KeyCorp is rushing back to Alaska.
The Cleveland-based bank, which has about $900 million of personal trust assets under management in Alaska, had been pulling back staff from the state.
But thanks to a law adopted in April that favors trust departments, KeyCorp is once again hot on the nation's coldest state.
"There's nothing wrong with being an opportunist," said William M. Hunter 2d, the executive vice president of KeyCorp's private bank.
The Alaska law contains several provisions intended to attract into trust accounts money that typically would go offshore for protection from creditors.
Unlike most states, Alaska now puts no time limit on the life of a trust.
Also, Alaska is now a safer place to protect assets from debt claims, because creditors now have only four years to demonstrate that money owed to them was fraudulently transferred into Alaska trusts.
The state also allows individuals to remain beneficiaries of their own trusts.
KeyCorp had opposed an earlier version of the law for fear it would protect the assets of deadbeat dads. It also viewed the prospects for personal trusts as weak because Alaskans generally retire to other states, Mr. Hunter said.
But the new law changed that demographic, he said, because it is designed to attract trusts from around the country, regardless of where clients live.
As a result, KeyCorp has sent Susan Brinkman, a vice president, back to Alaska. The bank is urging clients to strongly consider establishing trusts in the state.
After fielding calls from attorneys and accountants asking about the bank's status as an Alaska trustee, KeyCorp, which has $81 billion of trust assets under management, has rolled out a marketing brochure touting Alaska trusts.
Its competitors are already firing back.
"Our advantage," said Douglas J. Blattmachr, president of the recently founded Alaska Trust Co., Anchorage, "is we're the ones who proposed it (the law) and got it through, so we're the most familiar with how it works."
His brother, Jonathan G. Blattmachr, a partner in Millbank, Tweed, Hadley & McCloy, New York, drafted the bill and serves as a director of Alaska Trust Co. He said all of his law firm's trust and estate clients have expressed interest in Alaska trusts and "well over half" of them will set them up.
"I can't see how anyone who wants to do effective estate planning wouldn't," he added.
Other players are the state's largest bank, National Bank of Alaska, which has $2 billion of assets under management, and First National Bank of Anchorage.
The competition will heat up further as several other financial institutions, including Alaska USA Federal Credit Union, Anchorage, are seeking approval for trust powers from the Alaska Banking Department.
"We're doing more talking to people and working with attorneys around the state," said David L. Dobbs, vice president and trust officer of National Bank.