HF 3934

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to probate; enacting the Uniform Disclaimer of Property Interests Act;
proposing coding for new law in Minnesota Statutes, chapter 524; repealing
Minnesota Statutes 2006, sections 501B.86; 525.532.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [524.2-1101] SHORT TITLE.
new text end

new text begin Sections 524.2-1101 to 524.2-1119 may be cited as the "Uniform Disclaimer of
Property Interests Act."
new text end

Sec. 2.

new text begin [524.2-1102] DEFINITIONS.
new text end

new text begin In sections 524.2-1101 to 524.2-1119:
new text end

new text begin (a) "Disclaimant" means the person to whom a disclaimed interest or power would
have passed had the disclaimer not been made.
new text end

new text begin (b) "Disclaimed interest" means the interest that would have passed to the
disclaimant had the disclaimer not been made.
new text end

new text begin (c) "Disclaimer" means the refusal to accept an interest in or power over property.
new text end

new text begin (d) "Fiduciary" means a personal representative, trustee, agent acting under a power
of attorney, or other person authorized to act as a fiduciary with respect to the property
of another person.
new text end

new text begin (e) "Jointly held property" means property held in the name of two or more persons
under an arrangement in which all holders have concurrent interests and under which the
last surviving holder is entitled to the whole of the property.
new text end

new text begin (f) "Person" means an individual, corporation, business trust, estate, trust,
partnership, limited liability company, association, joint venture, or government;
governmental subdivision, agency, or instrumentality; public corporation, or any other
legal or commercial entity.
new text end

new text begin (g) "State" means a state of the United States, the District of Columbia, Puerto
Rico, the United States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States. The term includes an Indian tribe or band or Alaskan
native village recognized by federal law or formally acknowledged by a state.
new text end

new text begin (h) "Trust" means:
new text end

new text begin (1) an express trust, charitable or noncharitable, with additions thereto, whenever
and however created; and
new text end

new text begin (2) a trust created pursuant to a statute, judgment, or decree which requires the trust
to be administered in the manner of an express trust.
new text end

Sec. 3.

new text begin [524.2-1103] SCOPE.
new text end

new text begin Sections 524.2-1101 to 524.2-1119 apply to disclaimers of any interest in or power
over property, whenever created.
new text end

Sec. 4.

new text begin [524.2-1104] SUPPLEMENTATION BY OTHER LAW.
new text end

new text begin (a) Unless displaced by a provision of sections 524.2-1101 to 524.2-1119 the
principles of law and equity supplement sections 524.2-1101 to 524.2-1119.
new text end

new text begin (b) Sections 524.2-1101 to 524.2-1119 do not limit any right of a person to waive,
release, disclaim, or renounce an interest in or power over property under a law other
than sections 524.2-1101 to 524.2-1119.
new text end

Sec. 5.

new text begin [524.2-1105] POWER TO DISCLAIM; GENERAL REQUIREMENTS;
WHEN IRREVOCABLE.
new text end

new text begin (a) A person may disclaim, in whole or part, any interest in or power over property,
including a power of appointment. A person may disclaim the interest or power even if its
creator imposed a spendthrift provision or similar restriction on transfer or a restriction or
limitation on the right to disclaim.
new text end

new text begin (b) Except to the extent a fiduciary's right to disclaim is expressly restricted
or limited by another statute of this state or by the instrument creating the fiduciary
relationship, a fiduciary may disclaim, in whole or part, any interest in or power over
property, including a power of appointment, whether acting in a personal or representative
capacity. A fiduciary may disclaim the interest or power even if its creator imposed a
spendthrift provision or similar restriction on transfer or a restriction or limitation on the
right to disclaim, or an instrument other than the instrument that created the fiduciary
relationship imposed a restriction or limitation on the right to disclaim.
new text end

new text begin (c) To be effective, a disclaimer must be in a writing or other record, declare the
disclaimer, describe the interest or power disclaimed, be signed by the person making
the disclaimer, and be delivered or filed in the manner provided in section 524.2-1112.
In this paragraph:
new text end

new text begin (1) "record" means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form; and
new text end

new text begin (2) "signed" means, with present intent to authenticate or adopt a record, to:
new text end

new text begin (i) execute or adopt a tangible symbol; or
new text end

new text begin (ii) attach to or logically associate with the record an electronic sound, symbol,
or process.
new text end

new text begin (d) A partial disclaimer may be expressed as a fraction, percentage, monetary
amount, term of years, limitation of a power, or any other interest or estate in the property.
new text end

new text begin (e) A disclaimer becomes irrevocable when it is delivered or filed pursuant to
section 524.2-1112 or when it becomes effective as provided in sections 524.2-1106 to
524.2-1111, whichever occurs later.
new text end

new text begin (f) A disclaimer made under sections 524.2-1101 to 524.2-1119 is not a transfer,
assignment, or release.
new text end

Sec. 6.

new text begin [524.2-1106] DISCLAIMER OF INTEREST IN PROPERTY.
new text end

new text begin (a) In this section:
new text end

new text begin (1) "future interest" means an interest that takes effect in possession or enjoyment, if
at all, later than the time of its creation; and
new text end

new text begin (2) "time of distribution" means the time when a disclaimed interest would have
taken effect in possession or enjoyment.
new text end

new text begin (b) Except for a disclaimer governed by section 524.2-1107 or 524.2-1108 the
following rules apply to a disclaimer of an interest in property:
new text end

new text begin (1) the disclaimer takes effect as of the time the instrument creating the interest
becomes irrevocable, or, if the interest arose under the law of intestate succession, as of
the time of the intestate's death;
new text end

new text begin (2) the disclaimed interest passes according to any provision in the instrument
creating the interest providing for the disposition of the interest, should it be disclaimed,
or of disclaimed interests in general;
new text end

new text begin (3) if the instrument does not contain a provision described in clause (2), the
following rules apply:
new text end

new text begin (i) if the disclaimant is not an individual, the disclaimed interest passes as if the
disclaimant did not exist;
new text end

new text begin (ii) if the disclaimant is an individual, except as otherwise provided in items (iii)
and (iv), the disclaimed interest passes as if the disclaimant had died immediately before
the time of distribution;
new text end

new text begin (iii) if by law or under the instrument, the descendants of the disclaimant would
share in the disclaimed interest by any method of representation had the disclaimant died
before the time of distribution, the disclaimed interest passes only to the descendants of
the disclaimant who survive the time of distribution;
new text end

new text begin (iv) if the disclaimed interest would pass to the disclaimant's estate had the
disclaimant died before the time of distribution, the disclaimed interest instead passes by
representation to the descendants of the disclaimant who survive the time of distribution. If
no descendant of the disclaimant survives the time of distribution, the disclaimed interest
passes to those persons, including the state but excluding the disclaimant, and in such
shares as would succeed to the transferor's intestate estate under the intestate succession
law of the transferor's domicile had the transferor died at the time of distribution. However,
if the transferor's surviving spouse is living but is remarried at the time of distribution, the
transferor is deemed to have died unmarried at the time of distribution; and
new text end

new text begin (4) upon the disclaimer of a preceding interest, a future interest held by a person
other than the disclaimant takes effect as if the disclaimant had died or ceased to exist
immediately before the time of distribution, but a future interest held by the disclaimant is
not accelerated in possession or enjoyment.
new text end

Sec. 7.

new text begin [524.2-1107] DISCLAIMER OF RIGHTS OF SURVIVORSHIP IN
JOINTLY HELD PROPERTY.
new text end

new text begin (a) Upon the death of a holder of jointly held property, a surviving holder may
disclaim, in whole or part, the greater of:
new text end

new text begin (1) a fractional share of the property determined by dividing the number one by the
number of joint holders alive immediately before the death of the holder to whose death
the disclaimer relates; or
new text end

new text begin (2) all of the property except that part of the value of the entire interest attributable
to the contribution furnished by the disclaimant.
new text end

new text begin (b) A disclaimer under paragraph (a) takes effect as of the death of the holder of
jointly held property to whose death the disclaimer relates.
new text end

new text begin (c) An interest in jointly held property disclaimed by a surviving holder of the
property passes as if the disclaimant predeceased the holder to whose death the disclaimer
relates.
new text end

Sec. 8.

new text begin [524.2-1108] DISCLAIMER OF INTEREST BY TRUSTEE.
new text end

new text begin If a trustee disclaims an interest in property that otherwise would have become trust
property, the interest does not become trust property.
new text end

Sec. 9.

new text begin [524.2-1109] DISCLAIMER OF POWER OF APPOINTMENT OR
OTHER POWER NOT HELD IN FIDUCIARY CAPACITY.
new text end

new text begin If a holder disclaims a power of appointment or other power not held in a fiduciary
capacity, the following rules apply:
new text end

new text begin (1) if the holder has not exercised the power, the disclaimer takes effect as of the
time the instrument creating the power becomes irrevocable;
new text end

new text begin (2) if the holder has exercised the power and the disclaimer is of a power other
than a presently exercisable general power of appointment, the disclaimer takes effect
immediately after the last exercise of the power; and
new text end

new text begin (3) the instrument creating the power is construed as if the power expired when
the disclaimer became effective.
new text end

Sec. 10.

new text begin [524.2-1110] DISCLAIMER BY APPOINTEE, OBJECT, OR TAKER IN
DEFAULT OF EXERCISE OF POWER OF APPOINTMENT.
new text end

new text begin (a) A disclaimer of an interest in property by an appointee of a power of appointment
takes effect as of the time the instrument by which the holder exercises the power becomes
irrevocable.
new text end

new text begin (b) A disclaimer of an interest in property by an object or taker in default of an
exercise of a power of appointment takes effect as of the time the instrument creating
the power becomes irrevocable.
new text end

Sec. 11.

new text begin [524.2-1111] DISCLAIMER OF POWER HELD IN FIDUCIARY
CAPACITY.
new text end

new text begin (a) If a fiduciary disclaims a power held in a fiduciary capacity which has not been
exercised, the disclaimer takes effect as of the time the instrument creating the power
becomes irrevocable.
new text end

new text begin (b) If a fiduciary disclaims a power held in a fiduciary capacity which has been
exercised, the disclaimer takes effect immediately after the last exercise of the power.
new text end

new text begin (c) A disclaimer under this section is effective as to another fiduciary if the
disclaimer so provides and the fiduciary disclaiming has the authority to bind the estate,
trust, or other person for whom the fiduciary is acting.
new text end

Sec. 12.

new text begin [524.2-1112] DELIVERY OR FILING.
new text end

new text begin (a) In this section, "beneficiary designation" means an instrument, other than an
instrument creating a trust, naming the beneficiary of:
new text end

new text begin (1) an annuity or insurance policy;
new text end

new text begin (2) an account with a designation for payment on death;
new text end

new text begin (3) a security registered in beneficiary form;
new text end

new text begin (4) a pension, profit-sharing, retirement, or other employment-related benefit plan; or
new text end

new text begin (5) any other nonprobate transfer at death.
new text end

new text begin (b) Subject to paragraphs (c) to (l), delivery of a disclaimer may be effected by
personal delivery, first-class mail, or any other method likely to result in its receipt.
new text end

new text begin (c) In the case of an interest created under the law of intestate succession or an
interest created by will, other than an interest in a testamentary trust:
new text end

new text begin (1) a disclaimer must be delivered to the personal representative of the decedent's
estate; or
new text end

new text begin (2) if no personal representative is then serving, it must be filed with a court having
jurisdiction to appoint the personal representative.
new text end

new text begin (d) In the case of an interest in a testamentary trust:
new text end

new text begin (1) a disclaimer must be delivered to the trustee then serving, or if no trustee is then
serving, to the personal representative of the decedent's estate; or
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new text begin (2) if no personal representative is then serving, it must be filed with a court having
jurisdiction to enforce the trust.
new text end

new text begin (e) In the case of an interest in an inter vivos trust:
new text end

new text begin (1) a disclaimer must be delivered to the trustee then serving;
new text end

new text begin (2) if no trustee is then serving, it must be filed with a court having jurisdiction to
enforce the trust; or
new text end

new text begin (3) if the disclaimer is made before the time the instrument creating the trust
becomes irrevocable, it must be delivered to the settlor of a revocable trust or the
transferor of the interest.
new text end

new text begin (f) In the case of an interest created by a beneficiary designation made before the
time the designation becomes irrevocable, a disclaimer must be delivered to the person
making the beneficiary designation.
new text end

new text begin (g) In the case of an interest created by a beneficiary designation made after the
time the designation becomes irrevocable, a disclaimer must be delivered to the person
obligated to distribute the interest.
new text end

new text begin (h) In the case of a disclaimer by a surviving holder of jointly held property, the
disclaimer must be delivered to the person to whom the disclaimed interest passes.
new text end

new text begin (i) In the case of a disclaimer by an object or taker in default of exercise of a power
of appointment at any time after the power was created:
new text end

new text begin (1) the disclaimer must be delivered to the holder of the power or to the fiduciary
acting under the instrument that created the power; or
new text end

new text begin (2) if no fiduciary is then serving, it must be filed with a court having authority
to appoint the fiduciary.
new text end

new text begin (j) In the case of a disclaimer by an appointee of a nonfiduciary power of
appointment:
new text end

new text begin (1) the disclaimer must be delivered to the holder, the personal representative of the
holder's estate, or to the fiduciary under the instrument that created the power; or
new text end

new text begin (2) if no fiduciary is then serving, it must be filed with a court having authority
to appoint the fiduciary.
new text end

new text begin (k) In the case of a disclaimer by a fiduciary of a power over a trust or estate, the
disclaimer must be delivered as provided in paragraph (c), (d), or (e), as if the power
disclaimed were an interest in property.
new text end

new text begin (l) In the case of a disclaimer of a power by an agent, the disclaimer must be
delivered to the principal or the principal's representative.
new text end

Sec. 13.

new text begin [524.2-1113] WHEN DISCLAIMER BARRED OR LIMITED.
new text end

new text begin (a) A disclaimer is barred by a written waiver of the right to disclaim.
new text end

new text begin (b) A disclaimer of an interest in property is barred if any of the following events
occur before the disclaimer becomes effective:
new text end

new text begin (1) the disclaimant accepts the interest sought to be disclaimed;
new text end

new text begin (2) the disclaimant voluntarily assigns, conveys, encumbers, pledges, or transfers the
interest sought to be disclaimed or contracts to do so; or
new text end

new text begin (3) a judicial sale of the interest sought to be disclaimed occurs.
new text end

new text begin (c) A disclaimer, in whole or part, of the future exercise of a power held in a
fiduciary capacity is not barred by its previous exercise.
new text end

new text begin (d) A disclaimer, in whole or part, of the future exercise of a power not held in a
fiduciary capacity is not barred by its previous exercise unless the power is exercisable in
favor of the disclaimant.
new text end

new text begin (e) A disclaimer is barred or limited if so provided by law other than sections
524.2-1101 to 524.2-1119.
new text end

new text begin (f) A disclaimer of a power over property which is barred by this section is
ineffective. A disclaimer of an interest in property which is barred by this section takes
effect as a transfer of the interest disclaimed to the persons who would have taken the
interest under sections 524.2-1101 to 524.2-1119 had the disclaimer not been barred.
new text end

Sec. 14.

new text begin [524.2-1114] TAX QUALIFIED DISCLAIMER.
new text end

new text begin Notwithstanding any other provision of sections 524.2-1101 to 524.2-1119, if as a
result of a disclaimer or transfer the disclaimed or transferred interest is treated pursuant to
the provisions of United States Code, title 26, as amended, or any successor statute, and
the regulations promulgated under it, as never having been transferred to the disclaimant,
then the disclaimer or transfer is effective as a disclaimer under sections 524.2-1101
to 524.2-1119.
new text end

Sec. 15.

new text begin [524.2-1115] RECORDING OF DISCLAIMER.
new text end

new text begin If an instrument transferring an interest in or power over property subject to
a disclaimer is required or permitted by law to be filed, recorded, or registered, the
disclaimer may be so filed, recorded, or registered. Failure to file, record, or register the
disclaimer does not affect its validity as between the disclaimant and persons to whom the
property interest or power passes by reason of the disclaimer.
new text end

Sec. 16.

new text begin [524.2-1116] APPLICATION TO EXISTING RELATIONSHIPS.
new text end

new text begin Except as otherwise provided in section 524.2-1113, an interest in or power over
property existing on the effective date of sections 524.2-1101 to 524.2-1119 as to which
the time for delivering or filing a disclaimer under law superseded by sections 524.2-1101
to 524.2-1119 has not expired may be disclaimed after the effective date of sections
524.2-1101 to 524.2-1119.
new text end

Sec. 17.

new text begin [524.2-1117] RELATION TO ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT.
new text end

new text begin Sections 524.2-1101 to 524.2-1119 modify, limit, and supersede the federal
Electronic Signatures in Global and National Commerce Act of United States Code, title
15, section 7001 et seq., but does not modify, limit, or supersede United States Code,
title 15, section 101(c) of that act or authorize electronic delivery of any of the notices
described in United States Code, title 15, section 103(b) of that act.
new text end

Sec. 18.

new text begin [524.2-1118] UNIFORMITY OF APPLICATION AND
CONSTRUCTION.
new text end

new text begin In applying and construing sections 524.2-1101 to 524.2-1119, consideration must
be given to the need to promote uniformity of the law with respect to its subject matter
among states that enact it.
new text end

Sec. 19.

new text begin [524.2-1119] SEVERABILITY CLAUSE.
new text end

new text begin If any provision of sections 524.2-1101 to 524.2-1119 or its application to any
person or circumstance is held invalid, the invalidity does not affect other provisions or
applications of sections 524.2-1101 to 524.2-1119 which can be given effect without the
invalid provision or application, and to this end the provisions of sections 524.2-1101 to
524.2-1119 are severable.
new text end

Sec. 20. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, sections 501B.86; and 525.532, new text end new text begin are repealed.
new text end

Sec. 21. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 20 are effective August 1, 2009.
new text end