SF 2222 (LSB 5584SV (2) 83)

SENATE FILE 2222

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO SSB 3021)

A BILL FOR

An Act relating to Iowa’s uniform disclaimer of property interest Act.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 633E.4, Code 2009, is amended to read as follows:
   633E.4  Tax qualified disclaimer.

   Notwithstanding Except as provided in sections 633E.13 and 633E.15, notwithstanding any other provision of this chapter, any disclaimer or transfer that meets the requirements of section 2518 of the Internal Revenue Code, as now or hereafter amended, or any successor statute thereto, and the regulations promulgated thereunder, for the purpose of being a tax qualified disclaimer with the effect that the disclaimed or transferred interest is treated as never having been transferred to the disclaimant is effective as a disclaimer under this chapter.  For purposes of this section, “Internal Revenue Code” means the same as defined in section 422.3.
    Sec. 2.  Section 633E.7, subsection 1, Code 2009, is amended by striking the subsection and inserting in lieu thereof the following:
   1.  Upon the death of a holder of jointly held property, either of the following may occur:
   a.  If, during the deceased holder’s lifetime, the deceased holder could have unilaterally regained a portion of the property attributable to the deceased holder’s contribution without the consent of any other holder, a surviving holder may disclaim, in whole or in part, a fractional share of that portion of the property attributable to the deceased holder’s contributions determined by dividing the number one by the number of joint holders alive immediately after the death of the holder to whose death the disclaimer relates.
   b.  For all other jointly held property, a surviving holder may disclaim, in whole or in part, a fraction of the whole of the property the numerator of which is one and the denominator of which is the product of the number of joint holders alive immediately before the death of the holder to whose death the disclaimer relates multiplied by the number of joint holders alive immediately after the death of the holder to whose death the disclaimer relates.
    Sec. 3.  Section 633E.7, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  A noncitizen spouse who is a surviving joint tenant of real property interests created after July 13, 1988, can disclaim the spouse’s interest to the full extent permitted under section 633E.4.
    Sec. 4.  Section 633E.13, subsection 5, Code 2009, is amended to read as follows:
   5.  A disclaimer is barred or limited if so provided by law other than this chapter, except as provided in subsection 7.
    Sec. 5.  Section 633E.13, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  A disclaimer may be made at any time unless otherwise barred and any other law that would bar a disclaimer due to the passage of time shall not apply under this chapter.
    Sec. 6.  Section 633E.14, subsection 2, Code 2009, is amended to read as follows:
   2.  This chapter does not limit any right of a person to waive, release, disclaim, or renounce disclaim an interest in or power over property under a law statute other than this chapter.
EXPLANATION
   This bill amends Code section 633E.4, relating to a tax qualified disclaimer or transfer of a property interest, to allow two exceptions (Code sections 633E.13 and 633E.15) to the requirement that a disclaimer or transfer of a property interest that is valid under section 2518 of the Internal Revenue Code is valid for all purposes under Code chapter 633E. Code section 633E.13 identifies circumstances under which disclaimers are barred or limited and Code section 633E.15 prohibits a disclaimer from being used to avoid medical assistance obligations pursuant to Code chapter 249A.
   The bill amends Code section 633E.7 relating to disclaimers of rights of survivorship in jointly held property to provide that upon the death of a holder of jointly held property, either of the following may occur:
   1. If, during the deceased holder’s lifetime, the deceased holder could have unilaterally regained a portion of the property without the consent of any other holder, a surviving holder may disclaim, in whole or in part, a fractional share of that portion of the property attributable to the deceased holder’s contributions determined by dividing the number one by the number of joint holders alive immediately after the death of the holder to whose death the disclaimer relates.
   2. For all other jointly held property, a surviving holder may disclaim, in whole or in part, a fraction of the whole of the property the numerator of which is one and the denominator of which is the product of the number of joint holders alive immediately before the death of the holder to whose death the disclaimer relates multiplied by the number of joint holders alive immediately after the death of the holder to whose death the disclaimer relates.
   In addition, Code section 633E.7 is amended to allow a noncitizen, surviving spouse to make a tax-qualified disclaimer of property interests under section 2518 of the Internal Revenue Code.
   The bill amends Code section 633E.13 to provide that there is no time limit in regard to a disclaimer of an interest in property.
   The bill amends Code section 633E.14 to prohibit common law disclaimers as an alternative to disclaimers of property interests under Code chapter 633E.