Legislature(2025 - 2026)GRUENBERG 120
04/11/2025 01:00 PM House JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Trust & Estate Law in Alaska | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 11, 2025
1:00 p.m.
MEMBERS PRESENT
Representative Andrew Gray, Chair
Representative Ted Eischeid
Representative Mia Costello
Representative Jubilee Underwood
MEMBERS ABSENT
Representative Chuck Kopp, Vice Chair
Representative Genevieve Mina
Representative Sarah Vance
COMMITTEE CALENDAR
PRESENTATION(S): TRUST & ESTATE LAW IN ALASKA
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MATTHEW BLATTMACHR, President & CEO
Peak Trust Company
Anchorage, Alaska
POSITION STATEMENT: Provided the Trust and Estate Law in Alaska
presentation.
ACTION NARRATIVE
1:00:09 PM
CHAIR ANDREW GRAY called the House Judiciary Standing Committee
meeting to order at 1:00 p.m. Representatives Eischeid and Gray
were present at the call to order. Representatives Underwood
and Costello arrived as the meeting was in progress.
^PRESENTATION(S): Trust & Estate Law in Alaska
PRESENTATION(S): Trust & Estate Law in Alaska
1:00:43 PM
CHAIR GRAY announced that the first order of business would be
the Trust and Estate Law in Alaska presentation.
1:01:33 PM
MATTHEW BLATTMACHR, President & CEO, Peak Trust Company, gave
the PowerPoint presentation, titled "Alaska's Trust & Estate
Industry" [included in the committee packet]. He began on slide
2, "What to Take Away from Today," which read as follows
[original punctuation provided]:
• Why the industry was started in Alaska
How it was built (efforts of the legislature)
How Alaska competes
MR. BLATTMACHER continued to slide 3, "What Makes a 'Top' Trust
Jurisdiction," which read as follows [original punctuation
provided]:
Baseline requirements:
• Has abolished Rule Against Perpetuities "RAP" (to
allow for perpetual trusts)
• Allows self-settled trusts and modern planning
(directed trusts, asset preservation, etc.)
• No state income tax on trusts
• Sufficient local professionals to serve the industry
(attorneys, trustees, CPAs)
• Legislative environment that keeps laws current and
competitive
1:03:19 PM
stnd
MR. BLATTMACHER turned to slide 4, "1 and 2 Tier Trust
States," which read as follows [original punctuation provided]:
st
1 Tier States
•Alaska
•Delaware
•Nevada
•South Dakota
•Wyoming
nd
2 Tier States
•New Hampshire
•Ohio
•Tennessee
MR. BLATTMACHER advanced to slide 5, which showed a table
displaying the features of the top five trust states. He
continued to slide 6, "Genesis of Alaska Trust and Estate
Industry," which read as follows [original punctuation
provided]:
• Modern era of the industry started in 1997 with AK
Trust Act
• Desire by industry practitioners and professionals
to make Alaska a great place for estate planning
• Prior to 1997, Alaska had limited trust and estate
statutes
• Most importantly, nothing special
• Pre-1997, no reason to do trust business in
Alaska
MR. BLATTMACHER advanced to slide 7, "Why Alaska?" Slide 7 read
as follows [original punctuation provided]:
• Great laws provide no reason to perform T&E planning
anywhere else
• Preferential laws work in two ways
• Drive business in (non-residents)
• Keep business in (residents)
• All the requirements of a preferred state
• Permits long-term trusts and self-settled
trusts
• Does not impose an income or similar tax on
trusts located in the state
• Has a significant number of sophisticated
professionals that service the industry
• Engaged legislature willing to explore new
ideas
• Since 1997, has continued to enhance and refine T&E
laws
1:06:29 PM
MR. BLATTMACHR continued to slide 8, "Alaska Trust Act (1997),"
which read as follows [original punctuation provided]:
• The Alaska Trust Act was the first legislation of
its kind, set Alaska at the forefront of trust and
estate planning
• Authorized the creation of self-settled trusts
• Grantor is potential beneficiary
• Assets are removed from grantors estate
• Necessary for federal tax planning
(estate/transfer tax)
• Encourage and enhance use of lifetime gift and
estate tax exemptions, not creditor protection
• Common planning hurdle
• Great planning today, but what if?
• Safety valve
• Necessary in order to gain protection
• Cannot be relegated to creditors
• Has appropriate safeguards in place to prevent
misuse
• Alaska has history of case law where bad cases
failed, safeguards worked
MR. BLATTMACHR turned to slide 9, "Alaska Trust Act (1997),"
which read as follows [original punctuation provided]:
• Eliminated Rule Against Perpetuities allowed
"Dynasty trusts"
• Added Spendthrift provisions
• Beneficiary interest cannot be transferred
• Updated LP & LLC Statutes
1:09:46 PM
MR. BLATTMACHR advanced to slide 10, "1997 to Now," which read
as follows [original punctuation provided]:
AK Legislature has passed over ten T&E specific
bills
• 1997 Alaska Trust Act
• 1998 Opt-In Community Property, life
insurance premium tax
• 2000 Decanting
• 2003 Enhanced beneficiary protection
(spendthrift)
• 2006 Divorce protection, decanting (if done
properly)
• 2010 Pre-mortem probate Nonresidents
• 2013 Directed trusts, lifetime IRA transfers,
INGs
• 2015 Adjust. life insurance premium tax
• 2023 Community property clarification
• 2019 - Creation of ATEP the industry formally
united to advance the interests of Alaska as a
national player
MR. BLATTMACHR, in response to a series of questions from Chair
Gray, explained that in Alaska, spouses must be notified within
30 days of a self-settled trust creation to prevent individuals
from taking martial assets without their partner knowing. The
spouse must give consent for money to be transferred into the
trust. He defined "decanting" as the transfer of assets from
one trust to another.
1:12:35 PM
MR. BLATTMACHR continued to slide 11, "1997 to Now," which read
as follows [original punctuation provided]:
• T&E bills not passed
• 2018 Decanting fix, tracing of trust assets
• 2019 Transfer on death of vehicle titles
• 2020 Anti-Powell fix, Gift trusts
• 2021 E-wills
• 2024 Single member LLC powers for executor
issue fix
• 2025 Priorities
• Transfer on death of vehicle titles
• Update of Fiduciary Income and Principal act
MR. BLATTMACHR turned to slide 12, "Alaska Trust and Estate
Professionals (ATEP)," which read as follows [original
punctuation provided]:
• Formed in 2019
• Comprised of estate planning attorneys, professional
trustees, CPAs, financial advisors, insurance
professionals
• Any Alaskan professional working in the estate
planning industry is eligible to participate
• Group governed by bylaws designed for industry
collaboration and alignment, broad membership
determines what issues are prioritized and supported
1:14:57 PM
MR. BLATTMACHR proceeded to slide 13, "McDowell Group Report,"
which read as follows [original punctuation provided]:
• 2021 study performed by McKinley Research Group
(formerly McDowell Group) documenting the size and
economic impact of the trust industry in the state of
Alaska.
MR. BLATTMACHR continued to slide 14, "Trust Industry in
Alaska," which read as follows [original punctuation provided]:
Alaska's place as a premier jurisdiction for trusts
and estates contributes to:
• A sophisticated professional community that benefits
residents in their estate planning
• Brings millions to Alaska banks and wealth
management firms
• Employs hundreds of Alaskans
• Contributes millions in labor income to the state
economy
1:15:42 PM
MR. BLATTMACHR proceeded to slide 15, "Trust Industry in Alaska
Economic Impacts," which read as follows [original punctuation
provided]:
Assets Held in Alaska Banks: $100 million
Number of Direct Workers: 300
Direct Annual Average Jobs: 140
Direct Labor Income: $14.6 million
Total Jobs: 260
Total Labor Income: $21.6 million
1:16:49 PM
MR. BLATTMACHR concluded on slide 19, "Trust Industry and
Alaska's Financial Sector," which read as follows [original
punctuation provided]:
• Alaska's financial services sector accounts for less
than 2% of all wage and salary employment in the
state.
• This is the lowest rate of financial services sector
employment of any state and half the rate of the
national average of 4%.
• Without a robust trust industry in Alaska serving
non-resident clients, Alaska's already underdeveloped
finance sector would be even smaller.
• Most Alaska trust assets are managed outside the
state. Managing a larger portion of those assets in
Alaska is a potential opportunity to grow the
financial services sector in Alaska.
CHAIR GRAY asked whether Alaska is at 2 percent compared to the
national average of 4 percent because not enough Alaskans are
wealthy enough to establish a trust.
MR. BLATTMACHR said it has less to do with the population's
wealth and more to do with the number of jobs in the financial
services sector. He argued that in many ways, Alaska is a
wealth state because it has the largest sovereign wealth fund in
the nation, the Alaska Permanent Fund.
1:20:07 PM
ADJOURNMENT
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 1:20 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Intro to Alaska Trust & Estate Industry.pdf |
HJUD 4/11/2025 1:00:00 PM |
Trust Estate Presentation |