Senate File 540 - Enrolled

PAG LIN



  1  1                                            SENATE FILE 540
  1  2
  1  3                             AN ACT
  1  4 RELATING TO TRUSTS AND ESTATES INCLUDING FIDUCIARIES AND
  1  5    BENEFICIARIES AND INCLUDING APPLICABILITY PROVISIONS.
  1  6
  1  7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1  8
  1  9    Section 1.  Section 421.27, subsection 1, Code 2007, is
  1 10 amended by adding the following new paragraph:
  1 11    NEW PARAGRAPH.  m.  The failure to file a timely
  1 12 inheritance tax return resulting solely from a disclaimer that
  1 13 required the personal representative to file an inheritance
  1 14 tax return.  The penalty shall be waived if such return is
  1 15 filed and any tax due is paid within the later of nine months
  1 16 from the date of death or sixty days from the delivery or
  1 17 filing of the disclaimer pursuant to section 633E.12.
  1 18    Sec. 2.  Section 450.4, Code 2007, is amended by adding the
  1 19 following new subsection:
  1 20    NEW SUBSECTION.  9.  On the value of tangible personal
  1 21 property as defined in section 633.276 which is distributed in
  1 22 kind from the estate if the aggregate of all tangible personal
  1 23 property in the estate does not exceed five thousand dollars.
  1 24    Sec. 3.  Section 561.1, Code 2007, is amended to read as
  1 25 follows:
  1 26    561.1  "HOMESTEAD" DEFINED.
  1 27    1.  The homestead must embrace the house used as a home by
  1 28 the owner, and, if the owner has two or more houses thus used,
  1 29 the owner may select which the owner will retain.  It may
  1 30 contain one or more contiguous lots or tracts of land, with
  1 31 the building and other appurtenances thereon, habitually and
  1 32 in good faith used as part of the same homestead.
  1 33    2.  As used in this chapter, "owner" includes but is not
  1 34 limited to the person, or the surviving spouse of the person,
  1 35 occupying the homestead as a beneficiary of a trust that
  2  1 includes the property in the trust estate.
  2  2    Sec. 4.  NEW SECTION.  598.20A  BENEFICIARY REVOCATION ==
  2  3 LIFE INSURANCE.
  2  4    1.  Except as preempted by federal law, if a decree of
  2  5 dissolution, annulment, or separate maintenance is issued
  2  6 after an insured has designated the insured's spouse or one or
  2  7 more relatives of the insured's spouse as a beneficiary under
  2  8 a life insurance policy in effect on the date of the decree, a
  2  9 provision in the life insurance policy making such a
  2 10 designation is voided by the issuance of the decree unless any
  2 11 of the following apply:
  2 12    a.  The decree designates the insured's former spouse or
  2 13 one or more relatives of the insured's spouse as beneficiary.
  2 14    b.  After issuance of the decree, the insured executes a
  2 15 designation of beneficiary form provided by the insurance
  2 16 company naming the insured's former spouse or one or more
  2 17 relatives of the insured's former spouse as beneficiary.
  2 18    c.  The insured and the insured's former spouse remarry.
  2 19    2.  If a beneficiary designation is not effective pursuant
  2 20 to subsection 1, the benefits or proceeds of the life
  2 21 insurance policy are payable to an alternate beneficiary, or
  2 22 if there is no alternate beneficiary, to the estate of the
  2 23 insured.
  2 24    3.  An insurer who pays benefits or proceeds of a life
  2 25 insurance policy to a beneficiary under a designation that is
  2 26 void pursuant to subsection 1 is not liable for payment to an
  2 27 alternative beneficiary as provided under subsection 2 unless
  2 28 both of the following apply:
  2 29    a.  At least ten days prior to payment of the benefits or
  2 30 proceeds of the life insurance policy to the designated
  2 31 beneficiary, the insurer receives written notice at the home
  2 32 office of the insurer that the designation of the beneficiary
  2 33 is not effective pursuant to subsection 1.
  2 34    b.  The insurer has failed to interplead the benefits or
  2 35 proceeds of the life insurance policy in a court of competent
  3  1 jurisdiction in accordance with the rules of civil procedure.
  3  2    4.  This section does not limit the right of a beneficiary
  3  3 to seek recovery from any person or entity that erroneously
  3  4 receives or collects the benefits or proceeds from a life
  3  5 insurance policy.
  3  6    5.  This section does not affect the right of an insured's
  3  7 former spouse to assert an ownership interest in a life
  3  8 insurance policy that is not disclosed to the insured's spouse
  3  9 prior to the decree of dissolution, annulment, or separate
  3 10 maintenance and that is not addressed by the decree.
  3 11    6.  For purposes of this section, "relative of the
  3 12 insured's spouse" means a person who is related to the
  3 13 insured's former spouse by blood, adoption, or affinity, and
  3 14 who, subsequent to a decree of dissolution, annulment, or
  3 15 separate maintenance, ceases to be related to the insured by
  3 16 blood, adoption, or affinity.
  3 17    Sec. 5.  NEW SECTION.  598.20B  BENEFICIARY REVOCATION ==
  3 18 OTHER CONTRACTS.
  3 19    1.  Except as preempted by federal law, if a decree of
  3 20 dissolution, annulment, or separate maintenance is issued
  3 21 after a participant, annuitant, or account holder has
  3 22 designated the participant's, annuitant's, or account holder's
  3 23 spouse or one or more relatives of the participant's,
  3 24 annuitant's, or account holder's spouse as beneficiary under
  3 25 any individual retirement account, stock option plan, transfer
  3 26 on death account, payable on death account, or annuity in
  3 27 force at the date of the decree, a provision in the retirement
  3 28 account, stock option plan, transfer on death account, payable
  3 29 on death account, or annuity designating the participant's,
  3 30 annuitant's, or account holder's spouse or one or more
  3 31 relatives of the participant's, annuitant's, or account
  3 32 holder's spouse as beneficiary is voided by the issuance of
  3 33 the decree unless any of the following apply:
  3 34    a.  The decree designates the participant's, annuitant's,
  3 35 or account holder's spouse or one or more relatives of the
  4  1 participant's, annuitant's, or account holder's spouse as
  4  2 beneficiary.
  4  3    b.  After issuance of the decree, the participant,
  4  4 annuitant, or account holder executes a designation of
  4  5 beneficiary form provided by the plan or company naming the
  4  6 participant's, annuitant's, or account holder's former spouse
  4  7 or one or more relatives of the participant's, annuitant's, or
  4  8 account holder's former spouse as the beneficiary.
  4  9    c.  The participant, annuitant, or account holder and the
  4 10 participant's, annuitant's, or account holder's former spouse
  4 11 remarry.
  4 12    d.  Prior to the issuance of the decree, annuity payments
  4 13 have irrevocably commenced based on the joint life
  4 14 expectancies of the participant, annuitant, or account holder
  4 15 and the participant's, annuitant's, or account holder's former
  4 16 spouse.
  4 17    2.  If a beneficiary designation is not effective pursuant
  4 18 to subsection 1, the benefits or proceeds from the individual
  4 19 retirement account, stock option plan, transfer on death
  4 20 account, payable on death account, or annuity are payable to
  4 21 an alternate beneficiary, or if there is no alternate
  4 22 beneficiary, to the estate of the participant, annuitant, or
  4 23 account holder.
  4 24    3.  A business entity, employer, insurer, financial
  4 25 institution, or other person or entity obligated to pay the
  4 26 benefits or proceeds from an individual retirement account,
  4 27 stock option plan, transfer on death account, payable on death
  4 28 account, or annuity to a beneficiary under a designation that
  4 29 is void pursuant to subsection 1 is not liable for payment of
  4 30 the benefits or proceeds to a beneficiary as provided under
  4 31 subsection 2 unless both of the following apply:
  4 32    a.  At least ten days prior to payment of the benefits or
  4 33 proceeds to the designated beneficiary, the business entity,
  4 34 employer, insurer, financial institution, or other person or
  4 35 entity obligated to pay the benefits or proceeds receives
  5  1 written notice at the home office of the business entity,
  5  2 employer, insurer, financial institution, or other person or
  5  3 entity that the designation of the beneficiary is not
  5  4 effective pursuant to subsection 1.
  5  5    b.  The business entity, employer, insurer, financial
  5  6 institution, or other person or entity has failed to
  5  7 interplead the benefits or proceeds in a court of competent
  5  8 jurisdiction in accordance with the rules of civil procedure.
  5  9    4.  This section does not limit the right of a beneficiary
  5 10 to seek recovery from any person or entity that erroneously
  5 11 receives or collects the benefits or proceeds of an individual
  5 12 retirement account, stock option plan, transfer on death
  5 13 account, payable on death account, or annuity.
  5 14    5.  This section does not affect the right of the
  5 15 participant's, annuitant's, or account holder's former spouse
  5 16 to assert an ownership interest in an individual retirement
  5 17 account, stock option plan, transfer or payable on death
  5 18 account, or annuity that is not disclosed to the
  5 19 participant's, annuitant's, or account holder's spouse prior
  5 20 to the issuance of the decree of dissolution, annulment, or
  5 21 separate maintenance and that is not addressed by the decree.
  5 22    6.  For purposes of this section, "relative of the
  5 23 participant's, annuitant's, or account holder's spouse" means
  5 24 a person who is related to the participant's, annuitant's, or
  5 25 account holder's former spouse by blood, adoption, or
  5 26 affinity, and who, subsequent to a decree of dissolution,
  5 27 annulment, or separate maintenance ceases to be related to the
  5 28 participant, annuitant, or account holder by blood, adoption,
  5 29 or affinity.
  5 30    Sec. 6.  Section 602.8102, subsection 106, Code 2007, is
  5 31 amended to read as follows:
  5 32    106.  Carry out duties relating to the administration of
  5 33 small estates as provided in sections 635.1, 635.7, and 635.9
  5 34 chapter 635.
  5 35    Sec. 7.  NEW SECTION.  633.123  PRUDENT INVESTMENTS ==
  6  1 FIDUCIARIES.
  6  2    1.  When investing, reinvesting, purchasing, acquiring,
  6  3 exchanging, selling, or managing property for the benefit of
  6  4 another, a fiduciary shall consider all of the following
  6  5 circumstances along with the circumstances identified in
  6  6 section 633A.4302, if applicable:
  6  7    a.  The length of time the fiduciary will have control over
  6  8 the estate assets and the anticipated costs of complying with
  6  9 the provisions of this section.
  6 10    b.  The unique nature of all of the following:
  6 11    (1)  The duties of a personal representative or
  6 12 conservator.
  6 13    (2)  The assets, income, expenses, and distribution
  6 14 requirements of the estate.
  6 15    (3)  The needs and rights of the beneficiaries or the ward.
  6 16    c.  The express provisions of a will, codicil, or other
  6 17 controlling instrument.
  6 18    2.  The standards identified in this section shall be
  6 19 applied differently than similar standards for investment and
  6 20 management of trust property.  Special consideration shall be
  6 21 given to the expected term of estates.  Because some estates
  6 22 will have limited duration, there may be situations where an
  6 23 investment or a change in an investment is not warranted.
  6 24    Sec. 8.  Section 633.168, Code 2007, is amended to read as
  6 25 follows:
  6 26    633.168  OATH == CERTIFICATION.
  6 27    Every fiduciary, before entering upon the duties of the
  6 28 fiduciary's office and within such time as the court or clerk
  6 29 directs, shall subscribe an oath or certify under penalties of
  6 30 perjury that the fiduciary will faithfully discharge the
  6 31 duties imposed by law, according to the best of the
  6 32 fiduciary's ability.
  6 33    Sec. 9.  Section 633.178, Code 2007, is amended to read as
  6 34 follows:
  6 35    633.178  LETTERS.
  7  1    Upon the filing of an oath of office or certification and a
  7  2 bond, if any is required, the clerk shall issue letters under
  7  3 the seal of the court, giving the fiduciary the powers
  7  4 authorized by law.
  7  5    Sec. 10.  Section 633.199, Code 2007, is amended to read as
  7  6 follows:
  7  7    633.199  EXPENSES AND EXTRAORDINARY SERVICES.
  7  8    Such further allowances as are just and reasonable may be
  7  9 made by the court to personal representatives and their
  7 10 attorneys for actual necessary and extraordinary expenses or
  7 11 and services.  Necessary and extraordinary services shall be
  7 12 construed to also include but not be limited to services in
  7 13 connection with real estate, tax matters, and litigated
  7 14 issues, disputed matters, nonprobate assets, reopening the
  7 15 estate, location of unknown and lost heirs and beneficiaries,
  7 16 and management and disposition of unusual assets.  Relevant
  7 17 factors to be considered in determining the value of such
  7 18 services shall include but not be limited to the following:
  7 19    1.  Time necessarily spent by the personal representatives
  7 20 and their attorneys.
  7 21    2.  Nature of the matters or issues and the extent of the
  7 22 services provided.
  7 23    3.  Complexity of the issues and the importance of the
  7 24 issues to the estate.
  7 25    4.  Responsibilities assumed.
  7 26    5.  Resolution.
  7 27    6.  Experience and expertise of the personal
  7 28 representatives and their attorneys.
  7 29    Sec. 11.  Section 633.231, Code 2007, is amended to read as
  7 30 follows:
  7 31    633.231  NOTICE IN INTESTATE ESTATES == MEDICAL ASSISTANCE
  7 32 CLAIMS.
  7 33    Upon opening administration of an intestate estate, the
  7 34 administrator may shall, in accordance with section 633.410,
  7 35 provide by ordinary mail to the entity designated by the
  8  1 department of human services, a notice of opening
  8  2 administration of the estate and of the appointment of the
  8  3 administrator, which shall include a notice to file claims
  8  4 with the clerk within the later to occur of fifteen four
  8  5 months from the second publication of the notice to creditors
  8  6 or two six months from the date of mailing of this notice, or
  8  7 thereafter be forever barred.
  8  8    The notice shall be in substantially the following form:
  8  9         NOTICE OF OPENING ADMINISTRATION OF ESTATE, OF
  8 10      APPOINTMENT OF ADMINISTRATOR, AND NOTICE TO CREDITOR
  8 11 In the District Court of Iowa
  8 12 In and for .... County.
  8 13 In the Estate of ......, Deceased
  8 14 Probate No.  ....
  8 15    To the Department of Human Services Who May Be Interested
  8 16 in the Estate of ......, Deceased, who died on or about ....
  8 17 (date):
  8 18    You are hereby notified that on the ... day of ....
  8 19 (month), ... (year), an intestate estate was opened in the
  8 20 above=named court and that ...... was appointed administrator
  8 21 of the estate.
  8 22    You are further notified that the birthdate of the deceased
  8 23 is .... and the deceased's social security number is
  8 24 ...=..=....  The name of the spouse is ........  The birthdate
  8 25 of the spouse is .... and the spouse's social security number
  8 26 is ...=..=...., and that the spouse of the deceased is alive
  8 27 as of the date of this notice, or deceased as of .... (date).
  8 28    You are further notified that the deceased was/was not a
  8 29 disabled or a blind child of the medical assistance recipient
  8 30 by the name of ........., who had a birthdate of .... and a
  8 31 social security number of ...=..=...., and the medical
  8 32 assistance debt of that medical assistance recipient was
  8 33 waived pursuant to section 249A.5, subsection 2, paragraph
  8 34 "a", subparagraph (1), and is now collectible from this estate
  8 35 pursuant to section 249A.5, subsection 2, paragraph "b".
  9  1    Notice is hereby given that if the department of human
  9  2 services has a claim against the estate for the deceased
  9  3 person or persons named in this notice, the claim shall be
  9  4 filed with the clerk of the above=named district court, as
  9  5 provided by law, duly authenticated, for allowance, and unless
  9  6 so filed by the later to occur of fifteen four months from the
  9  7 second publication of the notice to creditors or two six
  9  8 months from the date of the mailing of this notice, unless
  9  9 otherwise allowed or paid, the claim is thereafter forever
  9 10 barred.
  9 11    Dated this ... day of .... (month), ... (year)
  9 12                                   ..........................
  9 13                                   Administrator of estate
  9 14                                   ..........................
  9 15                                   Address
  9 16 ..........
  9 17 Attorney for administrator
  9 18 ..........
  9 19 Address
  9 20 Date of second publication
  9 21 ... day of .... (month), ... (year)
  9 22    Sec. 12.  Section 633.272, Code 2007, is amended to read as
  9 23 follows:
  9 24    633.272  PARTIAL INTESTACY.
  9 25    If part but not all of the estate of a decedent is validly
  9 26 disposed of by will, the part not disposed of by will shall be
  9 27 distributed as provided herein for intestate estates.  If the
  9 28 testator left a surviving spouse, and the spouse does not
  9 29 elect to take against the will take an elective share, the
  9 30 spouse shall receive, in addition to the property given to the
  9 31 spouse by the will, all so much of the intestate property
  9 32 which shall be subject to the payment of its proportionate
  9 33 share of debts and charges against the estate as the spouse
  9 34 would receive pursuant to section 633.211 or 633.212.
  9 35    Sec. 13.  Section 633.304A, Code 2007, is amended to read
 10  1 as follows:
 10  2    633.304A  NOTICE OF PROBATE OF WILL == MEDICAL ASSISTANCE
 10  3 CLAIMS.
 10  4    On admission of a will to probate, the executor may shall,
 10  5 in accordance with section 633.410, provide by ordinary mail
 10  6 to the entity designated by the department of human services,
 10  7 a notice of admission of the will to probate and of the
 10  8 appointment of the executor, which shall include a notice to
 10  9 file claims with the clerk within the later to occur of
 10 10 fifteen four months from the second publication of the notice
 10 11 to creditors or two six months from the date of mailing of
 10 12 this notice, or thereafter be forever barred.
 10 13    The notice shall be in substantially the following form:
 10 14     NOTICE OF PROBATE OF WILL, OF APPOINTMENT OF EXECUTOR,
 10 15                     AND NOTICE TO CREDITORS
 10 16 In the District Court of Iowa
 10 17 In and for .... County.
 10 18 In the Estate of ......, Deceased
 10 19 Probate No.  ....
 10 20    To the Department of Human Services, Who May Be Interested
 10 21 in the Estate of ......, Deceased, who died on or about ....
 10 22 (date):
 10 23    You are hereby notified that on the .. day of ....
 10 24 (month), .. (year), the last will and testament of ........,
 10 25 deceased, bearing date of the .. day of ....  (month), ..
 10 26 (year), was admitted to probate in the above=named court and
 10 27 that ........ was appointed executor of the estate.
 10 28    You are further notified that the birthdate of the deceased
 10 29 is ...... and the deceased's social security number is
 10 30 ...=..=....  The name of the spouse is ...........  The
 10 31 birthdate of the spouse is ..... and the spouse's social
 10 32 security number is ...=..=...., and that the spouse of the
 10 33 deceased is alive as of the date of this notice, or deceased
 10 34 as of ...... (date).
 10 35    You are further notified that the deceased was/was not a
 11  1 disabled or a blind child of the medical assistance recipient
 11  2 by the name of ....., who had a birthdate of .....  and a
 11  3 social security number of ...=..=...., and the medical
 11  4 assistance debt of that medical assistance recipient was
 11  5 waived pursuant to section 249A.5, subsection 2, paragraph
 11  6 "a", subparagraph (1), and is now collectible from this estate
 11  7 pursuant to section 249A.5, subsection 2, paragraph "b".
 11  8    Notice is hereby given that if the department of human
 11  9 services has a claim against the estate for the deceased
 11 10 person or persons named in this notice, the claim shall be
 11 11 filed with the clerk of the above=named district court, as
 11 12 provided by law, duly authenticated, for allowance, and unless
 11 13 so filed by the later to occur of fifteen four months from the
 11 14 second publication of the notice to creditors or two six
 11 15 months from the date of mailing of this notice, unless
 11 16 otherwise allowed or paid, the claim is thereafter forever
 11 17 barred.
 11 18    Dated this .. day of ...... (month), .. (year)
 11 19                                   ..........................
 11 20                                   Executor of estate
 11 21                                   ..........................
 11 22                                   Address
 11 23 ..........
 11 24 Attorney for executor
 11 25 ..........
 11 26 Address
 11 27 Date of second publication
 11 28 .. day of ...... (month), .. (year)
 11 29    Sec. 14.  Section 633.410, subsection 2, Code 2007, is
 11 30 amended to read as follows:
 11 31    2.  Notwithstanding subsection 1, claims for debts created
 11 32 under section 249A.5, subsection 2, relating to the recovery
 11 33 of medical assistance payments shall be barred under this
 11 34 section unless filed with the clerk within the later to occur
 11 35 of fifteen four months after the date of the second
 12  1 publication of the notice to creditors, or two six months
 12  2 after service of notice by ordinary mail, on the form
 12  3 prescribed in section 633.231 for intestate estates or on the
 12  4 form prescribed in section 633.304A for testate estates, to
 12  5 the entity designated by the department of human services to
 12  6 receive notice.
 12  7    Sec. 15.  Section 633.551, Code 2007, is amended by adding
 12  8 the following new subsection:
 12  9    NEW SUBSECTION.  5.  Except as otherwise provided in
 12 10 sections 633.672 and 633.673, in proceedings to establish a
 12 11 guardianship or conservatorship, the costs, including attorney
 12 12 fees and expert witness fees, shall be assessed against the
 12 13 ward or the ward's estate unless the proceeding is dismissed
 12 14 either voluntarily or involuntarily, in which case fees and
 12 15 costs may be assessed against the petitioner for good cause
 12 16 shown.
 12 17    Sec. 16.  Section 633.669, subsection 1, paragraph b, Code
 12 18 2007, is amended to read as follows:
 12 19    b.  An annual report, within ninety days of the close of
 12 20 the reporting period, unless the court otherwise orders on
 12 21 good cause shown.
 12 22    Sec. 17.  Section 633.670, subsection 1, paragraph b,
 12 23 subparagraph (1), Code 2007, is amended to read as follows:
 12 24    (1)  Annually, within ninety days of the close of the
 12 25 reporting period, unless the court otherwise orders on good
 12 26 cause shown.
 12 27    Sec. 18.  Section 633.700, unnumbered paragraph 1, Code
 12 28 2007, is amended to read as follows:
 12 29    Unless specifically relieved from so doing, by the
 12 30 instrument creating the trust, or by order of the court, the
 12 31 trustee shall make a written report, under oath, to the court,
 12 32 once each year, within ninety days of the close of the
 12 33 reporting period, and more often, if required by the court.
 12 34 Such report shall state:
 12 35    Sec. 19.  Section 633A.4703, unnumbered paragraph 1, Code
 13  1 2007, is amended to read as follows:
 13  2    Except as otherwise provided by the governing instrument,
 13  3 where necessary to abate shares of the beneficiaries of a
 13  4 trust for the payment of debts and charges, federal and state
 13  5 estate taxes, bequests, the share of the surviving spouse who
 13  6 takes an elective share, and the shares of children born or
 13  7 adopted after the execution of the trust, abatement shall
 13  8 occur in the following order:
 13  9    Sec. 20.  Section 633A.4703, subsection 4, Code 2007, is
 13 10 amended to read as follows:
 13 11    4.  Notwithstanding subsections 1, 2, or 3, a disposition
 13 12 in favor of the grantor's settlor's surviving spouse who does
 13 13 not take an elective share shall not be abated where such
 13 14 abatement would have the effect of increasing the amount of
 13 15 federal estate or federal gift taxes payable by a person or an
 13 16 entity.
 13 17    Sec. 21.  Section 635.1, Code 2007, is amended by striking
 13 18 the section and inserting in lieu thereof the following:
 13 19    635.1  WHEN APPLICABLE.
 13 20    When the gross value of the probate assets of a decedent
 13 21 subject to the jurisdiction of this state does not exceed one
 13 22 hundred thousand dollars, and upon a petition as provided in
 13 23 section 635.2 of an authorized petitioner in accordance with
 13 24 section 633.227, 633.228, or 633.290, the clerk shall issue
 13 25 letters of appointment for administration to the proposed
 13 26 personal representative named in the petition, if qualified to
 13 27 serve.  Unless otherwise provided in this chapter, the
 13 28 provisions of chapter 633 apply to an estate probated pursuant
 13 29 to this chapter.
 13 30    Sec. 22.  Section 635.2, Code 2007, is amended to read as
 13 31 follows:
 13 32    635.2  PETITION REQUIREMENTS.
 13 33    The petition for administration of a small estate must
 13 34 contain the following:
 13 35    1.  The name, domicile, and date of death of the decedent.
 14  1    2.  The name and address of the surviving spouse, if any,
 14  2 the name and address of each child of the decedent, the name
 14  3 and address of each parent of the decedent, if the parent is
 14  4 an heir or beneficiary of the decedent, and the name and
 14  5 address of each grandchild of the decedent if the grandchild
 14  6 is an heir or beneficiary of the decedent, unless none are
 14  7 beneficiaries under the will of the decedent, and the name and
 14  8 address of each relative within the fourth degree of
 14  9 consanguinity of the decedent who is an heir or beneficiary of
 14 10 the decedent, unless none are beneficiaries under the will of
 14 11 the decedent.
 14 12    3.  Whether the decedent died intestate or testate, and, if
 14 13 testate, the date of the will was executed.
 14 14    4.  A statement that the probate and nonprobate property of
 14 15 the decedent subject to the jurisdiction of this state does
 14 16 not have an aggregate gross value of more than the amount
 14 17 permitted under the provisions of section 635.1.
 14 18    5.  The name and address of the proposed executor or
 14 19 administrator personal representative.
 14 20    Sec. 23.  Section 635.7, Code 2007, is amended to read as
 14 21 follows:
 14 22    635.7  REPORT AND INVENTORY == EXCESS VALUE AND TERMINATION
 14 23 CONVERSION.
 14 24    1.  The executor or administrator personal representative
 14 25 is required to file the report and inventory for which
 14 26 provision is made in section 633.361, including all probate
 14 27 and nonprobate assets.  Nothing in sections 635.1 to 635.3
 14 28 shall This chapter does not exempt the executor or
 14 29 administrator personal representative from complying with the
 14 30 requirements of section 422.27, 450.22, 450.58, 633.480, or
 14 31 633.481, and the administration of an estate whether converted
 14 32 to or from a small estate shall be considered one proceeding
 14 33 pursuant to section 633.330.
 14 34    2.  If the inventory and report shows the gross value of
 14 35 probate assets subject to the jurisdiction of this state which
 15  1 exceed the total gross value of the amount permitted the a
 15  2 small estate under the applicable provision of section 635.1,
 15  3 the clerk shall terminate the letters issued under section
 15  4 635.1 without prejudice to the rights of persons who delivered
 15  5 property as permitted under section 635.3.  The executor or
 15  6 administrator shall then be required to petition for
 15  7 administration of the estate shall be administered as provided
 15  8 in chapter 633.
 15  9    3.  If the inventory report in an estate probated pursuant
 15 10 to chapter 633 indicates the gross value of the probate assets
 15 11 subject to the jurisdiction of this state does not exceed the
 15 12 amount permitted under section 635.1, the estate shall be
 15 13 administered as a small estate upon the filing of a statement
 15 14 by the personal representative that the estate is a small
 15 15 estate.
 15 16    4.  Other interested parties may convert proceedings from a
 15 17 small estate to a regular estate or from a regular estate to a
 15 18 small estate only upon good cause shown with approval from the
 15 19 court.
 15 20    Sec. 24.  Section 635.8, Code 2007, is amended to read as
 15 21 follows:
 15 22    635.8  CLOSING BY SWORN STATEMENT.
 15 23    1.  Unless an interested person petitions for
 15 24 administration of the estate on a basis other than for a small
 15 25 estate within four months after letters of administration for
 15 26 a small estate are issued, if those letters of administration
 15 27 are not terminated under the provisions of section 635.7, any
 15 28 property of the estate shall then be free of debts and
 15 29 charges, unless a claim has been filed as provided in section
 15 30 635.13.  The executor or administrator is personally liable
 15 31 for the payment of debts and charges against the estate to the
 15 32 extent the assets of the estate would be subject to the
 15 33 payment of those debts and charges under estate administration
 15 34 other than a small estate.
 15 35    2.  1.  The executor or administrator personal
 16  1 representative shall file with the court a closing statement
 16  2 within six months a reasonable time from the date of issuance
 16  3 of the letters of appointment, and the closing statement shall
 16  4 be verified or affirmed under penalty of perjury, stating all
 16  5 of the following:
 16  6    a.  To the best knowledge of the person personal
 16  7 representative, the gross value of the estate probate assets
 16  8 subject to the jurisdiction of this state does not exceed the
 16  9 amount permitted the small estate under the applicable
 16 10 provision of section 635.1.
 16 11    b.  The estate has been fully administered, dispersed, and
 16 12 will be disbursed and distributed to persons entitled to the
 16 13 estate and a if no objection is filed to the closing statement
 16 14 after the requisite time period has expired as provided in
 16 15 subsection 2.
 16 16    c.  A description of the disbursement and distribution of
 16 17 the estate including an accurate description of all the real
 16 18 estate of which the decedent died seized, stating the nature
 16 19 and extent of the interest in the real estate and its
 16 20 disposition.
 16 21    c.  d.  A copy of the closing statement and an opportunity
 16 22 to object and request a hearing has been sent to all
 16 23 distributees of the estate and to all known creditors and a
 16 24 full account in writing of the administration of the estate
 16 25 has been furnished to the distributees whose interests are
 16 26 affected by proper notice, as provided in section 633.40, to
 16 27 all interested parties.
 16 28    e.  The personal representative has complied with all
 16 29 statutory requirements pertaining to taxes, including whether
 16 30 federal estate tax was paid or a return was filed, whether
 16 31 Iowa inheritance tax was paid or a return was filed, whether
 16 32 the decedent's final personal income taxes were filed, whether
 16 33 fiduciary income tax returns for the estate were filed, and
 16 34 whether a lien continues to exist for any federal or state
 16 35 tax.
 17  1    3.  2.  If no actions or proceedings involving the estate
 17  2 are pending in the court sixty thirty days after notice of the
 17  3 closing statement is filed, the estate shall close after
 17  4 distribution and the clerk shall discharge the administrator
 17  5 or executor personal representative shall be discharged.
 17  6    4.  3.  The closing statement shall include a statement as
 17  7 to the amount of fees to be paid for services rendered by the
 17  8 executor or administrator personal representative and the
 17  9 executor's or administrator's personal representative's
 17 10 attorney in administration of the estate.  The fees for the
 17 11 executor or administrator and the executor's or
 17 12 administrator's attorney shall not be in excess of the fees
 17 13 permitted by section 633.197 personal representative shall not
 17 14 exceed three percent of the gross value of the probate assets
 17 15 of the estate, unless the personal representative itemizes the
 17 16 personal representative's services to the estate.  The
 17 17 personal representative's attorney shall be paid reasonable
 17 18 fees as agreed to in writing by the personal representative at
 17 19 or before the time of filing the probate inventory or as
 17 20 approved by the court.  All interested parties shall have the
 17 21 opportunity to object and request a hearing as to all fees
 17 22 reported in the closing statement.
 17 23    5.  4.  If a closing statement is not filed within twelve
 17 24 months of the date of issuance of a letter of appointment, an
 17 25 interlocutory report shall be filed within such time period.
 17 26 Such report shall be provided to all interested parties at
 17 27 least once every six months until the closing statement has
 17 28 been filed unless excused by the court for good cause shown.
 17 29 A closing statement filed under this section has the same
 17 30 effect as final settlement of the estate under chapter 633.
 17 31    Sec. 25.  Section 635.13, Code 2007, is amended to read as
 17 32 follows:
 17 33    635.13  NOTICE == CLAIMS.
 17 34    If a petition for administration of a small estate of a
 17 35 decedent is granted, the notice as provided in section
 18  1 633.237, and either sections 633.230 and 633.231 or section
 18  2 sections 633.304 and 633.304A shall indicate administration as
 18  3 a small estate be given.  Creditors having claims against the
 18  4 estate must file them with the clerk within four months from
 18  5 the second publication of the notice the applicable time
 18  6 periods provided in such notices.  The notice has the same
 18  7 force and effect as in chapter 633.  Claimants of the estate
 18  8 shall be interested parties of the estate as long as the
 18  9 claims are pending in the estate.
 18 10    Sec. 26.  Sections 635.3, 635.4, 635.5, 635.6, 635.9,
 18 11 635.10, 635.12, and 635.14, Code 2007, are repealed.
 18 12    Sec. 27.  CODE EDITOR DIRECTIVE.  The Code editor is
 18 13 directed to transfer and renumber sections 635.7, 635.8, and
 18 14 635.13, as amended in this Act, to enhance the readability of
 18 15 Code chapter 635.
 18 16    Sec. 28.  APPLICABILITY.
 18 17    1.  The sections of this Act amending sections 633.168 and
 18 18 633.178 apply to fiduciaries appointed on or after July 1,
 18 19 2007.
 18 20    2.  The sections of this Act amending sections 421.27,
 18 21 450.4, 602.8102, 633.199, 633.272, 633A.4703, 635.1, 635.2,
 18 22 635.7, 635.8, and 635.13 apply to estates of decedents dying
 18 23 on or after July 1, 2007.
 18 24    3.  The section of this Act amending section 561.1 applies
 18 25 retroactively to beneficiaries of trusts in existence on or
 18 26 after July 1, 1997.
 18 27    4.  The sections of this Act enacting sections 598.20A and
 18 28 598.20B apply to all decrees of dissolution, annulment, or
 18 29 separation entered on or after July 1, 2007.
 18 30    5.  The section of this Act enacting section 633.123
 18 31 applies to all estates, conservatorships, and trusts under
 18 32 court supervision in existence on or after July 1, 2007.
 18 33    6.  The section of this Act amending section 633.551
 18 34 applies to petitions filed on or after July 1, 2007.
 18 35    7.  The sections of this Act amending sections 633.669,
 19  1 633.670, and 633.700 apply to annual reports of guardians,
 19  2 conservators, and court=supervised trusts due on or after
 19  3 September 30, 2007.
 19  4    8.  The section of this Act repealing sections 635.3,
 19  5 635.4, 635.5, 635.6, 635.9, 635.10, 635.12, and 635.14 applies
 19  6 to estates of decedents dying on or after July 1, 2007.
 19  7
 19  8
 19  9                                                             
 19 10                               JOHN P. KIBBIE
 19 11                               President of the Senate
 19 12
 19 13
 19 14                                                             
 19 15                               PATRICK J. MURPHY
 19 16                               Speaker of the House
 19 17
 19 18    I hereby certify that this bill originated in the Senate and
 19 19 is known as Senate File 540, Eighty=second General Assembly.
 19 20
 19 21
 19 22                                                             
 19 23                               MICHAEL E. MARSHALL
 19 24                               Secretary of the Senate
 19 25 Approved                , 2007
 19 26
 19 27
 19 28                                
 19 29 CHESTER J. CULVER
 19 30 Governor