(a) This section applies to a creditor's claim with respect to a discretionary interest in an irrevocable trust unless the trust instrument provides otherwise.
(b) A discretionary interest in an irrevocable trust is not a property interest or an enforceable right. It is an expectancy that a creditor of a beneficiary may not attach or otherwise reach.
(c) A creditor of a beneficiary may not force a distribution with regard to a discretionary interest in an irrevocable trust. A creditor may not compel a trustee to exercise the trustee's discretion to make a distribution with regard to a discretionary interest in an irrevocable trust.
(d) Even if a beneficiary has an outstanding creditor, in the case of a discretionary interest in an irrevocable trust, a trustee who has the authority to pay income or principal to a beneficiary may pay it to a third party if the payment is for the benefit of the beneficiary. A trustee is not liable to a creditor for paying income or principal on behalf of the beneficiary.
(e) A creditor of a beneficiary may not maintain an action or a proceeding in court that interferes with the trustee's discretion to apply income or principal on behalf of the beneficiary.
(f) A creditor of a beneficiary may not obtain an order of attachment or similar relief that would prevent a trustee from making a discretionary payment to a third party on behalf of the beneficiary.
(g) This section does not prevent a creditor from obtaining relief from a fraudulent transfer under AS 34.40.110.
(h) In this section, a beneficiary's entitlement to a distribution is within the discretion of a trustee, whether or not the trust instrument states the purposes for the distribution or uses “may,” “shall,” “sole and absolute,” “uncontrolled,” or similar words.
(i) In this section, “discretionary interest” means a beneficiary's interest in an irrevocable trust if the beneficiary's entitlement to a distribution is within the discretion of the trustee.
Structure Alaska Statutes
Chapter 40. Fraudulent Transfers, Revocations, and Trusts
Sec. 34.40.010. Invalidity generally.
Sec. 34.40.020. Invalidity as against purchasers.
Sec. 34.40.030. Purchasers with notice.
Sec. 34.40.040. Invalidating effect of provision for revocation, determination, or alteration.
Sec. 34.40.050. Conveyance in exercise of power to revoke and reconvey.
Sec. 34.40.060. Conveyance before accrual of right to execute power of revocation.
Sec. 34.40.070. Requirement of writing for grant or assignment of trust.
Sec. 34.40.080. Invalidity against heirs, successors, representatives, or assigns.
Sec. 34.40.090. Fraudulent intent question of fact.
Sec. 34.40.100. When title of purchaser for value not affected.
Sec. 34.40.110. Restricting transfers of trust interests.
Sec. 34.40.113. Discretionary interests in irrevocable trusts.
Sec. 34.40.115. Subjecting appointed property to claims of donee's creditor.
Sec. 34.40.118. Transfers of individual retirement accounts.
Sec. 34.40.120. “Land” and “estate and interest in land” defined.