HOUSE BILL NO. 292 "An Act relating to property exemptions for retirement plans; relating to pleadings, orders, liability, and notices under the Uniform Probate Code; relating to the Alaska Principal and Income Act; relating to the Alaska Uniform Transfers to Minors Act; relating to the disposition of human remains; relating to insurable interests for life insurance policies; relating to transfers of individual retirement plans; relating to the community property of married persons; and amending Rule 301(a), Alaska Rules of Evidence." 3:14:40 PM Vice-chair Fairclough MOVED CSHB 292(L&C), 27-LS1232/I as a working document before the committee. There being NO OBJECTION it was so ordered. JANE PIERSON, STAFF, REPRESENTATIVE STEVE THOMPSON, explained the legislation. She read from the sponsor statement: House Bill 292 provides for amendments to statute in the following areas: · Extends protection for retirement plan assets to the beneficiaries of retirement plans (often the surviving spouse). · Provides means of representation for minors and incapacitated persons in dealing with settlements of accounts or settlement agreements. · Amends the 2003 Alaska Principal and Income Act to conform to current IRS regulations. · Provides rules concerning who may control the disposition of decedents' remains. · Makes conforming amendments to Alaska's laws regarding insurable interests to align with changes to the Uniform Trust Code. · Provides that IRA interests can be voluntarily transferred to a family member or trust. · Makes amendments to Alaska's community property provisions to update and clarify the ownership of community property. · Allows a beneficiary to extend the time funds will be held in a Uniform Transfer to Minors Account. 3:17:08 PM DAVID SHAFTEL, PRIVATE ATTORNEY, ANCHORAGE (via teleconference), detailed the sectional analysis (copy on file). Representative Edgmon asked for the highlights of the bill. Mr. Shaftel pointed to Section 4 and 5, which dealt with extending virtual representation from agreements that were reached in court to agreements that were reached outside of court, such as settlements or trust accountings. He furthered that Sections 6 through 8 spoke to a method for modifying trust, and had been adopted by 13 states. He continued to explain that Sections 9-25 dealt with the Alaska Principal and Income Act, and incorporated new federal regulations and recommendations from national experts to improve the income act. Sections 26 through 28 detailed the amendments to Alaska Uniform Transfers to Minors Act; the change allowed, with the minors consent, the extension of the accounts beyond the age of 25. He concluded that Section 29 related to decedents remains. 3:22:19 PM Representative Costello asked whether Sections 26 through 28 provided a ceiling of 25 years of age, or extended the age. Mr. Shaftel replied that the extension could be applied to any age that was agreeable to the minor and the custodian. Representative Costello asked about the priority list in Section 29 related to the decision of disposing of remains. Mr. Shaftel answered that the list could be found on Pages 24 and 25 of the bill. He continued to Section 30, which spoke to insurable interests and clarified the law and made it clear that trusts and business entities could own life insurance if the beneficiaries were those with an insurable interest. He stated that Section 31 dealt with transfers of IRA interests and allowed for the voluntary transfer of IRA interests for estate planning purposes. Sections 32 through 36 spoke to the state community property act and clarified survivorship questions and beneficiary designations. 3:25:23 PM Representative Guttenberg asked about sections 6 through 8; particularly the last paragraph. He wondered about the level of flexibility that would be allowed for adjusting to changing circumstances. Mr. Shaftel replied that the statute was a result of hearing in New York concerning the balance of correcting administrative types of errors and dispositive changes. He said that when making a change to the trust the dispositive plan in place would need to be followed. He said that increasingly he had seen plans where the trustee was given absolute discretion to make distributions, which allowed for more leeway. He relayed that there was no such thing anymore as a completely irrevocable trust. He stressed that the provision had been carefully vetted. 3:27:58 PM DOUGLAS BLATTMACHR, ALASKA TRUST COMPANY (via teleconference), spoke in strong support of the bill. BETH CHAPMAN, PRIVATE ATTORNEY, JUNEAU, strongly supported the legislation. Representative Gara asked whether there was any language in the bill that would weaken the rights of beneficiaries or victims of fraud. Ms. Chapman responded in the negative. Co-Chair Thomas CLOSED public testimony. Vice-chair Fairclough discussed the one zero fiscal note from Department of Commerce, Community and Economic Development. Vice-chair Fairclough MOVED to report CSHB 292(L&C) out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 292(L&C) was REPORTED out of committee with a "do pass" recommendation and with one previously published zero fiscal note: FN1 (CED).