Alaska Trust Act

AAA

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.

INVESTOPEDIA EXPLAINS '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. Alimony Substitution Trust

    A trust agreement in which a divorced person agrees to pay spousal ...
  2. Alien Insurer

    An insurer that is formed following the laws of one country and ...
  3. Alaska Permanent Fund

    A permanent fund for the U.S. state of Alaska. The Alaska Permanent ...
  4. Estate Planning

    The collection of preparation tasks that serve to manage an individual's ...
  5. Taxable Estate

    The total value of a deceased person's assets that are subject ...
  6. Income Trust

    An investment trust that holds income-producing assets and trades ...
Related Articles
  1. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  2. Home & Auto

    Can You Trust Your Trustee?

    Ignorance and incompetence can cost you money. Make sure your trustee is up to the task.
  3. Home & Auto

    How To Analyze Real Estate Investment Trusts

    REITs are much like dividend-paying companies, but analyzing them requires consideration of the accounting treatment of property.
  4. Options & Futures

    An Introduction To Canadian Income Trusts

    Yields in excess of 10% aren't rare, but these unique investments need to be chosen very carefully.
  5. Bonds & Fixed Income

    The Impact Of Interest Rates On Real Estate Investment Trusts

    REITs are high-yield investments, but do they have an inverse relationship with interest rates? Find out here.
  6. Personal Finance

    4 Tips To Cut Your Monthly Bank Fees

    We asked banking professions to share their biggest tips for tackling bank fees, and hopefully save more even before spring hits.
  7. Professionals

    Tips for Spreading the Wealth to Relatives

    There are many ways that your clients can move money or other assets to relatives in order to reduce their tax bills. Here's a primer on best practices.
  8. Professionals

    Tips for Handling Client Inheritance

    When clients leave or receive an inheritance, be prepared to deal with much more than mere paperwork or financial transactions.
  9. Professionals

    Advice on Dealing with Unequal Inheritances

    When it comes to inheritances, the concept of equal versus equitable can be hard to navigate, even when all parties are reasonable.
  10. Insurance

    Homeowners Insurance Losers: States That Pay Most

    Which states charge you the most for homeowner's insurance? Hint: They're regularly featured on the Weather Channel.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center