To the surprise of virtually everyone, Alaska may now become the most hospitable estate planning jurisdiction in the United States. The new gold rush results from a new law, the Alaska Trust Act, which clearly and cleanly responds to two of the toughest of financial planning challenges. Most of us simply aren't prepared to give our assets away for fear we may need them to maintain our lifestyles down the road. So, a U.S. trust we set up to protect assets and fend off creditors isn't a particularly attractive bargain. The new Alaskan law seems to change all of that.
Trusts usually suffer from another restriction, too.
Eventually, trust assets must be distributed and transfer taxes paid. But Alaska has now opted out of the Uniform Statutory Rule Against Perpetuities and Alaskan trusts can live forever. Fortunately, neither you nor your intended beneficiaries need to live in Alaska, but there are a few requirements. First, at least one trustee must live in Alaska or, more likely, be a bank or trust company whose primary office is there. Second, the Alaskan trustee must see to it that the trust files its income tax returns.