ANCHORAGE, Alaska — Alaska USA Trust is looking to build its out-of state alliances with a campaign touting the state as being among the most trust-friendly in the country.
Launched in 1997 by $2.8 billion Alaska USA Federal Credit Union, the trust services CUSO has more than 500 institutional and member clients with $6 billion in assets under administration and $50 million in assets under management, respectively. Last year, Alaska USA Trust saw a 37% growth in personal trust and investment accounts, said Nancy Bear Usera, president/chief operating officer. This year, the CUSO plans to continue building on the personal trust side touting Alaska's liberal trust laws.
"Our state legislature has been proactive in ensuring that Alaska can be active [in trust services], Usera said.
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The Alaska Trust Act was signed into law April 1, 1997 and allows a maker of an Alaskan trust to place money in a trust that can last forever, protect it from the trustor's creditors, and, if drafted properly, exclude the money from the trustor's taxable estate, even if he or she is an eligible beneficiary of the trust.
Usera said much of AUTC's growth has also come through referrals from attorneys and accountants. Many of the credit union's members have assets spread out over different investment pools and are looking to consolidate. "A number of people are coming to us wanting to consolidate to generate a sustainable retirement income," Usera said. "The wave of baby boomers that hit retirement last year is also looking to do this." AUTC spent its early years building up its institutional accounts through municipalities and other public units. In the mid 1990s, Usera believes that credit unions with vision saw the opportunity to carve a niche in trust services. The market conditions were much different then with a larger wealth effect, the transfer of wealth from the World War II generation and the loom of state taxes as people grew concerned about losing their inheritances to governments, she said.
"Since then, the stock market corrected, Congress repealed the state tax, the [WW II] veterans are living longer and using their assets for long-term care," Usera said. "The big wave of trust accounts didn't materialize the way people thought it would. We still believe it's important to provide for members including building long-term relationships with trust services."
AUTC will move forward this year with building its personal trust and investment services side through wooing out-of-state clients. Alaska is among a handful of states that does not impose taxes on trust assets and are included with 20 others along with Florida and California that have statutes allowing trusts to pay beneficiaries a fixed percentage of trust assets ranging between 3% and 5%. The creation of trusts in offshore locations in places like Cook Islands and Nevis were pretty common for those concerned with liability, but now Alaska, Delaware, Rhode Island, Nevada, and South Dakota are among the states that permit these trusts.
Meanwhile, Usera said she acknowledges that credit unions, nor any financial institution, can't be all things to all people.
"An analysis we do frequently involves asking what can we do for our members that we can do better than anyone else. It also means acknowledging what we can't do," she said.
To that end, trust services is so individualized and "if asked for free advice," Usera would say it first starts with identifying the market a credit union is trying to reach and what financial needs need to be satisfied.
"We focus on things we can do well," Usera said. "There are a lot of competitors out there. Be sure you stay in touch with what your members' needs are." –[email protected]
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