Which U.S. jurisdiction currently has the most liberal living trust laws?
The state of Alaska has the most liberal living trust laws as a result of the April 1997 Alaska Trust Act. This law’s unique provisions include the following: * Future creditors of the trust creator are precluded from reaching the trust assets (unless a fraudulent conveyance exists) even though the creator can also be a discretionary beneficiary with trust distributions being in the determination of an independent Alaskan trustee. The IRS, in Revenue Ruling 76-103, stated that for a transfer to a trust to be considered a completed gift (and therefore not subject to subsequent estate taxation), the applicable state law must not allow for attachment of the trust principal by creditors. * Repeal of the rule against perpetuities allowing for the perpetual continuation of a trust. Whether a state such as Alaska will be able to provide true asset protection as accomplished by a properly structured foreign asset protection trust (APT) remains to be seen. States such as Nevada (as of July 1, 1
