Senate Study Bill 3021 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON KREIMAN) A BILL FOR An Act relating to Iowa’s uniform disclaimer of property 1 interest Act. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5584SC (3) 83 rh/nh

S.F. _____ Section 1. Section 633E.4, Code 2009, is amended to read as 1 follows: 2 633E.4 Tax qualified disclaimer. 3 Notwithstanding Except as provided in sections 633E.13 4 and 633E.15, notwithstanding any other provision of this 5 chapter, any disclaimer or transfer that meets the requirements 6 of section 2518 of the Internal Revenue Code, as now or 7 hereafter amended, or any a successor statute thereto, and the 8 regulations promulgated thereunder, for the purpose of being a 9 tax qualified disclaimer with the effect that the disclaimed 10 or transferred interest is treated as never having been 11 transferred to the disclaimant is effective as a disclaimer 12 under this chapter. For purposes of this section, “Internal 13 Revenue Code” means the same as defined in section 422.3. 14 Sec. 2. Section 633E.7, subsection 1, Code 2009, is amended 15 by striking the subsection and inserting in lieu thereof the 16 following: 17 1. Upon the death of a holder of jointly held property, 18 either of the following may occur: 19 a. If, during the deceased holder’s lifetime, the deceased 20 holder could have unilaterally regained the entire property 21 without the consent of any other holder, a surviving holder 22 may disclaim, in whole or in part, a fractional share of that 23 portion of the property attributable to the deceased holder’s 24 contributions determined by dividing the number one by the 25 number of joint holders alive immediately after the death of 26 the holder to whose death the disclaimer relates. 27 b. For all other jointly held property, a surviving holder 28 may disclaim, in whole or in part, a fraction of the whole of 29 the property the numerator of which is one and the denominator 30 of which is the product of the number of joint holders alive 31 immediately before the death of the holder to whose death the 32 disclaimer relates multiplied by the number of joint holders 33 alive immediately after the death of the holder to whose death 34 the disclaimer relates. 35 -1- LSB 5584SC (3) 83 rh/nh 1/ 3

S.F. _____ Sec. 3. Section 633E.7, Code 2009, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 4. A noncitizen spouse who is a surviving 3 joint tenant of real property interests created after July 13, 4 2008, can disclaim the spouse’s interest to the full extent 5 permitted under section 633E.4. 6 Sec. 4. Section 633E.13, subsection 5, Code 2009, is amended 7 to read as follows: 8 5. A disclaimer is barred or limited if so provided by law 9 other than this chapter , except as provided in subsection 7 . 10 Sec. 5. Section 633E.13, Code 2009, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 7. A disclaimer may be made at any time 13 unless otherwise barred and any other law that would bar a 14 disclaimer due to the passage of time shall not apply under 15 this chapter. 16 Sec. 6. Section 633E.14, subsection 2, Code 2009, is amended 17 to read as follows: 18 2. This chapter does not limit any right of a person to 19 waive, release, disclaim, or renounce disclaim an interest in 20 or power over property under a law statute other than this 21 chapter. 22 EXPLANATION 23 This bill amends Code section 633E.4, relating to a tax 24 qualified disclaimer or transfer of a property interest, to 25 allow two exceptions (Code sections 633E.13 and 633E.15) to 26 the requirement that a disclaimer or transfer of a property 27 interest that is valid under section 2518 of the Internal 28 Revenue Code is valid for all purposes under Code chapter 29 633E. Code section 633E.13 identifies circumstances under 30 which disclaimers are barred or limited and Code section 31 633E.15 prohibits a disclaimer from being used to avoid medical 32 assistance obligations pursuant to Code chapter 249A. 33 The bill amends Code section 633E.7 relating to disclaimers 34 of rights of survivorship in jointly held property to provide 35 -2- LSB 5584SC (3) 83 rh/nh 2/ 3

S.F. _____ that upon the death of a holder of jointly held property, 1 either of the following may occur: 2 1. If, during the deceased holder’s lifetime, the deceased 3 holder could have unilaterally regained the entire property 4 without the consent of any other holder, a surviving holder 5 may disclaim, in whole or in part, a fractional share of that 6 portion of the property attributable to the deceased holder’s 7 contributions determined by dividing the number one by the 8 number of joint holders alive immediately after the death of 9 the holder to whose death the disclaimer relates. 10 2. For all other jointly held property, a surviving holder 11 may disclaim, in whole or in part, a fraction of the whole of 12 the property the numerator of which is one and the denominator 13 of which is the product of the number of joint holders alive 14 immediately before the death of the holder to whose death the 15 disclaimer relates multiplied by the number of joint holders 16 alive immediately after the death of the holder to whose death 17 the disclaimer relates. 18 In addition, Code section 633E.7 is amended to allow a 19 noncitizen, surviving spouse to make a tax-qualified disclaimer 20 of property interests under section 2518 of the Internal 21 Revenue Code. 22 The bill amends Code section 633E.13 to provide that there 23 is no time limit in regard to a disclaimer of an interest in 24 property. 25 The bill amends Code section 633E.14 to prohibit common 26 law disclaimers as an alternative to disclaimers of property 27 interests under Code chapter 633E. 28 -3- LSB 5584SC (3) 83 rh/nh 3/ 3