Alaska offers these distinct advantages for asset protection trusts:

• Generational Tax Benefits with Perpetual Trusts: Trusts established in Alaska can endure forever, permanently removing trust assets and future growth from exposure to federal transfer taxes.
• Income Tax Efficiency: Alaska does not impose income, dividend, interest, or capital gains taxes on trust assets. Alaska trusts must file a federal income tax return, but there are no associated state taxes or filings in Alaska. This means that investable assets within an Alaska trust can grow significantly without the burden of state income tax payments for generation after generation.
• Optimized Planning: While Alaska’s self-settled trust statutes enable comprehensive asset protection planning, Alaska law also provides for many other techniques to enable great planning, including separated or directed trusts, opt-in community property for residents and non-residents of Alaska, competitive life insurance premium tax rates and trust decanting.
• Uniquely Clear Statutes Relating to Creditor Definitions: Alaska has no exception creditors for self-settled trusts. Alaska is notably the only state that has a definition of a so-called “pre-existing creditor” in its statutes. In Alaska, a fraudulent conveyance can only be set aside if the creditor can prove actual fraud as to that specific creditor. An Alaska resident who is married or will be married within 30 days, must obtain spousal consent prior to the creation and funding of a self-settled trust.
• Safeguards to Protect Public Interest Related to Fraudulent Conveyance: Alaska statutes contain several provisions designed to both protect the public interest from abuse of these laws and strengthen the position of grantors seeking to use these laws properly and with honest intent to perform good planning. Two of these safeguards include the requirement for an affidavit of solvency (to ensure no grantor becomes insolvent by transferring all assets into a self-settled trust) and a 4-year statute of limitation for pre-existing and future creditors.
• Supporting Case Law: Alaska’s self-settled trust statutes are the oldest in the nation. Alaska has case law in instances where grantors attempted to establish trusts fraudulently, and the statutory provisions to protect public interest and mitigate abuse of these laws were proven successful.

Note: The information provided here is for general educational and informational purposes only. It is not legal advice and should not be interpreted as such. For a thorough understanding of these topics relevant to your specific circumstances, we recommend consulting a qualified estate planning attorney. Peak Trust Company cannot provide legal advice; however, we can serve as an informational resource and provide referrals to highly skilled attorneys who can offer legal and tax guidance tailored to your specific needs.