HB 208 Summary

• Creates framework for nonfiduciary powers of appointment that can be exercised in any lawful manner without limitation based on the holder's fiduciary status, and protects property subject to such powers from creditor claims except as provided in AS 34.40.115.

• Expands trustee powers including authority to insure trust property against liability to beneficiaries, pay costs of authorized actions against trust property, and divide multi-settlor trusts into separate portions for income tax purposes.

• Distinguishes between unlimited and limited authorized trustees, allowing unlimited trustees greater flexibility in appointing trust principal to new trusts with different standards, including special needs trusts, pooled trusts, and third-party trusts.

• Modifies the perpetuities rule to allow second powers of appointment created by exercise of a first nongeneral power to vest within 1,000 years of the first power's creation, and establishes a 30-day notice period before appointment exercises become effective unless waived.

• Takes effect immediately upon enactment with retroactive application to perpetuities provisions dating to April 2, 1997, and applies to all powers of appointment and trusts existing on or after the effective date.