SB571 (2020) Detail

Relative to the uniform disclaimer of property interests act.


SB 571  - AS INTRODUCED

 

 

2020 SESSION

20-3029

10/04

 

SENATE BILL 571

 

AN ACT relative to the uniform disclaimer of property interests act.

 

SPONSORS: Sen. Feltes, Dist 15

 

COMMITTEE: Judiciary

 

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ANALYSIS

 

This bill reenacts RSA 563-B, the Uniform Disclaimer of Property Interests Act.  The bill removes the 9-month time limit for disclaimers, expands the prior definition of “disclaimer” to include a broader range of property, provides further instructions for when a disclaimer is delivered and under what circumstances it becomes effective, clarifies the result of refusing property or powers through a disclaimer, creates rules for several types of disclaimers, provides rules for the disclaimer of powers held in a fiduciary capacity, specifically allowing a partial disclaimer of an interest in property, and clarifies that the disclaimed interest passes without direction by the disclaimant.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

20-3029

10/04

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT relative to the uniform disclaimer of property interests act.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Purposes.  The general court finds:

I.  Through the development of thoughtful, innovative laws, New Hampshire has become one of the best legal environments for trusts, trust companies, fiduciaries, and fiduciary services.  

II.  This legal environment attracts individuals and families to the state and this act further reinforces the state’s long tradition of protecting settlor intent and further facilitates the administrations of trusts and estates.

III.  This act replaces New Hampshire’s existing and obsolete Uniform Disclaimer of Property Interests Act by removing the 9-month time limit for disclaimers, expanding the prior definition of “disclaimer” to include a broader range of property, providing further instructions for when a disclaimer is delivered and under what circumstances it becomes effective, clarifying the result of refusing property or powers through a disclaimer, creating rules for several types of disclaimers that have not been explicitly addressed in the prior act, providing rules for the disclaimer of powers held in a fiduciary capacity, specifically allowing a partial disclaimer of an interest in property, and clarifying that the disclaimed interest passes without direction by the disclaimant.

2  Uniform Disclaimer of Property Interests Act.  RSA 563-B is repealed and reenacted to read as follows:

CHAPTER 563-B

UNIFORM DISCLAIMER OF PROPERTY INTERESTS ACT

Article 1

Short Title

563-B:1  Short Title.  This chapter may be cited as the “Uniform Disclaimer of Property Interests Act.”

Article 2

Application

563-B:2  Application.  This chapter applies to disclaimers of any interest in or power over property, whenever created.

Article 3

Definitions

563-B:3  Definitions. For purpose of this chapter, the following definitions shall apply:

(a)  “Disclaimant” means the person to whom a disclaimed interest or power would have passed had the disclaimer not been made.

(b)  “Disclaimed interest” means the interest that would have passed to the disclaimant had the disclaimer not been made.

(c)  “Disclaimer” means the refusal to accept an interest in or power over property.

(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.

(e)  “Jointly held property” means property held in the name of 2 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.

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

(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.

(h)  “Trust” means:

(1)  An express trust, charitable or noncharitable, with additions thereto, whenever and however created as defined in RSA 564-A:1; and

(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.

Article 4

Power to Disclaim; General Requirements; When Irrevocable

563-B:4  Power to Disclaim; General requirements; When Irrevocable.

(a)  Power to Disclaim.

(1)  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.

(2)  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.

(b)  General Requirements.

(1)  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 Article 12.  In this Article:

(A)  “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

(B)  “Signed” means, with present intent to authenticate or adopt a record, to;

(i)  Execute or adopt a tangible symbol; or

(ii)  Attach to or logically associate with the record an electronic sound, symbol, or process.

(2)  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.

(c)  When Irrevocable.

(1)  A disclaimer becomes irrevocable when it is delivered or filed pursuant to Article 10 or when it becomes effective as provided in Articles 5 through 9, whichever occurs later.

(2)  A disclaimer made under this chapter is not a transfer, assignment, or release.

Article 5

Disclaimer of Interest in Property

563-B:5  Disclaimer of Interest in Property.

(a)  In this section:

(1)  “Future interest” means an interest that takes effect in possession or enjoyment, if at all, later than the time of its creation.

(2)  “Time of distribution” means the time when a disclaimed interest would have taken effect in possession or enjoyment.

(b)  Except for a disclaimer governed by Article 6 or 7, the following rules apply to a disclaimer of an interest in property:

(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.

(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.

(3)  If the instrument does not contain a provision described in paragraph (2), the following rules apply:

(A)  If the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist.

(B)  If the disclaimant is an individual, except as otherwise provided in subparagraphs (C) and (D), the disclaimed interest passes as if the disclaimant had died immediately before the time of distribution.

(C)  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.

(D)  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.

(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.

Article 6

Disclaimer of Rights of Survivorship in Jointly Held Property

563-B:6  Disclaimer of Rights of Survivorship in Jointly Held Property.

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

(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

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

(b)  A disclaimer under subsection (a) takes effect as of the death of the holder of jointly held property to whose death the disclaimer relates.

(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.

Article 7

Disclaimer of Interest by Trustee

563-B:7  Disclaimer of Interest by Trustee.  If a trustee disclaims an interest in property that otherwise would have become trust property, the interest does not become trust property.

Article 8

Disclaimer of Power of Appointment or Other Power

Not Held in a Fiduciary Capacity

563-B:8  Disclaimer of Power of Appointment or Other Power Not Held in a Fiduciary Capacity.  If a holder disclaims a power of appointment or other power not held in a fiduciary capacity, the following rules apply:

(a)  If the holder has not exercised the power, the disclaimer takes effect as of the time the instrument creating the power becomes irrevocable.

(b)  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.

(c)  The instrument creating the power is construed as if the power expired when the disclaimer became effective.

Article 9

Disclaimer by Appointee, Object, or Taker in Default of

Exercise of Power of Appointment

563-B:9  Disclaimer by Appointee, Object, or Taker in Default of Exercise of Power of Appointment.

(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.

(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.

Article 10

Disclaimer of Power Held in Fiduciary Capacity

563-B:10  Disclaimer of Power Held in Fiduciary Capacity.

(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.

(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.

(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.

Article 11

Delivery or Filing

563-B:11  Delivery or Filing.

(a)  In this section, “beneficiary designation” means an instrument, other than an instrument creating a trust, naming the beneficiary of:

(1)  An annuity or insurance policy;

(2)  An account with a designation for payment on death;

(3)  A security registered in beneficiary form;

(4)  A pension, profit-sharing, retirement, or other employment-related benefit plan; or

(5)  Any other non-probate transfer at death.

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

(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:

(1)  A disclaimer must be delivered to the administrator of the decedent's estate; or

(2)  If no administrator is then serving, it must be filed with a court having jurisdiction to appoint the personal representative.

(d)  In the case of an interest in a testamentary trust:

(1)  A disclaimer must be delivered to the trustee then serving, or if no trustee is then serving, to the administrator of the decedent's estate; or

(2)  If no administrator is then serving, it must be filed with a court having jurisdiction to enforce the trust.

(e)  In the case of an interest in an inter vivos trust:

(1)  A disclaimer must be delivered to the trustee then serving;

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

(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.

(f)  In the case of an interest created by a beneficiary designation which is disclaimed before the designation becomes irrevocable, the disclaimer must be delivered to the person making the beneficiary designation.

(g)  In the case of an interest created by a beneficiary designation which is disclaimed after the designation becomes irrevocable:

(1)  The disclaimer of an interest in personal property must be delivered to the person obligated to distribute the interest; and

(2)  An attested copy of the disclaimer of an interest in real property must be recorded in the office of registry of deeds of the county where the real property that is the subject of the disclaimer is located.

(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.

(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:

(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

(2)  If no fiduciary is then serving, it must be filed with a court having authority to appoint the fiduciary.

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

(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

(2)  If no fiduciary is then serving, it must be filed with a court having authority to appoint the fiduciary.

(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 subsection (c), (d), or (e), as if the power disclaimed were an interest in property.

(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.

(m)  Notwithstanding any right to disclaim an interest in property as provided for in this chapter, a person who has been devised real estate by testamentary instrument, or inherited under the laws of intestacy, may waive his or her rights to the property pursuant to RSA 554:18-b.

Article 12

When Disclaimer Barred or Limited

563-B:12  When Disclaimer Barred or Limited.

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

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

(1)  The disclaimant accepts the interest sought to be disclaimed;

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

(3)  A judicial sale of the interest sought to be disclaimed occurs.

(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.

(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.

(e)  A disclaimer is barred or limited if so provided by law other than this chapter.

(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 this chapter had the disclaimer not been barred.

Article 13

Tax Qualified Disclaimer

563-B:13  Tax Qualified Disclaimer.  Notwithstanding any other provision of this chapter, if as a result of a disclaimer or transfer the disclaimed or transferred interest is treated pursuant to the provisions of Title 26 of the United States Code, as now or hereafter amended, or any successor statute thereto, and the regulations promulgated thereunder, as never having been transferred to the disclaimant, then the disclaimer or transfer is effective as a disclaimer under this chapter.

Article 14

Recording of Disclaimer

563-B:14  Recording of Disclaimer.  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.  Except as otherwise provided in Article 11(g)(2), 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.

Article 15

Application to Existing Relationships

563-B:15  Application to Existing Relationships.  Except as otherwise provided in Article 12, an interest in or power over property existing on the effective date of this chapter as to which the time for delivering or filing a disclaimer under law superseded by this chapter has not expired may be disclaimed after the effective date of this chapter.

Article 16

Supplemented by Other Law

563-B:16  Supplemented by Other Law.

(a)  Unless displaced by a provision of this chapter, the principles of law and equity supplement this chapter.

(b)  This chapter does 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 this chapter.

Article 17

Uniformity of Application and Construction

563-B:17  Uniformity of Application and Construction.  In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

3  Effective Date.  This act shall take effect 60 days after its passage.

Links

SB571 at GenCourtMobile
SB571 Discussion

Action Dates

Date Body Type
Jan. 16, 2020 Senate Hearing

Bill Text Revisions

SB571 Revision: 7773 Date: Jan. 2, 2020, 1:52 p.m.

Docket

Date Status
Jan. 8, 2020 To Be Introduced 01/08/2020 and Referred to Judiciary; SJ 1
Jan. 16, 2020 Hearing: 01/16/2020, Room 100, SH, 02:00 pm; SC 2
June 16, 2020 Vacated from Committee and Laid on Table, MA, VV; 06/16/2020 SJ 8
June 16, 2020 No Pending Motion; 06/16/2020 SJ 8