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PAG LIN 1 1 Section 1. Section 450.1, Code 1995, is amended to read as 1 2 follows: 1 3 450.1 DEFINITIONS– AUTHORITY OF COUNTY ATTORNEYAND 1 4 CONSTRUCTION. 1 5 1. In the construction of this chapterthe word "person"1 6shall include: 1 7 a. "Child" includes a legally adopted child, an 1 8 illegitimate child entitled to inherit under the laws of this 1 9 state, and a stepchild. 1 10 b. "Lineal descendant of the decedent" includes 1 11 descendants of a stepchild of the deceased person, and persons 1 12 legally adopted by a descendant of the deceased person. 1 13 c. "Person" includes plural as well as singular, and 1 14 artificial as well as natural persons. 1 15 d. "Stepchild" shall include only the child of a person 1 16 who was married to the deceased person at the time of the 1 17 deceased person's death, or the child of a person to whom the 1 18 deceased person was married, which person died during the 1 19 marriage to the deceased person. 1 20 2. This chapter shall not be construed to confer upon a 1 21 county attorney authority to represent the state in any case, 1 22 and the county attorney shall represent the department of 1 23 revenue and finance only when especially authorized byitthe 1 24 department to do so. 1 25 3. For purposes of this chapter, unless the context 1 26 otherwise requires,: 1 27 a. "Internal Revenue Code" means the same as defined in 1 28 section 422.3. 1 29 b. "personalPersonal representative" means an executor, 1 30 administrator, or trustee as each is defined in section 633.3 1 31and "Internal Revenue Code" means the same as defined in1 32section 422.3. 1 33 Sec. 2. Section 450.2, Code 1995, is amended by striking 1 34 the section and inserting in lieu thereof the following: 1 35 450.2 TAXABLE ESTATES AND PROPERTY. 2 1 The following estates and property and any interest in or 2 2 income from any of the following estates and property, which 2 3 pass from the decedent owner in any manner described in this 2 4 chapter, are subject to tax as provided in this chapter: 2 5 1. An estate or property that is within this state at the 2 6 death of the decedent owner, regardless of whether the estate 2 7 consists of real, personal, tangible, intangible, or mixed 2 8 property, and whether or not the decedent owner is an 2 9 inhabitant of this state. 2 10 2. An estate or property that is subject to the 2 11 jurisdiction of the courts of this state at the death of the 2 12 decedent owner. 2 13 3. Property that is brought into this state after the 2 14 death of the decedent and becomes subject to the jurisdiction 2 15 of the courts of this state, except intangible personal 2 16 property owned by the decedent as an inhabitant of another 2 17 state. 2 18 4. Property of a decedent owner domiciled in this state at 2 19 the time of death, that is outside of this state, except real 2 20 estate located outside of this state that passes in fee from 2 21 the decedent owner. 2 22 Sec. 3. Section 450.3, subsection 2, Code 1995, is amended 2 23 to read as follows: 2 24 2. By deed, grant, sale, gift or transfer made within 2 25 three years of the death of the grantor or donor, which is not 2 26 a bona fide sale for an adequate and full consideration in 2 27 money or money's worth and which is in excess of the annual 2 28 gift tax exclusion allowable for each donee under section 2 29 2503, subsections b and e of the Internal Revenue Code. If 2 30 both spouses consent, a gift made by one spouse to a person 2 31 who is not the other spouse is considered, for the purposes of 2 32 this subsection, as made one half by each spouse under the 2 33 same terms and conditions provided for in section 2513 of the 2 34 Internal Revenue Code. Net market value for the purpose of 2 35 this subsection is the net market value at the date of 3 1 transfer. 3 2 Sec. 4. Section 450.4, subsection 4, Code 1995, is amended 3 3 to read as follows: 3 4 4. Bequests for the care and maintenance of the cemetery 3 5 or burial lot of the decedent or the decedent's family, and 3 6 bequests not to exceedfive hundredone thousand dollars in 3 7 any estate of a decedent for the performance of a religious 3 8 service or services by some person regularly ordained, 3 9 authorized, or licensed by some religious society to perform 3 10 such service, which service or services are to be performed 3 11 for or in behalf of the testator or some person named in the 3 12 testator's last will. 3 13 Sec. 5. Section 450.4, subsection 5, Code 1995, is amended 3 14 by striking the subsection and inserting in lieu thereof the 3 15 following: 3 16 5. On that portion of the decedent's interest in a pension 3 17 or retirement plan that will be includable as net income as 3 18 defined in section 422.7, when paid to the beneficiary. 3 19 Sec. 6. Section 450.9, subsections 2 and 4, Code 1995, are 3 20 amended to read as follows: 3 21 2. Eachson and daughter, including legally adopted sons3 22and daughters, or biological sons and daughters entitled to3 23inherit under the law of this statechild, fifty thousand 3 24 dollars. 3 25 4. Any other lineal descendant or brother, sister, niece, 3 26 or nephew of thedeceaseddecedent, fifteen thousand dollars. 3 27 Sec. 7. Section 450.10, subsection 1, unnumbered paragraph 3 28 1, Code 1995, is amended to read as follows: 3 29 When the property, interest, or income passes to the 3 30 father,ormother,or to abrother, sister, niece, nephew, 3 31 child, or other lineal descendant of the decedent, grantor, 3 32 donor, or vendor,including a legally adopted child or3 33biological child entitled to inherit under the laws of this3 34state,the tax imposed shall be on the individual share so 3 35 passing in excess of the exemptions allowed as follows: 4 1 Sec. 8. Section 450.10, subsection 2, unnumbered paragraph 4 2 1, Code 1995, is amended to read as follows: 4 3 When the property or any interest therein or income 4 4 therefrom taxable under the provisions of this chapter passes 4 5 to thebrother or sister,son-in-law or daughter-in-law,or4 6step-children,the rate of tax imposed on the individual share 4 7 so passing shall be as follows: 4 8 Sec. 9. NEW SECTION. 450.11 COMPROMISE SETTLEMENT AND 4 9 WILL CONTEST. 4 10 The distribution of property of the decedent pursuant to a 4 11 compromise settlement, an order of court approving a 4 12 compromise settlement, or an order of court settling a will 4 13 contest or disposing of a will contest, when such distribution 4 14 is based on valid claims and the distribution is economically 4 15 fair based on such claims, shall be binding upon the 4 16 department as to recipients of property and valuation of 4 17 property interests passing from the decedent for a 4 18 determination of inheritance tax under this chapter. 4 19 Sec. 10. Section 450.20, unnumbered paragraph 1, Code 4 20 1995, is amended to read as follows: 4 21ItThe department of revenue and finance shall also keep a 4 22 separate record of any deferred estate upon which the tax due 4 23 is not paidwithin fifteen months fromon or before the last 4 24 day of the ninth month after the death of the decedent, 4 25 showing substantially the same facts as are required in other 4 26 cases, and also showing: 4 27 Sec. 11. Section 614.14, subsection 4, paragraph b, Code 4 28 1995, is amended to read as follows: 4 29 b. That, to the knowledge of the trustee, the person 4 30 creating the trust was under no disability or infirmity at the 4 31 time the trust was created. 4 32 Sec. 12. Section 633.10, subsection 4, Code 1995, is 4 33 amended by adding the following new paragraph: 4 34 NEW PARAGRAPH. d. A trust that is administered solely or 4 35 jointly by an individual trustee or trustees is not subject to 5 1 the jurisdiction of the court unless jurisdiction is invoked 5 2 by a trustee or beneficiary, or if otherwise provided by the 5 3 governing instrument. Upon application of all trustees 5 4 administering a trust which is subject to the court's 5 5 jurisdiction, and following notice to beneficiaries as 5 6 provided in section 633.40, subsection 4, the court shall 5 7 release the trust from further jurisdiction unless one or more 5 8 beneficiaries object, on the condition that jurisdiction may 5 9 thereafter be invoked by a trustee or beneficiary. The 5 10 provisions of this paragraph shall be effective for 5 11 applications filed on or after July 1, 1996. 5 12 Sec. 13. Section 633.31, Code 1995, is amended by adding 5 13 the following new subsection: 5 14 NEW SUBSECTION. 3. The fee set forth in subsection 2, 5 15 paragraph "k" shall not be charged on any property transferred 5 16 to a testamentary trust from an estate that has been 5 17 administered in this state and for which court costs have been 5 18 assessed and paid. 5 19 Sec. 14. Section 633.440, Code 1995, is amended to read as 5 20 follows: 5 21 633.440 CONTENTS OF NOTICE OF DISALLOWANCE. 5 22 Such a notice of disallowance shall advise the claimant 5 23 that the claim has been disallowed and will be forever barred 5 24 unless the claimant shall within twenty days after the date of 5 25 mailing the notice, file a request for hearing on the claim 5 26 with the clerk, and mail a copy of such request for hearing to 5 27 the personal representative and the attorney of record, if 5 28 any, by certified mail. 5 29 Sec. 15. Section 633.681, Code 1995, is amended to read as 5 30 follows: 5 31 633.681 ASSETS OF MINOR WARD EXHAUSTED. 5 32 When the assets of a minor ward's conservatorship are 5 33 exhausted or consist of personal property only of an aggregate 5 34 value not in excess offourten thousand dollars, the court, 5 35 upon application or upon its own motion, may terminate the 6 1 conservatorshipand. The order for termination shall direct 6 2 the conservator to delivertheany property remaining after 6 3 the payment of allowed claims and expenses of administration 6 4 tothe parent or other person entitled to the custody of the6 5minor ward, for the use of the ward, after payment of allowed6 6claims and expenses of administrationa custodian under any 6 7 uniform transfers to minors Act. Such delivery shall have the 6 8 same force and effect as if delivery had been made to the ward 6 9 after attaining majority. 6 10 Sec. 16. Section 633.704, subsection 3, paragraph a, Code 6 11 Supplement 1995, is amended to read as follows: 6 12 a. PASSAGE OF DISCLAIMED INTEREST OR PROPERTY. Unless the 6 13 transferor has otherwise provided, the property, interest, or 6 14 right disclaimed, and any future interest which is to take 6 15 effect in possession or enjoyment at or after the termination 6 16 of the interest or right disclaimed, descends or shall be 6 17 distributed as if the disclaimant has died prior to the date 6 18 of the transfer, or if the disclaimant is one designated to 6 19 take pursuant to a power of appointment exercised by 6 20 testamentary instrument, then as if the disclaimant has 6 21 predeceased the donee of the power unless the donee of the 6 22 power has otherwise provided. In every case, the disclaimer 6 23 relates back for all purposes to the date of the transfer.In6 24the case of a disclaiming beneficiary under a will, other than6 25a spouse, the property, interest, or right disclaimed passes6 26to the heirs of the disclaimant unless from the terms of the6 27transferor's will the intent is clear and explicit to the6 28contrary, in which event the property, interest, or right6 29disclaimed passes pursuant to the will.In the case of a 6 30 disclaimer under a will by a spouse the property, interest, or 6 31 right disclaimed lapses unless from the terms of the 6 32 transferor's will the intent is clear and explicit to the 6 33 contrary. 6 34 EXPLANATION 6 35 This bill amends sections of the inheritance tax and 7 1 probate chapters. 7 2 Sections 1 through 10 of the bill address inheritance tax 7 3 issues. Section 1 adds directions for construction of the 7 4 terms "child", "lineal descendant", and "stepchild", to 7 5 clearly include stepchildren in consideration of inheritance 7 6 tax issues. Sections 6, 7, and 8 use these terms in place of 7 7 lists of certain descendants for exemption and rate of tax 7 8 purposes. Stepchildren are taxed equally with biological 7 9 children under this bill. In addition, brothers, sisters, 7 10 nieces and nephews of the decedent are given the same 7 11 exemptions and tax rates as children of the decedent. 7 12 Section 2 reorganizes and restates the list of estates and 7 13 property that are currently subject to inheritance tax, and 7 14 adds to the current law an express exception from the 7 15 inheritance tax for certain intangible personal property owned 7 16 by a resident of another state. Section 3 adds directions for 7 17 determining net market value (and, consequently, the taxable 7 18 amount) according to the date of transfer for certain taxable 7 19 property. Section 4 increases the limit for bequests for 7 20 religious services to $1,000. 7 21 Section 5 strikes the current provision on exemptions for 7 22 annuities purchased under a retirement or pension plan, and 7 23 replaces it with a similar provision related to any type of 7 24 interest in a pension or retirement plan. 7 25 Section 9 adds a new section regarding the distribution of 7 26 property pursuant to a compromise settlement and its treatment 7 27 for inheritance tax purposes, which makes Iowa law consistent 7 28 with federal tax law on this issue. Section 10 changes the 7 29 time period for filings of records of deferred estates. 7 30 Sections 11 through 16 of the bill address probate code 7 31 sections. Section 11 changes the warranty the trustee makes 7 32 regarding the trustor's condition at the time of creation of 7 33 the trust. Section 12 adds a new paragraph releasing certain 7 34 testamentary trusts from the jurisdiction of the court, to 7 35 allow such the same opportunities as other types of trusts. 8 1 Section 13 exempts certain property transferred from a 8 2 testamentary trust from certain statutory fees, to prohibit a 8 3 trust from being charged fees after the estate has paid its 8 4 fees. 8 5 Section 14 requires a request for a hearing on a notice of 8 6 disallowance of a claim against an estate to be mailed no only 8 7 to the personal representative, but also to any attorney of 8 8 record. Section 15 permits a court to terminate a 8 9 conservatorship where the value of the property is $10,000 or 8 10 less, an increase over the current statutory amount of $4,000. 8 11 Section 16 removes language regarding a disclaimer made by a 8 12 beneficiary, to make it consistent with the antilapse 8 13 provisions of the Code in sections 633.273 and 633.274. 8 14 LSB 3738SV 76 8 15 jls/sc/14.1
Text: SF02423 Text: SF02425 Text: SF02400 - SF02499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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