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SB0225B -1- CSSB 225(L&C)
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34-GS2636\I
CS FOR SENATE BILL NO. 225(L&C)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE SENATE LABOR AND COMMERCE COMMITTEE
Offered: 3/25/26
Referred: Judiciary
Sponsor(s): SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR
A BILL
FOR AN ACT ENTITLED
"An Act relating to trusts; relating to nonjudicial settlement agreements in trust 1
matters; relating to claims of a beneficiary against a trustee; relating to the modification 2
and termination of irrevocable trusts; and providing for an effective date." 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 4
* Section 1. AS 13.36 is amended by adding a new section to read: 5
Sec. 13.36.057. Nonjudicial settlement agreements. (a) Except as provided in 6
this section, indispensable parties may enter into a binding nonjudicial settlement 7
agreement with respect to any matter involving a trust that is within the scope of 8
proceedings described in AS 13.36.035(a) without the approval of the court. 9
(b) A nonjudicial settlement agreement is valid only to the extent that the 10
agreement does not violate a material purpose of the trust and includes terms and 11
conditions that could be properly approved by the court under this chapter or other 12
applicable law. 13
(c) Matters that may be resolved by a nonjudicial settlement agreement 14
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CSSB 225(L&C) -2- SB0225B
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include 1
(1) the investment or use of trust assets; 2
(2) the lending or borrowing of money; 3
(3) the addition, deletion, or modification of a term or condition of the 4
trust; 5
(4) the interpretation or construction of a term of the trust; 6
(5) the designation or transfer of the principal place of administration 7
of the trust; 8
(6) the approval of a report of a trustee under AS 13.36.100; 9
(7) the choice of law governing the construction of the trust instrument 10
or administration of the trust; 11
(8) the direction of a trustee to perform or refrain from performing a 12
particular act; 13
(9) the grant to a trustee of any necessary or desirable power; 14
(10) the resignation or appointment of a trustee and the determination 15
of a trustee's compensation; 16
(11) a merger or division of trusts; 17
(12) the grant of approval or authority for a trustee to make charitable 18
gifts from a noncharitable trust; 19
(13) the liability of a trustee for an action relating to the trust; and 20
(14) the termination of the trust. 21
(d) A nonjudicial settlement agreement takes effect when the agreement has 22
been signed by all indispensable parties. If an indispensable party may be represented 23
and bound by another person under AS 13.06.120, the agreement is considered to have 24
been signed by the indispensable party if the agreement is signed by the person who 25
may represent and bind the indispensable party under AS 13.06.120. 26
(e) An indispensable party may petition the court to approve a nonjudicial 27
settlement agreement. 28
(f) In this section, "indispensable party" means an interested person, as 29
defined in AS 13.06.050, whose consent would be required to achieve a binding 30
settlement if the settlement were to be approved by the court. 31
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SB0225B -3- CSSB 225(L&C)
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* Sec. 2. AS 13.36.100(a) is amended to read: 1
(a) Unless resolved or barred under (b), [OR] (c), or (i) of this section, and 2
notwithstanding the lack of adequate disclosure, all claims against a trustee who has 3
issued a report received by the beneficiary and who has informed the beneficiary of 4
the location and availability of records for examination by the beneficiary are barred 5
unless a proceeding to assert the claims is commenced within three years after the 6
beneficiary's receipt of the report. 7
* Sec. 3. AS 13.36.100 is amended by adding a new subsection to read: 8
(i) All potential claims of a beneficiary against a trustee are barred if a report 9
that adequately discloses the existence of the potential claims is approved by the 10
beneficiary in a nonjudicial settlement agreement under AS 13.36.057. 11
* Sec. 4. AS 13.36.360(a) is amended to read: 12
(a) Except as otherwise provided by this section, on petition by a trustee, 13
settlor, or beneficiary, a court may modify or terminate an irrevocable trust if all of the 14
beneficiaries consent and if continuation of the trust on the existing terms of the trust 15
is not necessary to further a material purpose of the trust. However, the court, in its 16
discretion, may determine that the reason for modifying or terminating the trust under 17
the circumstances outweighs the interest in accomplishing the material purposes of the 18
trust. The inclusion of a restriction on the voluntary or involuntary transfer of trust 19
interests under AS 34.40.110 may constitute a material purpose of the trust under this 20
subsection, but is not presumed to constitute a material purpose of the trust under this 21
subsection. If a settlor of an irrevocable trust consents to the modification or 22
termination of the trust, there is a rebuttable presumption that continuing the 23
trust on the existing terms of the trust is not necessary to further a material 24
purpose of the trust and that the reason for modifying or terminating the trust 25
outweighs the interest in accomplishing the material purposes of the trust. 26
* Sec. 5. AS 13.36.360(b) is repealed. 27
* Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 28
read: 29
APPLICABILITY. AS 13.36.360(a), as amended by sec. 4 of this Act, and the repeal 30
of AS 13.36.360(b) by sec. 5 of this Act apply to a trust that is created on or after the effective 31
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CSSB 225(L&C) -4- SB0225B
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date of this Act. 1
* Sec. 7. This Act takes effect immediately under AS 01.10.070(c). 2