SB 81 - NONADEMPTION OF TRANSFERS IN TRUSTS Number 0595 CHAIR ROKEBERG announced that the next order of business would be SENATE BILL NO. 81, "An Act relating to the nonademption of property transfers; and providing for an effective date." Number 0585 WILDA RODMAN, Staff to Senator Gene Therriault, Alaska State Legislature, presented SB 81 on behalf of the sponsor, Senator Therriault. She explained that SB 81 will make a correction to HB 275 [21st Alaska State Legislature], which changed some of the rules of construction applicable to wills and other governing instruments. She noted that Section 1 of HB 275 changed a rule of construction that outlines what happens when a request in a will cannot be carried out, and that Section 2 of HB 275 was meant to take the section pertaining to wills and apply it to trusts. When HB 275 was drafted, she explained, some intended changes were overlooked, and SB 81 will correct these discrepancies in the language. She noted that the Department of Law (DOL) has provided a letter confirming that SB 81 appears to accomplish this, and that the sponsor statement for HB 275 has also been provided. Number 0491 STEPHEN E. GREER, Attorney at Law, testified via teleconference and assisted with the presentation of SB 81. He concurred that SB 81 is merely a technical correction of legislation adopted last year. Specifically, SB 81 is meant to change the language in the Uniform Probate Code regarding nonademption [of property transfers]. He explained that SB 81 says: Nonademption refers to rule construction that applies when a person creating a trust or will designates that a specific person is to receive a specific item of property, and at death that is unable to be carried out because the property no longer exists. And the general rule is that the specific request is adeemed or extinguished if the property doesn't exist at the death of the settlor. ... This rule of construction, which can always be altered by a will - or [a] trust, in this case - is applied if nothing's stated. REPRESENTATIVE BERKOWITZ asked if the following interpretation of Section 2 is correct: "If you sell the property - get rid of it - then the beneficiary gets the money?" MR. GREER responded: If you sell the property before you die, and the property no longer exists, then the specific legatee will not receive that property; that's the general rule. And in this particular section, it says that general rule [will] be altered in certain specific situations that are spelled out in the Uniform Probate Code. REPRESENTATIVE BERKOWITZ said, "So, under these circumstances, if someone gets rid of the property, then the beneficiary gets compensation." MR. GREER said yes, under certain limited circumstances spelled out in [this] section. REPRESENTATIVE JAMES added, "If there's any left." MR. GREER noted that the sponsor statements detail the specific circumstances under which Section 2 of SB 81 would apply. Number 0238 REPRESENTATIVE JAMES moved to report SB 81 out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, SB 81 was reported from the House Judiciary Standing Committee.