An Alaska living trust allows you to place some or all of your assets into the ownership of a trust during your lifetime. The assets are then distributed to your beneficiaries after your death. A revocable living trust allows you can change or end the trust anytime you choose; it is possible to make an irrevocable living trust, but this means you cannot make any changes. A living trust is popular in Alaska because it is an alternative to wills and probate.
Living trusts in Alaska
The person creating the living trust is known as the grantor. To create a living trust in Alaska, you decide what the terms of your trust will be. When creating a living trust in Alaska, you choose a trustee, who will manage the assets in the trust and be responsible for distributing them to your beneficiaries after your death. You can name yourself as a trustee so you can manage your assets during your life, but you will need a successor trustee to handle the trust after your death. You can set up conditions and specific dates for distribution of the assets, such as upon certain birthdays or achievements. Alaska is one of only a few states that puts no statutory limit on the length of your trust, so it is up to you to decide this when you create the trust.
Do I need a living trust in Alaska?
A living trust is not required, but it can offer some benefits as part of estate planning. If you wish to avoid the traditional probate process, a living trust allows you to do this. A living trust is not public as are probate proceedings, so the terms of your trust will never be revealed, providing you and your family with privacy. The trust assets can be distributed immediately upon your death and there is no need to wait for the probate process or any kind of court order. If you have a small estate (under $100,000), note that Alaska has a simplified probate process which is quick and easy to access and is likely less expensive than setting up a trust.
Your trust also can provide peace of mind. Instead of creating a will and powers of attorney, you can set up one trust that will manage all the assets you place in it for the rest of your life. Should you become unable to manage your own affairs, your assets are already being managed via the trust.
Living trusts and estate taxes in Alaska
There is no estate tax levied by the state of Alaska. Federal estate taxes are in place but only for estates that exceed the yearly limit (this fluctuates but is over $5 million per person). A basic living trust will not sidestep the tax, but an AB trust, or QTIP trust, that transfers assets from one spouse to another will avoid the tax if the estate exceeds the exempted amount. A living trust also does not shelter your assets from Medicaid spend down laws.
How to create a living trust in Alaska
A living trust is created with a written document that places your assets in the trust and names your trustee and your beneficiaries. You need to sign the document before a notary to place it into effect. Once you have created the trust, you need to fund the trust by transferring assets into its control.
A living trust provides much flexibility and freedom and can be an important part of your estate planning.
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