Practitioners who focus on asset protection have been abuzz over the recent ruling by the Alaska Supreme Court in Toni 1 Trust v. Wacker. In that case, the court invalidated an Alaska state law that gives Alaska exclusive jurisdiction over an action brought to avoid, as fraudulent, a transfer of property to an Alaska self-settled spendthrift trust. In “Alaska Supreme Court Invalidates Exclusive Jurisdiction Provision,” p. 23, by Gideon Rothschild and Daniel S. Rubin, the authors analyze how the court came to its decision and the implications of the decision as they relate to the typical situation involving an out-of-state settlor and the effectiveness of his self-settled spendthrift trust for estate and asset protection planning purposes. For attorneys who want to notify their clients about the decision and how it may impact them, I recommend reading, “Send Client Letter About Self-Settled DAPTs Post-Wacker” posted on wealthmanagement.com, by Martin M. Shenkman and Alan Gassman. Their article contains a sample letter to clients that you can adapt and use.
This month’s issue also includes a round-up of other important court decisions, specifically those that affect fiduciaries, as part of our Fiduciary Professions Committee Report. In “Fiduciary Law Trends,” Joshua S. Miller and Michael Sneeringer, p. 43, cover cases involving various issues including digital assets, trustee discretion and decanting. Another article in the Committee Report highlights how some changes made by the Tax Cuts and Jobs Act could affect fiduciaries’ distribution decisions. In “Deductibility of Trust Expenses Under the Tax Cuts and Jobs Act,” p. 38, the authors explain how the new law will result in a renewed focus on the allocation of expenses of trusts and estates and may, for some trustees and executors, tip the scales in favor of distributing trust property to individual beneficiaries who are in a more advantageous income tax position as a result of the Act.