HF 3209

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to property; adopting the Uniform Disclaimer 
  1.3             of Property Interests Act; proposing coding for new 
  1.4             law as Minnesota Statutes, chapter 524A; repealing 
  1.5             Minnesota Statutes 2002, sections 501B.86; 525.532. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [524A.01] [SHORT TITLE.] 
  1.8      This chapter may be cited as the "Uniform Disclaimer of 
  1.9   Property Interests Act." 
  1.10     Sec. 2.  [524A.02] [DEFINITIONS.] 
  1.11     Subdivision 1.  [SCOPE.] The definitions in this section 
  1.12  apply to this chapter. 
  1.13     Subd. 2.  [DISCLAIMANT.] "Disclaimant" means the person to 
  1.14  whom a disclaimed interest or power would have passed had the 
  1.15  disclaimer not been made. 
  1.16     Subd. 3.  [DISCLAIMED INTEREST.] "Disclaimed interest" 
  1.17  means the interest that would have passed to the disclaimant had 
  1.18  the disclaimer not been made. 
  1.19     Subd. 4.  [DISCLAIMER.] "Disclaimer" means the refusal to 
  1.20  accept an interest in or power over property. 
  1.21     Subd. 5.  [FIDUCIARY.] "Fiduciary" means a personal 
  1.22  representative, trustee, agent acting under a power of attorney, 
  1.23  or other person authorized to act as a fiduciary with respect to 
  1.24  the property of another person. 
  1.25     Subd. 6.  [JOINTLY HELD PROPERTY.] "Jointly held property" 
  2.1   means property held in the name of two or more persons under an 
  2.2   arrangement in which all holders have concurrent interests and 
  2.3   under which the last surviving holder is entitled to the whole 
  2.4   of the property. 
  2.5      Subd. 7.  [PERSON.] "Person" means an individual; 
  2.6   corporation; business trust; estate; trust; partnership; limited 
  2.7   liability company; association; joint venture; government; 
  2.8   governmental subdivision, agency, or instrumentality; public 
  2.9   corporation; or any other legal or commercial entity. 
  2.10     Subd. 8.  [STATE.] "State" means a state of the United 
  2.11  States, the District of Columbia, Puerto Rico, the United States 
  2.12  Virgin Islands, or any territory or insular possession subject 
  2.13  to the jurisdiction of the United States.  The term includes an 
  2.14  Indian tribe or band, or Alaskan native village, recognized by 
  2.15  federal law or formally acknowledged by a state. 
  2.16     Subd. 9.  [TRUST.] "Trust" means: 
  2.17     (1) an express trust, charitable or noncharitable, with 
  2.18  additions, whenever and however created; and 
  2.19     (2) a trust created pursuant to a statute, judgment, or 
  2.20  decree which requires the trust to be administered in the manner 
  2.21  of an express trust. 
  2.22     Sec. 3.  [524A.03] [SCOPE.] 
  2.23     This chapter applies to disclaimers of any interest in or 
  2.24  power over property, whenever created. 
  2.25     Sec. 4.  [524A.04] [SUPPLEMENTATION BY OTHER LAW.] 
  2.26     (a) Unless displaced by a provision of this chapter, the 
  2.27  principles of law and equity supplement this chapter. 
  2.28     (b) This chapter does not limit any right of a person to 
  2.29  waive, release, disclaim, or renounce an interest in or power 
  2.30  over property under a law other than this chapter. 
  2.31     Sec. 5.  [524A.05] [POWER TO DISCLAIM; GENERAL 
  2.32  REQUIREMENTS; WHEN IRREVOCABLE.] 
  2.33     Subdivision 1.  [WHAT MAY BE DISCLAIMED.] A person may 
  2.34  disclaim, in whole or part, any interest in or power over 
  2.35  property, including a power of appointment.  A person may 
  2.36  disclaim the interest or power even if its creator imposed a 
  3.1   spendthrift provision or similar restriction on transfer or a 
  3.2   restriction or limitation on the right to disclaim. 
  3.3      Subd. 2.  [DISCLAIMER BY FIDUCIARY.] Except to the extent a 
  3.4   fiduciary's right to disclaim is expressly restricted or limited 
  3.5   by another statute of this state or by the instrument creating 
  3.6   the fiduciary relationship, a fiduciary may disclaim, in whole 
  3.7   or part, any interest in or power over property, including a 
  3.8   power of appointment, whether acting in a personal or 
  3.9   representative capacity.  A fiduciary may disclaim the interest 
  3.10  or power even if its creator imposed a spendthrift provision or 
  3.11  similar restriction on transfer or a restriction or limitation 
  3.12  on the right to disclaim, or an instrument other than the 
  3.13  instrument that created the fiduciary relationship imposed a 
  3.14  restriction or limitation on the right to disclaim. 
  3.15     Subd. 3.  [REQUIREMENTS.] To be effective, a disclaimer 
  3.16  must be in a writing or other record, declare the disclaimer, 
  3.17  describe the interest or power disclaimed, be signed by the 
  3.18  person making the disclaimer, and be delivered or filed in the 
  3.19  manner provided in section 524A.12.  In this subdivision, 
  3.20  "record" means information that is: 
  3.21     (1) inscribed on a tangible medium, or stored in an 
  3.22  electronic or other medium; and 
  3.23     (2) retrievable in perceivable form. 
  3.24     Subd. 4.  [PARTIAL DISCLAIMER.] A partial disclaimer may be 
  3.25  expressed as a fraction, percentage, monetary amount, term of 
  3.26  years, limitation of a power, or any other interest or estate in 
  3.27  the property. 
  3.28     Subd. 5.  [IRREVOCABILITY.] A disclaimer becomes 
  3.29  irrevocable when it is delivered or filed pursuant to section 
  3.30  524A.12 or when it becomes effective as provided in sections 
  3.31  524A.06 to 524A.11, whichever occurs later. 
  3.32     Subd. 6.  [NOT A TRANSFER, ASSIGNMENT, OR RELEASE.] A 
  3.33  disclaimer made under this chapter is not a transfer, 
  3.34  assignment, or release. 
  3.35     Sec. 6.  [524A.06] [DISCLAIMER OF INTEREST IN PROPERTY.] 
  3.36     Subdivision 1.  [DEFINITIONS.] (a) The definitions in this 
  4.1   subdivision apply to this section. 
  4.2      (b) "Future interest" means an interest that takes effect 
  4.3   in possession or enjoyment, if at all, later than the time of 
  4.4   its creation. 
  4.5      (c) "Time of distribution" means the time when a disclaimed 
  4.6   interest would have taken effect in possession or enjoyment. 
  4.7      Subd. 2.  [APPLICABLE RULES.] (a) Except for a disclaimer 
  4.8   governed by section 524A.07 or 524A.08, the rules in this 
  4.9   subdivision apply to a disclaimer of an interest in property. 
  4.10     (b) The disclaimer takes effect as of the time the 
  4.11  instrument creating the interest becomes irrevocable, or, if the 
  4.12  interest arose under the law of intestate succession, as of the 
  4.13  time of the intestate's death. 
  4.14     (c) The disclaimed interest passes according to any 
  4.15  provision in the instrument creating the interest providing for 
  4.16  the disposition of the interest, should it be disclaimed, or of 
  4.17  disclaimed interests in general. 
  4.18     (d) If the instrument does not contain a provision 
  4.19  described in paragraph (c), the following rules apply: 
  4.20     (1) if the disclaimant is an individual, the disclaimed 
  4.21  interest passes as if the disclaimant had died immediately 
  4.22  before the time of distribution unless, by law or under the 
  4.23  instrument, the descendants of the disclaimant would share in 
  4.24  the disclaimed interest by any method of representation had the 
  4.25  disclaimant died before the time of distribution, in which case 
  4.26  the disclaimed interest passes only to the descendants of the 
  4.27  disclaimant who survive the time of distribution; or 
  4.28     (2) if the disclaimant is not an individual, the disclaimed 
  4.29  interest passes as if the disclaimant did not exist. 
  4.30     (e) Upon the disclaimer of a preceding interest, a future 
  4.31  interest held by a person other than the disclaimant takes 
  4.32  effect as if the disclaimant had died or ceased to exist 
  4.33  immediately before the time of distribution, but a future 
  4.34  interest held by the disclaimant is not accelerated in 
  4.35  possession or enjoyment. 
  4.36     Sec. 7.  [524A.07] [DISCLAIMER OF RIGHTS OF SURVIVORSHIP IN 
  5.1   JOINTLY HELD PROPERTY.] 
  5.2      (a) Upon the death of a holder of jointly held property, a 
  5.3   surviving holder may disclaim, in whole or part, the greater of: 
  5.4      (1) a fractional share of the property determined by 
  5.5   dividing the number one by the number of joint holders alive 
  5.6   immediately before the death of the holder to whose death the 
  5.7   disclaimer relates; or 
  5.8      (2) all of the property except that part of the value of 
  5.9   the entire interest attributable to the contribution furnished 
  5.10  by the disclaimant. 
  5.11     (b) A disclaimer under paragraph (a) takes effect as of the 
  5.12  death of the holder of jointly held property to whose death the 
  5.13  disclaimer relates. 
  5.14     (c) An interest in jointly held property disclaimed by a 
  5.15  surviving holder of the property passes as if the disclaimant 
  5.16  predeceased the holder to whose death the disclaimer relates. 
  5.17     Sec. 8.  [524A.08] [DISCLAIMER OF INTEREST BY TRUSTEE.] 
  5.18     If a trustee disclaims an interest in property that 
  5.19  otherwise would have become trust property, the interest does 
  5.20  not become trust property. 
  5.21     Sec. 9.  [524A.09] [DISCLAIMER OF POWER OF APPOINTMENT OR 
  5.22  OTHER POWER NOT HELD IN FIDUCIARY CAPACITY.] 
  5.23     (a) If a holder disclaims a power of appointment or other 
  5.24  power not held in a fiduciary capacity, the rules in this 
  5.25  section apply. 
  5.26     (b) If the holder has not exercised the power, the 
  5.27  disclaimer takes effect as of the time the instrument creating 
  5.28  the power becomes irrevocable. 
  5.29     (c) If the holder has exercised the power and the 
  5.30  disclaimer is of a power other than a presently exercisable 
  5.31  general power of appointment, the disclaimer takes effect 
  5.32  immediately after the last exercise of the power. 
  5.33     (d) The instrument creating the power is construed as if 
  5.34  the power expired when the disclaimer became effective. 
  5.35     Sec. 10.  [524A.10] [DISCLAIMER BY APPOINTEE, OBJECT, OR 
  5.36  TAKER IN DEFAULT OF EXERCISE OF POWER OF APPOINTMENT.] 
  6.1      (a) A disclaimer of an interest in property by an appointee 
  6.2   of a power of appointment takes effect as of the time the 
  6.3   instrument by which the holder exercises the power becomes 
  6.4   irrevocable. 
  6.5      (b) A disclaimer of an interest in property by an object or 
  6.6   taker in default of an exercise of a power of appointment takes 
  6.7   effect as of the time the instrument creating the power becomes 
  6.8   irrevocable. 
  6.9      Sec. 11.  [524A.11] [DISCLAIMER OF POWER HELD IN FIDUCIARY 
  6.10  CAPACITY.] 
  6.11     (a) If a fiduciary disclaims a power held in a fiduciary 
  6.12  capacity which has not been exercised, the disclaimer takes 
  6.13  effect as of the time the instrument creating the power becomes 
  6.14  irrevocable. 
  6.15     (b) If a fiduciary disclaims a power held in a fiduciary 
  6.16  capacity which has been exercised, the disclaimer takes effect 
  6.17  immediately after the last exercise of the power. 
  6.18     (c) A disclaimer under this section is effective as to 
  6.19  another fiduciary if the disclaimer so provides and the 
  6.20  fiduciary disclaiming has the authority to bind the estate, 
  6.21  trust, or other person for whom the fiduciary is acting. 
  6.22     Sec. 12.  [524A.12] [DELIVERY OR FILING.] 
  6.23     (a) In this section, "beneficiary designation" means an 
  6.24  instrument, other than an instrument creating a trust, naming 
  6.25  the beneficiary of: 
  6.26     (1) an annuity or insurance policy; 
  6.27     (2) an account with a designation for payment on death; 
  6.28     (3) a security registered in beneficiary form; 
  6.29     (4) a pension, profit-sharing, retirement, or other 
  6.30  employment-related benefit plan; or 
  6.31     (5) any other nonprobate transfer at death. 
  6.32     (b) Subject to paragraphs (c) to (l), delivery of a 
  6.33  disclaimer may be effected by personal delivery, first class 
  6.34  mail, or any other method likely to result in its receipt. 
  6.35     (c) In the case of an interest created under the law of 
  6.36  intestate succession or an interest created by will, other than 
  7.1   an interest in a testamentary trust: 
  7.2      (1) a disclaimer must be delivered to the personal 
  7.3   representative of the decedent's estate; or 
  7.4      (2) if no personal representative is then serving, it must 
  7.5   be filed with a court having jurisdiction to appoint the 
  7.6   personal representative. 
  7.7      (d) In the case of an interest in a testamentary trust: 
  7.8      (1) a disclaimer must be delivered to the trustee then 
  7.9   serving, or if no trustee is then serving, to the personal 
  7.10  representative of the decedent's estate; or 
  7.11     (2) if no personal representative is then serving, it must 
  7.12  be filed with a court having jurisdiction to enforce the trust. 
  7.13     (e) In the case of an interest in an inter vivos trust: 
  7.14     (1) a disclaimer must be delivered to the trustee then 
  7.15  serving; 
  7.16     (2) if no trustee is then serving, it must be filed with a 
  7.17  court having jurisdiction to enforce the trust; or 
  7.18     (3) if the disclaimer is made before the time the 
  7.19  instrument creating the trust becomes irrevocable, it must be 
  7.20  delivered to the settlor of a revocable trust or the transferor 
  7.21  of the interest. 
  7.22     (f) In the case of an interest created by a beneficiary 
  7.23  designation made before the time the designation becomes 
  7.24  irrevocable, a disclaimer must be delivered to the person making 
  7.25  the beneficiary designation. 
  7.26     (g) In the case of an interest created by a beneficiary 
  7.27  designation made after the time the designation becomes 
  7.28  irrevocable, a disclaimer must be delivered to the person 
  7.29  obligated to distribute the interest. 
  7.30     (h) In the case of a disclaimer by a surviving holder of 
  7.31  jointly held property, the disclaimer must be delivered to the 
  7.32  person to whom the disclaimed interest passes. 
  7.33     (i) In the case of a disclaimer by an object or taker in 
  7.34  default of exercise of a power of appointment at any time after 
  7.35  the power was created: 
  7.36     (1) the disclaimer must be delivered to the holder of the 
  8.1   power of to the fiduciary acting under the instrument that 
  8.2   created the power; or 
  8.3      (2) if no fiduciary is then serving, it must be filed with 
  8.4   a court having authority to appoint the fiduciary. 
  8.5      (j) In the case of a disclaimer by an appointee of a 
  8.6   nonfiduciary power of appointment: 
  8.7      (1) the disclaimer must be delivered to the holder, the 
  8.8   personal representative of the holder's estate, or the fiduciary 
  8.9   under the instrument that created the power; or 
  8.10     (2) if no fiduciary is then serving, it must be filed with 
  8.11  a court having authority to appoint the fiduciary. 
  8.12     (k) In the case of a disclaimer by a fiduciary of a power 
  8.13  over a trust or estate, the disclaimer must be delivered as 
  8.14  provided in paragraph (c), (d), or (e), as if the power 
  8.15  disclaimed were an interest in property. 
  8.16     (l) In the case of a disclaimer of a power by an agent, the 
  8.17  disclaimer must be delivered to the principal or the principal's 
  8.18  representative. 
  8.19     Sec. 13.  [524A.13] [DISCLAIMER BARRED OR LIMITED.] 
  8.20     (a) A disclaimer is barred by a written waiver of the right 
  8.21  to disclaim. 
  8.22     (b) A disclaimer of an interest in property is barred if 
  8.23  any of the following events occur before the disclaimer becomes 
  8.24  effective: 
  8.25     (1) the disclaimant accepts the interest sought to be 
  8.26  disclaimed; 
  8.27     (2) the disclaimant voluntarily assigns, conveys, 
  8.28  encumbers, pledges, or transfers the interest sought to be 
  8.29  disclaimed or contracts to do so; or 
  8.30     (3) a judicial sale of the interest sought to be disclaimed 
  8.31  occurs. 
  8.32     (c) A disclaimer, in whole or in part, of the future 
  8.33  exercise of a power held in a fiduciary capacity is not barred 
  8.34  by its previous exercise. 
  8.35     (d) A disclaimer, in whole or in part, of the future 
  8.36  exercise of a power not held in a fiduciary capacity is not 
  9.1   barred by its previous exercise unless the power is exercisable 
  9.2   in favor of the disclaimant. 
  9.3      (e) A disclaimer is barred or limited if so provided by law 
  9.4   other than this chapter. 
  9.5      (f) A disclaimer of a power over property which is barred 
  9.6   by this section is ineffective.  A disclaimer of an interest in 
  9.7   property which is barred by this section takes effect as a 
  9.8   transfer of the interest disclaimed to the persons who would 
  9.9   have taken the interest under this chapter had the disclaimer 
  9.10  not been barred. 
  9.11     Sec. 14.  [524A.14] [TAX-QUALIFIED DISCLAIMER.] 
  9.12     Notwithstanding any other provision of this chapter, if as 
  9.13  a result of a disclaimer or transfer the disclaimed or 
  9.14  transferred interest is treated pursuant to the provisions of 
  9.15  United States Code, title 26, any successor statute, and the 
  9.16  regulations adopted under that statute, as never having been 
  9.17  transferred to the disclaimant, the disclaimer or transfer is 
  9.18  effective as a disclaimer under this chapter. 
  9.19     Sec. 15.  [524A.15] [RECORDING OF DISCLAIMER.] 
  9.20     If an instrument transferring an interest in or power over 
  9.21  property subject to a disclaimer is required or permitted by law 
  9.22  to be filed, recorded, or registered, the disclaimer may be so 
  9.23  filed, recorded, or registered.  Failure to file, record, or 
  9.24  register the disclaimer does not affect its validity between the 
  9.25  disclaimant and persons to whom the property interest or power 
  9.26  passes by reason of the disclaimer. 
  9.27     Sec. 16.  [524A.16] [APPLICATION TO EXISTING 
  9.28  RELATIONSHIPS.] 
  9.29     Except as otherwise provided in section 524A.13, an 
  9.30  interest in or power over property existing on the effective 
  9.31  date of this chapter as to which the time for delivering or 
  9.32  filing a disclaimer under law superseded by this chapter has not 
  9.33  expired, may be disclaimed after the effective date of this 
  9.34  chapter. 
  9.35     Sec. 17.  [524A.17] [UNIFORMITY OF APPLICATION AND 
  9.36  CONSTRUCTION.] 
 10.1      In applying and construing this chapter, consideration must 
 10.2   be given to the need to promote uniformity of the law with 
 10.3   respect to its subject matter among states that enact it. 
 10.4      Sec. 18.  [REPEALER.] 
 10.5      Minnesota Statutes 2002, sections 501B.86 and 525.532, are 
 10.6   repealed.