1. Glen W. Bobo, CLU, ChFC, MSFS, Douglas Hartman, Agents of New York Life Insurance Co. Alaska General Office 701 W 8 th, Suite 900 Anchorage, AK 99501 907-279-6471

2.  THIS SEMINAR AND THE INFORMATION CONTAINED IN THESE SLIDES, IS FOR INFORMATIONAL PURPOSES ONLY. NEITHER NEW YORK LIFE INSURNACE COMPANY, ITS SUBSIDIARIES, NOR ANY OF ITS AGENTS ARE IN THE BUSINESS OF OFFEREING TAX, LEGAL OR ACCOUNTING ADVICE. YOU SHOULD CONSULT WITH YOUR PROFESSIONAL ADVISORS FOR TAX, LEGAL, OR ACCOUNTING ADVICE WITH RESPECT TO THESE MATTERS.

3.  Alaska limited partnerships and limited liability companies  Alaska has legislative protection for assets of LPs and LLCs.  Generally, creditors and holders of judgments can only attach income distributed from these entities by obtaining a “charging order” from the court, and they cannot attach the underlying assets.  Generally the creditor will be liable for all taxes on pass-through income whether distributed or not, making the charging order unappealing to the creditor.

4.  Alaska Domestic Asset Protection Trust (DAPT)  Alaska is one of a handful of states that permit, under certain circumstances and restrictions, the maker, or “grantor” of an irrevocable trust to also be a beneficiary of that trust.

5. Any distribution decision involving the grantor/beneficiary must be made by an independent trustee based on an “ascertainable standard.” The basic effect of this is the grantor must financially need the money for things like health care and support, and not have other resources available.

6.  Some practical uses include life insurance trusts to fund estate taxes and other trusts used to accept gifts in trust for family members.  The availability of making trusts a DAPT takes some of the sting out of irrevocability, solving the problem of a grantor becoming destitute while large amounts of money sit just out of reach in trust for family members, or in life insurance cash value.

7.  Alaska optional community property statute  Generally all states follow either a separate property (civil law) or a community property (common law) regime. Separate property states attribute ownership interests to the spouse who received or earned it, while community property states create an undivided half interest (the community interest) to each spouse, except for individual gifts and inheritances received.

8.  There has been some movement for other states to become “marital property” states, most notably Wisconsin.  Alaska, historically a separate property state, in 1998 enacted the union’s only community property environment where property owners could opt, property by property, community treatment.

9.  So what? It is a big deal from an income tax planning viewpoint. Assets passed from one spouse to another at death receive a step-up in cost basis at the first spouse’s death on the entire property, not just their half. This can save enormous amounts of capital gains taxes when the survivor sells the asset. The tradeoff, of course, is the risk of divorce.

10.  Alaska’s new rules for unmatured life insurance and annuity contracts.  Increases creditor exemption from $12,500 to $500,000 per insured or annuitant. Note the policy(ies) must be owned by an individual.  Life insurance and annuities enjoy significant tax benefits.** Now, professionals can also enjoy significant creditor protection.  Planning tip: If you have “maxed out” on your qualified retirement plans, consider using life insurance or annuities as a supplemental retirement plan. *Neither New York Life, nor its agents give tax, legal or accounting advise. Please consult your own tax, legal or accounting professional before making any decision

11. Glen W. Bobo, CLU, ChFC, MSFS, Douglas Hartman, Agents of New York Life Insurance Co. Alaska General Office 701 W 8 th, Suite 900 Anchorage, AK 99501 907-279-6471