DEFINITION of 'Alaska Trust Act'
Provides protection against creditors for irrevocable trusts provided that the trust has a grantor who is a discretionary beneficiary. In order for the statute to be applicable, the following requirements must be met:
1. At least one of the trustees must reside in Alaska or have a principal place of business in Alaska.
2. A percentage of the assets of the trust is required to be on deposit in a checking account, brokerage account or other similar account.
3. The records of the trust must be physically located in Alaska, and a percentage of the administration of the trust must take place in Alaska.
BREAKING DOWN 'Alaska Trust Act'
An Alaska trust can save estate taxes, and the assets of the trust can be immunized from the claims of unknown future creditors. The trustee must either be a bank or trust company with its principal place of business in Alaska, or an individual who is a resident of Alaska. The Alaska trustee must have the power to maintain trust records in Alaska and file tax returns for the trust. Additionally, part or all of the administration must occur in Alaska, such as holding some trustee meetings or affecting some trades.
Alaska's laws are among the most progressive in the U.S., providing a number of unique estate planning and tax savings benefits not available in most other states. Alaska was the first state to pass legislation authorizing self-settled domestic asset protection trusts and continues to be in the forefront in updating and improving its statutes to provide favorable protections for individuals, families and family-owned entities. Alaska has become one of the top states of choice for the location of trusts and family limited liability companies (LLC).