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The Committee which acted for the National Conference of Commissioners on Uniform State Laws in preparing the Uniform Disclaimer Acts was as follows:

TOM MARTIN DAVIS, 3000 One Shell Plaza, Houston, Texas 77002, Chairman

JOE C. BARRETT, P.O. Box 1245 Jonesboro, Arkansas 72401

CLARKE A. GRAVEL, 109 S. Winooski Ave., Burlington, Vermont 05401

JAMES R. MERRITT, University of Louisville, School of Law, Louisville,

Kentucky 40208

ROBERT K. RUSHING, University of North Dakota, School of Law, Grand Forks,

North Dakota 58201

EUGENE F. SCOLES, University of Oregon, School of Law, Eugene, Oregon 97403

MILLARD H. RUUD, University of Texas, School of Law, Austin, Texas 78705,

Chairman, Division B, Ex Officio

EUGENE A. BURDICK, P.O. Box 757, Williston, North Dakota 58801, President,

Ex Officio

AUSTIN FLEMING, The Northern Trust Company, 50 S. LaSalle St., Chicago,

Illinois 60675

Copies of all Uniform and Model Acts and other printed matter issued by the Conference may be obtained from

There are many instances in which, either because of failure to plan effectively or because of unforeseen change of circumstances, transfers at death or gifts impose unexpected expense or hardship upon the recipients. The hardship is particularly acute when the assets are limited.

More efficient utilization of limited resources by the family and other estate planning objectives, which for one reason or another cannot be attained before death, can sometimes be accomplished after death by recourse to the common law right of renunciation, or "disclaimer" - a right which is recognized in virtually every state as holding that a gift under a will cannot be forced upon the legatee if he chooses not to accept it. However, even though the right to disclaim is well established, the common law principles leave much to be desired in the way of completeness and certainty.

Historically, only gifts under a will, i.e., testate successions, could be renounced; for reasons related to feudalism an heir was not permitted to reject his intestate share.

The right to make partial disclaimers has, under common law, depended on whether the gift is severable. If the will gives Blackacre and Whiteacre to A, he can accept Blackacre and renounce Whiteacre, but if the will gives him only Blackacre, he cannot accept half and reject the other half. If the will gives B a $1,000 legacy, he may not, it seems, accept $500 and reject the balance.

While the basic right has been recognized, the procedure for accomplishing a disclaimer, the time limits for doing so, the disposition of the disclaimed property, and the effect of the disclaimer on the rights of others are often unsettled. Legislation is needed to strip away historical limitations and provide clear procedures.

In some states codifiers have been unwilling to include in a probate code statutes relating to deeds and contractual arrangements such as trusts and insurance. For this reason, companion uniform acts have been proposed, one dealing with transfers at death and the other with inter-vivos transfers. A third act, being an integration of the separate acts, was developed for use in states where the codification system is able to accommodate a single law dealing with both types of transfers and where a single statute is preferred.

The uniform acts are generally similar to legislation developed by the Section on Real Property, Probate and Trust Law of the American Bar Association in 1968 and published in the Summer of 1968 JOURNAL of that Section. The A.B.A. proposed legislation was in turn based upon § 58 of the Model Probate Code (1948) which extended the right of disclaimer to intestate as well as testate succession and permitted partial as well as full disclaimers, and on § 15b of the Illinois Probate Act (1961) which applied the right of disclaimer to future interests and to interests under the exercise of a power of appointment. This latter was dictated by the frequency with which modern-day wills or trust agreements leave property on a life estate (legal or equitable) to a widow, with remainder to the decedent's children. If a child should wish to disclaim his share, the common law has been unclear on when he must renounce and by what method. See Estate of Page, 113 NJ Super. 582, 274 A2d 614 (1970). Although many states have legislation reflecting those concerns, the statutes are varied in the coverage and procedures employed, resulting in much confusion and uncertainty.

The disposition of disclaimed property has been one of the more difficult problems presented in legislation on disclaimers. The approach taken in the Acts is to analogize disclaimer to lapse and dispose of the renounced interest as if the disclaimant had predeceased the testator in the case of a disclaimer of a present interest and as if the disclaimant had predeceased the termination of the preceding interest in the case of a disclaimer of a future interest.

As respects the time for making disclaimer, the common law imposed only a requirement of reasonableness. The Conference concluded that a specific period had merit and suggests 9 months. The longer the time allowed, the greater the risk of conduct inconsistent with rejection of the gift and indicative of implied acceptance; the shorter the time allowed, the greater the risk of not having full information for intelligent action. See Broadhag v. U.S., 319 F. Supp. 747 (S.D. W.Va. 1970).

The Acts codify the doctrine of "relation back", which has the effect of preventing a succession from becoming operative in favor of the disclaimant. They also declare that the relation back shall be "for all purposes" which would include creditors and taxing authorities, and it has been so held under similar statutes. Estate of Hansen, 109 Ill. App. 2d 283, 248 N.E. 2d 709 (1969).

The Acts specifically state that a limitation in the nature of a spendthrift provision or similar restriction will not affect the right to disclaim.

The Tax Reform Act of 1976 introduced into the Internal Revenue Code the concept of a "qualified disclaimer" by the addition of Section 2518, and, for transfers creating an interest in a disclaimant made after 1976, the requirements of that Section must be met in order for a disclaimed interest to be treated as never having been transferred to the disclaimant for Federal estate, gift and generation-skipping tax purposes. As to the manner of making disclaimer, the Acts are consistent with the new Federal requirements. As to the time for making disclaimer, the Acts incorporate the time requirements of Section 2518 only for disclaimers which are subject to that Section and which specifically state that they are intended to qualify thereunder; the preexisting (and generally more liberal) time requirements have been retained for disclaimers not subject to that Section or not intended to qualify thereunder.

SECTION 1. [Right to Disclaim Transfers.] A person, or the representative of a deceased, incapacitated or protected person, who is a grantee, donee, surviving joint tenant, person succeeding to a disclaimed interest, beneficiary under a nontestamentary instrument or contract, or appointee under a power of appointment exercised by a nontestamentary instrument, may disclaim in whole or in part the right of transfer to him of any property or interest wherein by delivering a written disclaimer under this Act. A disclaimer may be of a fractional share or of any limited interest or estate. A surviving joint tenant [tenant by the entireties] may disclaim as a separate interest any property or interest therein devolving to him by right of survivorship. A surviving joint tenant [tenant by the entireties] may disclaim as a separate interest any property or interest therein devolving to him by right of survivorship. A surviving joint tenant [tenant by the entireties] may disclaim the entire interest in any property or interest therein that is the subject of a joint tenancy [tenancy by the entireties] devolving to him, if the joint tenancy was created by the act of a deceased joint tenant [tenant by the entireties] and if the survivor did not join in creating the joint tenancy [tenancy by the entireties]. The disclaimer shall (1) describe the property or interest therein disclaimed, (2) declare the disclaimer and extent thereof, and (3) be signed by the disclaimant.

Section 1 and the following sections are intended to provide a procedure for disclaiming the succession to real and personal property passing under instruments such as inter vivos trusts, deeds, insurance policies, and the like. The approach and structure of the sections are the same as the corresponding sections in the Will, Intestacy and Appointment Act, (herein referred to as the "testamentary Act"). However, in lieu of succession to property, it refers to the right of property.

Beneficiary: The scope of the term "beneficiary" is discussed under Section 1 of the testamentary Act.

Insurance Contracts: While it is generally said that the relationship between an insurance company and its policyholder is purely contractual, it has nevertheless been held that a life insurance policy is property, being a chose in action for the payment of money. Hawley v. Aetna Life Ins. Co., 214 Ill. App. 424, aff'd 291 Ill. 28, 125 N.E. 707. The interest of a beneficiary designated by the insured who retains the right to change the designation is like that of a legatee under a will, only an expectancy until the insured's death. Estate of Cohen, 23 Ill. App.2d 411, 163 N.E. 2d 533. It therefore appears that a beneficiary under an insurance policy, in which the right to change the beneficiary has been reserved to the insured, should be able to disclaim in whole or in part his right to the proceeds on the death of the insured the same as a legatee under a will and with like effect, upon compliance with the statutory conditions. The same principles would apply to an annuity contract for the benefit of a third person.

Joint Tenancy: The common law is unsettled whether a surviving joint tenant has any right to renounce his interest in jointly-owned property and if so to what extent. See Casner, Estate Planning, 1972 Supp. p 402, n. 3a. Specifically, if A and B own real estate or securities as joint tenants with right of survivorship and A dies, the problem is whether B may disclaim what was given to him originally upon the creation of the estate, or, if not, whether he can nevertheless reject the incremental portion derived through the right of survivorship. There is also a question of whether a joint bank account stands differently from jointly-owned securities or real estate for the purpose of disclaimer.

The general rule is that a joint tenant becomes vested with an equal undivided interest in the property immediately upon the creation of the estate. Kane v. Johnson, 397 Ill.112, 73 N.E.2d 321 (a joint tenancy is a present estate in all the joint tenants). It is possible to argue that a disclaimer of the survivor's original undivided interest comes too late at the death of the first tenant because an acquiescence in the initial establishment of the tenancy is in effect an acceptance of the interest which cannot be shed except by transfer. Casner, op. cit., n. 34. But if the survivor was not apprised of the creation of the tenancy and did nothing before the death of the first tenant to show his acquiescence, he should be able to reject both the original and the accretive portions. Casner, op. cit., n. 34.

Even where the survivor has acquiesced in the establishment of the estate, it would seem that the accretive portion derived through survivorship should stand differently from the original interest and that the accretion should be subject to disclaimer for the reason that it is contingent, uncertain and defeasible until the death of the first tenant like a legacy under a will or a beneficial designation under an insurance policy. Barring conduct indicative of acceptance he should be able to reject the interest if he so elects, with like effect.

Joint bank accounts are largely, if not always, creatures of statute with basis in contract rather than in the laws of succession. Nevertheless, it has been held that a joint bank account may properly be made the subject of disclaimer, particularly if the survivor was not aware of the existence of the account. Hershey, Ex'r'x. v. Bowers, 708 Oh.St.2d 4, 218 N.E.2d 455.

The position taken by the Act is to confer the right of disclaimer upon a surviving joint tenant and leave to the particular circumstances whether he may disclaim all of the interest or only the accretive part and the effect of knowledge of the existence of the tenancy, acceptance of benefits, and the like.

SECTION 2. [Time of Disclaimer - Delivery.]

(a) An instrument disclaiming (1) a present interest shall be delivered no later than [9] months after the effective date of the nontestamentary instrument or contract; and (2) a future interest shall be delivered not later than [9] months after the event determining that the taker of the property or interest has become finally ascertained and his interest indefeasibly vested. If the person entitled to disclaim does not have actual knowledge of the existence of the interest, the instrument of disclaimer shall be delivered not later than [9] months after he has actual knowledge of the existence of the interest. The effective date of a revocable instrument or contract is the date on which the maker no longer has power to revoke it or to transfer to himself or another the entire legal and equitable ownership of the interest. However, as to a transfer creating an interest in the disclaimant made after December 31, 1976 and subject to tax under chapter 11, 12 or 13 of the Internal Revenue Code of 1954 as amended, a disclaimer intended as a qualified disclaimer thereunder must specifically so state and must be delivered not later than [9] months after the later of the date the transfer is made or the day on which the person disclaiming attains age 21.

(b) The disclaimer shall be delivered in person or mailed by registered or certified mail to the trustee or other person having legal title to, or possession of, the property or interest disclaimed or who is entitled thereto in the event of disclaimer. If real property or an interest therein is disclaimed, a copy of the instrument may be filed for record in the office of the [Recorder of Deeds] of the county in which the real estate is situated.⁽¹⁾

This section is similar to Section 2 of the testamentary Act except for the reference to the effective date of the instrument, rather than the death of the decedent or donee of the power, as the beginning time for the disclaimer period. In regard to future interest the reference is to the event which determines that the taker of the property or interest is finally ascertained and his interest is indefeasibly vested.

Nontestamentary instruments sometimes may not be recorded or become public documents, and the possibility is real that the persons entitled to disclaim may not receive actual knowledge of the existence of their interest within the required time. Therefore, the section treats lack of knowledge as an overriding circumstance in respect to the time period otherwise applicable.

As under Section 2 of the testamentary Act, a disclaimer subject to the new Federal tax disclaimer rules and intended to qualify thereunder must comply with those rules. However, a disclaimer which is not intended to, and does not, comply with those rules can still be given effect for property law purposes if it meets the requirements of Section 2. In order to be as permissive as the new Federal rules, the Act allows a person to make a disclaimer which would be effective for Federal tax purposes within 9 months of the date he reaches age 21.

SECTION 3. [Effect of Disclaimer.] Unless the testamentary instrument or contract provides for another disposition, the property or interest therein disclaimed devolves (1) as to a present interest as if the disclaimant had died before the effective date of the instrument or contract; and (2) as to a future interest, as if the disclaimant had died before the event determining that the taker of the property or interest had become finally ascertained and his interest is indefeasibly vested; and the disclaimer shall relate back for all purposes to the effective date of the instrument or contract or the date of the determinative event, as the case may be.

This section parallels the provisions of the corresponding section in the testamentary Act except for the reference to the "effective date of the instrument" instead of the death of the decedent or donee of power.

Comments made with respect to the corresponding section of the testamentary Act are applicable to this section.

SECTION 4. [Waiver and Bar.]

(a) The right to disclaim property or an interest therein is barred by (1) an assignment, conveyance, encumbrance, pledge, or transfer of the property or interest, or a contract therefor, (2) a written waiver of the right to disclaim, (3) an acceptance of the property or interest or benefit thereunder, or (4) a sale of the property or interest under judicial sale made before the disclaimer is effected.

(b) The right to disclaim exists notwithstanding any limitation on the interest of the disclaimant in the nature of a spendthrift provision or similar restriction.

(c) The instrument of disclaimer or the written waiver of the right to disclaim is binding upon the disclaimant or person waiving and all persons claiming through or under him.

This section parallels the provisions of the corresponding section of the testamentary Act and the comments made with respect to it apply equally to this section.

SECTION 5. [Exclusiveness of Remedy.] This Act does not abridge the right of person to waive, release, disclaim, or renounce property or an interest therein under any other statute.

This section is identical with the corresponding section of the testamentary Act, and the same comments apply.

SECTION 6. [Application.] An interest in property existing on the effective date of this Act as to which, if a present interest, the time for delivering a disclaimer under this Act has not expired, or if a future interest, the interest has not become indefeasibly vested or the taker finally ascertained, may be disclaimed within [9] months after the effective date of this Act.

This section parallels the provisions of the corresponding section of the testamentary Act and the comments made with respect to it apply equally to this section.

SECTION 7. [Uniformity of Application and Construction.] This Act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this Act among states enacting it.

Section 7 is a standard provision in all Uniform Acts.

SECTION 8. [Short Title.] This Act may be cited as the Uniform Disclaimer of Transfers under Non-Testamentary Instruments Act.

SECTION 9. [Repeal.] The following acts and parts of acts are repealed:

(1)

(2)

(3)

SECTION 10. [Time of Taking Effect.] This Act shall take effect . . . . . . . . . . .

1. If Torrens system is in effect, add provisions to comply with local law.