 225. She
said the term "ascertainable" is added before "standards" to
align with the definition in SB 225, Section 20, line 15. It
refers to provisions in a trust that guide how a trustee may
distribute the trust's principal or income.
2:11:15 PM
SENATOR DUNBAR asked what does adding "ascertainable" in Section
9 change, and what is the practical difference between "the same
standard authorizing trustee to distribute the income" and "the
same ascertainable standard authorizing trustee distribute
income."
2:11:45 PM
MS. ROBINSON replied that Section 9 adds the term "ascertainable
standard" as a conforming amendment to align with the new
definition in Section 20. She said under AS 13.36.157, trustees
with limited discretion must comply with existing distribution
standards when exercising decanting powers, while trustees with
broader discretion under AS 13.36.157(a) are not subject to
those limits.
2:14:08 PM
SENATOR DUNBAR stated that SB 225, Section 2 expands the ability
for parties to enter agreements without court involvement and
asked whether the court has any perspective on how that change
might affect the public.
2:14:38 PM
NANCY MEADE, General Counsel, Alaska Court System, Anchorage,
Alaska, answered questions regarding SB 225. She replied that
non-judicial settlement agreements are generally allowed because
parties are able to resolve disputes without court involvement.
She supported allowing parties to work out issues outside of
court, noting that SB 225 still permits a party to seek court
approval of an agreement if needed, which appears as a
reasonable provision.
2:15:20 PM
SENATOR DUNBAR stated that in other settlements, courts may
reject agreements they find unfair or unlawful, such as those
involving a power imbalance. He asked if there is concern that
similar issues could arise without court review.
2:15:54 PM
MS. MEADE replied that Section 2, page 3, lines 3 through 5,
allows parties to reach agreements outside of court before any
case is filed and then optionally seek court approval afterward.
The section does not require prior court involvement, which the
speaker views as a sensible approach.
2:16:43 PM
CHAIR BJORKMAN asked if the Department of Law had any concerns
with SB 225.
2:16:48 PM
MS. MEADE replied that she has discussed a few minor changes
with the Department of Law and is working through whether they
are acceptable without affecting the policy of the bill.
2:17:21 PM
SENATOR DUNBAR said regarding Section 1 on the privacy of the
settler and beneficiaries, and the discussion of generational
wealth, can the department provide examples of other states that
have similar provisions and how common this approach is.
2:17:54 PM
MS. LATHAM replied that she is aware of Wyoming and South Dakota
having similar provisions.
SENATOR DUNBAR asked whether she thinks most states have the
provisions found in SB 225.
MS. LATHAM replied that she is not aware whether most states
have these provisions; however, the states that do tend to
remain more attractive for establishing trusts because they
offer greater privacy.
2:18:27 PM
SENATOR DUNBAR asked when she says, "personal privacy," what
specifically does that mean, and what information that is
typically public is kept private.
2:18:40 PM
MS. LATHAM replied that she will defer to the Department of Law,
but generally, filings are public and sealing them would make
those records unavailable to the public.
SENATOR DUNBAR asked Ms. Robinson what specific information is
protected, such as the amount of money in the trust and which is
typically public in court, or does the provision seal other
types of information.
2:19:40 PM
MS. ROBINSON replied that the information made confidential
would primarily relate to actions under AS 13.36.035(a), which
are protected under the new provision. She said financial
details and trust assets involved in a court action are
shielded. This typically applies to irrevocable trusts, often
involving significant family wealth, where parties seek to
resolve disputes privately.
2:21:07 PM
SENATOR DUNBAR expressed concern that shielding trust
information could reduce transparency around large transfers of
wealth. He suggested considering a dollar threshold so smaller
trusts remain private while larger ones are subject to public
disclosure.
2:23:26 PM
SENATOR YUNDT commented that some states make trust business
attractive by protecting privacy. He opined that people may
choose to establish trusts in those states if Alaska limits
privacy based on dollar thresholds
2:24:07 PM
CHAIR BJORKMAN asked why it's in the state's interest for people
to file trusts in Alaska.
2:24:17 PM
MS. LATHAM replied that it positions Alaska as a more attractive
place for investment, aligning with efforts to expand economic
activity and grow the financial sector. She said attracting
large amounts of wealth could also bring related services, such
as banking, legal, and other highly skilled professions,
supporting broader economic development.
2:25:11 PM
SENATOR DUNBAR asked whether the trusts that are established in
Alaska are required to spend distributions within the state.
2:25:23 PM
MS. LATHAM deferred the question to the Department of Law.
2:26:08 PM
MS. ROBINSON replied that it's her belief that there is a
requirement to spend funds in Alaska and that a certain amount
of assets are held in the state. She said she is unsure of the
specifics.
2:26:48 PM
CHAIR BJORKMAN held SB 225 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB198 Draft Proposed CS ver. N.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 198 |
| SB198 Explanation of Changes ver A to N.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 198 |
| SB198 Fiscal Note DOA-DRB 01.27.26.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 198 |
| SB225 ver. A.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 225 |
| SB225 Transmittal Letter 1.22.26.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 225 |
| SB225 Sectional Analysis version A 1.28.26.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 225 |
| SB225 Fiscal Note DCCED-DBS 1.22.26.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 225 |
| SB225 Fiscal Note-JUD-ACS 02.04.26.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 225 |
| SB198 Sectional Analysis ver N.pdf |
SL&C 2/6/2026 1:30:00 PM |
SB 198 |