Minimize Creditor Challenges to Self-Settled Spendthrift Trusts

November 1, 2018

Trusts & Estates

By: Gideon Rothschild and Daniel S. Rubin

In May, we published an article in this journal entitled "Alaska Supreme Court Invalidates Exclusive Jurisdiction Provision,"1 concerning the Alaska Supreme Court’s decision in Toni 1 Trust v. Wacker (Toni 1 Trust).2 That decision held that Section 34.40.110(k) of the Alaska Trust Act, which purported to grant Alaska courts exclusive jurisdiction over fraudulent transfer actions against Alaska self-settled spendthrift trusts, was an ineffective exercise of the Alaska legislature’s authority and couldn’t control the jurisdictional question that it sought to control. The Toni 1 Trust decision confirmed an earlier decision of the Montana courts to the effect that a transfer of Montana real estate to an Alaska self-settled spendthrift trust during the pendency of a lawsuit was, of course, a fraudulent transfer.

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