Section 13.38.730. Property not productive of income; marital deduction.

   (a) If a federal estate or gift tax marital deduction is allowed for all or part of a trust whose income is required to be paid to the settlor's or testator's spouse and whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets, and if the amounts that the trustee transfers from principal to income under AS 13.38.210 and that the trustee distributes to the spouse from principal under the governing instrument are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction, the spouse may require the trustee to make property productive of income, convert property within a reasonable time, or exercise the power conferred by AS 13.38.210(a). The trustee may decide which action or combination of actions to take. The income interest for a marital deduction trust described in this subsection shall be paid at least annually.
   (b) In cases not governed by (a) of this section, proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.
   (c) Unless otherwise provided by the trust instrument, a power or authority granted to a trustee, except for the authority to refrain from electing qualified terminal interest property treatment under 26 U.S.C. 2056 or 2523 (Internal Revenue Code), does not prevent a qualifying trust from being eligible for the marital deduction. All powers granted to a trustee shall be construed consistently with this subsection. In this subsection, "qualifying trust" means a trust
        (1) that is designated in the trust instrument as a trust eligible for the federal estate or gift tax marital deduction; or
        (2) if it can be inferred from the trust instrument that the grantor intended the trust to be eligible for the federal estate or gift tax marital deduction.

Notes

History

(Sec. 2 ch 145 SLA 2003; am Sec. 6, 7 ch 82 SLA 2004)