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Senate Study Bill 2349

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  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 ATTORNEY AND
  1  4 CONSTRUCTION.
  1  5    1.  In the construction of this chapter the word "person"
  1  6 shall 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 by it the
  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.  "personal Personal representative" means an executor,
  1 30 administrator, or trustee as each is defined in section 633.3
  1 31 and "Internal Revenue Code" means the same as defined in
  1 32 section 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 PROPERTY.
  2  1    The following property which passes from the decedent owner
  2  2 in any manner described in this chapter is subject to tax as
  2  3 provided in this chapter:
  2  4    1.  Property of a decedent owner domiciled in this state at
  2  5 the time of death except real estate and tangible personal
  2  6 property located outside of this state.
  2  7    2.  Real or tangible personal property located in this
  2  8 state in which a nonresident decedent has an interest at the
  2  9 time of death.
  2 10    Sec. 3.  Section 450.3, subsection 2, Code 1995, is amended
  2 11 to read as follows:
  2 12    2.  By deed, grant, sale, gift or transfer made within
  2 13 three years of the death of the grantor or donor, which is not
  2 14 a bona fide sale for an adequate and full consideration in
  2 15 money or money's worth and which is in excess of the annual
  2 16 gift tax exclusion allowable for each donee under section
  2 17 2503, subsections b and e of the Internal Revenue Code.  If
  2 18 both spouses consent, a gift made by one spouse to a person
  2 19 who is not the other spouse is considered, for the purposes of
  2 20 this subsection, as made one half by each spouse under the
  2 21 same terms and conditions provided for in section 2513 of the
  2 22 Internal Revenue Code.  Net market value for the purpose of
  2 23 this subsection is the net market value at the date of
  2 24 transfer.
  2 25    Sec. 4.  Section 450.4, subsection 4, Code 1995, is amended
  2 26 to read as follows:
  2 27    4.  Bequests for the care and maintenance of the cemetery
  2 28 or burial lot of the decedent or the decedent's family, and
  2 29 bequests not to exceed five hundred one thousand dollars in
  2 30 any estate of a decedent for the performance of a religious
  2 31 service or services by some person regularly ordained,
  2 32 authorized, or licensed by some religious society to perform
  2 33 such service, which service or services are to be performed
  2 34 for or in behalf of the testator or some person named in the
  2 35 testator's last will.
  3  1    Sec. 5.  Section 450.4, subsection 5, Code 1995, is amended
  3  2 by striking the subsection and inserting in lieu thereof the
  3  3 following:
  3  4    5.  On that portion of the decedent's interest in a pension
  3  5 or retirement plan that will be includable as net income as
  3  6 defined in section 422.7, when paid to the beneficiary.
  3  7    Sec. 6.  Section 450.9, subsections 2 and 4, Code 1995, are
  3  8 amended to read as follows:
  3  9    2.  Each son and daughter, including legally adopted sons
  3 10 and daughters, or biological sons and daughters entitled to
  3 11 inherit under the law of this state child, fifty thousand
  3 12 dollars.
  3 13    4.  Any other lineal descendant of the deceased decedent,
  3 14 fifteen thousand dollars.
  3 15    Sec. 7.  Section 450.10, subsection 1, unnumbered paragraph
  3 16 1, Code 1995, is amended to read as follows:
  3 17    When the property, interest, or income passes to the father
  3 18 or mother, or to a child or lineal descendant of the decedent,
  3 19 grantor, donor, or vendor, including a legally adopted child
  3 20 or biological child entitled to inherit under the laws of this
  3 21 state, the tax imposed shall be on the individual share so
  3 22 passing in excess of the exemptions allowed as follows:
  3 23    Sec. 8.  Section 450.10, subsection 2, unnumbered paragraph
  3 24 1, Code 1995, is amended to read as follows:
  3 25    When the property or any interest therein or income
  3 26 therefrom taxable under the provisions of this chapter passes
  3 27 to the brother or sister, son-in-law or daughter-in-law, or
  3 28 step-children, the rate of tax imposed on the individual share
  3 29 so passing shall be as follows:
  3 30    Sec. 9.  NEW SECTION.  450.11  COMPROMISE SETTLEMENT AND
  3 31 WILL CONTEST.
  3 32    The distribution of property of the decedent pursuant to a
  3 33 compromise settlement, an order of court approving a
  3 34 compromise settlement, or an order of court settling a will
  3 35 contest or disposing of a will contest, when such distribution
  4  1 is based on valid claims and the distribution is economically
  4  2 fair based on such claims, shall be binding upon the
  4  3 department as to recipients of property and valuation of
  4  4 property interests passing from the decedent for a
  4  5 determination of inheritance tax under this chapter.
  4  6    Sec. 10.  Section 450.20, unnumbered paragraph 1, Code
  4  7 1995, is amended to read as follows:
  4  8    It The department of revenue and finance shall also keep a
  4  9 separate record of any deferred estate upon which the tax due
  4 10 is not paid within fifteen months from on or before the last
  4 11 day of the ninth month after the death of the decedent,
  4 12 showing substantially the same facts as are required in other
  4 13 cases, and also showing:
  4 14    Sec. 11.  Section 614.14, subsection 4, paragraph b, Code
  4 15 1995, is amended to read as follows:
  4 16    b.  That, to the knowledge of the trustee, the person
  4 17 creating the trust was under no disability or infirmity at the
  4 18 time the trust was created.
  4 19    Sec. 12.  Section 633.10, subsection 4, Code 1995, is
  4 20 amended by adding the following new paragraph:
  4 21    NEW PARAGRAPH.  d.  A trust that is administered solely or
  4 22 jointly by an individual trustee or trustees is not subject to
  4 23 the jurisdiction of the court unless jurisdiction is invoked
  4 24 by a trustee or beneficiary, or if otherwise provided by the
  4 25 governing instrument.  Upon application of all trustees
  4 26 administering a trust which is subject to the court's
  4 27 jurisdiction, and following notice to beneficiaries as
  4 28 provided in section 633.40, subsection 4, the court shall
  4 29 release the trust from further jurisdiction unless one or more
  4 30 beneficiaries object, on the condition that jurisdiction may
  4 31 thereafter be invoked by a trustee or beneficiary.  The
  4 32 provisions of this paragraph shall be effective for
  4 33 applications filed on or after July 1, 1996.
  4 34    Sec. 13.  Section 633.31, Code 1995, is amended by adding
  4 35 the following new subsection:
  5  1    NEW SUBSECTION.  3.  The fee set forth in subsection 2,
  5  2 paragraph "k" shall not be charged on any property transferred
  5  3 to a testamentary trust from an estate that has been
  5  4 administered in this state and for which court costs have been
  5  5 assessed and paid.
  5  6    Sec. 14.  Section 633.440, Code 1995, is amended to read as
  5  7 follows:
  5  8    633.440  CONTENTS OF NOTICE OF DISALLOWANCE.
  5  9    Such a notice of disallowance shall advise the claimant
  5 10 that the claim has been disallowed and will be forever barred
  5 11 unless the claimant shall within twenty days after the date of
  5 12 mailing the notice, file a request for hearing on the claim
  5 13 with the clerk, and mail a copy of such request for hearing to
  5 14 the personal representative and the attorney of record, if
  5 15 any, by certified mail.
  5 16    Sec. 15.  Section 633.681, Code 1995, is amended to read as
  5 17 follows:
  5 18    633.681  ASSETS OF MINOR WARD EXHAUSTED.
  5 19    When the assets of a minor ward's conservatorship are
  5 20 exhausted or consist of personal property only of an aggregate
  5 21 value not in excess of four ten thousand dollars, the court,
  5 22 upon application or upon its own motion, may terminate the
  5 23 conservatorship and.  The order for termination shall direct
  5 24 the conservator to deliver the any property remaining after
  5 25 the payment of allowed claims and expenses of administration
  5 26 to the parent or other person entitled to the custody of the
  5 27 minor ward, for the use of the ward, after payment of allowed
  5 28 claims and expenses of administration a custodian under any
  5 29 uniform transfers to minors Act.  Such delivery shall have the
  5 30 same force and effect as if delivery had been made to the ward
  5 31 after attaining majority.
  5 32    Sec. 16.  Section 633.704, subsection 3, paragraph a, Code
  5 33 Supplement 1995, is amended to read as follows:
  5 34    a.  PASSAGE OF DISCLAIMED INTEREST OR PROPERTY.  Unless the
  5 35 transferor has otherwise provided, the property, interest, or
  6  1 right disclaimed, and any future interest which is to take
  6  2 effect in possession or enjoyment at or after the termination
  6  3 of the interest or right disclaimed, descends or shall be
  6  4 distributed as if the disclaimant has died prior to the date
  6  5 of the transfer, or if the disclaimant is one designated to
  6  6 take pursuant to a power of appointment exercised by
  6  7 testamentary instrument, then as if the disclaimant has
  6  8 predeceased the donee of the power unless the donee of the
  6  9 power has otherwise provided.  In every case, the disclaimer
  6 10 relates back for all purposes to the date of the transfer.  In
  6 11 the case of a disclaiming beneficiary under a will, other than
  6 12 a spouse, the property, interest, or right disclaimed passes
  6 13 to the heirs of the disclaimant unless from the terms of the
  6 14 transferor's will the intent is clear and explicit to the
  6 15 contrary, in which event the property, interest, or right
  6 16 disclaimed passes pursuant to the will.  In the case of a
  6 17 disclaimer under a will by a spouse the property, interest, or
  6 18 right disclaimed lapses unless from the terms of the
  6 19 transferor's will the intent is clear and explicit to the
  6 20 contrary.
  6 21    Sec. 17.  Sections 1 through 8 of this Act are applicable
  6 22 to estates of decedents dying on or after July 1, 1996.  
  6 23                           EXPLANATION
  6 24    This bill amends sections of the inheritance tax and
  6 25 probate chapters.
  6 26    Sections 1 through 10 of the bill address inheritance tax
  6 27 issues.  Section 17 of the bill makes sections 1 through 8
  6 28 applicable only to the estates of decedents dying on or after
  6 29 July 1, 1996.  Section 1 adds directions for construction of
  6 30 the terms "child", "lineal descendant", and "stepchild", to
  6 31 clearly include stepchildren in consideration of inheritance
  6 32 tax issues.  Sections 6, 7, and 8 use these terms in place of
  6 33 lists of certain descendants for exemption and rate of tax
  6 34 purposes.  Stepchildren are taxed equally with biological
  6 35 children under this bill.
  7  1    Section 2 restates the property that is subject to
  7  2 inheritance tax.  Section 3 adds directions for determining
  7  3 net market value (and, consequently, the taxable amount)
  7  4 according to the date of transfer for certain taxable
  7  5 property.  Section 4 increases the limit for bequests for
  7  6 religious services to $1,000.
  7  7    Section 5 strikes the current provision on exemptions for
  7  8 annuities purchased under a retirement or pension plan, and
  7  9 replaces it with a similar provision related to any type of
  7 10 interest in a pension or retirement plan.
  7 11    Section 9 adds a new section regarding the distribution of
  7 12 property pursuant to a compromise settlement and its treatment
  7 13 for inheritance tax purposes, which makes Iowa law consistent
  7 14 with federal tax law on this issue.  Section 10 changes the
  7 15 time period for filings of records of deferred estates.
  7 16    Sections 11 through 16 of the bill address probate code
  7 17 sections.  Section 11 changes the warranty the trustee makes
  7 18 regarding the trustor's condition at the time of creation of
  7 19 the trust.  Section 12 adds a new paragraph releasing certain
  7 20 testamentary trusts from the jurisdiction of the court, to
  7 21 allow such the same opportunities as other types of trusts.
  7 22 Section 13 exempts certain property transferred from a
  7 23 testamentary trust from certain statutory fees, to prohibit a
  7 24 trust from being charged fees after the estate has paid its
  7 25 fees.
  7 26    Section 14 requires a request for a hearing on a notice of
  7 27 disallowance of a claim against an estate to be mailed no only
  7 28 to the personal representative, but also to any attorney of
  7 29 record.  Section 15 permits a court to terminate a
  7 30 conservatorship where the value of the property is $10,000 or
  7 31 less, an increase over the current statutory amount of $4,000.
  7 32 Section 16 removes language regarding a disclaimer made by a
  7 33 beneficiary, to make it consistent with the antilapse
  7 34 provisions of the Code in sections 633.273 and 633.274.  
  7 35 LSB 4433SC 76
  8  1 jls/sc/14
     

Text: SSB02348                          Text: SSB02350
Text: SSB02300 - SSB02399               Text: SSB Index
Bills and Amendments: General Index     Bill History: General Index

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