Text: HF02456 Text: HF02458 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 249A.3, subsection 11, paragraph c, 1 2 Code Supplement 2003, is amended to read as follows: 1 3 c. A disclaimer of any property, interest, or right 1 4 pursuant to section633.704633.704E constitutes a transfer of 1 5 assets for the purpose of determining eligibility for medical 1 6 assistance in an amount equal to the value of the property, 1 7 interest, or right disclaimed. 1 8 Sec. 2. Section 633.356, subsection 1, unnumbered 1 9 paragraph 1, Code 2003, is amended to read as follows: 1 10 When the gross value of the decedent's personal property 1 11 does not exceed twenty-five thousand dollars and there is no 1 12 real property or the real property passes to persons exempt 1 13 from inheritance tax pursuant to section 450.9 as joint 1 14 tenants with right of survivorship, and if forty days have 1 15 elapsed since the death of the decedent, the successor of the 1 16 decedent as defined in subsection 2 may, by filing an 1 17 affidavit prepared pursuant to subsection 3 or 8, and without 1 18 procuring letters of appointment, do any of the following with 1 19 respect to one or more particular items of personal property: 1 20 Sec. 3. Section 633.356, subsection 3, paragraph a, Code 1 21 2003, is amended to read as follows: 1 22 a. The decedent's name, social security number, and the 1 23 date and place of the decedent's death. 1 24 Sec. 4. Section 633.356, subsection 4, unnumbered 1 25 paragraph 3, Code 2003, is amended to read as follows: 1 26 Judgments rendered by any court in this state and mortgages 1 27 belonging to a decedent whose personal property is being 1 28 distributed pursuant to this section may, without prior order 1 29 of court, be released, discharged, or assigned, in whole or in 1 30 part, as to any particular property, and deeds may be executed 1 31 in performance of real estate contracts entered into by the 1 32 decedent, where an affidavit made pursuant to subsection 3 or 1 33 8 is filed in the office of the county recorder of the county 1 34 wherein any judgment, mortgage, or real estate contract 1 35 appears of record. 2 1 Sec. 5. Section 633.356, subsection 7, unnumbered 2 2 paragraph 1, Code 2003, is amended to read as follows: 2 3 If the requirements of this section are satisfied, receipt 2 4 by the holder of the decedent's property of the affidavit 2 5 under subsection 3 or 8 constitutes sufficient acquittance for 2 6 the payment of money, delivery of property, or transferring 2 7 the registered ownership of property pursuant to this chapter 2 8 and discharges the holder from any further liability with 2 9 respect to the money or property. The holder may rely in good 2 10 faith on the statements in the affidavit and has no duty to 2 11 inquire into the truth of any statement in the affidavit. 2 12 Sec. 6. Section 633.356, subsection 8, Code 2003, is 2 13 amended to read as follows: 2 14 8. a. When a deceased distributee is entitled to money or 2 15 property claimed in an affidavit presented under this section 2 16 with respect to a deceased person whose estate is being 2 17 administered in this state, the personal representative of the 2 18 person whose estate is being administered shall present the 2 19 affidavit to the court in which the estate is being 2 20 administered. The court shall direct the personal 2 21 representative to pay the money or deliver the property to the 2 22 person identified by the affidavit as the successor of the 2 23 deceased distributee to the extent that the court determines 2 24 that the deceased distributee was entitled to the money or 2 25 property under the will or the laws of intestate succession. 2 26 b. When the department of human services is entitled to 2 27 money or property of a decedent pursuant to section 249A.5, 2 28 subsection 2, and no affidavit has been presented by a 2 29 successor of the decedent as defined in subsection 2, within 2 30 ninety days of the date of the decedent's death, the funds in 2 31 the account, up to the amount of the claim of the department, 2 32 shall be paid to the department upon presentation by the 2 33 department or an entity designated by the department of an 2 34 affidavit to the holder of the decedent's property. Such 2 35 affidavit shall include the information specified in 3 1 subsection 3, except that the department may submit proof of 3 2 payment of funeral expenses as verification of the decedent's 3 3 death instead of a certified copy of the decedent's death 3 4 certificate. The amount of the department's claim shall also 3 5 be included in the affidavit, which shall entitle the 3 6 department to receive the funds as a successor of the 3 7 decedent. The department shall issue a refund within sixty 3 8 days to any claimant with a superior priority pursuant to 3 9 section 633.425, if notice of such claim is given to the 3 10 department, or to the entity designated by the department to 3 11 receive notice, within one year of the department's receipt of 3 12 funds. 3 13 Sec. 7. Section 633.647, subsection 7, Code 2003, is 3 14 amended to read as follows: 3 15 7. To exercise the right to disclaim on behalf of the ward 3 16 as provided in section633.704633.704E. 3 17 Sec. 8. NEW SECTION. 633.704A SHORT TITLE. 3 18 This division shall be known and may be cited as the "Iowa 3 19 Uniform Disclaimer of Property Interest Act". 3 20 Sec. 9. NEW SECTION. 633.704B DEFINITIONS. 3 21 For purposes of this division, the following definitions 3 22 shall apply: 3 23 1. "Disclaimant" means the person to whom a disclaimed 3 24 interest or power would have passed had the disclaimer not 3 25 been made. 3 26 2. "Disclaimed interest" means the interest the 3 27 disclaimant refuses to accept that would have passed to the 3 28 disclaimant had the disclaimer not been made. 3 29 3. "Disclaimer" means the refusal to accept an interest in 3 30 or power over property. 3 31 4. "Fiduciary" means a personal representative, trustee, 3 32 agent acting under a power of attorney, or other person 3 33 authorized to act as a fiduciary with respect to the property 3 34 of another person. 3 35 5. "Jointly held property" means property held in the name 4 1 of two or more persons under an arrangement in which all 4 2 holders have concurrent interests and under which the last 4 3 surviving holder is entitled to the whole of the property. 4 4 6. "Person" means an individual; corporation; business 4 5 trust; estate; trust; partnership; limited liability company; 4 6 association; joint venture; government; governmental 4 7 subdivision, agency, or instrumentality; public corporation; 4 8 or any other legal or commercial entity. 4 9 7. "State" means a state of the United States, the 4 10 District of Columbia, the Commonwealth of Puerto Rico, the 4 11 United States Virgin Islands, or any territory or insular 4 12 possession subject to the jurisdiction of the United States. 4 13 The term includes any Indian tribe or band, or Alaskan 4 14 village, recognized by federal law or formally acknowledged by 4 15 a state. 4 16 8. "Trust" means any of the following: 4 17 a. An express trust, charitable or noncharitable, with 4 18 additions thereto, whenever and however created. 4 19 b. A trust created pursuant to a statute, judgment, or 4 20 decree which requires the trust to be administered in the 4 21 manner of an express trust. 4 22 Sec. 10. NEW SECTION. 633.704C SCOPE. 4 23 This division applies to disclaimers of any interest in or 4 24 power over property, whenever and however created. 4 25 Sec. 11. NEW SECTION. 633.704D TAX QUALIFIED DISCLAIMER. 4 26 Notwithstanding any other provision of this division, any 4 27 disclaimer or transfer that meets the requirements of section 4 28 2518 of the Internal Revenue Code, as now or hereafter 4 29 amended, or any successor statute thereto, and the regulations 4 30 promulgated thereunder, for the purpose of being a tax 4 31 qualified disclaimer with the effect that the disclaimed or 4 32 transferred interest is treated as never having been 4 33 transferred to the disclaimant is effective as a disclaimer 4 34 under this division. 4 35 Sec. 12. NEW SECTION. 633.704E POWER TO DISCLAIM – 5 1 GENERAL REQUIREMENTS – WHEN IRREVOCABLE. 5 2 1. A person may disclaim, in whole or in part, any 5 3 interest in or power over property, including a power of 5 4 appointment, whenever and however acquired. A person may 5 5 disclaim the interest or power even if its creator imposed a 5 6 spendthrift provision or similar restriction on transfer or a 5 7 restriction or limitation on the right to disclaim. 5 8 2. Except to the extent a fiduciary's right to disclaim is 5 9 expressly restricted or limited by another statute of this 5 10 state or by the instrument creating the fiduciary 5 11 relationship, or a disclaimer by a fiduciary would be a breach 5 12 of trust, a fiduciary may disclaim, in whole or in part, any 5 13 interest in or power over property, including a power of 5 14 appointment, whether acting in a personal or representative 5 15 capacity. A fiduciary may disclaim the interest or power even 5 16 if the creator imposed a spendthrift provision or similar 5 17 restriction on transfer or a restriction or limitation on the 5 18 right to disclaim, or an instrument other than the instrument 5 19 that created the fiduciary relationship imposed a restriction 5 20 or limitation on the right to disclaim. 5 21 3. To be effective, a disclaimer must be in writing or 5 22 other record, declare the disclaimer, describe the interest or 5 23 power disclaimed, be signed by the person making the 5 24 disclaimer, and be delivered or filed in the manner provided 5 25 in section 633.704L. In this subsection, "record" means 5 26 information that is inscribed on a tangible medium or that is 5 27 stored in an electronic or other medium and is retrievable in 5 28 perceivable form. 5 29 4. A partial disclaimer may be expressed as a fraction, 5 30 percentage, monetary amount, term of years, limitation of a 5 31 power, or any other interest or estate in the property. 5 32 5. A disclaimer becomes irrevocable when it is delivered 5 33 or filed pursuant to section 633.704L or when it becomes 5 34 effective as provided in sections 633.704F through 633.704K, 5 35 whichever occurs later. 6 1 6. A disclaimer made under this division is not a 6 2 transfer, assignment, or release. 6 3 Sec. 13. NEW SECTION. 633.704F EFFECT OF DISCLAIMER OF 6 4 INTEREST IN PROPERTY. 6 5 1. As used in this section: 6 6 a. "Future interest" means an interest that takes effect 6 7 in possession or enjoyment, if at all, later than the time of 6 8 its creation. 6 9 b. "Time of distribution" means the time when a disclaimed 6 10 interest would have taken effect in possession or enjoyment. 6 11 2. Except for a disclaimer governed by section 633.704G or 6 12 633.704H, the following rules apply to a disclaimer of an 6 13 interest in property: 6 14 a. The disclaimer takes effect as of the time the 6 15 instrument creating the interest becomes irrevocable, or, if 6 16 the interest arose under the law of intestate succession, as 6 17 of the time of the intestate's death. 6 18 b. The disclaimed interest passes according to any 6 19 provision in the instrument creating the interest providing 6 20 for the disposition of the interest, should it be disclaimed, 6 21 or of disclaimed interests in general. 6 22 c. If the instrument does not contain a provision 6 23 described in paragraph "b", the following rules shall apply: 6 24 (1) If the disclaimant is an individual, the disclaimed 6 25 interest passes as if the disclaimant had died immediately 6 26 before the time of distribution. 6 27 (2) If the disclaimant is not an individual, the 6 28 disclaimed interest passes as if the disclaimant did not 6 29 exist. 6 30 d. Upon the disclaimer of a preceding interest, a future 6 31 interest held by a person other than the disclaimant takes 6 32 effect as if the disclaimant had died or ceased to exist 6 33 immediately before the time of distribution, but a future 6 34 interest held by the disclaimant of the preceding interest is 6 35 not accelerated in possession or enjoyment. 7 1 e. For purposes of this section, if an individual 7 2 disclaims a future interest not held in trust, the disclaimed 7 3 future interest passes as if that interest had been held in 7 4 trust. 7 5 Sec. 14. NEW SECTION. 633.704G DISCLAIMER OF RIGHTS OF 7 6 SURVIVORSHIP IN JOINTLY HELD PROPERTY. 7 7 1. Upon the death of a holder of jointly held property, a 7 8 surviving holder may disclaim, in whole or part, the greater 7 9 of the following: 7 10 a. A fractional share of the property determined by 7 11 dividing the number one by the number of joint holders alive 7 12 immediately before the death of the holder to whose death the 7 13 disclaimer relates. 7 14 b. All of the property, except that part of the value of 7 15 the entire interest attributable to the contribution furnished 7 16 by the disclaimant. 7 17 2. A disclaimer under subsection 1 takes effect as of the 7 18 death of the holder of jointly held property to whose death 7 19 the disclaimer relates. 7 20 3. An interest in jointly held property disclaimed by a 7 21 surviving holder of the property passes as if the disclaimant 7 22 predeceased the holder to whose death the disclaimer relates. 7 23 Sec. 15. NEW SECTION. 633.704H DISCLAIMER OF INTEREST BY 7 24 TRUSTEE. 7 25 If a trustee disclaims an interest in property that 7 26 otherwise would have become trust property, the interest does 7 27 not become trust property. 7 28 Sec. 16. NEW SECTION. 633.704I DISCLAIMER OF POWER OF 7 29 APPOINTMENT OR OTHER POWER NOT HELD IN FIDUCIARY CAPACITY. 7 30 If a holder disclaims a power of appointment or other power 7 31 not held in a fiduciary capacity, the following rules shall 7 32 apply: 7 33 1. If the holder has not exercised the power, the 7 34 disclaimer takes effect as of the time the instrument creating 7 35 the power becomes irrevocable. 8 1 2. If the holder has exercised the power and the 8 2 disclaimer is of a power other than a presently exercisable 8 3 general power of appointment, the disclaimer takes effect 8 4 immediately after the last exercise of the power. 8 5 3. The instrument creating the power is construed as if 8 6 the power expired when the disclaimer became effective. 8 7 Sec. 17. NEW SECTION. 633.704J DISCLAIMER BY APPOINTEE, 8 8 OBJECT, OR TAKER IN DEFAULT OF EXERCISE OF POWER OF 8 9 APPOINTMENT. 8 10 1. For purposes of this section, all of the following 8 11 rules shall apply: 8 12 a. An appointee is a person to whom a holder of a power 8 13 has effectively appointed the property subject to the power. 8 14 b. An object of a power is a person to whom a holder of a 8 15 power may appoint the property subject to the power sometime 8 16 in the future. 8 17 c. A taker in default of the exercise of a power of 8 18 appointment is a person designated by the person creating the 8 19 power in the holder to take the property subject to the power 8 20 if the power has not been effectively exercised. 8 21 2. A disclaimer of an interest in property by an appointee 8 22 of a power of appointment takes effect as of the time the 8 23 instrument by which the holder exercises the power becomes 8 24 irrevocable. 8 25 3. A disclaimer of an interest in property by an object or 8 26 taker in default of an exercise of a power of appointment 8 27 takes effect as of the time the instrument creating the power 8 28 becomes irrevocable. 8 29 Sec. 18. NEW SECTION. 633.704K DISCLAIMER OF POWER HELD 8 30 IN FIDUCIARY CAPACITY. 8 31 1. If a fiduciary disclaims a power held in a fiduciary 8 32 capacity which has not been exercised, the disclaimer takes 8 33 effect as of the time the instrument creating the power 8 34 becomes irrevocable. 8 35 2. If a fiduciary disclaims a power held in a fiduciary 9 1 capacity which has been exercised, the disclaimer takes effect 9 2 immediately after the last exercise of the power. 9 3 3. A disclaimer under this section is effective as to 9 4 another fiduciary if the disclaimer so provides and the 9 5 fiduciary disclaiming has the authority to bind the estate, 9 6 trust, or other person for whom the fiduciary is acting. 9 7 Sec. 19. NEW SECTION. 633.704L DELIVERY OR FILING. 9 8 1. For the purposes of this section, "beneficiary 9 9 designation" means an instrument, other than an instrument 9 10 creating a trust, naming the beneficiary of any of the 9 11 following: 9 12 a. An annuity or insurance policy. 9 13 b. An account with a designation for payment on death. 9 14 c. A security registered in beneficiary form. 9 15 d. A pension, profit-sharing, retirement, or other 9 16 employment-related benefit plan. 9 17 e. Any other nonprobate transfer at death. 9 18 2. Subject to subsections 3 through 12, delivery of a 9 19 disclaimer may be effected by personal delivery, first-class 9 20 mail, or any other method likely to result in its receipt. 9 21 3. In the case of an interest created under the law of 9 22 intestate succession or an interest created by will, other 9 23 than an interest in a testamentary trust, the following shall 9 24 apply: 9 25 a. A disclaimer must be delivered to the personal 9 26 representative of the decedent's estate. 9 27 b. If no personal representative is then serving, a 9 28 disclaimer must be filed with a court having jurisdiction to 9 29 appoint the personal representative. 9 30 4. In the case of an interest in a testamentary trust, one 9 31 of the following shall apply: 9 32 a. A disclaimer must be delivered to the trustee then 9 33 serving, or if no trustee is then serving, to the personal 9 34 representative of the decedent's estate. 9 35 b. If no personal representative is then serving, a 10 1 disclaimer shall be filed with a court having jurisdiction to 10 2 enforce the trust. 10 3 5. In the case of an interest in an inter vivos trust, one 10 4 of the following shall apply: 10 5 a. A disclaimer must be delivered to the trustee then 10 6 serving. 10 7 b. If no trustee is then serving, a disclaimer must be 10 8 filed with a court having jurisdiction to enforce the trust. 10 9 c. If a disclaimer is made before the time the instrument 10 10 creating the trust becomes irrevocable, the disclaimer must be 10 11 delivered to the settlor of a revocable trust or the 10 12 transferor of the interest. 10 13 6. In the case of a disclaimer of an interest created by a 10 14 beneficiary designation made before the time the designation 10 15 becomes irrevocable, the disclaimer must be delivered to the 10 16 person making the beneficiary designation. 10 17 7. In the case of a disclaimer of an interest created by a 10 18 beneficiary designation made after the time the designation 10 19 becomes irrevocable, the disclaimer must be delivered to the 10 20 person obligated to distribute the interest. 10 21 8. In the case of a disclaimer by a surviving holder of 10 22 jointly held property, the disclaimer must be delivered to the 10 23 person to whom the disclaimed interest passes. 10 24 9. In the case of a disclaimer by an object or taker in 10 25 default of an exercise of a power of appointment at any time 10 26 after the power was created, one of the following shall apply: 10 27 a. The disclaimer must be delivered to the holder of the 10 28 power or to the fiduciary acting under the instrument that 10 29 created the power. 10 30 b. If no fiduciary is then serving, the disclaimer must be 10 31 filed with a court having authority to appoint the fiduciary. 10 32 10. In the case of a disclaimer by an appointee of a 10 33 nonfiduciary power of appointment, one of the following shall 10 34 apply: 10 35 a. The disclaimer must be delivered to the holder, the 11 1 personal representative of the holder's estate, or to the 11 2 fiduciary under the instrument that created the power. 11 3 b. If no fiduciary is then serving, the disclaimer must be 11 4 filed with a court having authority to appoint the fiduciary. 11 5 11. In the case of a disclaimer by a fiduciary of a power 11 6 over a trust or estate, the disclaimer must be delivered as 11 7 provided in subsection 3, 4, or 5, as if the power disclaimed 11 8 were an interest in property. 11 9 12. In the case of a disclaimer of a power by an agent, 11 10 the disclaimer must be delivered to the principal or the 11 11 principal's representative. 11 12 13. In addition to the foregoing, all of the following 11 13 shall apply: 11 14 a. A copy of any instrument of disclaimer affecting real 11 15 estate shall be filed in the office of the country recorder of 11 16 the county where the real estate is located. Failure to file, 11 17 record, or register the disclaimer does not affect its 11 18 validity as between the disclaimant and persons to whom the 11 19 property interest or power passes by reason of the disclaimer. 11 20 b. A copy of an instrument of disclaimer, regardless of 11 21 its subject, may be filed with the clerk of court of the 11 22 county in which proceedings for administration have been 11 23 commenced, if applicable. 11 24 Sec. 20. NEW SECTION. 633.704M WHEN DISCLAIMER BARRED OR 11 25 LIMITED. 11 26 1. A disclaimer is barred by a written waiver of the right 11 27 to disclaim. 11 28 2. A disclaimer of an interest in property is barred if 11 29 any of the following events occur before the disclaimer 11 30 becomes effective: 11 31 a. The disclaimant accepts the interest sought to be 11 32 disclaimed. 11 33 b. The disclaimant voluntarily assigns, conveys, 11 34 encumbers, pledges, or transfers the interest sought to be 11 35 disclaimed or contracts to do so. 12 1 c. A judicial sale of the interest sought to be disclaimed 12 2 occurs. 12 3 3. A disclaimer, in whole or part, of the future exercise 12 4 of a power held in a fiduciary capacity is not barred by its 12 5 previous exercise. 12 6 4. A disclaimer, in whole or part, of the future exercise 12 7 of a power not held in a fiduciary capacity is not barred by 12 8 its previous exercise unless the power is exercisable in favor 12 9 of the disclaimant. 12 10 5. A disclaimer is barred or limited if so provided by law 12 11 other than this division. 12 12 6. A disclaimer of a power over property which is barred 12 13 by this section is ineffective. A disclaimer of an interest 12 14 in property which is barred by this section takes effect as a 12 15 transfer of the interest disclaimed to the persons who would 12 16 have taken the interest under this division had the disclaimer 12 17 not been barred. 12 18 Sec. 21. NEW SECTION. 633.704N DIVISION SUPPLEMENTED BY 12 19 OTHER LAW. 12 20 1. Unless displaced by a provision of this division, the 12 21 principles of law and equity supplement this division. 12 22 2. This division does not limit any right of a person to 12 23 waive, release, disclaim, or renounce an interest in or power 12 24 over property under a law other than this division. 12 25 Sec. 22. NEW SECTION. 633.704O MEDICAL ASSISTANCE 12 26 ELIGIBILITY. 12 27 A disclaimer of any property, interest, or right pursuant 12 28 to the provisions of this division constitutes a transfer of 12 29 assets for the purpose of determining eligibility for medical 12 30 assistance under chapter 249A in an amount equal to the value 12 31 of the property, interest, or right disclaimed. 12 32 Sec. 23. NEW SECTION. 633.704P APPLICATION TO EXISTING 12 33 RELATIONSHIP. 12 34 Except as otherwise provided in section 633.704M, an 12 35 interest in or power over property existing on the effective 13 1 date of this Act as to which the time for delivering or filing 13 2 a disclaimer under law superseded by this division has not 13 3 expired may be disclaimed after the effective date of this 13 4 Act. 13 5 Sec. 24. NEW SECTION. 633.704Q SEVERABILITY. 13 6 If any provision of this division or the application 13 7 thereof to any person or circumstance is held invalid, the 13 8 invalidity shall not affect other provisions or application of 13 9 the division which can be given effect without the invalid 13 10 provisions or application, and to this end, the provisions of 13 11 the division are severable. 13 12 Sec. 25. Section 633.1102, subsection 17, Code Supplement 13 13 2003, is amended by adding the following new paragraph: 13 14 NEW PARAGRAPH. m. Burial, funeral, and perpetual care 13 15 trusts. 13 16 Sec. 26. Section 633.1105, Code Supplement 2003, is 13 17 amended to read as follows: 13 18 633.1105 TRUST PROVISIONS CONTROL. 13 19 Theprovisionsterms of a trust shall always control and 13 20 take precedence over any section of this trust code to the 13 21 contrary. If aprovisionterm of the trustinstrument13 22 modifies or makes any section of this trust code inapplicable 13 23 toathe trust, the common law shall apply to any issues 13 24 raised by suchprovisionterm. 13 25 Sec. 27. Section 633.2301, Code 2003, is amended by 13 26 striking the section and inserting in lieu thereof the 13 27 following: 13 28 633.2301 SPENDTHRIFT PROTECTION RECOGNIZED. 13 29 Except as otherwise provided in section 633.2302, all of 13 30 the following provisions shall apply: 13 31 1. A term of a trust providing that the interest of a 13 32 beneficiary is held subject to a "spendthrift trust", or words 13 33 of similar import, is sufficient to restrain both voluntary 13 34 and involuntary transfers of the beneficiary's interest. 13 35 2. a. A creditor or assignee of a beneficiary may reach a 14 1 mandatory distribution of income or principal, including a 14 2 distribution upon termination of the trust, if the trustee has 14 3 not made the distribution to the beneficiary within a 14 4 reasonable time after the required distribution date. 14 5 b. For the purposes of this subsection, "mandatory 14 6 distribution" means a distribution required by the express 14 7 terms of the trust of any of the following: 14 8 (1) All of the income, net income, or principal of the 14 9 trust. 14 10 (2) A fraction or percentage of the income or principal of 14 11 the trust. 14 12 (3) A specific dollar amount from the trust. 14 13 c. A distribution that is subject to a condition shall not 14 14 be considered a mandatory distribution. 14 15 3. If a creditor or assignee of a beneficiary is permitted 14 16 to reach a mandatory distribution under this section, the sole 14 17 remedy of the creditor or assignee shall be to apply to the 14 18 court having jurisdiction of the trust after such reasonable 14 19 period of time has expired for a judgment ordering the trustee 14 20 to pay to the creditor or the assignee a sum of money equal to 14 21 the lesser of the amount of the debt or assignment, or the 14 22 amount of the mandatory distribution described in subsection 14 23 2. No other remedy, including but not limited to, attachment 14 24 or garnishment of any interest in the trust, recovery of court 14 25 costs or attorney fees, or placing a lien of any type on any 14 26 trust property or on the interest of any beneficiary in the 14 27 trust, shall be permitted or ordered by any court. Any 14 28 writing signed by the beneficiary allowing any remedy other 14 29 than payment of the mandatory distribution not made to the 14 30 beneficiary within a reasonable time after the required 14 31 distribution date shall be void and shall not be enforced by 14 32 any court. 14 33 4. A creditor or assignee of a beneficiary of a 14 34 spendthrift trust shall not compel a distribution that is 14 35 subject to the trustee's discretion if any of the following 15 1 apply: 15 2 a. The distribution is expressed in the form of a standard 15 3 of distribution. 15 4 b. The trustee has abused its discretion. 15 5 Sec. 28. Section 633.2302, Code 2003, is amended to read 15 6 as follows: 15 7 633.2302 EXCEPTIONS TO SPENDTHRIFT PROTECTION. 15 8 A term of a trust prohibiting an involuntary transfer of a 15 9 beneficiary's interest shall be invalid as against claims by 15 10 anyof the following:15 111. Anycreditor of the beneficiary if the beneficiary is 15 12 the settlor. 15 132. Any creditor of the beneficiary as to a distribution to15 14be made upon an event terminating or partially terminating the15 15trust.15 16 Sec. 29. NEW SECTION. 633.4507 ATTORNEY FEES AND COSTS. 15 17 In a judicial proceeding involving the administration of a 15 18 trust, the court, as justice and equity may require, may award 15 19 costs and expenses, including reasonable attorney fees, to any 15 20 party, to be paid by another party or from the trust that is 15 21 the subject of the controversy. 15 22 Sec. 30. NEW SECTION. 633.4702 DISCRETIONARY LANGUAGE 15 23 PREVAILS OVER OTHER STANDARD. 15 24 In the absence of clear and convincing evidence to the 15 25 contrary, language in a governing instrument granting a 15 26 trustee discretion to make or withhold a distribution shall 15 27 prevail over any language in the governing instrument 15 28 indicating that the beneficiary may have a legally enforceable 15 29 right to distributions or indicating a standard for payments 15 30 or distributions. 15 31 Sec. 31. Section 633.704, Code 2003, is repealed. 15 32 EXPLANATION 15 33 This bill relates to the Iowa probate code, including 15 34 provisions relating to estate recovery of medical assistance 15 35 benefits, the power to disclaim property interests, and 16 1 trusts. 16 2 The bill allows the department of human services to obtain 16 3 funds in satisfaction of a decedent's medical assistance debts 16 4 when no successor affidavit has been presented to the court in 16 5 which the decedent's estate is being administered. Current 16 6 law provides that the only person entitled to sign an 16 7 affidavit to release such funds is a successor of a decedent 16 8 who must be a person named in the decedent's will, or an heir 16 9 if the decedent died intestate. The bill specifically 16 10 authorizes the department to sign an affidavit requesting such 16 11 funds up to the amount of the department's claim if no 16 12 affidavit has been presented by a successor of the decedent 16 13 within 90 days of the date of the decedent's death. The bill 16 14 further specifies that the decedent's social security number 16 15 must be provided in the affidavit. 16 16 The bill creates the "Iowa Uniform Disclaimer of Property 16 17 Interest Act", which replaces current Code section 633.704 16 18 relating to the same subject. The Act applies to disclaimers 16 19 of any interest in or power over property, including 16 20 disclaimers used for tax planning purposes. 16 21 The bill provides certain definitions and defines 16 22 "disclaimant" to mean a person who would have received the 16 23 disclaimed property or power if the disclaimer had not been 16 24 made, "disclaimed interest" to mean the interest that would 16 25 have passed to the disclaimant had the disclaimer not been 16 26 made, and "disclaimer" to mean the refusal to accept an 16 27 interest in or power over property. 16 28 The bill provides that any disclaimer which is qualified 16 29 for estate and gift tax purposes under the Internal Revenue 16 30 Code is also a valid disclaimer under this bill even if the 16 31 disclaimer does not otherwise meet the specific requirements 16 32 of the bill. 16 33 The bill specifies that persons and fiduciaries as defined 16 34 under the bill have broad powers to disclaim both interests in 16 35 and powers over property, regardless of whether the disclaimed 17 1 interest is vested. The bill makes ineffective any attempt to 17 2 limit the right to disclaim which the creator of the interest 17 3 or nonfiduciary power seeks to impose on a person. The bill 17 4 also specifies the formal requirements of a disclaimer, and 17 5 specifically allows a partial disclaimer of an interest in 17 6 property or of a power over property. The bill also specifies 17 7 that a disclaimer is irrevocable on the later date to occur of 17 8 either delivery or filing, or the effective date of the 17 9 disclaimer, and provides that a disclaimer must be irrevocable 17 10 in order to be a qualified disclaimer for tax purposes. 17 11 The bill provides certain rules related to the effect of a 17 12 disclaimer on interests in property, including both present 17 13 and future interests, certain rules related to a disclaimer of 17 14 rights of survivorship in jointly held property, a disclaimer 17 15 of interest by a trustee, a disclaimer of a power of 17 16 appointment or other power not held by a fiduciary, a 17 17 disclaimer by an appointee, object, or taker in default of an 17 18 exercise of a power of appointment, and a disclaimer by a 17 19 fiduciary. 17 20 The bill further specifies certain rules related to the 17 21 delivery or filing of a disclaimer, depending on the manner in 17 22 which the disclaimer was created, and specifies certain 17 23 circumstances under which a disclaimer is barred or limited. 17 24 The bill further provides that a disclaimer under the 17 25 provisions of the bill constitutes a transfer of assets for 17 26 the purpose of determining eligibility for medical assistance 17 27 benefits under Code chapter 249A in an amount equal to the 17 28 value of the property, interest, or right disclaimed. 17 29 The bill specifies certain amendments relating to the trust 17 30 code. The bill provides that burial, funeral, and perpetual 17 31 trusts are exempted from the trust code, specifies the 17 32 circumstances under which a spendthrift trust is created to 17 33 restrain both voluntary and involuntary transfers of the 17 34 beneficiary's interest, and circumstances under which such a 17 35 trust may be available to a creditor, provides for an award of 18 1 attorney fees and costs in a judicial proceeding involving the 18 2 administration of a trust, and provides that in the absence of 18 3 contrary evidence, discretionary language granting a trustee 18 4 discretion to make or withhold a distribution shall prevail 18 5 over any language indicating that the beneficiary may have a 18 6 legally enforceable right to distributions or indicating a 18 7 standard for payments or distributions. 18 8 LSB 5147HV 80 18 9 rh/pj/5
Text: HF02456 Text: HF02458 Text: HF02400 - HF02499 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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