9082 / What is an Alaska Trust?

This means creditors that exist when the trust is created, or those who become creditors after the trust is created, are unable to satisfy their claims from the beneficiary’s interest in the trust in most circumstances.¹

This is the case even if the trust beneficiary is also the settlor of the trust.² The settlor can also permissibly serve as co-trustee or trust advisor, as long as the settlor does not have authority over discretionary trust distributions.³ A non-settlor trust beneficiary may serve as sole trustee, co-trustee or advisor without jeopardizing the validity of the transfer restrictions.⁴

“Payment or delivery” of trust assets, for these purposes, does not include a beneficiary’s use or occupancy of either real property or tangible personal property owned by the trust, so long as the use is in accordance with the trustee’s discretionary authority as specified in the trust document.⁵

See Q 9083 for a discussion of situations where a creditor can reach assets held in an Alaska trust despite proper structuring of the trust. See Q 9074 to Q 9076 for a discussion of domestic asset protection trusts generally. The rules governing asset protection trusts established in Delaware are discussed in Q 9078 to Q 9081.