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).

RELATED TERMS
  1. Active Trust

    A trust where the trustee is held accountable for additional ...
  2. Trustee

    A person or firm that holds or administers property or assets ...
  3. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  4. Asset Protection Trust

    A vehicle for holding an individual's assets to shield them from ...
  5. Trust Property

    Assets that have been placed into a fiduciary relationship between ...
  6. Irrevocable Income-Only Trust - ...

    A type of living trust often used for Medicaid planning. It protects ...
Related Articles
  1. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  2. Financial Advisor

    Advisors: Tips for When to Employ Living Trusts

    Revocable living trusts accomplish estate planning objectives that aren't possible with a will. Here are some of the cases that show when to use a trust.
  3. Financial Advisor

    Should You Put Your Faith In A Trust?

    Many institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
  4. Retirement

    Estate Planning for Beginners: Part Three

    A primary purpose of most trusts is to provide a timetable for the distributions of assets where an outright distribution may not be warranted.
  5. Investing

    A Look Into Creating a Trust Fund With ETFs (VCIT, SDIV)

    Learn the basics of how a trust works and the two most common types. Discover how to use ETFs to fund a trust and the different strategies.
  6. Managing Wealth

    What's a Trust Fund?

    A trust fund is a fund comprised of a variety of assets, established by a grantor, to provide financial security to an individual, most often a child or grandchild - or organizations, such as ...
  7. Personal Finance

    Buying a Home in Trust

    Buying a home in a real estate trust allows for tax advantages, possibly avoiding probate court, and future family conflict. Below we outline the two different types and what to arm yourself ...
  8. Retirement

    What Does It Cost to Retire in Alaska?

    Learn how much money it takes to retire with a comfortable lifestyle in Alaska, and discover some ways to save for an Alaskan retirement.
  9. Managing Wealth

    Surprising Uses for Trust Funds

    Here are five common situations where a trust fund makes financial sense.
  10. Investing

    Alaska Revises Q4 and 2016 Guidance (ALK)

    Alaska Airlines has reiterated its previous guidance regarding passenger forecasts and decreased its estimated cost of fuel for Q4 and for 2016.
Hot Definitions
  1. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  2. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  3. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  4. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  5. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  6. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
Trading Center