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What is an Alaska trust?
What is an Alaska trust? It is a trust governed by Alaska law, in which a trustee holds assets for beneficiaries under a written deed. This page answers the questions families ask, from basics and set-up to running the trust, reporting and getting help.
Reviewed by a senior trust administrator, updated
Top questions
Jump to an answer below.
Key facts
- Governing law
- A settlor can also be a beneficiary of a spendthrift trust: AS 34.40.110[1]
- Asset protection rule
- A creditor must prove intent to defraud by clear and convincing evidence[1]
- Reserved settlor powers
- The settlor may appoint and remove trustees, protectors and advisors[1]
- Reporting to authorities
- A nonresident non-citizen's estate files Form 706-NA above a US-asset threshold[2]
Numbers in brackets point to the Sources list at the end of this page.
Basics: settlor, trustee, beneficiaries and the deed
Three roles and one document cover the basics. The settlor puts assets in, the trustee holds them, the beneficiaries receive the benefit, and a written deed binds the trustee throughout.
Alaska’s spendthrift statute, AS 34.40.110, lets the settlor also be a beneficiary of a protected trust (source: Alaska Statutes: Title 34, chapter 40, Restricting Transfers of Trust Interests).
The statute lets the settlor appoint and remove trustees, protectors and advisors within set limits (same source).
Setting up: checks, drafting and moving the assets
Most of the set-up time goes on identity checks, documents and third parties such as the law firm and the bank.
The step-by-step guide lists the documents the trustee asks for and the order of the steps, and the cost guide explains what shapes the price.
Running the trust: records, decisions and later changes
After the trust is created, the trustee runs it under the deed from day to day: holding the assets, keeping records and accounts, meeting when a decision is needed and refreshing identity checks as time passes.
What can change later is fixed by the powers written into the deed on day one.
Creditor rules and their limits, with sources, are set out on the legal features page.
Reporting and tax: what the trustee files
Filing falls to the trustee, while your personal tax belongs to your adviser.
The trustee collects tax residence forms, along with the records that banks need for account reporting.
Form 706-NA is filed by the estate of a non-US person whose US-situated assets exceed the IRS threshold at death (source: Internal Revenue Service: Some nonresidents with U.S. assets must file estate tax returns).
Getting help: a call or a quote first
If your question is not answered here, the overview of Alaska trusts also covers who helps you start.
To get started, send us your enquiry. You can also compare Alaska with another place.
Other questions
What does a trustee do in Alaska?
The trustee holds title, follows the deed, keeps records and accounts, holds meetings when decisions are needed and handles reporting. The deed can let the settlor appoint and remove the trustee within the statute's limits. The trustee also refreshes identity checks over time.
Can someone who lives abroad use a trust in Alaska?
Yes, a settlor can live elsewhere. Your home country's tax and trust rules still apply to you, and your advisers there should review the plan before anything is signed. The deed still carries the spendthrift restriction, and the settlor still signs the affidavit before the assets move in.
Is a trust the same as a company?
No. A company is its own legal person and has shareholders, whereas a trust is a relationship in which the trustee owns assets on behalf of others. A trust may own a company, and a family may form a trust company to act as trustee.
Can the settlor keep a say in how the assets are invested?
The deed can name an advisor to the trustee, and the statute lets a settlor who is also a beneficiary serve as one if the settlor has no trustee power over discretionary distributions. Your lawyer confirms the wording. The deed records which investment decisions stay with the trustee.
Can a creditor still reach assets in an Alaska trust?
Sometimes. A settlor's creditor can bring a claim by proving intent to defraud, to a clear and convincing standard, and the statute lists further exceptions such as child support in default. Your lawyer applies this to your facts, including how long ago the assets moved in.
How long does a claim against an Alaska trust stay open?
A claim by someone who became a creditor after the transfer lapses unless brought within 4 years of the transfer. An earlier creditor has the later of 4 years or one year after discovery, if it meets set conditions. Your lawyer checks how these dates apply to your transfer.
Does a settlor have to sign anything before transferring assets?
Yes. The settlor signs a sworn affidavit before transferring assets. It states that the settlor has the right to transfer the assets, will not be made insolvent and does not intend to defraud a creditor. Alaska courts have exclusive jurisdiction over an action based on the transfer.
Can a trust hold shares in my family company?
Yes, a trust can own shares and the trustee then holds them under the deed. We request the incorporation papers, the share register and an ownership chart, and your lawyers check the company's own rules for transfer limits. The trustee then votes the shares as the deed directs.
What goes into a letter of wishes?
The letter records what you hope for: who benefits first, how to treat education or a business, what to avoid. The trustee weighs it but is not bound by it, and you can revise it as the family changes. It sits beside the deed, which carries the spendthrift restriction.
Can beneficiaries be added or removed later?
Only when the deed grants the power, for instance to the trustee or a protector. Many deeds name a class such as descendants, so newcomers join automatically. Your lawyer fixes the power at drafting. Changing it later usually means amending the deed, and the settlor's own interest stays subject to the transfer restriction in the deed.
What happens to the trust when the settlor dies?
The deed carries on. The trustee keeps administering the trust and pays out as the deed directs. A US estate tax filing may or may not arise, depending on where the assets sit; your lawyer confirms how the deed treats the settlor's death.
Is a divorcing beneficiary's share divided?
For a beneficiary other than the settlor, the statute says a protected interest is not property to divide on divorce. A settlor's own interest can be treated differently for assets moved in around the marriage. Your lawyer reviews the facts.
Will a trust reduce my tax?
That is not something we can say, as it depends on your residence, your citizenship and where your assets are. A trust does not remove reporting duties. Take the question to advisers in your home country and in the United States.
Do I need my own lawyer as well?
Yes. An Alaska law firm drafts the deed, but you should have your own lawyer review it, especially for your home country's rules on trusts, inheritance and tax. We do not give legal advice. Your own lawyer also checks how your home country treats the spendthrift restriction and the settlor's affidavit.
What should I prepare before contacting a trustee?
Note the purpose, the assets and where they are, the beneficiaries, and who you would like as protector or advisor. Have passport details and a rough account of how the wealth arose ready. Rough answers are enough to begin. The settlor's affidavit comes later, once the deed is drafted and before the assets move.