(a) If a beneficiary fails to survive the decedent and is a grandparent, a descendant of a grandparent, or a stepchild of the decedent, the following apply:

1. (1) except as provided in (4) of this subsection, if the beneficiary designation is not in the form of a class gift and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary's surviving descendants; the beneficiary's surviving descendants take by representation the property to which the beneficiary would have been entitled had the beneficiary survived the decedent;
2. (2) except as provided in (4) of this subsection, if the beneficiary designation is in the form of a class gift, other than a beneficiary designation to “issue,” “descendants,” “heirs of the body,” “heirs,” “next of kin,” “relatives,” or “family,” or a class described by language of similar import, a substitute gift is created in the surviving descendants of a deceased beneficiary; the property to which the beneficiaries would have been entitled had all of them survived the decedent passes to the surviving beneficiaries and the surviving descendants of the deceased beneficiaries; each surviving beneficiary takes the share to which the surviving beneficiary would have been entitled had the deceased beneficiaries survived the decedent; each deceased beneficiary's surviving descendants who are substituted for the deceased beneficiary take by representation the share to which the deceased beneficiary would have been entitled had the deceased beneficiary survived the decedent; in this paragraph, “deceased beneficiary” means a class member who failed to survive the decedent and left one or more surviving descendants;
3. (3) for the purposes of AS 13.12.701, words of survivorship, as in a beneficiary designation to an individual “if the individual survives me,” or in a beneficiary designation to “my surviving children,” are not, in the absence of additional evidence, a sufficient indication of an intent contrary to the application of this section;
4. (4) if a governing instrument creates an alternative beneficiary designation with respect to a beneficiary designation for which a substitute gift is created by (1) or (2) of this subsection, the substitute gift is superseded by the alternative beneficiary designation only if an expressly designated beneficiary of the alternative beneficiary designation is entitled to take.

(b) If, under (a) of this section, substitute gifts are created and not superseded with respect to more than one beneficiary designation and the beneficiary designations are alternative beneficiary designations, one to the other, the property passes under the primary substitute gift, except that if there is a younger-generation beneficiary designation, the property passes under the younger-generation substitute gift and not under the primary substitute gift. In this subsection,

1. (1) “primary beneficiary designation” means the beneficiary designation that would have taken effect had all the deceased beneficiaries of the alternative beneficiary designations who left surviving descendants survived the decedent;
2. (2) “primary substitute gift” means the substitute gift created with respect to the primary beneficiary designation;

3. (3) “younger-generation beneficiary designation” means a beneficiary designation that

   1. (A) is to a descendant of a beneficiary of the primary beneficiary designation;
   2. (B) is an alternative beneficiary designation with respect to the primary beneficiary designation;
   3. (C) is a beneficiary designation for which a substitute gift is created; and
   4. (D) would have taken effect had all the deceased beneficiaries who left surviving descendants survived the decedent except the deceased beneficiary or beneficiaries of the primary beneficiary designation;
4. (4) “younger-generation substitute gift” means the substitute gift created with respect to the younger-generation beneficiary designation.

(g) In this section,

1. (1) “alternative beneficiary designation” means a beneficiary designation that is expressly created by the governing instrument and, under the terms of the governing instrument, can take effect instead of another beneficiary designation on the happening of one or more events, including survival of the decedent or failure to survive the decedent, whether an event is expressed in condition-precedent, condition-subsequent, or another form;

2. (2) “beneficiary” means the beneficiary of a beneficiary designation under which the beneficiary must survive the decedent and

   1. (A) includes a class member if the beneficiary designation is in the form of a class gift;
   2. (B) includes an individual or class member who was deceased at the time the beneficiary designation was executed as well as an individual or class member who was then living but who failed to survive the decedent;
   3. (C) excludes a joint tenant of a joint tenancy with the right of survivorship and a party to a joint and survivorship account;
3. (3) “beneficiary designation” includes an alternative beneficiary designation and a beneficiary designation in the form of a class gift;
4. (4) “class member” includes an individual who fails to survive the decedent but who would have taken under a beneficiary designation in the form of a class gift had the individual survived the decedent;
5. (5) “stepchild” means a child of the decedent's surviving, deceased, or former spouse, and not of the decedent;
6. (6) “surviving beneficiary” or “surviving descendant” means a beneficiary or a descendant who neither predeceased the decedent nor is considered to have predeceased the decedent under AS 13.12.702.