Senate Study Bill 3077 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON SODDERS) A BILL FOR An Act relating to civil law provisions, including notice 1 requirements for the disposition of the real property of 2 an estate, notice and document delivery under the trust 3 code, the powers of an agent under a power of attorney, and 4 liability for refusing to accept an acknowledged power of 5 attorney, and including effective date and retroactive and 6 other applicability provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 5680XC (6) 86 jh/nh

S.F. _____ DIVISION I 1 SALE OF REAL PROPERTY OF AN ESTATE —— NOTICE REQUIREMENTS 2 Section 1. Section 633.389, Code 2016, is amended to read 3 as follows: 4 633.389 Notice on sale, mortgage, exchange, pledge , or lease 5 of property. 6 Upon the filing of the petition , unless notice is waived in 7 writing , or unless all interested persons are also personal 8 representatives and have signed the petition, notice in 9 accordance with section 633.40 , shall be served on all persons 10 interested in the property, provided that as to personal 11 property and as to the lease of real property not specifically 12 devised, for a period not to exceed one year, the court may 13 hear the petition without notice. When notice is required, the 14 notice shall state briefly the nature of the application. Upon 15 satisfactory proof, the court may order the sale, mortgage, 16 exchange, pledge , or lease of the property described, or any 17 part of the property, at a price and upon terms and conditions 18 as the court may authorize. For the purposes of this section , 19 the term “all persons interested” includes only distributees in 20 the estate and persons who have requested notice as provided by 21 this probate code. 22 DIVISION II 23 TRUST CODE —— NOTICE AND DOCUMENT DELIVERY REQUIREMENTS 24 Sec. 2. NEW SECTION . 633A.1109 Methods of notice and 25 document delivery —— waiver. 26 Except as otherwise provided by this chapter: 27 1. Giving notice to a person, including notice of a judicial 28 proceeding, or the sending of a document to a person under this 29 chapter shall be accomplished in a manner reasonably suitable 30 under the circumstances and likely to result in receipt of the 31 notice or document. Permissible methods of giving notice or 32 sending a document include first-class mail, personal delivery 33 to a person’s last known place of residence or place of 34 business, or by properly directed electronic mail. When notice 35 -1- LSB 5680XC (6) 86 jh/nh 1/ 6

S.F. _____ in a trust proceeding is served on an interested party via the 1 United States postal service, the service is made and completed 2 when the notice being served is enclosed in a sealed envelope 3 with proper postage paid, is addressed to the interested party 4 at the party’s last known post office address, and is deposited 5 in a mail receptacle provided by the United States postal 6 service. 7 2. In the case of a proceeding against an unknown person 8 whose address or whereabouts are unknown, the court shall 9 prescribe that notice may be served by publication within 10 the time and in the manner provided by the rules of civil 11 procedure. 12 3. Notice under this chapter or the right to receive a 13 document under this chapter may be waived by the person to be 14 notified or entitled to receive the document. 15 4. For purposes of this section, “properly directed” 16 means directed to an electronic mail address that the sender 17 reasonably believes is a current electronic mail address of the 18 recipient. 19 Sec. 3. APPLICABILITY. This division of this Act applies to 20 notices and documents sent on or after July 1, 2016, regarding 21 trusts in existence on or created after July 1, 2016. 22 DIVISION III 23 POWERS OF ATTORNEY —— POWERS OF AN AGENT —— LIABILITY FOR 24 REFUSAL TO ACCEPT ACKNOWLEDGED POWER OF ATTORNEY 25 Sec. 4. Section 633B.120, subsection 3, paragraph b, Code 26 2016, is amended to read as follows: 27 b. Liability for damages sustained by the principal for and 28 reasonable attorney fees and costs incurred in any action or 29 proceeding that confirms the validity of the power of attorney 30 or mandates acceptance of the power of attorney, provided that 31 any such action must be brought within one year of the initial 32 request for acceptance of the power of attorney. 33 Sec. 5. Section 633B.204, subsections 2 and 3, Code 2016, 34 are amended to read as follows: 35 -2- LSB 5680XC (6) 86 jh/nh 2/ 6

S.F. _____ 2. Sell; exchange; convey with or without covenants, 1 representations, or warranties; quitclaim; release; surrender; 2 retain title for security; encumber; partition; consent to 3 partitioning; be subject to an easement or covenant; subdivide; 4 apply for zoning or other governmental permits; plat or consent 5 to platting; develop; grant an option concerning; lease; 6 sublease; contribute to an entity in exchange for an interest 7 in that entity; or otherwise grant or dispose of an interest in 8 real property or a right incident to real property , including 9 the transfer or release of any and all of the principal’s 10 homestead rights under section 561.13 and chapter 597 . 11 3. Pledge or mortgage an interest in real property or a 12 right incident to real property as security to borrow money 13 or pay, renew, or extend the time of payment of a debt of the 14 principal or a debt guaranteed by the principal , including the 15 transfer or release of any and all of the principal’s homestead 16 rights under section 561.13 and chapter 597 . 17 Sec. 6. Section 633B.211, subsection 2, paragraph h, Code 18 2016, is amended by striking the paragraph. 19 Sec. 7. Section 633B.214, subsection 2, Code 2016, is 20 amended by adding the following new paragraph: 21 NEW PARAGRAPH . g. Create and fund a medical assistance 22 income trust as defined in section 633C.1 or a trust or device 23 that meets the criteria of 42 U.S.C. §1396p(d)(4)(B)(i)-(ii) 24 that is authorized under the applicable law of another 25 jurisdiction in which the principal is a resident. 26 Sec. 8. EFFECTIVE UPON ENACTMENT. This division of this 27 Act, being deemed of immediate importance, takes effect upon 28 enactment. 29 Sec. 9. RETROACTIVE APPLICABILITY. This division of this 30 Act applies retroactively to July 1, 2014. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill relates to notice requirements for the sale or 35 -3- LSB 5680XC (6) 86 jh/nh 3/ 6

S.F. _____ other disposition of the real property of an estate under the 1 Iowa probate code, methods of notice and document delivery 2 under the Iowa trust code, the powers of an agent under a 3 power of attorney, and liability for refusing to accept an 4 acknowledged power of attorney. 5 DIVISION I —— NOTICE REQUIREMENTS FOR SALE OF REAL PROPERTY 6 OF AN ESTATE. Under current law, a personal representative may 7 petition a court to sell, mortgage, pledge, lease, or exchange 8 property belonging to the decedent in order to pay debts of 9 the estate, to distribute the estate, or for any other purpose 10 which is in the best interests of the estate. For the sale, 11 mortgage, exchange, or pledge of real property, or the lease 12 of real property with a rental term exceeding one year, the 13 personal representative is required to serve notice of such 14 a petition on all persons interested in the property unless 15 the right to receive notice is waived in writing. The bill 16 provides that notice of the petition is not required if all 17 interested persons are also personal representatives who have 18 signed the petition. 19 DIVISION II —— TRUST CODE NOTICE AND DOCUMENT DELIVERY 20 REQUIREMENTS. The bill provides that notice and the sending 21 of a document related to proceedings under the Iowa trust 22 code (Code chapter 633A) shall be accomplished in a manner 23 reasonably suitable under the circumstances and likely to 24 result in receipt of the notice or document. Permissible 25 methods of notice and document delivery include first-class 26 mail, personal delivery, and properly directed electronic mail. 27 If notice is served via United States mail, service is made and 28 completed when the notice is enclosed in a sealed envelope with 29 proper postage paid, addressed to the interested party at the 30 last known address, and deposited in a mail receptacle provided 31 by the United States postal service. 32 The bill provides that in the case of a proceeding against an 33 unknown person whose address or whereabouts are unknown, the 34 court shall prescribe that notice may be served by publication 35 -4- LSB 5680XC (6) 86 jh/nh 4/ 6

S.F. _____ within the time and in the manner provided by the rules of 1 civil procedure. 2 The bill provides that a person entitled to notice or the 3 receipt of documents under Code chapter 633A may waive such 4 rights. 5 DIVISION III —— POWERS OF AN AGENT UNDER A POWER OF ATTORNEY 6 —— LIABILITY FOR REFUSING TO ACCEPT AN ACKNOWLEDGED POWER OF 7 ATTORNEY. Under current law, if a person refuses to accept an 8 acknowledged power of attorney, the person may be subject to 9 liability for damages sustained by the principal for reasonable 10 attorney fees and costs incurred in any action or proceeding 11 that confirms the validity of the power of attorney. The bill 12 provides that a person who refuses to accept an acknowledged 13 power of attorney may be subject to liability for damages and 14 reasonable attorney fees and costs. 15 Under current law, unless the power of attorney otherwise 16 provides, language in a power of attorney granting general 17 authority with respect to real property authorizes the agent 18 to, among other things, grant or dispose of an interest in 19 real property or a right incident to real property. The bill 20 provides that such authority includes the right to the transfer 21 or release of any and all of the principal’s homestead rights 22 under Code section 561.13 and Code chapter 597. 23 Under current law, unless the power of attorney otherwise 24 provides, language in a power of attorney granting general 25 authority with respect to real property authorizes the agent 26 to, among other things, release, assign, satisfy, or enforce by 27 litigation or otherwise, a mortgage, deed of trust, conditional 28 sale contract, encumbrance, lien, or other claim to real 29 property which exists or is asserted. The bill provides that 30 such authority includes the right to the transfer or release 31 of any and all of the principal’s homestead rights under Code 32 section 561.13 and Code chapter 597. 33 Under current Code section 633B.201, an agent’s power to 34 disclaim property must be specifically granted in the power of 35 -5- LSB 5680XC (6) 86 jh/nh 5/ 6

S.F. _____ attorney. Under Code section 633B.211, subsection 2, paragraph 1 “h”, a grant of general authority with respect to estates, 2 trusts, and other beneficial interests authorizes the agent to 3 reject, renounce, disclaim, release, or consent to a reduction 4 in or modification of a share in or payment from an estate, 5 trust, or other beneficial interest. The bill strikes the 6 general power in Code section 633B.211, subsection 2, paragraph 7 “h”, and therefore an agent cannot disclaim property on behalf 8 of a principal unless the power of attorney specifically grants 9 such power. 10 The bill provides that, unless a power of attorney otherwise 11 provides, language in a power of attorney granting general 12 authority with respect to benefits from governmental programs 13 or civil or military service authorizes the agent to create 14 and fund a medical assistance income trust as defined in Code 15 section 633C.1, also known as a “Miller trust”, or a similar 16 trust that is authorized under the applicable law of another 17 jurisdiction in which the principal is a resident. 18 The bill’s provisions relating to powers of attorney take 19 effect upon enactment and apply retroactively to July 1, 2014. 20 -6- LSB 5680XC (6) 86 jh/nh 6/ 6