UNIFORM PROBATE
CODE
(Last
Amended or Revised in 2008)
Drafted
by the
NATIONAL
CONFERENCE OF COMMISSIONERS
ON UNIFORM STATE
LAWS
and
by it
APPROVED AND
RECOMMENDED FOR ENACTMENT
IN ALL THE
STATES
WITH
COMMENTS
COPYRIGHT
© 2004
By
NATIONAL
CONFERENCE OF COMMISSIONERS
ON
UNIFORM STATE LAWS
(Last updated: January 23, 2009)
National
Conference of Commissioners on
111
N. Wabash Ave., Suite 1010 • Chicago, IL 60602
(312)
450-6600, Fax (312) 450-6601, www.nccusl.org
UNIFORM PROBATE CODE
Table of Contents
____________________
ARTICLE I
GENERAL PROVISIONS, DEFINITIONS AND PROBATE JURISDICTION OF COURT
PART 1.
SHORT TITLE, CONSTRUCTION, GENERAL PROVISIONS
Section
1‑101. Short Title.
1‑102. Purposes; Rule of
Construction.
1‑103. Supplementary
General Principles of Law Applicable.
1‑104. Severability.
1‑105. Construction
Against Implied Repeal.
1‑106. Effect of Fraud
and Evasion.
1‑107. Evidence of Death
or Status.
1-108.
Acts by Holder of General Power.
1-109.
Cost of Living Adjustment of Certain Dollar Amounts.
PART 2
DEFINITIONS
Section
1-201.
General Definitions.
PART 3
SCOPE, JURISDICTION AND COURTS
Section
1‑301. Territorial
Application.
1‑302. Subject Matter
Jurisdiction.
1‑303. Venue; Multiple
Proceedings; Transfer.
1‑304. Practice in Court.
1‑305. Records and
Certified Copies.
1‑306. Jury Trial.
1‑307. Registrar; Powers.
1‑308. Appeals.
1‑309. Qualifications of
Judge.
1-310.
Oath or Affirmation on Filed Documents.
PART 4
NOTICE, PARTIES AND REPRESENTATION IN ESTATE
LITIGATION AND OTHER MATTERS
Section
1‑401. Notice; Method and
Time of Giving.
1‑402. Notice; Waiver.
1-403. Pleadings;
When Parties Bound by Others; Notice.
Article II
INTESTACY, WILLS, AND DONATIVE TRANSFERS
PART 1
INTESTATE SUCCESSION
Subpart 1. General Rules
Section
2‑101. Intestate Estate.
2-102.
Share of Spouse.
2-102A. [Share of Spouse.]
2‑103. Share of Heirs
Other Than Surviving Spouse.
2‑104. Requirement of
Survival by 120 Hours; Individual in Gestation.
2‑105. No Taker.
2‑106. Representation.
2‑107. Kindred of Half
Blood.
2‑108. [Reserved.]
2‑109. Advancements.
2‑110. Debts to Decedent.
2‑111. Alienage.
2‑112. Dower and Curtesy
Abolished.
2‑113. Individuals
Related to Decedent Through Two Lines.
2-114.
Parent Barred from Inheriting in Certain Circumstances.
Subpart 2. Parent-Child Relationship
2-115. Definitions.
2-116. Effect of
Parent-Child Relationship.
2-117. No Distinction Based on Marital Status.
2-118. Adoptee and Adoptee’s Adoptive Parent or
Parents.
2-119. Adoptee and Adoptee’s Genetic Parents.
2-120. Child Conceived by Assisted Reproduction Other
Than Child Born to Gestational Carrier.
2-121. Child Born to Gestational Carrier.
2-122. Equitable Adoption.
PART 2
ELECTIVE SHARE OF SURVIVING SPOUSE
Section
2‑201. Definitions.
2‑202. Elective Share.
2‑203. Composition of the
Augmented Estate; Marital-Property Portion.
2‑204. Decedent's Net
Probate Estate.
2‑205. Decedent's
Nonprobate Transfers to Others.
2‑206. Decedent's
Nonprobate Transfers to the Surviving Spouse.
2‑207. Surviving Spouse's
Property and Nonprobate Transfers to Others.
2‑208. Exclusions,
Valuation, and Overlapping Application.
2‑209. Sources from Which
Elective Share Payable.
2‑210. Personal Liability
of Recipients.
2‑211. Proceeding for
Elective Share; Time Limit.
2‑212. Right of Election
Personal to Surviving Spouse; Incapacitated Spouse.
2‑213. Waiver of Right to
Elect and of Other Rights.
2-214.
Protection of Payors and Other Third Parties.
PART 3
SPOUSE AND CHILDREN UNPROVIDED FOR IN WILLS
Section
2‑301. Entitlement of
Spouse; Premarital Will.
2-302.
Omitted Children.
PART 4
EXEMPT PROPERTY AND ALLOWANCES
Section
2‑401. Applicable Law.
2‑402.
2‑402A. [Constitutional
2‑403. Exempt Property.
2‑404. Family Allowance.
2-405.
Source, Determination, and Documentation.
PART 5
WILLS, WILL CONTRACTS, AND CUSTODY AND DEPOSIT OF WILLS
Section
2‑501. Who May Make Will.
2‑502. Execution;
Witnessed or Notarized Wills; Holographic Wills.
2‑503. Harmless Error.
2‑504. Self‑proved
Will.
2‑505. Who May Witness.
2‑506. Choice of Law as
to Execution.
2‑507. Revocation by
Writing or by Act.
2‑508. Revocation by
Change of Circumstances.
2‑509. Revival of Revoked
Will.
2‑510. Incorporation by
Reference.
2‑511. Testamentary
Additions to Trusts.
2‑512. Events of
Independent Significance.
2‑513. Separate Writing
Identifying Devise of Certain Types of Tangible Personal Property.
2‑514. Contracts
Concerning Succession.
2‑515. Deposit of Will
With Court in Testator's Lifetime.
2‑516. Duty of Custodian
of Will; Liability.
2-517.
Penalty Clause for Contest.
PART 6
RULES OF CONSTRUCTION APPLICABLE ONLY TO WILLS
Section
2‑601. Scope.
2‑602. Will
2‑603. Antilapse;
Deceased Devisee; Class Gifts.
2‑604. Failure of
Testamentary Provision.
2‑605. Increase in
Securities; Accessions.
2‑606. Nonademption of
Specific Devises; Unpaid Proceeds of
2‑607. Nonexoneration.
2‑608. Exercise of Power
of Appointment.
2-609.
Ademption by Satisfaction.
PART 7
RULES OF CONSTRUCTION APPLICABLE TO WILLS
AND OTHER GOVERNING INSTRUMENTS
Section
2‑701. Scope.
2‑702. Requirement of
Survival by 120 Hours.
2‑703. Choice of Law as
to Meaning and Effect of Governing Instrument.
2‑704. Power of
Appointment; Meaning of Specific Reference Requirement.
2‑705. Class Gifts
Construed to Accord with Intestate Succession; Exceptions.
2‑706. Life Insurance;
Retirement Plan; Account With POD Designation; Transfer‑on‑Death
Registration; Deceased Beneficiary.
2‑707. Survivorship With
Respect to Future Interests Under Terms of Trust; Substitute Takers.
2‑708. Class Gifts to
"Descendants," "Issue," or "Heirs of the Body";
Form of Distribution If None Specified.
2‑709. Representation;
Per Capita at Each Generation; Per Stirpes.
2‑710. Worthier‑Title
Doctrine Abolished.
2-711.
Future Interests in "Heirs" and Like.
PART 8
GENERAL PROVISIONS CONCERNING PROBATE AND NONPROBATE TRANSFERS
Section
2-801.
[Reserved.]
2‑802. Effect of Divorce,
Annulment, and Decree of Separation.
2‑803. Effect of Homicide
on Intestate Succession, Wills, Trusts, Joint Assets, Life Insurance, and
Beneficiary Designations.
2-804. Revocation of Probate
and Nonprobate Transfers by Divorce; No Revocation by Other Changes of
Circumstances.
2-805. Reformation to Correct
Mistakes.
2-806. Modification to Achieve
Transferor’s Tax Objectives.
PART 9
STATUTORY RULE AGAINST PERPETUITIES; HONORARY TRUSTS
Subpart 1. Statutory Rule Against Perpetuities
Section
2‑901. Statutory Rule
Against Perpetuities.
2‑902. When Nonvested
Property Interest or Power of Appointment Created.
2‑903. Reformation.
2‑904. Exclusions From
Statutory Rule Against Perpetuities.
2‑905. Prospective
Application.
2-906. [Supersession] [Repeal].
Subpart 2. [Honorary Trusts]
Section
2-907. [Honorary Trusts; Trusts
for Pets.]
PART 10
UNIFORM INTERNATIONAL WILLS ACT
INTERNATIONAL WILL; INFORMATION REGISTRATION
Section
2‑1001. Definitions.
2‑1002. International
Will; Validity.
2‑1003. International
Will; Requirements.
2‑1004. International
Will; Other Points of Form.
2‑1005. International
Will; Certificate.
2‑1006. International
Will; Effect of Certificate.
2‑1007. International
Will; Revocation.
2‑1008. Source and
Construction.
2‑1009. Persons Authorized to Act in Relation to International Will; Eligibility; Recognition by Authorizing Agency
2‑1010. International Will
Information Registration.
PART 11
UNIFORM DISCLAIMER OF PROPERTY INTERESTS ACT (1999)
Section
2-1101. Short
Title.
2-1102. Definitions.
2-1103. Scope.
2-1104. Part
Supplemented By Other Law.
2-1105. Power
To Disclaim; General Requirements; When Irrevocable.
2-1106. Disclaimer
Of Interest In Property.
2-1107. Disclaimer
Of Rights Of Survivorship In Jointly Held Property.
2-1108. Disclaimer
Of Interest By Trustee.
2-1109. Disclaimer
Of Power Of Appointment Or Other Power Not Held In Fiduciary Capacity.
2-1110. Disclaimer
By Appointee, Object, Or Taker In Default Of Exercise Of Power Of Appointment.
2-1111. Disclaimer
Of Power Held In Fiduciary Capacity.
2-1112. Delivery
Or Filing.
2-1113. When
Disclaimer Barred Or Limited.
2-1114. Tax
Qualified Disclaimer.
2-1115. Recording
Of Disclaimer.
2-1116. Application
To Existing Relationships.
Article III
PROBATE OF WILLS AND ADMINISTRATION
Part 1
GENERAL PROVISIONS
Section
3-101.
Devolution of Estate at Death; Restrictions.
3-101A. [Devolution of Estate at
Death; Restrictions.]
3‑102. Necessity of Order
of Probate For Will.
3‑103. Necessity of
Appointment For Administration.
3‑104. Claims Against
Decedent; Necessity of Administration.
3‑105. Proceedings
Affecting Devolution and Administration; Jurisdiction of Subject Matter.
3‑106. Proceedings Within
the Exclusive Jurisdiction of Court; Service; Jurisdiction Over Persons.
3‑107. Scope of
Proceedings; Proceedings Independent; Exception.
3‑108. Probate, Testacy
and Appointment Proceedings; Ultimate Time Limit.
3-109.
Statutes of Limitation on Decedent's Cause of Action.
PART 2
VENUE FOR PROBATE AND ADMINISTRATION; PRIORITY TO ADMINISTER;
DEMAND FOR NOTICE
Section
3‑201. Venue for First
and Subsequent Estate Proceedings; Location of Property.
3‑202. Appointment or
Testacy Proceedings; Conflicting Claim of Domicile in Another State.
3‑203. Priority Among
Persons Seeking Appointment as Personal Representative.
3-204.
Demand for Notice of Order or Filing Concerning Decedent's Estate.
PART 3
INFORMAL PROBATE AND APPOINTMENT PROCEEDINGS;
SUCCESSION WITHOUT ADMINISTRATION
Section
3‑301. Informal Probate
or Appointment Proceedings; Application; Contents.
3‑302. Informal Probate; Duty of Registrar; Effect
of Informal Probate.
3‑303. Informal Probate;
Proof and Findings Required.
3‑304. Informal Probate;
Unavailable in Certain Cases.
3‑305. Informal Probate; Registrar Not Satisfied.
3‑306. Informal Probate;
Notice Requirements.
3‑307. Informal Appointment Proceedings; Delay in
Order; Duty of Registrar; Effect of Appointment.
3‑308. Informal
Appointment Proceedings; Proof and Findings Required.
3‑309. Informal Appointment Proceedings; Registrar
Not Satisfied.
3‑310. Informal Appointment Proceedings; Notice Requirements.
3-311.
Informal Appointment Unavailable in Certain Cases.
SUCCESSION WITHOUT ADMINISTRATION
3‑312. Universal
Succession; In General.
3‑313. Universal
Succession; Application; Contents.
3‑314. Universal
Succession; Proof and Findings Required.
3‑315. Universal Succession; Duty of Registrar;
Effect of Statement of Universal Succession.
3‑316. Universal
Succession; Universal Successors' Powers.
3‑317. Universal
Succession; Universal Successors' Liability to Creditors, Other Heirs, Devisees
and Persons Entitled to Decedent's Property; Liability of Other Persons
Entitled to Property.
3‑318. Universal
Succession; Universal Successors' Submission to Jurisdiction; When Heirs or
Devisees May Not Seek Administration.
3‑319. Universal
Succession; Duty of Universal Successors; Information to Heirs and Devisees.
3‑320. Universal
Succession; Universal Successors' Liability For Restitution to Estate.
3‑321. Universal
Succession; Liability of Universal Successors for Claims, Expenses, Intestate
Shares and Devises.
3-322.
Universal Succession; Remedies of Creditors, Other Heirs, Devisees or
Persons Entitled to Decedent's Property.
PART 4
FORMAL TESTACY AND APPOINTMENT PROCEEDINGS
Section
3‑401. Formal Testacy
Proceedings; Nature; When Commenced.
3‑402. Formal Testacy or
Appointment Proceedings; Petition; Contents.
3‑403. Formal Testacy
Proceedings; Notice of Hearing on Petition.
3‑404. Formal Testacy
Proceedings; Written Objections to Probate.
3‑405. Formal Testacy
Proceedings; Uncontested Cases; Hearings and Proof.
3‑406. Formal Testacy
Proceedings; Contested Cases.
3‑407. Formal Testacy
Proceedings; Burdens in Contested Cases.
3‑408. Formal Testacy
Proceedings; Will Construction; Effect of Final Order in Another Jurisdiction.
3‑409. Formal Testacy
Proceedings; Order; Foreign Will.
3‑410. Formal Testacy
Proceedings; Probate of More Than One Instrument.
3‑411. Formal Testacy
Proceedings; Partial Intestacy.
3‑412. Formal Testacy
Proceedings; Effect of Order; Vacation.
3‑413. Formal Testacy
Proceedings; Vacation of Order For Other Cause.
3-414.
Formal Proceedings Concerning Appointment of Personal Representative.
PART 5
SUPERVISED ADMINISTRATION
Section
3‑501. Supervised
Administration; Nature of Proceeding.
3‑502. Supervised
Administration; Petition; Order.
3‑503. Supervised
Administration; Effect on Other Proceedings.
3‑504. Supervised
Administration; Powers of Personal Representative.
3-505.
Supervised Administration; Interim Orders; Distribution and Closing
Orders.
PART 6
PERSONAL REPRESENTATIVE; APPOINTMENT,
CONTROL AND TERMINATION OF AUTHORITY
Section
3‑601. Qualification.
3‑602. Acceptance of
Appointment; Consent to Jurisdiction.
3‑603. Bond Not Required
Without Court Order, Exceptions.
3‑604. Bond Amount;
Security; Procedure; Reduction.
3‑605. Demand For Bond by
Interested Person.
3‑606. Terms and
Conditions of Bonds.
3‑607. Order Restraining
Personal Representative.
3‑608. Termination of
Appointment; General.
3‑609. Termination of
Appointment; Death or Disability.
3‑610. Termination of
Appointment; Voluntary.
3‑611. Termination of
Appointment by Removal; Cause; Procedure.
3‑612. Termination of
Appointment; Change of Testacy Status.
3‑613. Successor Personal
Representative.
3‑614. Special
Administrator; Appointment.
3‑615. Special
Administrator; Who May Be Appointed.
3‑616. Special
Administrator; Appointed Informally; Powers and Duties.
3‑617. Special
Administrator; Formal Proceedings; Power and Duties.
3-618.
Termination of Appointment; Special Administrator.
PART 7
DUTIES AND POWERS OF PERSONAL REPRESENTATIVES
Section
3‑701. Time of Accrual of
Duties and Powers.
3‑702. Priority Among
Different Letters.
3‑703. General Duties;
Relation and Liability to Persons Interested in Estate; Standing to Sue.
3‑704. Personal
Representative to Proceed Without Court Order; Exception.
3‑705. Duty of Personal
Representative; Information to Heirs and Devisees.
3‑706. Duty of Personal
Representative; Inventory and Appraisement.
3‑707. Employment of
Appraisers.
3‑708. Duty of Personal
Representative; Supplementary Inventory.
3‑709. Duty of Personal
Representative; Possession of Estate.
3‑710. Power to Avoid
Transfers.
3‑711. Powers of Personal
Representatives; In General.
3‑712. Improper Exercise
of Power; Breach of Fiduciary Duty.
3‑713.
3‑714. Persons Dealing
with Personal Representative; Protection.
3‑715. Transactions
Authorized for Personal Representatives; Exceptions.
3‑716. Powers and Duties
of Successor Personal Representative.
3‑717. Co‑representatives;
When Joint Action Required.
3‑718. Powers of
Surviving Personal Representative.
3‑719. Compensation of
Personal Representative.
3‑720. Expenses in Estate
Litigation.
3-721.
Proceedings for Review of Employment of Agents and Compensation of
Personal Representatives and Employees of Estate.
PART 8
CREDITORS' CLAIMS
Section
3‑801. Notice to
Creditors.
3‑802. Statutes of
Limitations.
3‑803. Limitations on
Presentation of Claims.
3‑804. Manner of
Presentation of Claims.
3‑805. Classification of
Claims.
3‑806. Allowance of
Claims.
3‑807. Payment of Claims.
3‑808. Individual
Liability of Personal Representative.
3‑809. Secured Claims.
3‑810. Claims Not Due and
Contingent or Unliquidated Claims.
3‑811. Counterclaims.
3‑812. Execution and
Levies Prohibited.
3‑813. Compromise of
Claims.
3‑814. Encumbered Assets.
3‑815. Administration in
More Than
3-816.
Final Distribution to Domiciliary Representative.
PART 9
SPECIAL PROVISIONS RELATING TO DISTRIBUTION
Section
3‑901. Successors' Rights
if No Administration.
3-902.
Distribution; Order in Which Assets Appropriated; Abatement.
3-902A. [Distribution; Order in
Which Assets Appropriated; Abatement.]
3‑903. Right of Retainer.
3‑904. Interest on
General Pecuniary Devise.
3‑905. Penalty Clause for
Contest.
3‑906. Distribution in
Kind; Valuation; Method.
3‑907. Distribution in
Kind; Evidence.
3‑908. Distribution;
Right or Title of Distributee.
3‑909. Improper
Distribution; Liability of Distributee.
3‑910. Purchasers from
Distributees Protected.
3‑911. Partition for
Purpose of Distribution.
3‑912. Private Agreements
Among Successors to Decedent Binding on Personal Representative.
3‑913. Distributions to
Trustee.
3‑914. Disposition of Unclaimed Assets.
3‑915. Distribution to
Person Under Disability.
3-916.
[Reserved]
PART 9A
APPORTIONMENT
OF ESTATE TAXES
Section
3-9A-101. Short Title
3-9A-102. Definitions
3-9A-103. Apportionment
By Will Or Other Dispositive Instrument
3-9A-104. Statutory
Apportionment Of Estate Taxes
3-9A-105. Credits
And Deferrals
3-9A-106. Insulated
Property: Advancement Of Tax
3-9A-107. Apportionment
And Recapture Of Special Elective Benefits
3-9A-108. Securing
Payment Of Estate Tax From Property In Possession Of Fiduciary
3-9A-109. Collection
Of Estate Tax By Fiduciary
3-9A-110. Right
Of Reimbursement
3-9A-111. Action
To Determine Or Enforce Act
3-9A-112. [Reserved]
3-9A-113. [Reserved]
3-9A-114. Delayed
Application
3-9A-115. Effective Date
PART 10
CLOSING ESTATES
Section
3‑1001. Formal Proceedings Terminating
Administration; Testate or Intestate; Order of General Protection.
3‑1002. Formal Proceedings
Terminating Testate Administration; Order Construing Will Without Adjudicating
Testacy.
3‑1003. Closing Estates;
By Sworn Statement of Personal Representative.
3‑1004. Liability of
Distributees to Claimants.
3‑1005. Limitations on
Proceedings Against Personal Representative.
3‑1006. Limitations on
Actions and Proceedings Against Distributees.
3‑1007. Certificate
Discharging Liens Securing Fiduciary Performance.
3-1008.
Subsequent Administration.
PART 11
COMPROMISE OF CONTROVERSIES
Section
3‑1101. Effect of Approval
of Agreements Involving Trusts, Inalienable Interests, or Interests of Third
Persons.
3-1102.
Procedure for Securing Court Approval of Compromise.
PART 12
COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT AND
SUMMARY ADMINISTRATION PROCEDURE FOR SMALL ESTATES
Section
3‑1201. Collection of
Personal Property by Affidavit.
3‑1202. Effect of
Affidavit.
3‑1203. Small Estates;
Summary Administration Procedure.
3-1204.
Small Estates; Closing by Sworn Statement of Personal Representative.
ARTICLE IV
FOREIGN PERSONAL REPRESENTATIVES; ANCILLARY ADMINISTRATION
PART 1
DEFINITIONS
Section
4-101.
Definitions.
PART 2
POWERS OF FOREIGN PERSONAL REPRESENTATIVES
Section
4‑201. Payment of Debt
and Delivery of Property to Domiciliary Foreign Personal Representative Without
Local Administration.
4‑202. Payment or
Delivery Discharges.
4‑203. Resident Creditor
Notice.
4‑204. Proof of Authority‑Bond.
4‑205. Powers.
4‑206. Power of Representatives
in Transition.
4-207.
Ancillary and Other Local Administrations; Provisions Governing.
PART 3
JURISDICTION OVER FOREIGN REPRESENTATIVES
Section
4‑301. Jurisdiction by
Act of Foreign Personal Representative.
4‑302. Jurisdiction by
Act of Decedent.
4-303.
Service on Foreign Personal Representative.
PART 4
JUDGMENTS AND PERSONAL REPRESENTATIVES
Section
4-401.
Effect of Adjudication For or Against Personal Representative.
ARTICLE V
PROTECTION OF PERSONS UNDER DISABILITY AND THEIR PROPERTY
PART 1
GENERAL PROVISIONS
Section
5-101. Short Title.
5-102. Definitions.
5-103. [Reserved].
5-104. Facility of Transfer.
5-105. Delegation of Power by Parent or Guardian.
5-106. Subject-Matter Jurisdiction.
5-107. Transfer of Jurisdiction.
5-108.
Venue.
5-109.
[Reserved].
5-110.
Letters of Office.
5-111. Effect of Acceptance of Appointment.
5-112. Termination of or Change in Guardian’s or
Conservator’s Appointment.
5-113. Notice.
5-114. Waiver of Notice.
5-115. Guardian Ad Litem.
5-116. Request For Notice; Interested Persons.
5-117. Multiple Appointments or Nominations.
PART 2
GUARDIANSHIP OF MINOR
Section
5-201. Appointment and Status of Guardian.
5-202. Parental Appointment of Guardian.
5-203. Objection by Minor or Others to Parental
Appointment.
5-204. Judicial Appointment of Guardian: Conditions
for Appointment.
5-205.
Judicial Appointment of Guardian: Procedure.
5-206. Judicial Appointment of Guardian: Priority
of Minor’s Nominee; Limited Guardianship.
5-207. Duties of Guardian.
5-208. Powers of Guardian.
5-209. Rights and Immunities of Guardian.
5-210. Termination of Guardianship; Other Proceedings After Appointment.
PART 3
GUARDIANSHIP OF
INCAPACITATED PERSON
Section
5-301. Appointment and Status of Guardian.
5-302. Appointment of Guardian By Will or Other
Writing.
5-303. Appointment of Guardian By Will or Other
Writing: Effectiveness; Acceptance; Confirmation.
5-304. Judicial Appointment of Guardian: Petition.
5-305. Judicial Appointment of Guardian:
Preliminaries to Hearing.
5-306. Judicial Appointment of Guardian: Professional
Evaluation.
5-307. Confidentiality of Records.
5-308. Judicial Appointment of Guardian: Presence
and Rights at Hearing.
5-309. Notice.
5-310. Who May Be Guardian: Priorities.
5-311. Findings; Order of Appointment.
5-312. Emergency Guardian.
5-313. Temporary Substitute Guardian.
5-314. Duties of Guardian.
5-315. Powers of Guardian.
5-316. Rights and Immunities of Guardian;
Limitations.
5-317. Reports; Monitoring of Guardianship.
5-318. Termination or Modification of Guardianship.
PART 4
PROTECTION OF PROPERTY OF
PROTECTED PERSON
Section
5-401.
Protective Proceeding.
5-402.
Jurisdiction Over Business Affairs of Protected Person.
5-403.
Original Petition for Appointment or Protective Order.
5-404.
Notice.
5-405.
Original Petition: Minors; Preliminaries to Hearing.
5-406.
Original Petition: Preliminaries to Hearing.
5-407. Confidentiality of Records.
5-408. Original Petition: Procedure at Hearing.
5-409. Original Petition: Orders.
5-410. Powers of Court.
5-411. Required Court Approval.
5-412.
Protective Arrangements and Single Transactions.
5-413.
Who May be Conservator: Priorities.
5-414.
Petition for Order Subsequent to Appointment.
5-415.
Bond.
5-416.
Terms and Requirements of Bond.
5-417. Compensation and Expenses.
5-418. General Duties of Conservator; Plan.
5-419. Inventory; Records.
5-420. Reports; Appointment of Visitor; Monitoring.
5-421. Title by Appointment.
5-422. Protected Person’s Interest Inalienable.
5-423.
5-424. Protection of Person Dealing With
Conservator.
5-425.
Powers of Conservator In Administration.
5-426.
Delegation.
5-427.
Principles of Distribution by Conservator.
5-428.
Death of Protected Person.
5-429. Presentation and Allowance of Claims.
5-430. Personal Liability of Conservator.
5-431. Termination of Proceedings.
5-432. Payment of Debt and Delivery of Property to
Foreign Conservator Without Local Proceedings.
5-433.
Foreign Conservator: Proof of Authority; Bond; Powers.
PART 5
DURABLE POWER OF ATTORNEY
Section
5-501. Definition.
5-502. Durable
Power of Attorney Not Affected By Lapse of Time, Disability Or Incapacity.
5-503. Relation
of Attorney in Fact to Court-Appointed Fiduciary.
5-504. Power
of Attorney Not Revoked Until Notice.
5-505. Proof
of Continuance of Durable and Other Powers of Attorney by Affidavit.
ARTICLE VI
NONPROBATE TRANSFERS ON DEATH (1989)
PART 1
PROVISIONS RELATING TO EFFECT OF DEATH
Section
6‑101. Nonprobate
Transfers on Death.
6-102. Liability of Nonprobate
Transferees For Creditor Claims and Statutory Allowances.
PART 2
MULTIPLE‑PERSON ACCOUNTS
Subpart 1. Definitions And
General Provisions
Section
6‑201. Definitions.
6‑202. Limitation on
Scope of Part.
6‑203. Types of Account;
Existing Accounts.
6‑204. Forms.
6‑205. Designation of
Agent.
6‑206. Applicability of
Part.
Subpart 2. Ownership As Between
Parties And Others
Section
6‑211. Ownership During
Lifetime.
6‑212. Rights at Death.
6‑213. Alteration of
Rights.
6‑214. Accounts and
Transfers Nontestamentary.
6‑215. [Reserved].
6‑216. Community Property
and Tenancy by the Entireties.
Subpart 3. Protection Of
Financial Institutions
Section
6‑221. Authority of
Financial Institution.
6‑222. Payment on
Multiple‑Party Account.
6‑223. Payment on POD
Designation.
6‑224. Payment to
Designated Agent.
6‑225. Payment to Minor.
6‑226. Discharge.
6‑227. Set‑off.
PART 3
UNIFORM TOD SECURITY REGISTRATION ACT
Section
6‑301. Definitions.
6‑302. Registration in
Beneficiary Form; Sole or Joint Tenancy Ownership.
6‑303. Registration in
Beneficiary Form; Applicable Law.
6‑304. Origination of
Registration in Beneficiary Form.
6‑305. Form of Registration
in Beneficiary Form.
6‑306. Effect of
Registration in Beneficiary Form.
6‑307. Ownership on Death
of Owner.
6‑308. Protection of
Registering Entity.
6‑309. Nontestamentary
Transfer on Death.
6‑310. Terms,Conditions,and
Forms for Registration.
6‑311. Application of
Part.
ARTICLE VII
TRUST ADMINISTRATION
PART 1
TRUST REGISTRATION
Section
7‑101. Duty to Register
Trusts.
7‑102. Registration
Procedures.
7‑103. Effect of
Registration.
7‑104. Effect of Failure
to Register.
7-105.
Registration, Qualification of Foreign Trustee.
PART 2
JURISDICTION OF
COURT CONCERNING TRUSTS
Section
7-201. Court; Exclusive Jurisdiction of Trusts.
7-202. Trust Proceedings; Venue.
7-203. Trust Proceedings; Dismissal of Matters Relating to Foreign
Trusts.
7-204. Court;
Concurrent Jurisdiction of Litigation Involving Trusts and Third
Parties.
7-205. Proceedings for Review of Employment of
Agents and Review of Compensation of Trustee and Employees of Trust.
7-206. Trust Proceedings; Initiation by Notice; Necessary Parties.
PART 3
DUTIES AND
LIABILITIES OF TRUSTEES
Section
7-301. General Duties Not Limited.
7-302. Trustee's Standard of Care and Performance.
7-303. Duty to Inform and Account to Beneficiaries.
7-304. Duty to Provide Bond.
7-305. Trustee's Duties; Appropriate Place of Administration; Deviation.
7-306. Personal Liability of Trustee to Third
Parties.
7-307. Limitations on
Proceedings Against Trustees After Final Account.
PART 4
POWERS OF
TRUSTEES
[GENERAL COMMENT ONLY]
ARTICLE VIII
EFFECTIVE DATE AND REPEALER
Section
8‑101. Time of Taking
Effect; Provisions for Transition.
8‑102. Specific Repealer
and Amendments.
____________________
UNIFORM
PROBATE CODE
__________
Official Text
and Comments Approved by the National Conference of Commissioners on
AN ACT
Relating to
affairs of decedents, missing persons, protected persons, minors, incapacitated
persons and certain others and constituting the Uniform Probate Code;
consolidating and revising aspects of the law relating to wills and intestacy
and the administration and distribution of estates of decedents, missing
persons, protected persons, minors, incapacitated persons and certain others;
ordering the powers and procedures of the Court concerned with the affairs of
decedents and certain others; providing for the validity and effect of certain
non‑testamentary transfers, contracts and deposits which relate to death
and appear to have testamentary effect; providing certain procedures to facilitate
enforcement of testamentary and other trusts; making uniform the law with
respect to decedents and certain others; and repealing inconsistent
legislation.
COMMENT
The
long title of the Code should be adapted to the constitutional, statutory requirements
and practices of the enacting jurisdiction. The concept of the Code is that the
"affairs of decedents, missing persons, disabled persons, minors, and
certain others" is a single subject of the law notwithstanding its many
facets.
____________________
ARTICLE I
GENERAL PROVISIONS, DEFINITIONS AND PROBATE JURISDICTION OF COURT
PART 1
SHORT TITLE, CONSTRUCTION, GENERAL PROVISIONS
Section
1‑101. Short
Title.
1‑102. Purposes;
Rule of Construction.
1‑103. Supplementary
General Principles of Law Applicable.
1‑104. Severability.
1‑105. Construction
Against Implied Repeal.
1‑106. Effect
of Fraud and Evasion.
1‑107. Evidence
as to Death or Status.
1-108.
Acts by Holder of General Power.
PART 2
DEFINITIONS
Section
1-201.
General Definitions.
PART 3
SCOPE, JURISDICTION AND COURTS
Section
1‑301. Territorial
Application.
1‑302. Subject
Matter Jurisdiction.
1‑303. Venue;
Multiple Proceedings; Transfer.
1‑304. Practice
in Court.
1‑305. Records
and Certified Copies.
1‑306. Jury
Trial.
1‑307. Registrar;
Powers.
1‑308. Appeals.
1‑309. Qualifications
of Judge.
1-310.
Oath or Affirmation on Filed Documents.
PART 4
NOTICE, PARTIES AND REPRESENTATION IN
ESTATE LITIGATION AND OTHER MATTERS
Section
1‑401. Notice;
Method and Time of Giving.
1‑402. Notice;
Waiver.
1‑403. Pleadings;
When Parties Bound by Others; Notice.
______________
PART 1
SHORT TITLE, CONSTRUCTION, GENERAL PROVISIONS
Section 1‑101.
Short Title.
This Act shall be known and may be cited as
the Uniform Probate Code.
Section 1‑102.
Purposes; Rule of Construction.
(a)
This Code shall be liberally construed and applied to promote its
underlying purposes and policies.
(b)
The underlying purposes and policies of this Code are:
(1)
to simplify and clarify the law concerning the affairs of decedents,
missing persons, protected persons, minors and incapacitated persons;
(2)
to discover and make effective the intent of a decedent in distribution
of his property;
(3)
to promote a speedy and efficient system for liquidating the estate of
the decedent and making distribution to his successors;
(4)
to facilitate use and enforcement of certain trusts;
(5)
to make uniform the law among the various jurisdictions.
Section 1‑103.
Supplementary General Principles of Law Applicable.
Unless displaced by the particular provisions
of this Code, the principles of law and equity supplement its provisions.
Section 1‑104.
Severability.
If any provision of this Code or the
application thereof to any person or circumstances is held invalid, the
invalidity shall not affect other provisions or applications of the Code which
can be given effect without the invalid provision or application, and to this
end the provisions of this Code are declared to be severable.
Section 1‑105.
Construction Against Implied Repeal.
This Code is a general act intended as a
unified coverage of its subject matter and no part of it shall be deemed
impliedly repealed by subsequent legislation if it can reasonably be avoided.
Section 1‑106.
Effect of Fraud and Evasion.
Whenever fraud has been perpetrated in
connection with any proceeding or in any statement filed under this Code or if
fraud is used to avoid or circumvent the provisions or purposes of this Code,
any person injured thereby may obtain appropriate relief against the
perpetrator of the fraud or restitution from any person (other than a bona fide
purchaser) benefitting from the fraud, whether innocent or not. Any proceeding must be commenced within 2
years after the discovery of the fraud, but no proceeding may be brought
against one not a perpetrator of the fraud later than 5 years after the time of
commission of the fraud. This section
has no bearing on remedies relating to fraud practiced on a decedent during his
lifetime which affects the succession of his estate.
COMMENT
This
is an overriding provision that provides an exception to the procedures and
limitations provided in the Code. The remedy of a party wronged by fraud is
intended to be supplementary to other protections provided in the Code and can
be maintained outside the process of settlement of the estate. Thus, if a will which is known to be a
forgery is probated informally, and the forgery is not discovered until after
the period for contest has run, the defrauded heirs still could bring a fraud
action under this section. Or if a will is fraudulently concealed after the
testator's death and its existence not discovered until after the basic three
year period (section 3‑108) has elapsed, there still may be an action
under this section. Similarly, a closing statement normally provides binding
protection for the personal representative after six months from filing
(section 3‑1005). However, if there is fraudulent misrepresentation or
concealment in the preparation of the claim, a later suit may be brought under
this section against the personal representative for damages; or restitution
may be obtained from those distributees who benefit by the fraud. In any case,
innocent purchasers for value are protected.
Any
action under this section is subject to usual rules of res judicata; thus, if a
forged will has been informally probated, an heir discovers the forgery, and
then there is a formal proceeding under section 3‑1001 of which the heir
is given notice, followed by an order of complete settlement of the estate, the
heir could not bring a subsequent action under section 1‑106 but would be
bound by the litigation in which the issue could have been raised. The usual
rules for securing relief for fraud on a Court would govern, however.
The
final limitation in this section is designed to protect innocent distributees
after a reasonable period of time. There is no limit (other than the 2 years
from discovery of the fraud) against the wrongdoer. But there ought to be some
limit after which innocent persons who have built up expectations in good faith
cannot be deprived of the property by a restitution action.
The time of "discovery" of a fraud
is a fact question to be determined in the individual case. In some situations
persons may not actually know that a fraud has been perpetrated but have such
strong suspicion and evidence that a Court may conclude there has been a
discovery of the fraud at that stage. On the other hand, there is no duty to
exercise reasonable care to discover fraud; the burden should not be on the
heirs and devisees to check on the honesty of the other interested persons or
the fiduciary.
Section 1‑107.
Evidence of Death or Status.
In addition to the rules of evidence in
courts of general jurisdiction, the following rules relating to a determination
of death and status apply:
(1)
Death occurs when an individual [is determined to be dead under the
Uniform Determination of Death Act] [has sustained either (i) irreversible
cessation of circulatory and respiratory functions or (ii) irreversible
cessation of all functions of the entire brain, including the brain stem. A
determination of death must be made in accordance with accepted medical
standards].
(2)
A certified or authenticated copy of a death certificate purporting to
be issued by an official or agency of the place where the death purportedly
occurred is prima facie evidence of the fact, place, date, and time of death
and the identity of the decedent.
(3)
A certified or authenticated copy of any record or report of a
governmental agency, domestic or foreign, that an individual is missing,
detained, dead, or alive is prima facie evidence of the status and of the
dates, circumstances, and places disclosed by the record or report.
(4)
In the absence of prima facie evidence of death under paragraph (2) or
(3), the fact of death may be established by clear and convincing evidence,
including circumstantial evidence.
(5)
An individual whose death is not established under the preceding
paragraphs who is absent for a continuous
period of 5 years, during which he [or she] has not been heard from, and whose absence is not satisfactorily
explained after diligent search or inquiry, is presumed to be dead. His [or her] death is presumed to have
occurred at the end of the period unless there is sufficient evidence for
determining that death occurred earlier.
(6)
In the absence of evidence disputing the time of death stated on a
document described in paragraph (2) or (3), a document described in paragraph
(2) or (3) that states a time of death 120 hours or more after the time of
death of another individual, however the time of death of the other individual
is determined, establishes by clear and convincing evidence that the individual
survived the other individual by 120 hours.
COMMENT
Paragraph
(1) defines death by reference to the Uniform Determination of Death Act
(UDDA). States that have adopted the
UDDA should use the first set of bracketed language. States that have not adopted the UDDA should
use the second set of bracketed language.
Note
that paragraph (6) is made desirable by the fact that Sections 2‑104 and
2‑702 require that survival by 120 hours must be established by clear and
convincing evidence.
Paragraph
(4) is inconsistent with Section 1 of Uniform Absence as Evidence of Death and
Absentees' Property Act (1938).
Proceedings to secure protection of property
interests of an absent person may be commenced as provided in 5‑401.
Section 1‑108. Acts by Holder of General Power.
For the purpose of granting consent or
approval with regard to the acts or accounts of a personal representative or
trustee, including relief from liability or penalty for failure to post bond,
to register a trust, or to perform other duties, and for purposes of consenting
to modification or termination of a trust or to deviation from its terms, the
sole holder or all co‑holders of a presently exercisable general power of
appointment, including one in the form of a power of amendment or revocation,
are deemed to act for beneficiaries to the extent their interests (as objects,
takers in default, or otherwise) are subject to the power.
COMMENT
The
status of a holder of a general power in estate litigation is dealt with by
section 1‑403.
This
section permits the settlor of a revocable trust to excuse the trustee from
registering the trust so long as the power of revocation continues.
"General power," as used in this
section, is intended to refer to the common law concept, rather than to tax or
other statutory meanings. A general power, as used herein, is one which enables
the power holder to draw absolute ownership to himself.
Section 1-109.
Cost of Living Adjustment of Certain Dollar
Amounts.
(a) In this section:
(1)
“CPI” means the Consumer Price Index (Annual Average) for All Urban Consumers (CPI-U):
U.S. City Average — All items, reported by the Bureau of Labor Statistics,
United States Department of Labor or its successor or, if the index is
discontinued, an equivalent index reported by a federal authority. If no such
index is reported, the term means the substitute index chosen by [insert
appropriate state agency]; and
(2)
“Reference base index” means the CPI for calendar year [insert year immediately
preceding the year in which this section takes effect].
(b) The dollar amounts stated
in Sections 2-102, [2-102A,] 2-202(b), 2-402, 2-403, and 2-405 apply to the
estate of a decedent who died in or after [insert year in which this section
takes effect], but for the estate of a decedent who died after [insert year
after the year in which this section takes effect], these dollar amounts must
be increased or decreased if the CPI for the calendar year immediately
preceding the year of death exceeds or is less than the reference base index.
The amount of any increase or decrease is computed by multiplying each dollar
amount by the percentage by which the CPI for the calendar year immediately
preceding the year of death exceeds or is less than the reference base index.
If any increase or decrease produced by the computation is not a multiple of
$100, the increase or decrease is rounded down, if an increase, or up, if a
decrease, to the next multiple of $100, but for the purpose of Section 2-405,
the periodic installment amount is the lump-sum amount divided by 12. If the
CPI for [insert year immediately before the effective date of this section] is
changed by the Bureau of Labor Statistics, the reference base index must be
revised using the rebasing factor reported by the Bureau of Labor Statistics,
or other comparable data if a rebasing factor is not reported.
[(c) Before February 1,
[insert year after the year in which this section takes effect], and before
February 1 of each succeeding year, the [insert appropriate state agency] shall
publish a cumulative list, beginning with the dollar amounts effective for the
estate of a decedent who died in [insert year after the year in which this
section takes effect], of each dollar amount as increased or decreased under
this section.]
Legislative Note: To establish and maintain uniformity among the states,
an enacting state that enacted the sections listed in subsection (b)
before 2008 should bring those dollar amounts up to date. To adjust for
inflation, these amounts were revised in 2008. Between 1990 (when these amounts
were previously adjusted for inflation) and 2008, the consumer price index
(CPI) increased about 50 percent. As a result, the following increases in the
UPC’s specific dollar amounts were adopted in 2008 and should be adopted by a
state that enacted these sections before 2008:
Section
2-102(2) should be amended to change $200,000 to $300,000; Section 2-102(3)
should be amended to change $150,000 to $225,000; and Section 2-102(4) should
be amended to change $100,000 to $150,000. Section 2-102A, if enacted instead
of Section 2-102, should be amended accordingly.
Section
2-201(b) should be amended to change $50,000 to $75,000.
Section
2-402 should be amended to change $15,000 to $22,500; Section 2-403 should be
amended to change $10,000 to $15,000; and Section 2-405 should be amended to
change $18,000 to $27,000 and to change $1,500 to $2,250.
A state enacting these
sections after 2008 should adjust the dollar figures for changes in the cost of
living that have occurred between 2008 and the effective date of the new
enactment.
Comment
Automatic
Adjustments for Inflation. Added in 2008, Section 1-109 operates in conjunction with the inflation
adjustments of the dollar amounts listed in subsection (b) also adopted in
2008. Section 1-109 was added to make it unnecessary in the future for the ULC
or individual enacting states to continue to amend the UPC periodically to
adjust the dollar amounts for inflation. This section provides for an automatic
adjustment of each of the above dollar amounts annually.
In
each January, the Bureau of Labor Statistics of the U.S. Department of Labor
reports the CPI (annual average) for the preceding calendar year. The
information can be obtained by telephone (202/691-5200) or on the Bureau’s
website <http://www.bls.gov/cpi>.
Subsection (c) tasks an appropriate state agency, such as the Department of Revenue, to issue an official cumulative list of the adjusted amounts beginning in January of the year after the effective date of the act. This subsection is bracketed because some enacting states might not have a state agency that could appropriately be assigned the task of issuing updated amounts. Such an enacting state might consider tasking the state supreme court to issue a court rule each year making the appropriate adjustment.
PART 2
DEFINITIONS
Section 1‑201.
General Definitions.
Subject to additional
definitions contained in the subsequent articles that are applicable to
specific articles, parts, or sections, and unless the context otherwise
requires, in this Code:
(1) "Agent"
includes an attorney‑in‑fact under a durable or nondurable power of
attorney, an individual authorized to make decisions concerning another's
health care, and an individual authorized to make decisions for another under a
natural death act.
(2) "Application"
means a written request to the Registrar
for an order of informal probate or appointment under Part 3 of Article
III.
(3) "Beneficiary,"
as it relates to a trust beneficiary, includes a person who has any present or
future interest, vested or contingent, and also includes the owner of an
interest by assignment or other transfer; as it relates to a charitable trust,
includes any person entitled to enforce the trust; as it relates to a
"beneficiary of a beneficiary designation," refers to a beneficiary
of an insurance or annuity policy, of an account with POD designation, of a
security registered in beneficiary form (TOD), or of a pension, profit‑sharing,
retirement, or similar benefit plan, or other nonprobate transfer at
death; and, as it relates to a
"beneficiary designated in a governing ," includes a grantee of a
deed, a devisee, a trust beneficiary, a beneficiary of a beneficiary
designation, a donee, appointee, or taker in default of a power of appointment,
or a person in whose favor a power of attorney or a power held in any individual,
fiduciary, or representative capacity is exercised.
(4) "Beneficiary
designation" refers to a governing instrument naming a beneficiary of an
insurance or annuity policy, of an account with POD designation, of a security
registered in beneficiary form (TOD), or of a pension, profit‑sharing,
retirement, or similar benefit plan, or other nonprobate transfer at death.
(5) "Child"
includes an individual entitled to take as a child under this Code by intestate
succession from the parent whose relationship is involved and excludes a person
who is only a stepchild, a foster child, a grandchild, or any more remote
descendant.
(6) "Claims,"
in respect to estates of decedents and protected persons, includes liabilities
of the decedent or protected person, whether arising in contract, in tort, or
otherwise, and liabilities of the estate which arise at or after the death of
the decedent or after the appointment of a conservator, including funeral
expenses and expenses of administration.
The term does not include estate or inheritance taxes, or demands or
disputes regarding title of a decedent or protected person to specific assets
alleged to be included in the estate.
(7)
“Conservator” as defined in Section 5-102.
(8)
"Court" means the [… Court] or branch in this State having
jurisdiction in matters relating to the affairs of decedents.
(9) "Descendant"
of an individual means all of his [or her] descendants of all generations, with
the relationship of parent and child at each generation being determined by the
definition of child and parent contained in this Code.
(10) "Devise,"
when used as a noun, means a testamentary disposition of real or personal
property and, when used as a verb, means to dispose of real or personal
property by will.
(11) "Devisee"
means a person designated in a will to receive a devise. For the purposes of Article III, in the case
of a devise to an existing trust or trustee, or to a trustee or trust described
by will, the trust or trustee is the devisee and the beneficiaries are not
devisees.
(12) "Distributee"
means any person who has received property of a decedent from his [or her]
personal representative other than as a creditor or purchaser. A testamentary
trustee is a distributee only to the extent of distributed assets or increment
thereto remaining in his [or her] hands.
A beneficiary of a testamentary trust to whom the trustee has
distributed property received from a personal representative is a distributee
of the personal representative. For the
purposes of this provision, "testamentary trustee" includes a trustee
to whom assets are transferred by will, to the extent of the devised assets.
(13) "Estate"
includes the property of the decedent, trust, or other person whose affairs are
subject to this Code as originally constituted and as it exists from time to
time during administration.
(14) "Exempt
property" means that property of a decedent's estate which is described in
Section 2‑403.
(15) "Fiduciary"
includes a personal representative, guardian, conservator, and trustee.
(16) "Foreign
personal representative" means a personal representative appointed by
another jurisdiction.
(17) "Formal
proceedings" means proceedings conducted before a judge with notice to
interested persons.
(18) "Governing
instrument" means a deed, will, trust, insurance or annuity policy,
account with POD designation, security registered in beneficiary form (TOD),
pension, profit‑sharing, retirement, or similar benefit plan, instrument
creating or exercising a power of appointment or a power of attorney, or a
dispositive, appointive, or nominative instrument of any similar type.
(19) "Guardian"
is as defined in Section 5-102.
(20) "Heirs,"
except as controlled by Section 2‑711, means persons, including the
surviving spouse and the state, who are entitled under the statutes of
intestate succession to the property of a decedent.
(21) "Incapacitated
person" means an individual described in Section 5‑102.
(22) "Informal
proceedings" means those conducted without notice to interested persons by
an officer of the Court acting as a registrar for probate of a will or appointment of a personal representative.
(23) "Interested
person" includes heirs, devisees, children, spouses, creditors,
beneficiaries, and any others having a property right in or claim against a
trust estate or the estate of a decedent, ward, or protected person. It also includes persons having priority for appointment as personal
representative, and other fiduciaries representing interested persons. The
meaning as it relates to particular persons may vary from time to time and must
be determined according to the particular purposes of, and matter involved in,
any proceeding.
(24) "Issue"
of an individual means descendant.
(25) "Joint
tenants with the right of survivorship" and "community property with
the right of survivorship" includes co‑owners of property held under
circumstances that entitle one or more to the whole of the property on the
death of the other or others, but excludes forms of co‑ownership
registration in which the underlying ownership of each party is in proportion
to that party's contribution.
(26) "Lease"
includes an oil, gas, or other mineral lease.
(27) "Letters"
includes letters testamentary, letters of guardianship, letters of
administration, and letters of conservatorship.
(28) "Minor"
has the meaning described in Section 5-102.
(29) "Mortgage"
means any conveyance, agreement, or arrangement in which property is encumbered
or used as security.
(30) "Nonresident
decedent" means a decedent who was domiciled in another jurisdiction at
the time of his [or her] death.
(31) "Organization"
means a corporation, business trust, estate, trust, partnership, joint venture,
association, government or governmental subdivision or agency, or any other
legal or commercial entity.
(32) "Parent"
includes any person entitled to take, or who would be entitled to take if the
child died without a will, as a parent under this Code by intestate succession
from the child whose relationship is in question and excludes any person who is
only a stepparent, foster parent, or grandparent.
(33) "Payor"
means a trustee, insurer, business entity, employer, government, governmental
agency or subdivision, or any other person authorized or obligated by law or a
governing instrument to make payments.
(34) "Person"
means an individual or an organization.
(35) "Personal
representative" includes executor administrator, successor personal
representative, special administrator, and persons who perform substantially
the same function under the law governing their status. "General personal
representative" excludes special administrator.
(36) "Petition"
means a written request to the Court for an order after notice.
(37) "Proceeding"
includes action at law and suit in equity.
(38) "Property"
includes both real and personal property or any interest therein and means
anything that may be the subject of ownership.
(39) "Protected
person" is as defined in Section 5‑102.
(40) "Protective
proceeding" means a proceeding under Part 4 of Article V.
(41) “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.
(42) "Registrar" refers to the official of the Court
designated to perform the functions of Registrar as provided in Section 1‑307.
(43) "Security"
includes any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in an oil, gas, or
mining title or lease or in payments out of production under such a title or
lease, collateral trust certificate, transferable share, voting trust
certificate or, in general, any interest or instrument commonly known as a
security, or any certificate of interest or participation, any temporary or
interim certificate, receipt, or certificate of deposit for, or any warrant or
right to subscribe to or purchase, any of the foregoing.
(44) "Settlement,"
in reference to a decedent's estate, includes the full process of
administration, distribution, and closing.
(45) “Sign” means, with present intent to authenticate or adopt a
record other than a will:
(A)
to execute or adopt a tangible symbol; or
(B)
to attach to or logically associate with the record an electronic symbol,
sound, or process.
(46) "Special
administrator" means a personal representative as described by Sections 3‑614
through 3‑618.
(47) "State"
means a state of the
(48) "Successor
personal representative" means a personal representative, other than a
special administrator, who is appointed to succeed a previously appointed
personal representative.
(49) "Successors"
means persons, other than creditors, who are entitled to property of a decedent
under his [or her] will or this Code.
(50) "Supervised
administration" refers to the proceedings described in Article III, Part
5.
(51) "Survive"
means that an individual has neither predeceased an event, including the death
of another individual, nor is deemed to have predeceased an event under Section 2‑104 or 2‑702. The term includes its derivatives, such as
"survives," "survived," "survivor,"
"surviving."
(52) "Testacy
proceeding" means a proceeding to establish a will or determine intestacy.
(53) "Testator"
includes an individual of either sex.
(54) "Trust"
includes an express trust, private or charitable, with additions thereto,
wherever and however created. The term
also includes a trust created or determined by judgment or decree under which
the trust is to be administered in the manner of an express trust. The term excludes other constructive trusts
and excludes resulting trusts, conservatorships, personal representatives,
trust accounts as defined in Article VI, custodial arrangements pursuant to
[each state should list its legislation, including that relating to
[gifts][transfers] to minors, dealing with special custodial situations], business trusts providing for
certificates to be issued to beneficiaries, common trust funds, voting trusts,
security arrangements, liquidation trusts, and trusts for the primary purpose
of paying debts, dividends, interest, salaries, wages, profits, pensions, or
employee benefits of any kind, and any arrangement under which a person is
nominee or escrowee for another.
(55) "Trustee"
includes an original, additional, or successor trustee, whether or not
appointed or confirmed by court.
(56) "Ward"
means an individual described in Section 5‑102.
(57) "Will"
includes codicil and any testamentary instrument that merely appoints an
executor, revokes or revises another will, nominates a guardian, or expressly
excludes or limits the right of an individual or class to succeed to property
of the decedent passing by intestate succession.
[FOR ADOPTION IN COMMUNITY PROPERTY STATES]
[(58)“Separate property” (if necessary, to be
defined locally in accordance with existing concept in adopting state.)
(59) “Community
property” (if necessary, to be defined locally in accordance with exciting
concept in adopting state.)]
COMMENT
Special definitions for
Articles V and VI are contained in Sections 5‑103, 6‑201, and 6‑301. Except as controlled by special definitions
applicable to these particular Articles, or applicable to particular sections,
the definitions in Section 1‑201 apply to the entire Code.
PART 3
SCOPE, JURISDICTION AND COURTS
Section 1‑301.
Territorial Application.
Except as otherwise provided in this Code,
this Code applies to (1) the affairs and estates of decedents, missing persons,
and persons to be protected, domiciled in this state, (2) the property of
nonresidents located in this state or property coming into the control of a
fiduciary who is subject to the laws of this state, (3) incapacitated persons
and minors in this state, (4) survivorship and related accounts in this State,
and (5) trusts subject to administration in this state.
Section 1‑302. Subject Matter Jurisdiction.
(a) To the full extent permitted by the constitution, the Court has
persons; and jurisdiction over all subject matter relating to (1) estates of
decedents, including construction of wills and
determination of heirs and successors of decedents, and estates of
protected persons; (2) protection of minors and incapacitated (3) trusts.
(b) The Court has full power to make orders, judgments and decrees and
take all other action necessary and proper to administer justice in the matters
which come before it.
(c) The Court has jurisdiction over protective proceedings and
guardianship proceedings.
(d) If both guardianship and protective proceedings as to the same
person are commenced or pending in the same court, the proceedings may be
consolidated.
Section 1‑303. Venue; Multiple Proceedings;
Transfer.
(a) Where a proceeding under this Code could be maintained in more than
one place in this state, the Court
in which the proceeding is first commenced has the exclusive right to proceed.
(b) If proceedings concerning the same estate, protected person, ward, or trust are commenced in more than one Court of this state, the Court in which the proceeding was first commenced shall continue to hear the matter, and the other courts shall hold the matter in abeyance until the question of venue is decided, and if the ruling Court determines that venue is properly in another Court, it shall transfer the proceeding to the other Court.
(c) If a Court finds that in the interest of justice a proceeding or a file should be located in another Court of this state, the Court making the finding may transfer the proceeding or file to the other Court.
Section 1‑304. Practice in Court.
Unless specifically provided to the contrary
in this Code or unless inconsistent with its provisions, the rules of civil
procedure including the rules concerning vacation of orders and appellate review
govern formal proceedings under this Code.
Section 1‑305. Records and Certified Copies.
The [Clerk of Court] shall keep a record for each decedent, ward, protected person or trust involved in any document which may be filed with the Court under this Code, including petitions and applications, demands for notices or bonds, trust registrations, and of any orders or responses relating thereto by the Registrar or Court, and establish and maintain a system for indexing, filing or recording which is sufficient to enable users of the records to obtain adequate information. Upon payment of the fees required by law the [clerk] must issue certified copies of any probated wills, letters issued to personal representatives, or any other record or paper filed or recorded. Certificates relating to probated wills must indicate whether the decedent was domiciled in this state, and whether the probate was formal or informal. Certificates relating to letters must show the date of appointment.
Section 1‑306.
Jury Trial.
(a) If duly demanded, a party is entitled to trial by jury in [a formal testacy proceeding and] any proceeding in which any controverted question of fact arises as to which any party has a constitutional right to trial by jury.
(b) If there is no right to trial by jury under subsection (a)or the
right is waived, the Court in its discretion may call a jury to decide any
issue of fact, in which case the verdict is advisory only.
Section 1‑307.
Registrar; Powers.
The acts and orders which this Code specifies as performable by the Registrar may be performed either by a judge of the Court or by a person, including the clerk, designated by the Court by a written order filed and recorded in the office of the Court.
Section 1‑308.
Appeals.
Appellate review, including the right to
appellate review, interlocutory appeal, provisions as to time, manner, notice,
appeal bond, stays, scope of review, record on appeal, briefs, arguments and
power of the appellate court, is governed by the rules applicable to the appeals
to the [Supreme Court] in equity cases from the [court of general
jurisdiction], except that in proceedings where jury trial has been had as a
matter of right, the rules applicable to the scope of review in jury cases
apply.
Section 1‑309.
Qualifications of Judge.
A judge must
have the same qualifications as a judge of the [court of general jurisdiction].
COMMENT
In Article VIII, Section 8‑101 on
transition from old law to new law provision is made for the continuation in
service of a sitting judge not qualified for initial selection.
Section 1‑310.
Oath or Affirmation on Filed Documents.
Except as otherwise specifically provided in
this Code or by rule, every document filed with the Court under this Code
including applications, petitions, and demands for notice, shall be deemed to
include an oath, affirmation, or statement to the effect that its
representations are true as far as the person executing or filing it knows or
is informed, and penalties for perjury may follow deliberate falsification
therein.
PART 4
NOTICE, PARTIES AND REPRESENTATION IN ESTATE LITIGATION AND OTHER
MATTERS
Section 1‑401. Notice; Method and Time of
Giving.
(a) If notice of a hearing on any petition is required and except for
specific notice requirements as otherwise provided, the petitioner shall cause
notice of the time and place of hearing of any petition to be given to any
interested person or his attorney if he has appeared by attorney or requested
that notice be sent to his attorney. Notice shall be given:
(1) by mailing
a copy thereof at least 14 days before the time set for the hearing by
certified, registered or ordinary first class mail addressed to the person
being notified at the post office address given in his demand for notice, if
any, or at his office or place of residence, if known;
(2) by
delivering a copy thereof to the person being notified personally at least 14
days before the time set for the hearing; or
(3) if the
address, or identity of any person is not known and cannot be ascertained with
reasonable diligence, by publishing at least once a week for 3 consecutive
weeks, a copy thereof in a newspaper having general circulation in the county
where the hearing is to be held, the last publication of which is to be at
least 10 days before the time set for the hearing.
(b) The Court for good cause shown may provide for a different method
or time of giving notice for any hearing.
(c) Proof of the giving of notice shall be made on or before the
hearing and filed in the proceeding.
Section 1‑402. Notice; Waiver.
A person, including a guardian ad litem,
conservator, or other fiduciary, may waive notice by a writing signed by him or
his attorney and filed in the proceeding.
A person for whom a guardianship or other protective order is sought, a
ward, or a protected person may not waive notice.
COMMENT
The subject of appearance is covered by
Section 1‑304.
Section 1‑403. Pleadings; When Parties Bound by
Others; Notice.
In formal proceedings
involving trusts or estates of decedents, minors, protected persons, or
incapacitated persons, and in judicially supervised settlements, the following
rules apply:
(1) Interests
to be affected must be described in pleadings that give reasonable information
to owners by name or class, by reference to the instrument creating the
interests or in another appropriate manner.
(2) A person
is bound by an order binding another in the following cases:
(i) An order
binding the sole holder or all co‑holders of a power of revocation or a
presently exercisable general power of appointment, including one in the form
of a power of amendment, binds other persons to the extent their interests as
objects, takers in default, or otherwise are subject to the power.
(ii) To the
extent there is no conflict of interest between them or among persons
represented:
(A) An order
binding a conservator binds the person whose estate the conservator controls;
(B) An order
binding a guardian binds the ward if no conservator of the ward’s estate has been appointed;
(C) An order
binding a trustee binds beneficiaries of the trust in proceedings to probate a
will establishing or adding to a trust, to review the acts or accounts of a
former fiduciary, and in proceedings involving creditors or other third
parties;
(D) An order
binding a personal representative binds persons interested in the undistributed
assets of a decedent’s estate in actions or proceedings by or against the
estate; and
(E) An order
binding a sole holder or all co-holders of a general testamentary power of
appointment binds other persons to the extent their interests as objects,
takers in default, or otherwise are subject to the power.
(iii)Unless otherwise represented, a minor or an
incapacitated, unborn, or unascertained person is bound by an order to the
extent the person’s interest is adequately represented by another party having
a substantially identical interest in the proceeding.
(3) If no
conservator or guardian has been appointed, a parent may represent a minor
child.
(4)
Notice is required as follows:
(i) The notice
prescribed by Section 1-401 must be given to every interested person or to one
who can bind an interested person as described in paragraph (2)(i) or (ii). Notice
may be given both to a person and to another who may bind the person.
(ii) Notice is
given to unborn or unascertained persons, who are not represented under
paragraph(2)(i)or (ii), by giving notice to all known persons whose interests
in the proceedings are substantially identical to those of the unborn or
unascertained persons.
(5) At any
point in a proceeding, a court may appoint a guardian ad litem to represent the
interest of a minor, an incapacitated, unborn, or unascertained person, or a
person whose identity or address is unknown, if the court determines that
representation of the interest otherwise would be inadequate. If not precluded
by conflict of interests, a guardian ad litem may be appointed to represent
several persons or interests. The court
shall state its reasons for appointing a guardian ad litem as a part of the
record of the proceeding.
COMMENT
A
general power, as used here and in Section 1‑108, is one which enables
the power holder to draw absolute ownership to himself. The section assumes a valid general power. If
the validity of the power itself were in issue, the power holder could not
represent others, as for example, the takers in default.
The general rules of civil procedure are
applicable where not replaced by specific provision, see Section 1‑304. Those rules would determine the mode of
giving notice or serving process on a minor or the mode of notice in class
suits involving large groups of persons made party to a suit.
1997 Technical
Amendment. By technical amendment effective July 31,
1997, (E) under subsection 2(ii) was added to clarify that orders binding the
holder of a general testamentary power may bind others to the extent their
interests are subject to the power. The
addition, like the other lettered segments of subsection (2)(ii), is qualified
by the stem language: “To the extent
there is no conflict between them or among persons represented…” Also, (iii) under (2) was broadened to
include minors and incapacitated persons with the others listed as persons who
may be bound by judicial orders under principles of virtual representation.
ARTICLE II
INTESTACY, WILLS, AND DONATIVE TRANSFERS (1990)
PART 1
INTESTATE SUCCESSION
Subpart 1. General Rules
Section
2‑101. Intestate
Estate.
2-102.
Share of Spouse.
2-102A. [Share
of Spouse.]
2‑103. Share
of Heirs Other Than Surviving Spouse.
2‑104. Requirement
of Survival by 120 Hours.
2‑105. No
Taker.
2‑106. Representation.
2‑107. Kindred
of Half Blood.
2‑108. [Reserved]
2‑109. Advancements.
2‑110. Debts
to Decedent.
2‑111. Alienage.
2‑112. Dower
and Curtesy Abolished.
2‑113. Individuals
Related to Decedent Through Two Lines.
2-114.
Parents Barred from Inheriting in Certain Circumstances.
Subpart 2. Parent-Child
Relationship
2-115.
Definitions.
2-116.
Effect of Parent-Child Relationship.
2-117.
No Distinction Based on Marital Status.
2-118.
Adoptee and Adoptee’s Adoptive Parent or Parents.
2-119.
Adoptee and Adoptee’s Genetic Parents.
2-120.
Child Conceived by Assisted Reproduction Other than Child Born
to Gestational Carrier.
2-121.
Child Born to Gestational Carrier.
2-122.
Equitable Adoption.
PART 2
ELECTIVE SHARE OF SURVIVING SPOUSE
Section
2‑201. Definitions.
2‑202. Elective
Share.
2‑203. Composition
of the Augmented Estate; Marital-Property Portion.
2‑204. Decedent's
Net Probate Estate.
2‑205. Decedent's
Nonprobate Transfers to Others.
2‑206. Decedent's
Nonprobate Transfers to the Surviving Spouse.
2‑207. Surviving
Spouse's Property and Nonprobate Transfers to Others.
2‑208. Exclusions,
Valuation, and Overlapping Application.
2‑209. Sources
from Which Elective Share Payable.
2‑210. Personal
Liability of Recipients.
2‑211. Proceeding
for Elective Share; Time Limit.
2‑212. Right of Election Personal to Surviving
Spouse; Incapacitated Surviving Spouse.
2‑213. Waiver
of Right to Elect and of Other Rights.
2-214.
Protection of Payors and Other Third Parties.
PART 3
SPOUSE AND CHILDREN UNPROVIDED FOR IN WILLS
Section
2‑301. Entitlement
of Spouse; Premarital Will.
2-302.
Omitted Children.
PART 4
EXEMPT PROPERTY AND ALLOWANCES
Section
2‑401. Applicable
Law.
2‑402.
2‑402A. [Constitutional
2‑403. Exempt
Property.
2‑404. Family
Allowance.
2-405.
Source, Determination, and Documentation.
PART 5
WILLS, WILL CONTRACTS, AND CUSTODY AND DEPOSIT OF WILLS
Section
2‑501. Who
May Make Will.
2‑502. Execution;
Witnessed or Notarized Wills; Holographic Wills.
2‑503. Harmless
Error.
2‑504. Self‑proved
Will.
2‑505. Who
May Witness.
2‑506. Choice
of Law as to Execution.
2‑507. Revocation
by Writing or by Act.
2‑508. Revocation
by Change of Circumstances.
2‑509. Revival
of Revoked Will.
2‑510. Incorporation
by Reference.
2‑511. Testamentary
Additions to Trusts.
2‑512. Events
of Independent Significance.
2‑513. Separate Writing Identifying Devise of
Certain Types of Tangible Personal Property.
2‑514. Contracts
Concerning Succession.
2‑515. Deposit
of Will With Court in Testator's Lifetime.
2‑516. Duty
of Custodian of Will; Liability.
2-517.
Penalty Clause for Contest.
PART 6
RULES OF CONSTRUCTION APPLICABLE ONLY TO WILLS
Section
2‑601. Scope.
2‑602. Will
2‑603. Antilapse;
Deceased Devisee; Class Gifts.
2‑604. Failure
of Testamentary Provision.
2‑605. Increase
in Devised Securities; Accessions.
2-606.
Nonademption of Specific Devises; Unpaid Proceeds of
2-607.
Nonexoneration.
2‑608. Exercise
of Power of Appointment.
2-609.
Ademption by Satisfaction.
PART 7
RULES OF CONSTRUCTION APPLICABLE TO WILLS
AND OTHER GOVERNING INSTRUMENTS
Section
2‑701. Scope.
2‑702. Requirement
of Survival by 120 Hours.
2‑703. Choice
of Law as to Meaning and Effect of Governing Instrument.
2‑704. Power
of Appointment; Meaning of Specific Reference Requirement.
2‑705. Class
Gifts Construed to Accord with Intestate Succession; Exceptions.
2‑706. Life Insurance; Retirement Plan; Account With POD
Designation; Transfer‑on‑Death Registration; Deceased Beneficiary.
2‑707. Survivorship With Respect to Future
Interests Under Terms of Trust; Substitute Takers.
2‑708. Class Gifts to "Descendants,"
"Issue," or "Heirs of the Body"; Form of Distribution If
None Specified.
2‑709. Representation;
Per Capita at Each Generation; Per Stirpes.
2‑710. Worthier‑Title
Doctrine Abolished.
2-711.
Interests in "Heirs" and Like.
PART 8
GENERAL PROVISIONS CONCERNING PROBATE
AND NONPROBATE TRANSFERS
Section
2‑801. [Reserved.]
2‑802. Effect
of Divorce, Annulment, and Decree of Separation.
2‑803. Effect of Homicide on Intestate Succession,
Wills, Trusts, Joint Assets, Life Insurance, and Beneficiary Designations.
2-804.
Revocation of Probate and Nonprobate Transfers by Divorce; No Revocation
by Other Changes of Circumstances.
2-805.
Reformation to Correct Mistakes.
2-806.
Modification to Achieve Transferor’s Tax Objectives.
PART 9
STATUTORY RULE AGAINST PERPETUITIES; HONORARY TRUSTS
Subpart 1. Statutory Rule Against Perpetuities
Section
2‑901. Statutory
Rule Against Perpetuities.
2‑902. When Nonvested Property Interest or Power of
Appointment Created.
2‑903. Reformation.
2‑904. Exclusions
From Statutory Rule Against Perpetuities.
2‑905. Prospective
Application.
2-906.
[Supersession] [Repeal].
Subpart 2. [Honorary Trusts].
Section
2-907.
[Honorary Trusts; Trusts for Pets.]
PART 10
UNIFORM INTERNATIONAL WILLS ACT
INTERNATIONAL WILL;INFORMATION REGISTRATION
Section
2‑1001. Definitions.
2‑1002. International
Will; Validity.
2‑1003. International
Will; Requirements.
2‑1004. International
Will; Other Points of Form.
2‑1005. International
Will; Certificate.
2‑1006. International
Will; Effect of Certificate.
2‑1007. International
Will; Revocation.
2‑1008. Source
and Construction.
2‑1009. Persons Authorized to Act in Relation to
International Will; Eligibility; Recognition by Authorizing Agency.
2‑1010. International
Will Information Registration.
PART 11
UNIFORM DISCLAIMER OF PROPERTY INTERESTS ACT (1999)
Section
2-1101. Short Title.
2-1102. Definitions.
2-1103. Scope.
2-1104. Part Supplemented By Other Law.
2-1105. Power To Disclaim; General Requirements; When
Irrevocable.
2-1106. Disclaimer Of Interest In Property.
2-1107. Disclaimer Of Rights Of Survivorship In
Jointly Held Property.
2-1108. Disclaimer Of Interest By Trustee.
2-1109. Disclaimer
Of Power Of Appointment Or Other Power Not Held In Fiduciary Capacity.
2-1110. Disclaimer
By Appointee, Object, Or Taker In Default Of Exercise Of Power Of Appointment.
2-1111. Disclaimer Of Power Held In Fiduciary
Capacity.
2-1112. Delivery Or Filing.
2-1113. When Disclaimer Barred Or Limited.
2-1114. Tax Qualified Disclaimer.
2-1115. Recording Of Disclaimer.
2-1116. Application To Existing Relationships.
______________
The following free-standing Acts are associated with
Article II:
Uniform
Disclaimer of Property Interests Act (1999)
Article
II, Part 11 has been adopted as the free-standing Uniform Disclaimer of
Property Interests Act (1999).
Uniform
International Wills Act
Article
II, Part 10 has been adopted as the free-standing Uniform International Wills
Act.
Uniform Act on
Intestacy, Wills, and Donative Transfers Act
Revised
Article II has been adopted as the free-standing Uniform Act on Intestacy,
Wills, and Donative Transfers Act.
Uniform
Simultaneous Death Act
Article
II, sections 1-107, 2-104 and 2-702 have been adopted as the free-standing
Uniform Simultaneous Death Act (1993).
Uniform
Statutory Rule Against Perpetuities with 1990 Amendments
Article
II, Part 9, Subpart 1 has been adopted as the free-standing Uniform Statutory
Rule Against Perpetuities with 1990 Amendments.
Uniform
Testamentary Additions to Trusts Act (1991)
Article
II, Section 2-511 has been adopted as the free-standing Uniform Testamentary
Additions to Trusts Act (1991).
ARTICLE II
INTESTACY, WILLS, AND
DONATIVE TRANSFERS
PREFATORY NOTE
The
Uniform Probate Code was originally promulgated in 1969.
1990
Revisions. In
1990, Article II underwent significant revision. The 1990 revisions were the
culmination of a systematic study of the Code conducted by the Joint Editorial
Board for the Uniform Probate Code (now named the Joint Editorial Board for
Uniform Trust and Estate Acts) and a special Drafting Committee to Revise
Article II. The 1990 revisions concentrated on Article II, which is the article
that covers the substantive law of intestate succession; spouse’s elective
share; omitted spouse and children; probate exemptions and allowances;
execution and revocation of wills; will contracts; rules of construction;
disclaimers; and the effect of homicide and divorce on succession rights; and
the rule against perpetuities and honorary trusts.
Themes
of the 1990 Revisions. In the twenty or so years between the original promulgation of the Code
and 1990, several developments occurred that prompted the systematic round of
review. Three themes were sounded: (1) the decline of formalism in favor of
intent-serving policies; (2) the recognition that will substitutes and other
inter-vivos transfers have so proliferated that they now constitute a major, if
not the major, form of wealth transmission; (3) the advent of the
multiple-marriage society, resulting in a significant fraction of the
population being married more than once and having stepchildren and children by
previous marriages and (4) the acceptance of a partnership or marital-sharing theory
of marriage.
The
1990 revisions responded to these themes. The multiple-marriage society and the
partnership/marital-sharing theory were reflected in the revised elective-share
provisions of Part 2. As the General Comment to Part 2 explained, the revised
elective share granted the surviving spouse a right of election that
implemented the partnership/marital-sharing theory of marriage.
The
children-of-previous-marriages and stepchildren phenomena were reflected most
prominently in the revised rules on the spouse’s share in intestacy.
The
proliferation of will substitutes and other inter-vivos transfers was
recognized, mainly, in measures tending to bring the law of probate and
nonprobate transfers into greater unison. One aspect of this tendency was reflected
in the restructuring of the rules of construction. Rules of construction are
rules that supply presumptive meaning to dispositive and similar provisions of
governing instruments. See Restatement (Third) of Property: Wills and Other
Donative Transfers § 11.3 (2003). Part 6 of the pre-1990 Code contained several
rules of construction that applied only to wills. Some of those rules of
construction appropriately applied only to wills; provisions relating to lapse,
testamentary exercise of a power of appointment, and ademption of a devise by
satisfaction exemplify such rules of construction. Other rules of construction,
however, properly apply to all governing instruments, not just wills; the
provision relating to inclusion of adopted persons in class gift language
exemplifies this type of rule of construction. The 1990 revisions divided
pre-1990 Part 6 into two parts — Part 6, containing rules of construction for
wills only; and Part 7, containing rules of construction for wills and other
governing instruments. A few new rules of construction were also added.
In
addition to separating the rules of construction into two parts, and adding new
rules of construction, the revocation-upon-divorce provision (section 2-804)
was substantially revised so that divorce not only revokes testamentary
devises, but also nonprobate beneficiary designations, in favor of the former
spouse. Another feature of the 1990 revisions was a new section (section 2-503)
that brought the execution formalities for wills more into line with those for
nonprobate transfers.
2008
Revisions. In
2008, another round of revisions was adopted. The principal features of the
2008 revisions are summarized as follows:
Inflation
Adjustments. Between
1990 and 2008, the Consumer Price Index rose by somewhat more than 50 percent.
The 2008 revisions raised the dollar amounts by 50 percent in Article II
Sections 2-102, 2-102A, 2-201, 2-402, 2-403, and 2-405, and added a new cost of
living adjustment section — Section 1-109.
Intestacy. Part 1 on intestacy was
divided into two subparts: Subpart 1 on general rules of intestacy and subpart
2 on parent-child relationships. For details, see the General Comment to Part
1.
Execution
of Wills.
Section 2-502 was amended to allow notarized wills as an alternative to wills
that are attested by two witnesses. That amendment necessitated minor revisions
to Section 2-504 on self-proved wills and to Section 3-406 on the effect of
notarized wills in contested cases.
Class
Gifts.
Section 2-705 on class gifts was revised in a variety of ways, as explained in
the revised Comment to that section.
Reformation
and Modification. New Sections 2-805 and 2-806 brought the reformation and modification
sections now contained in the Uniform Trust Code into the Uniform Probate Code.
Historical
Note. This
Prefatory Note was revised in 2008.
Legislative
Note:
References to spouse or marriage appear throughout Article II. States that
recognize civil unions, domestic partnerships, or similar relationships between
unmarried individuals should add appropriate language wherever such references
or similar references appear.
States that do not recognize
such relationships between unmarried individuals, or marriages between same-sex
partners, are urged to consider whether to recognize the spousal-type rights
that partners acquired under the law of another jurisdiction in which the
relationship was formed but who die domiciled in this state. Doing so would not
be the equivalent of recognizing such relationships in this state but simply
allowing those who move to and die in this state to retain the rights they
previously acquired elsewhere. See Christine A. Hammerle, Note, Free Will to
Will? A Case for the Recognition of Intestacy Rights for Survivors to a
Same-Sex Marriage or Civil Union, 104 Mich. L. Rev. 1763 (2006).
PART 1
INTESTATE SUCCESSION
GENERAL
COMMENT
The pre-1990 Code’s basic
pattern of intestate succession, contained in Part 1, was designed to provide
suitable rules for the person of modest means who relies on the estate plan
provided by law. The 1990 and 2008 revisions were intended to further that
purpose, by fine tuning the various sections and bringing them into line with
developing public policy and family relationships.
1990
Revisions. The
principal features of the 1990 revisions were:
1.
So-called negative wills were authorized, under which the decedent who dies
intestate, in whole or in part, can by will disinherit a particular heir.
2.
A surviving spouse was granted the whole of the intestate estate, if the
decedent left no surviving descendants and no parents or if the decedent’s
surviving descendants are also descendants of the surviving spouse and the
surviving spouse has no descendants who are not descendants of the decedent.
The surviving spouse receives the first $200,000 plus three-fourths of the
balance if the decedent left no surviving descendants but a surviving parent.
The surviving spouse receives the first $150,000 plus one-half of the balance
of the intestate estate, if the decedent’s surviving descendants are also
descendants of the surviving spouse but the surviving spouse has one or more
other descendants. The surviving spouse receives the first $100,000 plus
one-half of the balance of the intestate estate, if the decedent has one or
more surviving descendants who are not descendants of the surviving spouse. (To
adjust for inflation, these dollar figures and other dollar figures in Article
II were increased by fifty percent in 2008.)
3.
A system of representation called per capita at each generation was adopted as
a means of more faithfully carrying out the underlying premise of the pre-1990
UPC system of representation. Under the per-capita-at-each-generation system,
all grandchildren (whose parent has predeceased the intestate) receive equal
shares.
4.
Although only a modest revision of the section dealing with the status of
adopted children and children born of unmarried parents was then made, the
question was under continuing review and it was anticipated that further
revisions would be forthcoming in the future.
5.
The section on advancements was revised so that it applies to partially
intestate estates as well as to wholly intestate estates.
2008
Revisions.
As noted in Item 4 above, it was recognized in 1990 that further revisions on
matters of status were needed. The 2008 revisions fulfilled that need.
Specifically, the 2008 revisions contained the following principal features:
Part
1 Divided into Two Subparts. Part 1 was divided into two subparts: Subpart 1 on general rules of
intestacy and Subpart 2 on parent-child relationships.
Subpart
1: General Rules of Intestacy. Subpart 1 contains Sections 2-101 (unchanged),
2-102 (dollar figures adjusted for inflation), 2-103 (restyled and amended to
grant intestacy rights to certain stepchildren as a last resort before the
intestate estate escheats to the state), 2-104 (amended to clarify the
requirement of survival by 120 hours as it applies to heirs who are born before
the intestate’s death and those who are in gestation at the intestate’s death),
2-105 (unchanged), 2-106 (unchanged), 2-107 (unchanged), 2-108 (deleted and
matter dealing with heirs in gestation at the intestate’s death relocated to
2-104), 2-109 (unchanged), 2-110 (unchanged), 2-111 (unchanged), 2-112
(unchanged), 2-113 (unchanged), and 2-114 (deleted and replaced with a new
section addressing situations in which a parent is barred from inheriting).
Subpart
2: Parent-Child Relationships. New Subpart 2 contains several new or substantially
revised sections. New Section 2-115 contains definitions of terms that are used
in subpart 2. New Section 2-116 is an umbrella section declaring that, except
as otherwise provided in Section 2-119(b) through (e), if a parent-child
relationship exists or is established under this subpart 2, the parent is a
parent of the child and the child is a child of the parent for purposes of
intestate succession. Section 2-117 continues the rule that, except as
otherwise provided in Sections 2-120 and 2-121, a parent-child relationship
exists between a child and the child’s genetic parents, regardless of their
marital status. Regarding adopted children, Section 2-118 continues the rule
that adoption establishes a parent-child relationship between the adoptive
parents and the adoptee for purposes of intestacy. Section 2-119 addresses the
extent to which an adoption severs the parent-child relationship with the
adoptee’s genetic parents. New Sections 2-120 and 2-121 turn to various
parent-child relationships resulting from assisted reproductive technologies in
forming families. As one researcher reported: “Roughly 10 to 15 percent of all
adults experience some form of infertility.” Debora L. Spar, The Baby Business
31 (2006). Infertility, coupled with the desire of unmarried individuals to
have children, have led to increased questions concerning children of assisted
reproduction. Sections 2-120 and 2-121 address inheritance rights in cases of
children of assisted reproduction, whether the birth mother is the one who
parents the child or is a gestational carrier who bears the child for an
intended parent or intended parents. As two authors have noted: “Parents,
whether they are in a married or unmarried union with another, whether they are
a single parent, whether they procreate by sexual intercourse or by assisted
reproductive technology, are entitled to the respect the law gives to family
choice.” Charles P. Kindregan, Jr. & Maureen McBrien, Assisted Reproductive
Technology: A Lawyer’s Guide to Emerging Law and Science 6-7 (2006). The final
section, new Section 2-122, provides that nothing contained in Subpart 2 should
be construed as affecting application of the judicial doctrine of equitable
adoption.
Historical Note. This General Comment was
revised in 2008.
Subpart 1. General Rules.
Section 2‑101. Intestate Estate.
(a) Any part of a decedent's estate not effectively disposed of by will
passes by intestate succession to the decedent's heirs as prescribed in this
Code, except as modified by the decedent's will.
(b) A decedent by will may expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession. If that individual or a member of that class survives the decedent, the share of the decedent's intestate estate to which that individual or class would have succeeded passes as if that individual or each member of that class had disclaimed his [or her] intestate share.
COMMENT
Purpose of Revision. The amendments to subsection (a) are
stylistic, not substantive.
New
subsection (b) authorizes the decedent, by will, to exclude or limit the right
of an individual or class to share in the decedent's intestate estate, in
effect disinheriting that individual or class. By specifically authorizing so‑called
negative wills, subsection (b) reverses the usually accepted common‑law
rule, which defeats a testator's intent for no sufficient reason. See
Note, "The Intestate Claims of Heirs Excluded by Will: Should 'Negative Wills' Be Enforced?",
52 U. Chi. L. Rev. 177(1985).
Whether
or not in an individual case the decedent's will has excluded or limited the
right of an individual or class to take a share of the decedent's intestate
estate is a question of construction. A clear case would be one in which the
decedent's will expressly states that an individual is to receive none of the
decedent's estate. Examples would be testamentary language such as "my
brother, Hector, is not to receive any of my property" or "Brother
Hector is disinherited."
Another
rather clear case would be one in which the will states that an individual is
to receive only a nominal devise, such as "I devise $50.00 to my brother,
Hector, and no more."
An
individual need not be identified by name to be excluded. Thus, if brother
Hector is the decedent's only brother, Hector could be identified by a term
such as "my brother." A group or class of relatives (such as "my
brothers and sisters") can also be excluded under this provision.
Subsection (b) establishes
the consequence of a disinheritance‑the share of the decedent's intestate
estate to which the disinherited individual or class would have succeeded
passes as if that individual or class had disclaimed the intestate share. Thus,
if the decedent's will provides that brother Hector is to receive $50.00 and no
more, Hector is entitled to the $50.00 devise (because Hector is not treated as having predeceased the
decedent for purposes of testate succession),
but the portion of the decedent's intestate
estate to which Hector would have succeeded passes as if Hector had disclaimed
his intestate share. The consequence of
a disclaimer by Hector of his intestate share is governed by Section 2‑1106(b),
which provides that Hector's intestate share passes to Hector's descendants by
representation.
Example: G died partially intestate. G is survived by brother Hector, Hector’s 3
children (X, Y, and Z), and the child (V) of a deceased sister. G’s will excluded Hector from sharing in G’s
intestate estate.
Solution: V takes half of G’s intestate
estate, X, Y, and Z split the other half, i.e. they take 1/6 each. Sections 2-103(3); 2-106, 2-1106(b). Had Hector not been excluded by G’s will, the
share to which Hector would have succeeded would have been 1/2. Under section 2-1106(b), that half, not the
whole of G’s intestate estate, is what passes to Hector’s descendants by
representation as if Hector had disclaimed the intestate share.
Note that if brother Hector had actually predeceased G, or was treated as if he predeceased G by reason of not surviving G by 120 hours (see section 2-104), then no consequence flows from Hector’s disinheritance: V, X, Y, and Z would each take 1/4 of G’s intestate estate under section 2-103(3) and 2-106.
Section 2‑102.
Share of Spouse.
The intestate share of a
decedent's surviving spouse is:
(1) the entire
intestate estate if:
(i) no
descendant or parent of the decedent survives the decedent; or
(ii) all of the
decedent's surviving descendants are also descendants of the surviving spouse
and there is no other descendant of the surviving spouse who survives the
decedent;
(2) the first
[$300,000], plus three‑fourths of any balance of the intestate estate, if
no descendant of the decedent survives the decedent, but a parent of the
decedent survives the decedent;
(3) the first
[$225,000], plus one‑half of any balance of the intestate estate, if all
of the decedent's surviving descendants are also descendants of the surviving
spouse and the surviving spouse has one or more surviving descendants who are
not descendants of the decedent;
(4) the first
[$150,000], plus one‑half of any balance of the intestate estate, if one
or more of the decedent's surviving descendants are not descendants of the
surviving spouse.
COMMENT
Purpose and Scope of 1990
Revisions.
This section was revised in 1990 to give the surviving spouse a larger share
than the pre-1990 UPC. If the decedent leaves no surviving descendants and no
surviving parent or if the decedent does leave surviving descendants but
neither the decedent nor the surviving spouse has other descendants, the
surviving spouse is entitled to all of the decedent’s intestate estate.
If
the decedent leaves no surviving descendants but does leave a surviving parent,
the decedent’s surviving spouse receives the first $300,000 plus three-fourths
of the balance of the intestate estate.
If
the decedent leaves surviving descendants and if the surviving spouse (but not
the decedent) has other descendants, and thus the decedent’s descendants are
unlikely to be the exclusive beneficiaries of the surviving spouse’s estate,
the surviving spouse receives the first $225,000 plus one-half of the balance
of the intestate estate. The purpose is to assure the decedent’s own
descendants of a share in the decedent’s intestate estate when the estate
exceeds $225,000.
If
the decedent has other descendants, the surviving spouse receives $150,000 plus
one-half of the balance. In this type of case, the decedent’s descendants who
are not descendants of the surviving spouse are not natural objects of the
bounty of the surviving spouse.
Note
that in all the cases where the surviving spouse receives a lump sum plus a
fraction of the balance, the lump sums must be understood to be in addition to
the probate exemptions and allowances to which the surviving spouse is entitled
under Part 4. These can add up to a minimum of $64,500.
Under
the pre-1990 Code, the decedent’s surviving spouse received the entire
intestate estate only if there were neither surviving descendants nor parents.
If there were surviving descendants, the descendants to one-half of the balance
of the estate in excess of $50,000 (for example, $25,000 in a $100,000 estate).
If there were no surviving descendants, but there was a surviving parent or
parents, the parent or parents took that one-half of the balance in excess of
$50,000.
2008
Cost-of-Living Adjustments. As revised in 1990, the dollar amount in paragraph
(2) was $200,000, in paragraph (3) was $150,000, and in paragraph (4) was
$100,000. To adjust for inflation, these amounts were increased in 2008 to
$300,000, $225,000, and $150,000 respectively. The dollar amounts in these
paragraphs are subject to annual cost-of-living adjustments under Section
1-109.
References. The theory of this section
is discussed in Waggoner, “The Multiple- Marriage Society and Spousal Rights
Under the Revised Uniform Probate Code”, 76 Iowa L. Rev. 223, 229-35 (1991).
Empirical
studies support the increase in the surviving spouse’s intestate share,
reflected in the revisions of this section. The studies have shown that testators
in smaller estates (which intestate estates overwhelmingly tend to be) tend to
devise their entire estates to their surviving spouses, even when the couple
has children. See C. Shammas, M. Salmon & M. Bahlin, Inheritance in America
from Colonial Times to the Present 184-85 (1987); M. Sussman, J. Cates & D.
Smith, The Family and Inheritance (1970); Browder, “Recent Patterns of Testate
Succession in the United States and England”, 67 Mich. L. Rev. 1303, 1307-08
(1969); Dunham, “The Method, Process and Frequency of Wealth Transmission at
Death”, 30 U. Chi. L. Rev. 241, 252 (1963); Gibson, “Inheritance of Community
Property in Texas—A Need for Reform”, 47 Texas L. Rev. 359, 364-66 (1969);
Price, “The Transmission of Wealth at Death in a Community Property Jurisdiction”,
50 Wash. L. Rev. 277, 283, 311-17 (1975). See also Fellows, Simon & Rau,
“Public Attitudes About Property Distribution at Death and Intestate Succession
Laws in the United States”, 1978 Am. B. F. Research J. 319, 355-68; Note, “A
Comparison of Iowans’ Dispositive Preferences with Selected Provisions of the
Iowa and Uniform Probate Codes”, 63 Iowa L. Rev. 1041, 1091-92 (1978).
Cross
Reference.
See Section 2-802 for the definition of spouse, which controls for purposes of
intestate succession.
Historical Note. This Comment was revised in
2008.
[ALTERNATE PROVISION FOR COMMUNITY PROPERTY STATES]
[Section
2-102A. Share of Spouse.
(a) The intestate share of a decedent's surviving spouse is:
(1) the entire
intestate estate if:
(i) no
descendant or parent of the decedent survives the decedent; or
(ii) all of the
decedent's surviving descendants are also descendants of the surviving spouse
and there is no other descendant of the surviving spouse who survives the
decedent;
(2) the first
[$300,000], plus three‑fourths of any balance of the intestate estate, if
no descendant of the decedent survives
the decedent, but a parent of the decedent survives the decedent;
(3) the first
[$225,000], plus one‑half of any balance of the intestate estate, if all of
the decedent's surviving descendants are also descendants of the surviving
spouse and the surviving spouse has one or more surviving descendants who are
not descendants of the decedent;
(4) the first
[$150,000], plus one‑half of any balance of the intestate estate, if one
or more of the decedent's surviving descendants are not descendants of the
surviving spouse.
(b) The
one-half of community property belonging to the decedent passes to the
[surviving spouse] as the intestate share.]
COMMENT
The brackets around the term “surviving
spouse” in subsection (b) indicate that states are free to adopt a different
scheme for the distribution of the decedent’s half of the community property,
as some community property states have done.
2008 Cost-of-Living
Adjustments. As
revised in 1990, the dollar amount in subsection (a)(2) was $200,000, in (a)(3)
was $150,000, and in (a)(4) was $100,000. To adjust for inflation, these
amounts were increased in 2008 to $300,000, $225,000, and $150,000 respectively.
The dollar amounts in these paragraphs are subject to annual cost-of-living
adjustments under Section 1-109.
Historical Note. This Comment was revised in 2008.
Section 2‑103.
Share of Heirs other than Surviving Spouse.
(a) Any part of the intestate estate not passing to a decedent’s
surviving spouse under Section 2-102, or the entire intestate estate if there
is no surviving spouse, passes in the following order to the individuals who
survive the decedent:
(1)
to the decedent’s descendants by representation;
(2)
if there is no surviving descendant, to the decedent’s parents equally if both
survive, or to the surviving parent if only one survives;
(3)
if there is no surviving descendant or parent, to the descendants of the
decedent’s parents or either of them by representation;
(4)
if there is no surviving descendant, parent, or descendant of a parent, but the
decedent is survived on both the paternal and maternal sides by one or more
grandparents or descendants of grandparents:
(A)
half to the decedent’s paternal grandparents equally if both survive, to the
surviving paternal grandparent if only one survives, or to the descendants of
the decedent’s paternal grandparents or either of them if both are deceased,
the descendants taking by representation; and
(B)
half to the decedent’s maternal grandparents equally if both survive, to the
surviving maternal grandparent if only one survives, or to the descendants of
the decedent’s maternal grandparents or either of them if both are deceased,
the descendants taking by representation;
(5)
if there is no surviving descendant, parent, or descendant of a parent, but the
decedent is survived by one or more grandparents or descendants of grandparents
on the paternal but not the maternal side, or on the maternal but not the
paternal side, to the decedent’s relatives on the side with one or more
surviving members in the manner described in paragraph (4).
(b) If there is no taker
under subsection (a), but the decedent has:
(1)
one deceased spouse who has one or more descendants who survive the decedent,
the estate or part thereof passes to that spouse’s descendants by
representation; or
(2)
more than one deceased spouse who has one or more descendants who survive the
decedent, an equal share of the estate or part thereof passes to each set of
descendants by representation.
COMMENT
This section provides for
inheritance by descendants of the decedent, parents and their descendants, and
grandparents and collateral relatives descended from grandparents; in line with
modern policy, it eliminates more remote relatives tracing through
great-grandparents.
1990
Revisions.
The 1990 revisions were stylistic and clarifying, not substantive. The pre-1990
version of this section contained the phrase “if they are all of the same
degree of kinship to the decedent they take equally (etc.).” That language was
removed. It was unnecessary and confusing because the system of representation
in Section 2-106 gives equal shares if the decedent’s descendants are all of
the same degree of kinship to the decedent.
The
word “descendants” replaced the word “issue” in this section and throughout the
1990 revisions of Article II. The term issue is a term of art having a
biological connotation. Now that inheritance rights, in certain cases, are
extended to adopted children, the term descendants is a more appropriate term.
2008
Revisions. In
addition to making a few stylistic changes, which were not intended to change
meaning, the 2008 revisions divided this section into two subsections. New
subsection (b) grants inheritance rights to descendants of the intestate’s
deceased spouse(s) who are not also descendants of the intestate. The term
deceased spouse refers to an individual to whom the intestate was married at
the individual’s death.
Historical
Note. This
Comment was revised in 2008.
Section 2‑104. Requirement of Survival by 120 Hours; Individual in
Gestation.
(a) [Requirement of
Survival by 120 Hours; Individual in Gestation.] For purposes of intestate succession, homestead
allowance, and exempt property, and except as otherwise provided in subsection
(b), the following rules apply:
(1)
An individual born before a decedent’s death who fails to survive the decedent by
120 hours is deemed to have predeceased the decedent. If it is not established
by clear and convincing evidence that an individual born before the decedent’s
death survived the decedent by 120 hours, it is deemed that the individual
failed to survive for the required period.
(2)
An individual in gestation at a decedent’s death is deemed to be living at the
decedent’s death if the individual lives 120 hours after birth. If it is not
established by clear and convincing evidence that an individual in gestation at
the decedent’s death lived 120 hours after birth, it is deemed that the
individual failed to survive for the required period.
(b) [Section Inapplicable If Estate Would Pass to
State.] This section does not apply
if its application would cause the estate to pass to the state under Section
2-105.
COMMENT
This
section avoids multiple administrations and in some instances prevents the
property from passing to persons not desired by the decedent. See Halbach
&Waggoner, The UPC’s New Survivorship and Antilapse Provisions, 55 Alb. L.
Rev. 1091, 1094-1099 (1992). The 120-hour period will not delay the
administration of a decedent’s estate because Sections 3-302 and 3-307 prevent
informal issuance of letters for a period of five days from death. Subsection
(b) prevents the survivorship requirement from defeating inheritance by the
last eligible relative of the intestate who survives for any period.
In
the case of a surviving spouse who survives the 120-hour period, the 120-hour
requirement of survivorship does not disqualify the spouse’s intestate share
for the federal estate-tax marital deduction. See Int.Rev.Code § 2056(b)(3).
2008
Revisions. In
2008, this section was reorganized, revised, and combined with former Section
2-108. What was contained in former Section 2-104 now appears as subsections
(a)(1) and (b). What was contained in former Section 2-108 now appears as
subsection (a)(2). Subsections (a)(1) and (a)(2) now distinguish between an
individual who was born before the decedent’s death and an individual who was
in gestation at the decedent’s death. With respect to an individual who was
born before the decedent’s death, it must be established by clear and
convincing evidence that the individual survived the decedent by 120 hours. For
a comparable provision applicable to wills and other governing instruments, see
Section 2-702. With respect to an individual who was in gestation at the
decedent’s death, it must be established by clear and convincing evidence that
the individual lived for 120 hours after birth.
Historical Note. This Comment was revised in
2008.
Section 2‑105.
No Taker.
If there is no taker under the provisions of
this Article, the intestate estate passes to the [state].
Section 2‑106. Representation.
(a) [Definitions.] In this section:
(1) "Deceased
descendant," "deceased parent," or "deceased
grandparent" means a descendant, parent, or grandparent who either
predeceased the decedent or is deemed to have predeceased the decedent under
Section 2‑104.
(2) "Surviving
descendant" means a descendant who neither predeceased the decedent nor is
deemed to have predeceased the decedent under Section 2‑104.
(b) [Decedent's Descendants.] If, under Section 2‑103(a)(1), a
decedent's intestate estate or a part thereof passes "by representation"
to the decedent's descendants, the estate or part thereof is divided into as
many equal shares as there are (i) surviving descendants in the generation
nearest to the decedent which contains one or more surviving descendants and
(ii) deceased descendants in the same generation who left surviving
descendants, if any. Each surviving descendant in the nearest generation is
allocated one share. The remaining shares, if any, are combined and then
divided in the same manner among the surviving descendants of the deceased
descendants as if the surviving descendants who were allocated a share and
their surviving descendants had predeceased the decedent.
(c) [Descendants of Parents or
Grandparents.] If, under Section 2‑103(a)(3) or (4), a decedent's
intestate estate or a part thereof passes "by representation" to the
descendants of the decedent's deceased parents or either of them or to the
descendants of the decedent's deceased paternal or maternal grandparents or
either of them, the estate or part thereof is divided into as many equal shares
as there are (i) surviving descendants in the generation nearest the deceased
parents or either of them, or the deceased grandparents or either of them, that
contains one or more surviving descendants and
(ii) deceased descendants in the same generation who left surviving
descendants, if any. Each surviving descendant in the nearest generation is
allocated one share. The remaining shares, if any, are combined and then
divided in the same manner among the surviving
descendants of the deceased descendants as if the surviving descendants
who were allocated a share and their surviving descendants had predeceased the
decedent.
COMMENT
Purpose and Scope of
Revisions.
This section is revised to adopt the system of representation called per capita
at each generation. The per-capita-at-each-generation system is more responsive
to the underlying premise of the original UPC system, in that it always
provides equal shares to those equally related; the pre‑1990 UPC achieved
this objective in most but not all cases.
(See Variation 4, below, for an illustration of this point.) In
addition, a recent survey of client preferences, conducted by Fellows of the
To
illustrate the differences among the three systems, consider a family, in which
G is the intestate. G has 3 children, A,
B, and C. Child A has 3 children, U,V,
and W. Child B has 1 child, X. Child C has 2 children, Y and Z. Consider
four variations.
Variation 1: All Three children survive G.
Solution: All three systems reach the same result: A,B, and C take 1/3 each.
Variation 2: One child, A, predeceases G; the other two
survive G.
Solution: Again, all three systems reach the same result: B and C take 1/3 each; U, V, and W take 1/9
each.
Variation 3: All three children predecease G.
Solution: The pre-1990 UPC and the
1990 UPC systems reach the same result:
U,V, W, X, Y, and Z take 1/6 each.
The
per-stirpes system gives a different result:
U, V, and W take 1/9 each; X takes 1/3; and Y and Z take 1/6 each.
Variation 4: Two of the three children, A
and B predecease G; C survives G.
Solution: In this instance, the 1990 UPC system (per
capita at each generation) departs from the pre-1990 UPC system. Under the 1990 UPC system, C takes 1/3 and
the other two 1/3 shares are combined into a single share (amounting to 2/3 of
the estate) and distributed as if C, Y and Z had predeceased G; the result is
that U,V, W, and X take 1/6 each.
Although
the pre-1990 UPC rejected the per-stirpes system, the result reached under the
pre-1990 UPC was aligned with the per-stirpes system in this instance: C would
have taken 1/3, X would have taken 1/3, and U,V, and W would have taken 1/9
each.
The
1990 UPC system furthers the purpose
of the pre-1990 UPC. The pre-1990 UPC
system was premised on a desire to provide equality among those equally
related. The pre-1990 UPC system failed to achieve that objective in this
instance. The 1990 system
(per-capita-at-each-generation) remedies that defect in the pre-1990 system.
Reference. Waggoner, "A
Proposed Alternative to the Uniform Probate Code's System for Intestate
Distribution among Descendants," 66 Nw. U.L. Rev. 626 (1971).
Effect of Disclaimer. By virtue of Section 2-1106(b), an heir
cannot use a disclaimer to effect a change in the division of an intestate's
estate. To illustrate this point,
consider the following example:
As
it stands, G’s intestate estate is divided into two equal parts: A takes half and B’s child, Z, takes the
other half. Suppose, however, that A
files a disclaimer under Article II, Part 11.
A cannot affect the basic division of G’s intestate estate by this
maneuver. Section 2-1106(b)(3)(A)
provides that “the disclaimed interest passes as if the disclaimant had died
immediately before the time of distribution [except that] if, by law…, the
descendents 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 interst passes only to the descedents of the
disclaimant who survive the time of distribution.” In this example, the “disclaimed interest” is
A’s share (1/2) of G’s estate; thus the 1/2 interest renounced by A devolves to
A’s children, X and Y, who take 1/4 each.
If
Section 2-1106(b)(3)(A) had provided that G’s “estate” is to be divided as if A
predeceased G, A could have used his disclaimer to increase the share going to
his children from 1/2 to 2/3 (1/3 for each child) and to decrease Z’s share to
1/3. The careful wording of 2-1106(b)(3)(A),
however, prevents A from manipulating the result by this method.
2002 Amendment
Relating to Disclaimers. In 2002, the Code’s former disclaimer provision (§2-801) was replaced
by the Uniform Disclaimer of Property Interests Act, which is incorporated into
the Code as Part 11 of Article 2 (§§2-1001 – 2-1117). The statutory references in this Comment to
former section 2-801 have been replaced by appropriate references to Part 11. Updating these statutory references has not
changed the substance of this Comment.
Section 2‑107.
Kindred of Half Blood.
Relatives of the half blood inherit the same
share they would inherit if they were of the whole blood.
SECTION 2-108.
[Reserved.]
Legislative Note: Section 2-108 is reserved for possible future use. The
2008 amendments moved the content of this section to Section 2-104(a)(2).
Section 2‑109.
Advancements.
(a)
If an individual dies intestate as to all or a portion of his [or her]
estate, property the decedent gave during the decedent's lifetime to an
individual who, at the decedent's death, is an heir is treated as an
advancement against the heir's intestate share only if (i) the decedent
declared in a contemporaneous writing or the heir acknowledged in writing that
the gift is an advancement or (ii) the decedent's contemporaneous writing or
the heir's written acknowledgment otherwise indicates that the gift is to be
taken into account in computing the division and distribution of the decedent's
intestate estate.
(b) For purposes of subsection (a), property advanced is valued as of
the time the heir came into possession or enjoyment of the property or as of the time of the
decedent's death, whichever first occurs.
(c) If the recipient of the property fails to survive the decedent, the
property is not taken into account in computing the division and distribution
of the decedent's intestate estate, unless the decedent's contemporaneous
writing provides otherwise.
COMMENT
Purpose of the 1990
Revisions.
This section was revised so that an advancement can be taken into account with
respect to the intestate portion of a partially intestate estate.
Other
than these revisions, and a few stylistic and clarifying amendments, the
original content of the section is maintained, under which the common law
relating to advancements is altered by requiring written evidence of the intent
that an inter-vivos gift be an advancement.
The
statute is phrased in terms of the donee being an heir “at the decedent’s
death.” The donee need not be a prospective heir at the time of the gift. For
example, if the intestate, G, made an inter-vivos gift intended to be an
advancement to a grandchild at a time when the intestate’s child who is the
grandchild’s parent is alive, the grandchild would not then be a prospective
heir. Nevertheless, if G’s intent that the gift be an advancement is contained
in a written declaration or acknowledgment as provided in subsection (a), the
gift is regarded as an advancement if G’s child (who is the grandchild’s
parent) predeceases G, making the grandchild an heir.
To
be an advancement, the gift need not be an outright gift; it can be in the form
of a will substitute, such as designating the donee as the beneficiary of the
intestate’s life-insurance policy or the beneficiary of the remainder interest
in a revocable inter-vivos trust.
Most
inter-vivos transfers today are intended to be absolute gifts or are carefully
integrated into a total estate plan. If the donor intends that any transfer
during the donor’s lifetime be deducted from the donee’s share of his estate,
the donor may either execute a will so providing or, if he or she intends to
die intestate, charge the gift as an advance by a writing within the present
section.
This
section applies to advances to the decedent’s spouse and collaterals (such as
nephews and nieces) as well as to descendants.
Computation
of Shares—Hotchpot Method. This section does not specify the method of taking an advancement into
account in distributing the decedent’s intestate estate. That process, called
the hotchpot method, is provided by the common law. The hotchpot method is
illustrated by the following example.
Example: G died intestate, survived
by his wife (W) and his three children (A, B, and C) by a prior marriage. G’s
probate estate is valued at $190,000. During his lifetime, G had advanced A
$50,000 and B $10,000. G memorialized both gifts in a writing declaring his
intent that they be advancements.
Solution. The first step in the
hotchpot method is to add the value of the advancements to the value of G’s
probate estate. This combined figure is called the hotchpot estate.
In
this case, G’s hotchpot estate preliminarily comes to $250,000 ($190,000 +
$50,000 + $10,000). W’s intestate share of a $250,000 estate under Section
2-102(4) is $200,000 ($150,000 plus 1/2 of $100,000). The remaining $50,000 is
divided equally among A, B, and C, or $16,667 each. This calculation reveals
that A has received an advancement greater than the share to which he is
entitled; A can retain the $50,000 advancement, but is not entitled to any
additional amount. A and A’s $50,000 advancement are therefore disregarded and
the process is begun over.
Once
A and A’s $50,000 advancement are disregarded, G’s revised hotchpot estate is
$200,000 ($190,000 + $10,000). W’s intestate share is $175,000 ($150,000 plus
1/2 of $50,000). The remaining $25,000 is divided equally between B and C, or
$12,500 each. From G’s intestate estate, B receives $2,500 (B already having
received $10,000 of his ultimate $12,500 share as an advancement); and C
receives $12,500. The final division of G’s probate estate is $175,000 to W,
zero to A, $2,500 to B, and $12,500 to C.
Effect
if Advancee Predeceases the Decedent; Disclaimer. If a decedent had made an
advancement to a person who predeceased the decedent, the last sentence of
Section 2-109 provides that the advancement is not taken into account in
computing the intestate share of the recipient’s descendants (unless the
decedent’s declaration provides otherwise). The rationale is that there is no
guarantee that the recipient’s descendants received the advanced property or
its value from the recipient’s estate.
To
illustrate the application of the last sentence of Section 2-109, consider this
case: During her lifetime, G had advanced $10,000 to her son, A. G died
intestate, leaving a probate estate of $50,000. G was survived by her daughter,
B, and by A’s child, X. A predeceased G.
G’s
advancement to A is disregarded. G’s $50,000 intestate estate is divided into two
equal shares, half ($25,000) going to B and the other half ($25,000) going to
A’s child, X.
Now,
suppose that A survived G. In this situation, of course, the advancement to A
is taken into account in the division of G’s intestate estate. Under the hotchpot
method, illustrated above, G’s hotchpot estate is $60,000 (probate estate of
$50,000 plus advancement to A of $10,000). A takes half of this $60,000 amount,
or $30,000, but is charged with already having received $10,000 of it.
Consequently, A takes only a 2/5 share ($20,000) of G’s intestate estate, and B
takes the remaining 3/5 share ($30,000).
Note
that A cannot use a disclaimer under Section 2-1105 in effect to give his
child, X, a larger share than A was entitled to. Under Section 2-1106(b)(3)(A),
the effect of a disclaimer by A is that the disclaimant’s “interest” devolves
to A’s descendants as if the disclaimant had predeceased the decedent. The
“interest” that A renounced was a right to a 2/5 share of G’s estate, not a 1/2
share. Consequently, A’s 2/5 share ($20,000) passes to A’s child, X.
2002
Amendment Relating to Disclaimers. In 2002, the Code’s former disclaimer provision (§
2-801) was replaced by the Uniform Disclaimer of Property Interests Act, which
is incorporated into the Code as Part 11 of Article 2 (§§ 2-1101 to 2-1117).
The statutory references in this Comment to former Section 2-801 have been
replaced by appropriate references to Part 11. Updating these statutory
references has not changed the substance of this Comment.
2008
Cost-of-Living Adjustment. As revised in 1990, the dollar amount in Section 2-102(a)(4) was
$100,000. To adjust for inflation, that amount was increased in 2008 to
$150,000. The Example in this Comment was revised in 2008 to reflect that
increase.
Historical Note. This Comment was revised in 2002 and 2008.
Section 2‑110.
Debts to Decedent.
A debt owed to a decedent is not charged
against the intestate share of any individual except the debtor. If the debtor fails to survive the decedent,
the debt is not taken into account in computing the intestate share of the
debtor's descendants.
COMMENT
Section
2‑110 supplements Section 3‑903, Right of Retainer.
Effect of
Disclaimer.
Section 2‑1106(b)(3)(A) prevents a living debtor from using the combined
effects of the last sentence of Section 2‑110 and a disclaimer to avoid a
setoff. Although Section 2‑110 provides that, if the debtor actually
fails to survive the decedent, the debt is not taken into account in computing
the intestate share of the debtor's descendants, the same result is not
produced when a living debtor disclaims. Section 2‑1106(b)(3)(A) provides
that the "interest" disclaimed, not the decedent's estate as a whole,
devolves as though the disclaimant predeceased the decedent. The
"interest" disclaimed by a living debtor is the share the debtor would have taken had he or she
not disclaimed‑his or her intestate share minus the debt.
2002 Amendment
Relating to Disclaimers. In 2002, the Code’s former disclaimer provision (§2-801) was replaced
by the Uniform Disclaimer of Property Interests Act, which is incorporated into
the Code as Part 11 of Article 2 (§§2-1001 – 2-1117). The statutory references in this Comment to
former section 2-801 have been replaced by appropriate references to Part
11. Updating these statutory references
has not changed the substance of this Comment.
Section 2‑111.
Alienage.
No individual is disqualified to take as an
heir because the individual or an individual through whom he [or she] claims is
or has been an alien.
COMMENT
This section eliminates the ancient rule that
an alien cannot acquire or transmit land by descent, a rule based on the feudal
notions of the obligations of the tenant to the King. Although there never was
a corresponding rule as to personalty, the present section is phrased in light
of the basic premise of the Code that distinctions between real and personal
property should be abolished.
Section 2‑112.
Dower and Curtesy Abolished.
The estates of dower and curtesy are abolished.
COMMENT
The provisions of this Code
replace the common-law concepts of dower and curtesy and their statutory
counterparts. Thos estates provided both
a share in intestacy and a protection against disinheritance.
In states that have
previously abolished dower and curtesy, or where those states have never
existed, the above section should be omitted.
Section 2‑113.
Individuals Related to Decedent Through Two Lines.
An individual who is related to the decedent
through two lines of relationship is entitled to only a single share based on
the relationship that would entitle the individual to the larger share.
COMMENT
This section prevents double
inheritance. It has potential application in a case in which a deceased
person's brother or sister marries the spouse of the decedent and adopts a
child of the former marriage; if the adopting parent died thereafter leaving
the child as a natural and adopted grandchild of its grandparents, this section
prevents the child from taking as an heir from the grandparents in both
capacities.
Section 2‑114.
Parent Barred from Inheriting in Certain Circumstances.
(a) A parent is barred from inheriting from or through a child of the
parent if:
(1)
the parent’s parental rights were terminated and the parent-child relationship
was not judicially reestablished; or
(2)
the child died before reaching [18] years of age and there is clear and
convincing evidence that immediately before the child’s death the parental
rights of the parent could have been terminated under law of this state other
than this [code] on the basis of nonsupport, abandonment, abuse, neglect, or
other actions or inactions of the parent toward the child.
(b) For the purpose of intestate succession from or
through the deceased child, a parent who is barred from inheriting under this
section is treated as if the parent predeceased the child.
COMMENT
2008 Revisions. In 2008, this section
replaced former Section 2-114(c), which provided: “(c) Inheritance from or through
a child by either natural parent or his [or her] kindred is precluded unless
that natural parent has openly treated the child as his [or hers], and has not
refused to support the child.”
Subsection
(a)(1) recognizes that a parent whose parental rights have been terminated is
no longer legally a parent.
Subsection
(a)(2) addresses a situation in which a parent’s parental rights were not
actually terminated. Nevertheless, a parent can still be barred from inheriting
from or through a child if the child died before reaching [18] years of age and
there is clear and convincing evidence that immediately before the child’s
death the parental rights of the parent could have been terminated under law of
this state other than this [code], but only if those parental rights could have
been terminated on the basis of nonsupport, abandonment, abuse, neglect, or
other actions or inactions of the parent toward the child.
Statutes
providing the grounds for termination of parental rights include: Ariz. Rev.
Stat. Ann. § 8-533; Conn. Gen. Stat. § 45a-717; Del. Code Ann. tit. 13 § 1103;
Fla. Stat. Ann. § 39.806; Iowa Code § 600A.8; Kan. Stat. Ann. § 38-2269; Mich.
Comp. L. Ann. § 712A.19b; Minn. Stat. Ann. § 260C.301; Miss. Code Ann. §
93-15-103; Mo. Rev. Stat. § 211.447; Tex. Fam. Code §§ 161.001 to .007.
Subpart 2. Parent-Child Relationship.
SECTION 2-115.
Definitions. In this [subpart]:
(1) “Adoptee” means an
individual who is adopted.
(2) “Assisted reproduction”
means a method of causing pregnancy other than sexual intercourse.
(3) “Divorce”includes an
annulment, dissolution, and declaration of invalidity of a marriage.
(4) “Functioned as a parent
of the child” means behaving toward a child in a manner consistent with being
the child’s parent and performing functions that are customarily performed by a
parent, including fulfilling parental responsibilities toward the child,
recognizing or holding out the child as the individual’s child, materially
participating in the child’s upbringing, and residing with the child in the
same household as a regular member of that household.
(5) “Genetic father” means
the man whose sperm fertilized the egg of a child’s genetic mother. If the
father-child relationship is established under the presumption of paternity
under [insert applicable state law], the term means only the man for whom that
relationship is established.
(6) “Genetic mother” means
the woman whose egg was fertilized by the sperm of a child’s genetic father.
(7) “Genetic parent” means a
child’s genetic father or genetic mother.
(8) “Incapacity” means the
inability of an individual to function as a parent of a child because of the
individual’s physical or mental condition.
(9) “Relative” means a
grandparent or a descendant of a grandparent.
Legislative Note: States that have enacted the Uniform Parentage Act
(2000, as amended) should replace “applicable state law” in paragraph (5) with
“Section 201(b)(1), (2), or (3) of the Uniform Parentage Act (2000), as
amended”. Two of the principal features of Articles 1 through 6 of the Uniform
Parentage Act (2000, as amended) are (i) the presumption of paternity and the
procedure under which that presumption can be disproved by adjudication and
(ii) the acknowledgment of paternity and the procedure under which that
acknowledgment can be rescinded or challenged. States that have not enacted
similar provisions should consider whether such provisions should be added as
part of Section 2-115(5). States
that have not enacted the Uniform Parentage Act (2000, as amended) should also
make sure that applicable state law authorizes parentage to be established
after the death of the alleged parent, as provided in the Uniform Parentage Act
§ 509 (2000, as amended), which provides: “For good cause shown, the court may
order genetic testing of a deceased individual.”
Comment
Scope.
This
section sets forth definitions that apply for purposes of the intestacy rules
contained in Subpart 2 (Parent-Child Relationship).
Definition
of “Adoptee”. The
term “adoptee” is not limited to an individual who is adopted as a minor but
includes an individual who is adopted as an adult.
Definition
of “Assisted Reproduction”. The definition of “assisted reproduction” is copied
from the Uniform Parentage Act § 102. Current methods of assisted reproduction
include intrauterine insemination (previously and sometimes currently called
artificial insemination), donation of eggs, donation of embryos, in-vitro
fertilization and transfer of embryos, and intracytoplasmic sperm injection.
Definition
of “Functioned as a Parent of the Child”. The term “functioned as a parent of the
child” is derived from the Restatement (Third) of Property: Wills and Other
Donative Transfers. The Reporter’s Note No. 4 to § 14.5 of the Restatement
lists the following parental functions:
Custodial responsibility refers to physical
custodianship and supervision of a child. It usually includes, but does not
necessarily require, residential or overnight responsibility.
Decisionmaking responsibility refers to authority for
making significant life decisions on behalf of the child, including decisions
about the child’s education, spiritual guidance, and health care.
Caretaking functions are tasks that involve
interaction with the child or that direct, arrange, and supervise the
interaction and care provided by others. Caretaking functions include but are
not limited to all of the following:
(a) satisfying the nutritional needs of the child,
managing the child’s bedtime and wake-up routines, caring for the child when
sick or injured, being attentive to the child’s personal hygiene needs
including washing, grooming, and dressing, playing with the child and arranging
for recreation, protecting the child’s physical safety, and providing
transportation;
(b) directing the child’s various developmental
needs, including the acquisition of motor and language skills, toilet training,
self-confidence, and maturation;
(c) providing discipline, giving instruction in
manners, assigning and supervising chores, and performing other tasks that
attend to the child’s needs for behavioral control and self-restraint;
(d) arranging for the child’s education, including
remedial or special services appropriate to the child’s needs and interests,
communicating with teachers and counselors, and supervising homework;
(e) helping the child to develop and maintain
appropriate interpersonal relationships with peers, siblings, and other family
members;
(f) arranging for health-care providers, medical
follow-up, and home health care;
(g) providing moral and ethical guidance;
(h) arranging alternative care by a family member,
babysitter, or other child-care provider or facility, including investigation
of alternatives, communication with providers, and supervision of care.
Parenting functions are tasks that serve the
needs of the child or the child’s residential family. Parenting functions
include caretaking functions, as defined [above], and all of the following
additional functions:
(a) providing economic support;
(b) participating in decisionmaking regarding the
child’s welfare;
(c) maintaining or improving the family residence,
including yard work, and house cleaning;
(d) doing and arranging for financial planning and
organization, car repair and maintenance, food and clothing purchases, laundry
and dry cleaning, and other tasks supporting the consumption and savings needs
of the household;
(e) performing any other functions that are
customarily performed by a parent or guardian and that are important to a
child’s welfare and development.
Ideally,
a parent would perform all of the above functions throughout the child’s
minority. In cases falling short of the ideal, the trier of fact must balance
both time and conduct. The question is, did the individual perform sufficient
parenting functions over a sufficient period of time to justify concluding that
the individual functioned as a parent of the child. Clearly, insubstantial
conduct, such as an occasional gift or social contact, would be insufficient.
Moreover, merely obeying a child support order would not, by itself, satisfy
the requirement. Involuntarily providing support is inconsistent with
functioning as a parent of the child.
The
context in which the question arises is also relevant. If the question is
whether the individual claiming to have functioned as a parent of the child
inherits from the child, the court might require more substantial conduct over
a more substantial period of time than if the question is whether a child
inherits from an individual whom the child claims functioned as his or her
parent.
Definition
of “Genetic Father”. The term “genetic father” means the man whose sperm fertilized the egg
of a child’s genetic mother. If the father-child relationship is established
under the presumption of paternity recognized by the law of this state, the
term means only the man for whom that relationship is established. As stated in
the Legislative Note, a state that has enacted the Uniform Parentage Act (2000,
as amended) should insert a reference to Section 201(b)(1), (2), or (3) of that
Act.
Definition
of “Relative”. The term “relative” does not include any relative no matter how remote
but is limited to a grandparent or a descendant of a grandparent, as determined
under this subpart 2.
Section
2-116. Effect of Parent-Child
Relationship. Except as otherwise provided in Section
2-119(b) through (e), if a parent-child relationship exists or is established
under this [subpart], the parent is a parent of the child and the child is a
child of the parent for the purpose of intestate succession.
Comment
Scope.
This
section provides that if a parent-child relationship exists or is established
under any section in subpart 2, the consequence is that the parent is a parent
of the child and the child is a child of the parent for the purpose of
intestate succession by, from, or through the parent and the child. The
exceptions in Section 2-119(b) through (e) refer to cases in which a
parent-child relationship exists but only for the purpose of the right of an
adoptee or a descendant of an adoptee to inherit from or through one or both
genetic parents.
Section 2-117. No Distinction Based on Marital Status. Except as otherwise provided in Sections
2-114, 2-119, 2-120, or 2-121, a parent-child relationship exists between a
child and the child’s genetic parents, regardless of the parents’ marital
status.
Comment
Scope.
This
section, adopted in 2008, provides the general rule that a parent-child
relationship exists between a child and the child’s genetic parents, regardless
of the parents’ marital status. Exceptions to this general rule are contained
in Sections 2-114 (Parent Barred from Inheriting in Certain Circumstances),
2-119 (Adoptee and Adoptee’s Genetic Parents), 2-120 (Child Conceived by
Assisted Reproduction Other than Child Born to Gestational Carrier), and
2-121(Child Born to Gestational Carrier).
This
section replaces former Section 2-114(a), which provided: “(a) Except as
provided in subsections (b) and (c), for purposes of intestate succession by,
through, or from a person, an individual is the child of his [or her] natural
parents, regardless of their marital status. The parent and child relationship
may be established under [the Uniform Parentage Act] [applicable state law]
[insert appropriate statutory reference].”
Defined
Terms. Genetic
parent is
defined in Section 2-115 as the child’s genetic father or genetic mother. Genetic
mother is defined as the woman whose egg was fertilized by the sperm of a
child’s genetic father. Genetic father is defined as the man whose sperm
fertilized the egg of a child’s genetic mother.
Section 2-118. Adoptee and Adoptee’s Adoptive Parent or
Parents.
(a) [Parent-Child
Relationship Between Adoptee and Adoptive Parent or Parents.] A parent-child relationship exists between an adoptee
and the adoptee’s adoptive parent or parents.
(b) [Individual in Process
of Being Adopted by Married Couple; Stepchild in Process of Being Adopted by
Stepparent.] For purposes of
subsection (a):
(1)
an individual who is in the process of being adopted by a married couple when
one of the spouses dies is treated as adopted by the deceased spouse if the
adoption is subsequently granted to the decedent’s surviving spouse; and
(2)
a child of a genetic parent who is in the process of being adopted by a genetic
parent’s spouse when the spouse dies is treated as adopted by the deceased
spouse if the genetic parent survives the deceased spouse by 120 hours.
(c) [Child of Assisted
Reproduction or Gestational Child in Process of Being Adopted.] If, after a parent-child relationship is established
between a child of assisted reproduction and a parent under Section 2-120 or
between a gestational child and a parent under Section 2-121, the child is in
the process of being adopted by the parent’s spouse when that spouse dies, the
child is treated as adopted by the deceased spouse for the purpose of subsection
(b)(2).
Comment
2008
Revisions. In
2008, this section and Section 2-119 replaced former Section 2-114(b), which
provided: “(b) An adopted individual is the child of his [or her] adopting
parent or parents and not of his [or her] natural parents, but adoption of a
child by the spouse of either natural parent has no effect on (i) the
relationship between the child and that natural parent or (ii) the right of the
child or a descendant of the child to inherit from or through the other natural
parent”. The 2008 revisions divided the coverage of former Section 2-114(b)
into two sections. Subsection (a) of this section covered that part of former
Section 2-114(b) that provided that an adopted individual is the child of his
or her adopting parent or parents. Section 2-119(a) and (b)(1) covered that
part of former Section 2-114(b) that provided that an adopted individual is not
the child of his natural parents, but adoption of a child by the spouse of
either natural parent has no effect on
the relationship between the child and that natural parent or (ii) the
right of the child or a descendant of the child to inherit from or through the
other natural parent.
The
2008 revisions also added subsections (b)(2) and (c), which are explained
below.
Data
on Adoptions. Official
data on adoptions are not regularly collected. Partial data are sometimes
available from the Children’s Bureau of the U.S. Department of Health and Human
Services, the U.S. Census Bureau, and the Evan B. Donaldson Adoption Institute.
For
an historical treatment of adoption, from ancient Greece, through the Middle
Ages, 19th- and 20th-century America, to open adoption
and international adoption, see Debora L. Spar, The Baby Business ch. 6 (2006)
and sources cited therein.
Defined
Term. Adoptee is defined in Section 2-115
as an individual who is adopted. The term is not limited to an individual who
is adopted as a minor but includes an individual who is adopted as an adult.
Subsection
(a): Parent-Child Relationship Between Adoptee and Adoptive Parent or Parents. Subsection (a) states the
general rule that adoption creates a parent-child relationship between the
adoptee and the adoptee’s adoptive parent or parents.
Subsection
(b)(1): Individual in Process of Being Adopted by Married Couple. If the spouse who
subsequently died had filed a legal proceeding to adopt the individual before
the spouse died, the individual is “in the process of being adopted” by the
deceased spouse when the spouse died. However, the phrase “in the process of
being adopted” is not intended to be limited to that situation, but is intended
to grant flexibility to find on a case by case basis that the process commenced
earlier.
Subsection
(b)(2): Stepchild in Process of Being Adopted by Stepparent. If the stepparent who
subsequently died had filed a legal proceeding to adopt the stepchild before
the stepparent died, the stepchild is “in the process of being adopted” by the
deceased stepparent when the stepparent died. However, the phrase “in the
process of being adopted” is not intended to be limited to that situation, but
is intended to grant flexibility to find on a case by case basis that the
process commenced earlier.
Subsection
(c): Child of Assisted Reproduction or Gestational Child in Process of Being
Adopted. Subsection
(c) provides that if, after a parent-child relationship is established between
a child of assisted reproduction and a parent under Section 2-120 or between a
gestational child and a parent under Section 2-121, the child is in the process
of being adopted by the parent’s spouse when that spouse dies, the child is
treated as adopted by the deceased spouse for the purpose of subsection (b)(2).
An example would be a situation in which an unmarried mother or father is the
parent of a child of assisted reproduction or a gestational child, and
subsequently marries an individual who then begins the process of adopting the
child but who dies before the adoption becomes final. In such a case,
subsection (c) provides that the child is treated as adopted by the deceased spouse
for the purpose of subsection (b)(2). The phrase “in the process of being
adopted” carries the same meaning under subsection (c) as it does under
subsection (b)(2).
Section 2-119. Adoptee and Adoptee’s Genetic Parents.
(a) [Parent-Child
Relationship Between Adoptee and Genetic Parents.] Except as otherwise provided in subsections (b)
through (e), a parent-child relationship does not exist between an adoptee and
the adoptee’s genetic parents.
(b) [Stepchild Adopted by
Stepparent.] A parent-child
relationship exists between an individual who is adopted by the spouse of
either genetic parent and:
(1)
the genetic parent whose spouse adopted the individual; and
(2)
the other genetic parent, but only for the purpose of the right of the adoptee
or a descendant of the adoptee to inherit from or through the other genetic
parent.
(c) [Individual Adopted by
Relative of Genetic Parent.] A
parent-child relationship exists between both genetic parents and an individual
who is adopted by a relative of a genetic parent, or by the spouse or surviving
spouse of a relative of a genetic parent, but only for the purpose of the right
of the adoptee or a descendant of the adoptee to inherit from or through either
genetic parent.
(d) [Individual Adopted
after Death of Both Genetic Parents.] A
parent-child relationship exists between both genetic parents and an individual
who is adopted after the death of both genetic parents, but only for the
purpose of the right of the adoptee or a descendant of the adoptee to inherit
through either genetic parent.
(e) [Child of Assisted
Reproduction or Gestational Child Who Is Subsequently Adopted.] If, after a parent-child relationship is established
between a child of assisted reproduction and a parent or parents under Section
2-120 or between a gestational child and a parent or parents under Section
2-121, the child is adopted by another or others, the child’s parent or parents
under Section 2-120 or 2-121 are treated as the child’s genetic parent or
parents for the purpose of this section.
Comment
2008 Revisions. In 2008, this section and Section 2-118 replaced
former Section 2-114(b), which provided: “(b) An adopted individual is the
child of his [or her] adopting parent or parents and not of his [or her]
natural parents, but adoption of a child by the spouse of either natural parent
has no effect on (i) the relationship between the child and that natural parent
or (ii) the right of the child or a descendant of the child to inherit from or
through the other natural parent”.The 2008 revisions divided the coverage of
former Section 2-114(b) into two sections. Section 2-118(a) covered that part
of former Section 2-114(b) that provided that an adopted individual is the child
of his or her adopting parent or parents. Subsections (a) and (b) of this
section covered that part of former Section 2-114(b) that provided that an
adopted individual is not the child of his natural parents, but adoption of a
child by the spouse of either natural parent has no effect on the relationship between the child and that
natural parent or (ii) the right of the child or a descendant of the child to
inherit from or through the other natural parent.
The 2008 revisions also added
subsections (c), (d), and (e), which are explained below.
Defined Terms. Section 2-119 uses terms that are defined in Section
2-115.
Adoptee is defined in Section 2-115 as an individual who is
adopted. The term is not limited to an individual who is adopted as a minor, but
includes an individual who is adopted as an adult.
Genetic parent is defined in Section 2-115 as the child’s genetic
father or genetic mother. Genetic mother is defined as the woman whose
egg was fertilized by the sperm of a child’s genetic father. Genetic father is
defined as the man whose sperm fertilized the egg of a child’s genetic mother.
Relative is defined in Section 2-115 as a grandparent or a
descendant of a grandparent.
Subsection (a):
Parent-Child Relationship Between Adoptee and Adoptee’s Genetic Parents. Subsection (a) states the general rule that a
parent-child relationship does not exist between an adopted child and the
child’s genetic parents. This rule recognizes that an adoption severs the
parent-child relationship between the adopted child and the child’s genetic
parents. The adoption gives the adopted child a replacement family, sometimes
referred to in the case law as “a fresh start”. For further elaboration of this
theory, see Restatement (Third) of Property: Wills and Other Donative Transfers
§ 2.5(2)(A) & cmts. d & e (1999). Subsection (a) also states, however,
that there are exceptions to this general rule in subsections (b) through (d).
Subsection (b): Stepchild
Adopted by Stepparent. Subsection (b)
continues the so-called “stepparent exception” contained in the Code since its
original promulgation in 1969. When a stepparent adopts his or her stepchild,
Section 2-118 provides that the adoption creates a parent-child relationship
between the child and his or her adoptive stepparent. Section 2-119(b)(1)
provides that a parent-child relationship continues to exist between the child
and the child’s genetic parent whose spouse adopted the child. Section
2-119(b)(2) provides that a parent-child relationship also continues to exist
between an adopted stepchild and his or her other genetic parent (the
noncustodial genetic parent) for purposes of inheritance from and through that
genetic parent, but not for purposes of inheritance by the other genetic parent
and his or her relatives from or through the adopted stepchild.
Example
1—Post-Widowhood Remarriage. A and B
were married and had two children, X and Y. A died, and B married C. C adopted
X and Y. Under subsection (b)(1), X and Y are treated as B’s children and under
Section 2-118(a) as C’s children for all purposes of inheritance. Under
subsection (b)(2), X and Y are treated as A’s children for purposes of
inheritance from and through A but not for purposes of inheritance from or
through X or Y. Thus, if A’s father, G, died intestate, survived by X and Y and
by G’s daughter (A’s sister), S, G’s heirs would be S, X, and Y. S would take
half and X and Y would take one-fourth each.
Example
2—Post-Divorce Remarriage. A and B
were married and had two children, X and Y. A and B got divorced, and B married
C. C adopted X and Y. Under subsection (b)(1), X and Y are treated as B’s
children and under Section 2-118(a) as C’s children for all purposes of
inheritance. Under subsection (b)(2), X and Y are treated as A’s children for
purposes of inheritance from and through A. On the other hand, neither A nor
any of A’s relatives can inherit from or through X or Y.
Subsection (c): Individual
Adopted by Relative of a Genetic Parent. Under subsection (c), a child who is adopted by a maternal or a paternal
relative of either genetic parent, or by the spouse or surviving spouse of such
a relative, remains a child of both genetic parents.
Example
3. F and M, a married couple with a
four-year old child, X, were badly injured in an automobile accident. F subsequently
died. M, who was in a vegetative state and on life support, was unable to care
for X. Thereafter, M’s sister, A, and A’s husband, B, adopted X. F’s father,
PGF, a widower, then died intestate. Under subsection (c), X is treated as
PGF’s grandchild (F’s child).
Subsection (d): Individual
Adopted After Death of Both Genetic Parents. Usually, a post-death adoption does not remove a child from contact
with the genetic families. When someone with ties to the genetic family or
families adopts a child after the deaths of the child’s genetic parents, even
if the adoptive parent is not a relative of either genetic parent or a spouse
or surviving spouse of such a relative, the child continues to be in a
parent-child relationship with both genetic parents. Once a child has taken
root in a family, an adoption after the death of both genetic parents is likely
to be by someone chosen or approved of by the genetic family, such as a person
named as guardian of the child in a deceased parent’s will. In such a case, the
child does not become estranged from the genetic family. Such an adoption does
not “remove” the child from the families of both genetic parents. Such a child
continues to be a child of both genetic parents, as well as a child of the
adoptive parents.
Example
4. F and M, a married couple with a
four-year-old child, X, were involved in an automobile accident that killed F
and M. Neither M’s parents nor F’s father (F’s mother had died before the
accident) nor any other relative was in a position to take custody of X. X was
adopted by F and M’s close friends, A and B, a married couple approximately of
the same ages as F and M. F’s father, PGF, a widower, then died intestate.
Under subsection (d), X is treated as PGF’s grandchild (F’s child). The result would
be the same if F’s or M’s will appointed A and B as the guardians of the person
of X, and A and B subsequently successfully petitioned to adopt X.
Subsection (e): Child of Assisted Reproduction or Gestational
Child Who Is Subsequently Adopted. Subsection (e) puts a child of assisted
reproduction and a gestational child on the same footing as a genetic child for
purposes of this section. The results in Examples 1 through 4 would have been
the same had the child in question been a child of assisted reproduction or a
gestational child.
Section 2-120. Child Conceived by Assisted Reproduction
Other Than Child Born to Gestational Carrier.
(a) [Definitions.] In this section:
(1)
“Birth mother” means a woman, other than a gestational carrier under Section
2-121, who gives birth to a child of assisted reproduction. The term is not
limited to a woman who is the child’s genetic mother.
(2)
“Child of assisted reproduction” means a child conceived by means of assisted
reproduction by a woman other than a gestational carrier under Section 2-121.
(3)
“Third-party donor” means an individual who produces eggs or sperm used for
assisted reproduction, whether or not for consideration. The term does not
include:
(A)
a husband who provides sperm, or a wife who provides eggs, that are used for
assisted reproduction by the wife;
(B)
the birth mother of a child of assisted reproduction; or
(C)
an individual who has been determined under subsection (e) or (f) to have a
parent-child relationship with a child of assisted reproduction.
(b) [Third-Party Donor.] A parent-child relationship does not exist between a
child of assisted reproduction and a third-party donor.
(c) [Parent-Child
Relationship with Birth Mother.] A
parent-child relationship exists between a child of assisted reproduction and
the child’s birth mother.
(d) [Parent-Child
Relationship with Husband Whose Sperm Were Used During His Lifetime by His Wife
for Assisted Reproduction.] Except as
otherwise provided in subsections (i) and (j), a parent-child relationship
exists between a child of assisted reproduction and the husband of the child’s
birth mother if the husband provided the sperm that the birth mother used
during his lifetime for assisted reproduction.
(e) [Birth Certificate:
Presumptive Effect.] A birth
certificate identifying an individual other than the birth mother as the other
parent of a child of assisted reproduction presumptively establishes a
parent-child relationship between the child and that individual.
(f) [Parent-Child
Relationship with Another.] Except as
otherwise provided in subsections (g), (i), and (j), and unless a parent-child
relationship is established under subsection (d) or (e), a parent-child
relationship exists between a child of assisted reproduction and an individual
other than the birth mother who consented to assisted reproduction by the birth
mother with intent to be treated as the other parent of the child. Consent to
assisted reproduction by the birth mother with intent to be treated as the
other parent of the child is established if the individual:
(1)
before or after the child’s birth, signed a record that, considering all the
facts and circumstances, evidences the individual’s consent; or
(2)
in the absence of a signed record under paragraph (1):
(A)
functioned as a parent of the child no later than two years after the child’s
birth;
(B)
intended to function as a parent of the child no later than two years after the
child’s birth but was prevented from carrying out that intent by death,
incapacity, or other circumstances; or
(C)
intended to be treated as a parent of a posthumously conceived child, if that
intent is established by clear and convincing evidence.
(g) [Record Signed More
than Two Years after the Birth of the Child: Effect.] For the purpose of subsection (f)(1), neither an
individual who signed a record more than two years after the birth of the
child, nor a relative of that individual who is not also a relative of the
birth mother, inherits from or through the child unless the individual
functioned as a parent of the child before the child reached [18] years of age.
(h) [Presumption: Birth
Mother Is Married or Surviving Spouse.] For
the purpose of subsection (f)(2), the following rules apply:
(1)
If the birth mother is married and no divorce proceeding is pending, in the
absence of clear and convincing evidence to the contrary, her spouse satisfies
subsection (f)(2)(A) or (B).
(2)
If the birth mother is a surviving spouse and at her deceased spouse’s death no
divorce proceeding was pending, in the absence of clear and convincing evidence
to the contrary, her deceased spouse satisfies subsection (f)(2)(B) or (C).
(i) [Divorce Before
Placement of Eggs, Sperm, or Embryos.] If
a married couple is divorced before placement of eggs, sperm, or embryos, a
child resulting from the assisted reproduction is not a child of the birth
mother’s former spouse, unless the former spouse consented in a record that if
assisted reproduction were to occur after divorce, the child would be treated
as the former spouse’s child.
(j) [Withdrawal of Consent Before Placement of Eggs, Sperm, or Embryos.] If,
in a record, an individual withdraws consent to assisted reproduction before
placement of eggs, sperm, or embryos, a child resulting from the assisted
reproduction is not a child of that individual, unless the individual
subsequently satisfies subsection (f).
(k) [When Posthumously
Conceived Child Treated as in Gestation.] If, under this section, an individual is a parent of a child of
assisted reproduction who is conceived after the individual’s death, the child
is treated as in gestation at the individual’s death for purposes of Section
2-104(a)(2) if the child is:
(1)
in utero not later than 36 months after the individual’s death; or
(2)
born not later than 45 months after the individual’s death.
Legislative Note: States are encouraged to enact a provision requiring
genetic depositories to provide a consent form that would satisfy subsection
(f)(1). See Cal. Health & Safety Code § 1644.7 and .8 for a possible model
for such a consent form.
Comment
Data on Children of
Assisted Reproduction. The Center for
Disease Control (CDC) of the U.S. Department of Health and Human Services
collects data on children of assisted reproduction (ART). See Center for
Disease Control, 2004 Assisted Reproductive Technology Success Rates (Dec.
2006) (2004 CDC Report), available at http://www.cdc.gov/ART/ART2004. The data,
however, is of limited use because the definition of ART used in the CDC Report
excludes intrauterine (artificial) insemination (2004 CDC Report at 3), which
is probably the most common form of assisted reproductive procedures. The CDC
estimates that in 2004 ART procedures (excluding intrauterine insemination)
accounted for slightly more than one percent of total U.S. births. 2004 CDC
Report at 13. According to the Report: “The number of infants born who were
conceived using ART increased steadily between 1996 and 2004. In 2004, 49,458
infants were born, which was more than double the 20,840 born in 1996.” 2004
CDC Report at 57. “The average age of women using ART services in 2004 was 36.
The largest group of women using ART services were women younger than 35, representing
41% of all ART cycles carried out in 2004. Twenty-one percent of ART cycles
were carried out among women aged 35-37, 19% among women aged 38-40, 9% among
women aged 41-42, and 9% among women older than 42.” 2004 CDC Report at 15.
Updates of the 2004 CDC Report are to be posted at
http://www.cdc.gov/ART/ART2004.
AMA Ethics Policy on
Posthumous Conception. The ethics
policies of the American Medical Association concerning artificial insemination
by a known donor state that “[i]f semen is frozen and the donor dies before it
is used, the frozen semen should not be used or donated for purposes other than
those originally intended by the donor. If the donor left no instructions, it
is reasonable to allow the remaining partner to use the semen for intrauterine
insemination but not to donate it to someone else. However, the donor should be
advised of such a policy at the time of donation and be given an opportunity to
override it.” Am. Med. Assn. Council on Ethical & Judicial Affairs, Code of
Medical Ethics: Current Opinions E-2.04 (Issued June 1993; updated December
2004), available at
http://www0.ama-assn.org/apps/pf_new/pf_online?f_n=browse&doc=
policyfiles/HnE/E-2.0 (last visited October 16, 2008).
Subsection (a):
Definitions. Subsection (a) defines
the following terms:
Birth mother is defined as the woman (other than a gestational
carrier under Section 2-121) who gave birth to a child of assisted
reproduction.
Child of assisted
reproduction is defined as a child
conceived by means of assisted reproduction by a woman other than a gestational
carrier under Section 2-121.
Third-party donor. The definition of third-party donor is based on the
definition of “donor” in the Uniform Parentage Act § 102.
Other Defined Terms. In addition to the terms defined in subsection (a),
this section uses terms that are defined in Section 2-115.
Assisted reproduction is defined in Section 2-115 as a method of causing
pregnancy other than sexual intercourse.
Divorce is defined in Section 2-115 as including an
annulment, dissolution, and declaration of invalidity of a marriage.
Functioned as a parent of
the child is defined in Section 2-115
as behaving toward a child in a manner consistent with being the child’s parent
and performing functions that are customarily performed by a parent, including
fulfilling parental responsibilities toward the child, recognizing or holding
out the child as the individual’s child, materially participating in the
child’s upbringing, and residing with the child in the same household as a regular
member of that household. See also the Comment to Section 2-115 for additional
explanation of the term.
Genetic father is defined in Section 2-115 as the man whose sperm
fertilized the egg of a child’s genetic mother.
Genetic mother is defined as the woman whose egg was fertilized by
the sperm of the child’s genetic father.
Incapacity is defined in Section 2-115 as the inability of an
individual to function as a parent of a child because of the individual’s
physical or mental condition.
Subsection (b):
Third-Party Donor. Subsection (b) is
consistent with the Uniform Parentage Act § 702. Under subsection (b), a
third-party donor does not have a parent-child relationship with a child of
assisted reproduction, despite the donor’s genetic relationship with the child.
Subsection (c):
Parent-Child Relationship With Birth Mother. Subsection (c) is in accord with the Uniform Parentage Act § 201 in
providing that a parent-child relationship exists between a child of assisted
reproduction and the child’s birth mother. The child’s birth mother, defined in
subsection (a) as the woman (other than a gestational carrier) who gave birth
to the child, made the decision to undergo the procedure with intent to become
pregnant and give birth to the child. Therefore, in order for a parent-child
relationship to exist between her and the child, no proof that she consented to
the procedure with intent to be treated as the parent of the child is
necessary.
Subsection (d):
Parent-Child Relationship with Husband Whose Sperm Were Used During His
Lifetime By His Wife for Assisted Reproduction. The principal application of subsection (d) is in the
case of the assisted reproduction procedure known as intrauterine insemination
husband (IIH), or, in older terminology, artificial insemination husband (AIH).
Subsection (d) provides that, except as otherwise provided in subsection (i), a
parent-child relationship exists between a child of assisted reproduction and
the husband of the child’s birth mother if the husband provided the sperm that
were used during his lifetime by her for assisted reproduction and the husband
is the genetic father of the child. The exception contained in subsection (i)
relates to the withdrawal of consent in a record before the placement of eggs,
sperm, or embryos. Note that subsection (d) only applies if the husband’s sperm
were used during his lifetime by his wife to cause a pregnancy by assisted
reproduction. Subsection (d) does not apply to posthumous conception.
Subsection (e): Birth
Certificate: Presumptive Effect. A
birth certificate will name the child’s birth mother as mother of the child.
Under subsection (c), a parent-child relationship exists between a child of
assisted reproduction and the child’s birth mother. Note that the term “birth
mother” is a defined term in subsection (a) as not including a gestational
carrier as defined in Section 2-121.
Subsection (e) applies to the
individual, if any, who is identified on the birth certificate as the child’s
other parent. Subsection (e) grants presumptive effect to a birth certificate
identifying an individual other than the birth mother as the other parent of a
child of assisted reproduction. In the case of unmarried parents, federal law
requires that states enact procedures under which “the name of the father shall
be included on the record of birth,” but only if the father and mother have
signed a voluntary acknowledgment of paternity or a court or an administrative
agency of competent jurisdiction has issued an adjudication of paternity. See
42 U.S.C. § 666(a)(5)(D). This federal statute is included as an appendix to
the Uniform Parentage Act.
The federal statute applies
only to unmarried opposite-sex parents. Section 2-120(e)’s presumption,
however, could apply to a same-sex couple if state law permits a woman who is
not the birth mother to be listed on the child’s birth certificate as the
child’s other parent. Even if state law does not permit that listing, the woman
who is not the birth mother could be the child’s parent by adoption of the
child (see Section 2-118) or under subsection (f) as a result of her consent to
assisted reproduction by the birth mother “with intent to be treated as the
other parent of the child,” or by satisfying the “function as a parent” test in
subsection (f)(2).
Section 2-120 does not apply
to same-sex couples that use a gestational carrier. For same-sex couples using
a gestational carrier, the parent-child relationship can be established by
adoption (see Section 2-118 and Section 2-121(b)), or it can be established
under subsection 2-121(d) if the couple enters into a gestational agreement
with the gestational carrier under which the couple agrees to be the parents of
the child born to the gestational carrier. It is irrelevant whether either
intended parent is a genetic parent of the child. See Section 2-121(a)(4).
Subsection (f):
Parent-Child Relationship with Another. In
order for someone other than the birth mother to have a parent-child
relationship with the child, there needs to be proof that the individual
consented to assisted reproduction by the birth mother with intent to be
treated as the other parent of the child. The other individual’s genetic
material might or might not have been used to create the pregnancy. Except as
otherwise provided in this section, merely depositing genetic material is not,
by itself, sufficient to establish a parent-child relationship with the child.
Subsection (f)(1): Signed
Record Evidencing Consent, Considering All the Facts and Circumstances, to
Assisted Reproduction with Intent to Be Treated as the Other Parent of the
Child. Subsection (f)(1) provides
that a parent-child relationship exists between a child of assisted
reproduction and an individual other than the birth mother who consented to
assisted reproduction by the birth mother with intent to be treated as the
other parent of the child. Consent to assisted reproduction with intent to be
treated as the other parent of the child is established if the individual
signed a record, before or after the child’s birth, that considering all the
facts and circumstances evidences the individual’s consent. Recognizing consent
in a record not only signed before the child’s birth but also at any time after
the child’s birth is consistent with the Uniform Parentage Act §§ 703 and 704.
As noted, the signed record
need not explicitly express consent to the procedure with intent to be treated
as the other parent of child, but only needs to evidence such consent
considering all the facts and circumstances. An example of a signed record that
would satisfy this requirement comes from In re Martin B., 841 N.Y.S.2d 207
(Sur. Ct. 2007). In that case, the New York Surrogate’s Court held that a child
of posthumous conception was included in a class gift in a case in which the
deceased father had signed a form that stated: “In the event of my death I
agree that my spouse shall have the sole right to make decisions regarding the
disposition of my semen samples. I authorize repro lab to release my specimens
to my legal spouse [naming her].” Another form he signed stated: “I, [naming
him], hereby certify that I am married or intimately involved with [naming her]
and the cryopreserved specimens stored at repro lab will be used for future
inseminations of my wife/intimate partner.” Although these forms do not explicitly
say that the decedent consented to the procedure with intent to be treated as
the other parent of the child, they do evidence such consent in light of all of
the facts and circumstances and would therefore satisfy subsection (f)(1).
Subsection (f)(2):Ideally an individual other than the birth mother who
consented to assisted reproduction by the birth mother with intent to be
treated as the other parent of the child will have signed a record that
satisfies subsection (f)(1). If not, subsection (f)(2) recognizes that actions
speak as loud as words. Under subsection (f)(2), consent to assisted
reproduction by the birth mother with intent to be treated as the other parent
of the child is established if the individual functioned as a parent of the
child no later than two years after the child’s birth. Under subsection
(f)(2)(B), the same result applies if the evidence establishes that the
individual had that intent but death, incapacity, or other circumstances
prevented the individual from carrying out that intent. Finally, under
subsection (f)(2)(C), the same result applies if it can be established by clear
and convincing evidence that the individual intended to be treated as a parent
of a posthumously conceived child.
Subsection (g): Record
Signed More than Two Years after the Birth of the Child: Effect. Subsection (g) is designed to prevent an individual
who has never functioned as a parent of the child from signing a record in
order to inherit from or through the child or in order to make it possible for
a relative of the individual to inherit from or through the child. Thus,
subsection (g) provides that, for purposes of subsection (f)(1), an individual
who signed a record more than two years after the birth of the child, or a
relative of that individual, does not inherit from or through the child unless
the individual functioned as a parent of the child before the child reached the
age of [18].
Subsection (h):
Presumption: Birth Mother is Married or Surviving Spouse. Under subsection (h), if the birth mother is married
and no divorce proceeding is pending, then in the absence of clear and
convincing evidence to the contrary, her spouse satisfies subsection (f)(2)(A)
or (B) or if the birth mother is a surviving spouse and at her deceased
spouse’s death no divorce proceeding was pending, then in the absence of clear
and convincing evidence to the contrary, her deceased spouse satisfies
subsection (f)(2)(B) or (C).
Subsection (i): Divorce
Before Placement of Eggs, Sperm, or Embryos. Subsection (i) is derived from the Uniform Parentage Act § 706(b).
Subsection (j): Withdrawal
of Consent Before Placement of
Eggs, Sperm, or Embryos. Subsection (j) is derived from the Uniform
Parentage Act § 706(a). Subsection (j) provides that if, in a record, an
individual withdraws consent to assisted reproduction before placement of eggs,
sperm, or embryos, a child resulting from the assisted reproduction is not a
child of that individual, unless the individual subsequently satisfies the
requirements of subsection (f).
Subsection (k): When
Posthumously Conceived Gestational Child Treated as in Gestation. Subsection (k) provides that if, under this section,
an individual is a parent of a gestational child who is conceived after the
individual’s death, the child is treated as in gestation at the individual’s
death for purposes of Section 2-104(a)(2) if the child is either (i) in utero
no later than 36 months after the individual’s death or (ii) born no later than
45 months after the individual’s death. Note also that Section 3-703 gives the
decedent’s personal representative authority to take account of the possibility
of posthumous conception in the timing of all or part of the distribution of
the estate.
The 36-month period in
subsection (k) is designed to allow a surviving spouse or partner a period of
grieving, time to make up his or her mind about whether to go forward with
assisted reproduction, and a reasonable allowance for unsuccessful attempts to
achieve a pregnancy. The 36-month period also coincides with Section 3-1006,
under which an heir is allowed to recover property improperly distributed or
its value from any distributee during the later of three years after the
decedent’s death or one year after distribution. If the assisted-reproduction
procedure is performed in a medical facility, the date when the child is in
utero will ordinarily be evidenced by medical records. In some cases, however,
the procedure is not performed in a medical facility, and so such evidence may
be lacking. Providing an alternative of birth within 45 months is designed to
provide certainty in such cases. The 45-month period is based on the 36-month
period with an additional nine months tacked on to allow for a typical period
of pregnancy.
Section 2-121. Child Born to Gestational Carrier.
(a) [Definitions.] In this section:
(1)
“Gestational agreement” means an enforceable or unenforceable agreement for
assisted reproduction in which a woman agrees to carry a child to birth for an
intended parent, intended parents, or an individual described in subsection
(e).
(2)
“Gestational carrier” means a woman who is not an intended parent who gives
birth to a child under a gestational agreement. The term is not limited to a
woman who is the child’s genetic mother.
(3)
“Gestational child” means a child born to a gestational carrier under a
gestational agreement.
(4)
“Intended parent” means an individual who entered into a gestational agreement
providing that the individual will be the parent of a child born to a
gestational carrier by means of assisted reproduction. The term is not limited
to an individual who has a genetic relationship with the child.
(b) [Court Order
Adjudicating Parentage: Effect.] A
parent-child relationship is conclusively established by a court order
designating the parent or parents of a gestational child.
(c) [Gestational Carrier.]
A parent-child relationship between a
gestational child and the child’s gestational carrier does not exist unless the
gestational carrier is:
(1)
designated as a parent of the child in a court order described in subsection
(b); or
(2)
the child’s genetic mother and a parent-child relationship does not exist under
this section with an individual other than the gestational carrier.
(d) [Parent-Child
Relationship with Intended Parent or Parents.] In the absence of a court order under subsection (b),
a parent-child relationship exists between a gestational child and an intended
parent who:
(1)
functioned as a parent of the child no later than two years after the child’s
birth; or
(2)
died while the gestational carrier was pregnant if:
(A)
there were two intended parents and the other intended parent functioned as a
parent of the child no later than two years after the child’s birth;
(B)
there were two intended parents, the other intended parent also died while the
gestational carrier was pregnant, and a relative of either deceased intended
parent or the spouse or surviving spouse of a relative of either deceased
intended parent functioned as a parent of the child no later than two years
after the child’s birth; or
(C)
there was no other intended parent and a relative of or the spouse or surviving
spouse of a relative of the deceased intended parent functioned as a parent of
the child no later than two years after the child’s birth.
(e) [Gestational Agreement
after Death or Incapacity.] In the
absence of a court order under subsection (b), a parent-child relationship
exists between a gestational child and an individual whose sperm or eggs were
used after the individual’s death or incapacity to conceive a child under a
gestational agreement entered into after the individual’s death or incapacity
if the individual intended to be treated as the parent of the child. The
individual’s intent may be shown by:
(1)
a record signed by the individual which considering all the facts and
circumstances evidences the individual’s intent; or
(2)
other facts and circumstances establishing the individual’s intent by clear and
convincing evidence.
(f) [Presumption:
Gestational Agreement after Spouse’s Death or Incapacity.] Except as otherwise provided in subsection (g), and
unless there is clear and convincing evidence of a contrary intent, an
individual is deemed to have intended to be treated as the parent of a
gestational child for purposes of subsection (e)(2) if:
(1)
the individual, before death or incapacity, deposited the sperm or eggs that
were used to conceive the child;
(2)
when the individual deposited the sperm or eggs, the individual was married and
no divorce proceeding was pending; and
(3)
the individual’s spouse or surviving spouse functioned as a parent of the child
no later than two years after the child’s birth.
(g) [Subsection (f)
Presumption Inapplicable.] The
presumption under subsection (f) does not apply if there is:
(1)
a court order under subsection (b); or
(2)
a signed record that satisfies subsection (e)(1).
(h) [When Posthumously
Conceived Gestational Child Treated as in Gestation.] If, under this section, an individual is a parent of a
gestational child who is conceived after the individual’s death, the child is
treated as in gestation at the individual’s death for purposes of Section
2-104(a)(2) if the child is:
(1)
in utero not later than 36 months after the individual’s death; or
(2)
born not later than 45 months after the individual’s death.
(i) [No Effect on Other
Law.] This section does not affect
law of this state other than this [code] regarding the enforceability or
validity of a gestational agreement.
Comment
Subsection
(a): Definitions. Subsection (a) defines the following terms:
Gestational
agreement.
The
definition of gestational agreement is based on the Comment to Article 8 of the
Uniform Parentage Act, which states that the term “gestational carrier”
“applies to both a woman who, through assisted reproduction, performs the
gestational function without being genetically related to a child, and a woman
who is both the gestational and genetic mother. The key is that an agreement
has been made that the child is to be raised by the intended parents.” The
Comment also points out that “The [practice in which the woman is both the
gestational and genetic mother] has elicited disfavor in the ART community,
which has concluded that the gestational carrier’s genetic link to the child
too often creates additional emotional and psychological problems in enforcing
a gestational agreement.”
Gestational
carrier is
defined as a woman who is not an intended parent and who gives birth to a child
under a gestational agreement. The term is not limited to a woman who is the
child’s genetic mother.
Gestational
child is
defined as a child born to a gestational carrier under a gestational agreement.
Intended
parent is
defined as an individual who entered into a gestational agreement providing
that the individual will be the parent of a child born to a gestational carrier
by means of assisted reproduction. The term is not limited to an individual who
has a genetic relationship with the child.
Other
Defined Terms. In addition to the terms defined in subsection (a), this section uses
terms that are defined in Section 2-115.
Child
of assisted reproduction is defined in Section 2-115 as a method of causing pregnancy other
than sexual intercourse.
Divorce is defined in Section 2-115
as including an annulment, dissolution, and declaration of invalidity of a
marriage.
Functioned
as a parent of the child is defined in Section 2-115 as behaving toward a child in a manner
consistent with being the child’s parent and performing functions that are
customarily performed by a parent, including fulfilling parental
responsibilities toward the child, recognizing or holding out the child as the
individual’s child, materially participating in the child’s upbringing, and
residing with the child in the same household as a regular member of that
household. See also the Comment to Section 2-115 for additional explanation of
the term.
Genetic
mother is
defined as the woman whose egg was fertilized by the sperm of the child’s
genetic father.
Incapacity is defined in Section 2-115
as the inability of an individual to function as a parent of a child because of
the individual’s physical or mental condition.
Relative is defined in Section 2-115
as a grandparent or a descendant of a grandparent.
Subsection
(b): Court Order Adjudicating Parentage: Effect. A court order issued under §
807 of the Uniform Parentage Act (UPA) would qualify as a court order
adjudicating parentage for purposes of subsection (b). UPA § 807 provides:
UPA § 807. Parentage under Validated Gestational
Agreement.
(a) Upon
birth of a child to a gestational carrier, the intended parents shall file
notice with the court that a child has been born to the gestational carrier
within 300 days after assisted reproduction. Thereupon, the court shall issue
an order:
(1)
confirming that the intended parents are the parents of the child ;
(2)
if necessary, ordering that the child be surrendered to the intended parents;
and
(3)
directing the [agency maintaining birth records] to issue a birth certificate
naming the intended parents as parents of the child.
(b) If the
parentage of a child born to a gestational carrier is alleged not to be the
result of assisted reproduction, the court shall order genetic testing to
determine the parentage of the child.
(c) If the
intended parents fail to file notice required under subsection (a), the
gestational carrier or the appropriate State agency may file notice with the
court that a child has been born to the gestational carrier within 300 days
after assisted reproduction. Upon proof of a court order issued pursuant to
Section 803 validating the gestational agreement, the court shall order the
intended parents are the parents of the child and are financially responsible
for the child.
Subsection
(c): Gestational Carrier. Under subsection (c), the only way that a parent-child relationship
exists between a gestational child and the child’s gestational carrier is if
she is (1) designated as a parent of the child in a court order described in
subsection (b) or (2) the child’s genetic mother and a parent-child
relationship does not exist under this section with an individual other than
the gestational carrier.
Subsection
(d): Parent-Child Relationship With Intended Parent or Parents. Subsection (d) only applies
in the absence of a court order under subsection (b). If there is no such court
order, subsection (b) provides that a parent-child relationship exists between
a gestational child and an intended parent who functioned as a parent of the
child no later than two years after the child’s birth. A parent-child also
exists between a gestational child and an intended parent if the intended
parent died while the gestational carrier was pregnant, but only if (A) there
were two intended parents and the other intended parent functioned as a parent
of the child no later than two years after the child’s birth; (B) there were
two intended parents, the other intended parent also died while the gestational
carrier was pregnant, and a relative of either deceased intended parent or the
spouse or surviving spouse of a relative of either deceased intended parent
functioned as a parent of the child no later than two years after the child’s
birth; or (C) there was no other intended parent and a relative of or the
spouse or surviving spouse of a relative of the deceased intended parent
functioned as a parent of the child no later than two years after the child’s
birth.
Subsection
(e): Gestational Agreement After Death or Incapacity. Subsection (e)only applies
in the absence of a court order under subsection (b). If there is no such court
order, a parent-child relationship exists between a gestational child and an
individual whose sperm or eggs were used after the individual’s death or
incapacity to conceive a child under a gestational agreement entered into after
the individual’s death or incapacity if the individual intended to be treated
as the parent of the child. The individual’s intent may be shown by a record
signed by the individual which considering all the facts and circumstances
evidences the individual’s intent or by other facts and circumstances
establishing the individual’s intent by clear and convincing evidence.
Subsections
(f) and (g): Presumption: Gestational Agreement After Spouse’s Death or
Incapacity.
Subsection (f) and (g) are connected. Subsection (f) provides that unless there
is clear and convincing evidence of a contrary intent, an individual is deemed
to have intended to be treated as the parent of a gestational child for
purposes of subsection (e)(2) if (1) the individual, before death or
incapacity, deposited the sperm or eggs that were used to conceive the child,
(2) when the individual deposited the sperm or eggs, the individual was married
and no divorce proceeding was pending; and (3) the individual’s spouse or
surviving spouse functioned as a parent of the child no later than two years
after the child’s birth.
Subsection
(g) provides, however, that the presumption under subsection (f) does not apply
if there is a court order under subsection (b) or a signed record that
satisfies subsection (e)(1).
Subsection
(h): When Posthumously Conceived Gestational Child is Treated as in Gestation. Subsection (h) provides that
if, under this section, an individual is a parent of a gestational child who is
conceived after the individual’s death, the child is treated as in gestation at
the individual’s death for purposes of Section 2-104(a)(2) if the child is
either (i) in utero not later than 36 months after the individual’s death or
(ii) born not later than 45 months after the individual’s death. Note also that
Section 3-703 gives the decedent’s personal representative authority to take
account of the possibility of posthumous conception in the timing of the
distribution of part or all of the estate.
The
36-month period in subsection (g) is designed to allow a surviving spouse or
partner a period of grieving, time to make up his or her mind about whether to
go forward with assisted reproduction, and a reasonable allowance for
unsuccessful attempts to achieve a pregnancy. The three-year period also
coincides with Section 3-1006, under which an heir is allowed to recover
property improperly distributed or its value from any distributee during the
later of three years after the decedent’s death or one year after distribution.
If the assisted-reproduction procedure is
performed in a medical facility, the date when the child is in utero will
ordinarily be evidenced by medical records. In some cases, however, the
procedure is not performed in a medical facility, and so such evidence may be
lacking. Providing an alternative of birth within 45 months is designed to
provide certainty in such cases. The 45-month period is based on the 36-month
period with an additional nine months tacked on to allow for a typical period
of pregnancy.
Section 2-122. Equitable Adoption. This [subpart]
does not affect the doctrine of equitable adoption.
Comment
On
the doctrine of equitable adoption, see Restatement (Third) of Property: Wills
and Other Donative Transfers § 2.5, cmt. k & Reporter’s Note No. 7 (1999).
PART 2
ELECTIVE SHARE OF SURVIVING SPOUSE
GENERAL COMMENT
The elective share of the surviving spouse was
fundamentally revised in 1990 and was reorganized and clarified in 1993 and
2008. The main purpose of the revisions is to bring elective-share law into
line with the contemporary view of marriage as an economic partnership. The
economic partnership theory of marriage is already implemented under the equitable-distribution
system applied in both the common-law and community-property states when a
marriage ends in divorce. When a marriage ends in death, that theory is also
already implemented under the community-property system and under the system
promulgated in the Model Marital Property Act. In the common-law states,
however, elective-share law has not caught up to the partnership theory of
marriage.
The general effect of implementing the partnership theory in
elective-share law is to increase the entitlement of a surviving spouse in a
long-term marriage in cases in which the marital assets were disproportionately
titled in the decedent’s name; and to decrease or even eliminate the
entitlement of a surviving spouse in a long-term marriage in cases in which the
marital assets were more or less equally titled or disproportionately titled in
the surviving spouse’s name. A further general effect is to decrease or even
eliminate the entitlement of a surviving spouse in a short-term, later-in-life
marriage (typically a post-widowhood remarriage) in which neither spouse
contributed much, if anything, to the acquisition of the other’s wealth, except
that a special supplemental elective-share amount is provided in cases in which
the surviving spouse would otherwise be left without sufficient funds for
support.
The Partnership Theory of Marriage
The partnership theory of marriage, sometimes also called the
marital-sharing theory, is stated in various ways. Sometimes it is thought of
“as an expression of the presumed intent of husbands and wives to pool their
fortunes on an equal basis, share and share alike.” M. Glendon, The
Transformation of Family Law 131 (1989). Under this approach, the economic
rights of each spouse are seen as deriving from an unspoken marital bargain
under which the partners agree that each is to enjoy a half interest in the
fruits of the marriage, i.e., in the property nominally acquired by and titled
in the sole name of either partner during the marriage (other than in property
acquired by gift or inheritance). A decedent who disinherits his or her
surviving spouse is seen as having reneged on the bargain. Sometimes the theory
is expressed in restitutionary terms, a return-of-contribution notion. Under
this approach, the law grants each spouse an entitlement to compensation for
non-monetary contributions to the marital enterprise, as “a recognition of the
activity of one spouse in the home and to compensate not only for this activity
but for opportunities lost.” Id. See also American Law Institute, Principles of
Family Dissolution § 4.09 Comment c (2002).
No matter how the rationale is expressed, the community-property
system, including that version of community law promulgated in the Model
Marital Property Act, recognizes the partnership theory, but it is sometimes
thought that the common-law system denies it. In the ongoing marriage, it is
true that the basic principle in the common-law (title-based) states is that
marital status does not affect the ownership of property. The regime is one of separate
property. Each spouse owns all that he or she earns. By contrast, in the
community-property states, each spouse acquires an ownership interest in half
the property the other earns during the marriage. By granting each spouse upon
acquisition an immediate half interest in the earnings of the other, the
community-property regimes directly recognize that the couple’s enterprise is
in essence collaborative.
The common-law states, however, also give effect or purport to
give effect to the partnership theory when a marriage is dissolved by divorce.
If the marriage ends in divorce, a spouse who sacrificed his or her
financial-earning opportunities to contribute so-called domestic services to
the marital enterprise (such as child rearing and homemaking) stands to be
recompensed. All states now follow the equitable-distribution system upon
divorce, under which “broad discretion [is given to] trial courts to assign to
either spouse property acquired during the marriage, irrespective of title,
taking into account the circumstances of the particular case and recognizing
the value of the contributions of a nonworking spouse or homemaker to the
acquisition of that property. Simply stated, the system of equitable
distribution views marriage as essentially a shared enterprise or joint
undertaking in the nature of a partnership to which both spouses
contribute–directly and indirectly, financially and nonfinancially–the fruits
of which are distributable at divorce.” J. Gregory, The Law of Equitable
Distribution ¶ 1.03, at p. 1-6 (1989).
The other situation in which spousal property rights figure
prominently is disinheritance at death. The original (pre-1990) Uniform Probate
Code, along with almost all other non-UPC common-law states, treats this as one
of the few instances in American law where the decedent’s testamentary freedom
with respect to his or her title-based ownership interests must be curtailed.
No matter what the decedent’s intent, the original Uniform Probate Code and
almost all of the non-UPC common-law states recognize that the surviving spouse
does have some claim to a portion of the decedent’s estate. These statutes
provide the spouse a so-called forced share. The forced share is expressed as
an option that the survivor can elect or let lapse during the administration of
the decedent’s estate, hence in the UPC the forced share is termed the
“elective” share.
Elective-share law in the common-law states, however, has not
caught up to the partnership theory of marriage. Under typical American
elective-share law, including the elective share provided by the original
Uniform Probate Code, a surviving spouse may claim a one-third share of the
decedent’s estate—not the 50 percent share of the couple’s combined assets that
the partnership theory would imply.
Long-term Marriages. To illustrate the discrepancy
between the partnership theory and conventional elective-share law, consider
first a long-term marriage, in which the couple’s combined assets were
accumulated mostly during the course of the marriage. The original
elective-share fraction of one-third of the decedent’s estate plainly does not
implement a partnership principle. The actual result depends on which spouse
happens to die first and on how the property accumulated during the marriage
was nominally titled.
Example 1—Long-term Marriage under Conventional Forced-share
Law. Consider A and B, who were married in their twenties or early
thirties; they never divorced, and A died at age, say, 70, survived by B. For
whatever reason, A left a will entirely disinheriting B.
Throughout their long life together, the couple managed to
accumulate assets worth $600,000, marking them as a somewhat affluent but
hardly wealthy couple.
Under conventional elective-share law, B’s ultimate entitlement
depends on the manner in which these $600,000 in assets were nominally titled
as between them. B could end up much poorer or much richer than a 50/50
partnership principle would suggest. The reason is that under conventional
elective-share law, B has a claim to one-third of A’s “estate.”
Marital Assets Disproportionately Titled in Decedent’s Name;
Conventional Elective-share Law Frequently Entitles Survivor to Less Than Equal
Share of Marital Assets. If all the marital assets were titled in A’s name,
B’s claim against A’s estate would only be for $200,000—well below B’s $300,000
entitlement produced by the partnership/marital-sharing principle.
If $500,000 of the marital assets were titled in A’s name, B’s
claim against A’s estate would still only be for $166,500 (1/3 of $500,000),
which when combined with B’s “own” $100,000 yields a $266,500 cut for B—still
below the $300,000 figure produced by the partnership/marital-sharing
principle.
Marital Assets Equally Titled; Conventional Elective-share
Law Entitles Survivor to Disproportionately Large Share. If $300,000 of the
marital assets were titled in A’s name, B would still have a claim against A’s
estate for $100,000, which when combined with B’s “own” $300,000 yields a
$400,000 cut for B—well above the $300,000 amount to which the
partnership/marital-sharing principle would lead.
Marital Assets Disproportionately Titled in Survivor’s Name;
Conventional Elective-share Law Entitles Survivor to Magnify the Disproportion.
If only $200,000 were titled in A’s name, B would still have a claim against
A’s estate for $66,667 (1/3 of $200,000), even though B was already
overcompensated as judged by the partnership/marital-sharing theory.
Short-term, Later-in-Life Marriages. Short-term
marriages, particularly the post-widowhood remarriage occurring later in life,
present different considerations. Because each spouse in this type of marriage
typically comes into the marriage owning assets derived from a former marriage,
the one-third fraction of the decedent’s estate far exceeds a 50/50 division of
assets acquired during the marriage.
Example 2—Short-term, Later-in-Life Marriage
under Conventional Elective-share Law. Consider B and C. A year or so after
A’s death, B married C. Both B and C are in their seventies, and after five
years of marriage, B dies survived by C. Both B and C have adult children and a
few grandchildren by their prior marriages, and each naturally would prefer to
leave most or all of his or her property to those children.
The value of the couple’s combined assets is $600,000, $300,000
of which is titled in B’s name (the decedent) and $300,000 of which is titled
in C’s name (the survivor).
For reasons that are not immediately apparent, conventional
elective-share law gives the survivor, C, a right to claim one-third of B’s
estate, thereby shrinking B’s estate (and hence the share of B’s children by
B’s prior marriage to A) by $100,000 (reducing it to $200,000) while
supplementing C’s assets (which will likely go to C’s children by C’s prior
marriage) by $100,000 (increasing their value to $400,000).
Conventional elective-share law, in other words, basically
rewards the children of the remarried spouse who manages to outlive the other,
arranging for those children a windfall share of one-third of the “loser’s”
estate. The “winning” spouse who chanced to survive gains a windfall, for this
“winner” is unlikely to have made a contribution, monetary or otherwise, to the
“loser’s” wealth remotely worth one-third.
The Redesigned Elective Share
The redesigned elective share is intended to bring
elective-share law into line with the partnership theory of marriage.
In the long-term marriage illustrated in Example 1, the effect
of implementing a partnership theory is to increase the entitlement of the
surviving spouse when the marital assets were disproportionately titled in the
decedent’s name; and to decrease or even eliminate the entitlement of the
surviving spouse when the marital assets were more or less equally titled or
disproportionately titled in the surviving spouse’s name. Put differently, the
effect is both to reward the surviving spouse who sacrificed his or her
financial-earning opportunities in order to contribute so-called domestic
services to the marital enterprise and to deny an additional windfall to the
surviving spouse in whose name the fruits of a long-term marriage were mostly
titled.
In the short-term, later-in-life marriage illustrated in Example
2, the effect of implementing a partnership theory is to decrease or even
eliminate the entitlement of the surviving spouse because in such a marriage
neither spouse is likely to have contributed much, if anything, to the
acquisition of the other’s wealth. Put differently, the effect is to deny a
windfall to the survivor who contributed little to the decedent’s wealth, and
ultimately to deny a windfall to the survivor’s children by a prior marriage at
the expense of the decedent’s children by a prior marriage. Bear in mind that
in such a marriage, which produces no children, a decedent who disinherits or
largely disinherits the surviving spouse may not be acting so much from malice
or spite toward the surviving spouse, but from a natural instinct to want to
leave most or all of his or her property to the children of his or her former,
long-term marriage. In hardship cases, however, as explained later, a special
supplemental elective-share amount is provided when the surviving spouse would
otherwise be left without sufficient funds for support.
2008 Revisions. When first promulgated in the early 1990s,
the statute provided that the “elective-share percentage” increased annually
according to a graduated schedule. The “elective-share percentage” ranged from
a low of 0 percent for a marriage of less than one year to a high of 50 percent
for a marriage of fifteen years or more. The “elective-share percentage” did
double duty. The system equated the “elective-share percentage” of the couple’s
combined assets with 50 percent of the marital-property portion of the couple’s
assets—the assets that are subject to equalization under the partnership theory
of marriage. Consequently, the elective share effected the partnership theory
rather indirectly. Although the schedule was designed to represent by
approximation a constant fifty percent of the marital-property portion of the
couple’s assets (the augmented estate), it did not say so explicitly.
The 2008 revisions are designed to present the system in a more
direct form, one that makes the system more transparent and therefore more
understandable. The 2008 revisions disentangle the elective-share percentage
from the system that approximates the marital-property portion of the augmented
estate. As revised, the statute provides that the “elective-share percentage”
is always 50 percent, but it is not 50 percent of the augmented estate but 50
percent of the “marital-property portion” of the augmented estate. The
marital-property portion of the augmented estate is computed by
approximation—by applying the percentages set forth in a graduated schedule
that increases annually with the length of the marriage (each “marital-portion
percentage” being double the percentage previously set forth in the
“elective-share percentage” schedule). Thus, for example, under the former
system, the elective-share amount in a marriage of ten years was 30 percent of
the augmented estate. Under the revised system, the elective-share amount is 50
percent of the marital-property portion of the augmented estate, the
marital-property portion of the augmented estate being 60 percent of the augmented
estate.
The primary benefit of these changes is that the statute, as
revised, presents the elective-share’s implementation of the partnership theory
of marriage in a direct rather than indirect form, adding clarity and
transparency to the system. An important byproduct of the revision is that it
facilitates the inclusion of an alternative provision for enacting states that
want to implement the partnership theory of marriage but prefer not to define
the marital-property portion by approximation but by classification. Under the
deferred marital-property approach, the marital-property portion consists of
the value of the couple’s property that was acquired during the marriage other
than by gift or inheritance. (See below.)
The 2008 revisions are based on a proposal presented in
Waggoner, “The Uniform Probate Code’s Elective Share: Time for a Reassessment,”
37 U. Mich. J. L. Reform 1 (2003), an article that gives a more extensive
explanation of the rationale of the 2008 revisions.
Specific Features of the Redesigned Elective
Share
Because ease of administration and predictability of result are
prized features of the probate system, the redesigned elective share implements
the marital-partnership theory by means of a mechanically determined
approximation system. Under the redesigned elective share, there is no need to
identify which of the couple’s property was earned during the marriage and
which was acquired prior to the marriage or acquired during the marriage by
gift or inheritance. For further discussion of the reasons for choosing this
method, see Waggoner, “Spousal Rights in Our Multiple-Marriage Society: The
Revised Uniform Probate Code,” 26 Real Prop. Prob. & Tr. J. 683 (1992).
Section 2-202(a)—The “Elective-share Amount.” Under
Section 2-202(a, the elective-share amount is equal to 50 percent of the value
of the “marital-property portion of the augmented estate.” The marital-property
portion of the augmented estate, which is determined under Section 2-203(b),
increases with the length of the marriage. The longer the marriage, the larger
the “marital-property portion of the augmented estate.” The sliding scale
adjusts for the correspondingly greater contribution to the acquisition of the
couple’s marital property in a marriage of 15 years than in a marriage of 15
days. Specifically, the “marital-property portion of the augmented estate”
starts low and increases annually according to a graduated schedule until it reaches
100 percent. After one year of marriage, the marital-property portion of the augmented
estate is six percent of the augmented estate and it increases with each
additional year of marriage until it reaches the maximum 100 percent level
after 15 years of marriage.
Section 2-203(a)—the “Augmented Estate.” The
elective-share percentage of 50 percent is applied to the value of the “marital-property
portion of the augmented estate.” As defined in Section 2-203, the “augmented
estate” equals the value of the couple’s combined assets, not merely the
value of the assets nominally titled in the decedent’s name.
More specifically, the “augmented estate” is composed of the sum
of four elements:
Section 2-204—the value of the decedent’s net probate
estate;
Section 2-205—the value of the decedent’s nonprobate
transfers to others, consisting of will-substitute-type inter-vivos transfers
made by the decedent to others than the surviving spouse;
Section 2-206—the value of the decedent’s nonprobate
transfers to the surviving spouse, consisting of will-substitute-type
inter-vivos transfers made by the decedent to the surviving spouse; and
Section 2-207—the value of the surviving spouse’s net
assets at the decedent’s death, plus any property that would have been in the
surviving spouse’s nonprobate transfers to others under Section 2-205 had the
surviving spouse been the decedent.
Section 2-203(b)—the “Marital-property portion” of the
Augmented Estate. Section 2-203(b) defines the marital-property portion of
the augmented estate.
Section 2-202(a)—the “Elective-share Amount.” Section
2-202(a) requires the elective-share percentage of 50 percent to be applied to
the value of the marital-property portion of the augmented estate. This
calculation yields the “elective-share amount”—the amount to which the
surviving spouse is entitled. If the elective-share percentage were to be
applied only to the marital-property portion of the decedent’s assets, a
surviving spouse who has already been overcompensated in terms of the way the
marital-property portion of the couple’s assets have been nominally titled would
receive a further windfall under the elective-share system. The
marital-property portion of the couple’s assets, in other words, would not be
equalized. By applying the elective-share percentage of 50 percent to the
marital-property portion of the augmented estate (the couple’s combined
assets), the redesigned system denies any significance to how the spouses took
title to particular assets.
Section 2-209—Satisfying the Elective-share Amount.
Section 2-209 determines how the elective-share amount is to be satisfied.
Under Section 2-209, the decedent’s net probate estate and nonprobate transfers
to others are liable to contribute to the satisfaction of the elective-share
amount only to the extent the elective-share amount is not fully satisfied by
the sum of the following amounts:
Subsection (a)(1)—amounts that pass or have passed
from the decedent to the surviving spouse by testate or intestate succession
and amounts included in the augmented estate under Section 2-206, i.e., the
value of the decedent’s nonprobate transfers to the surviving spouse; and
Subsection (a)(2)the marital-property portion of
amounts included in the augmented estate under Section 2-207.
If the combined value of
these amounts equals or exceeds the elective-share amount, the surviving spouse
is not entitled to any further amount from recipients of the decedent’s net
probate estate or nonprobate transfers to others, unless the surviving spouse
is entitled to a supplemental elective-share amount under Section 2-202(b).
Example 3—15-Year or
Longer Marriage under Redesigned Elective Share; Marital Assets
Disproportionately Titled in Decedent’s Name. A and B were married to each other more than 15 years. A died,
survived by B. A’s will left nothing to B, and A made no nonprobate transfers
to B. A made nonprobate transfers to others in the amount of $100,000 as
defined in Section 2-205.
|
A’s net probate estate A’s nonprobate transfers to
others A’s nonprobate transfers to
B B’s net assets and
nonprobate transfers to others Augmented
Estate |
Augmented Estate $300,000 $100,000 $0 $200,000 $600,000 |
Marital-Property Portion (100%) $300,000 $100,000 $0 $200,000 $600,000 |
|
Elective-Share Amount (50 % of Marital-property
portion)... $300,000 Less Amount Already Satisfied.............................. $200,000 Unsatisfied Balance........................................ $100,000 |
||
Under Section 2-209(a)(2), the full value of B’s assets
($200,000) counts first toward satisfying B’s entitlement. B, therefore, is
treated as already having received $200,000 of B’s ultimate entitlement of
$300,000. Section 2-209(c) makes A’s net probate estate and nonprobate
transfers to others liable for the unsatisfied balance of the elective-share
amount, $100,000, which is the amount needed to bring B’s own $200,000 up to
$300,000.
Example 4—15-Year or
Longer Marriage under Redesigned Elective Share; Marital Assets
Disproportionately Titled in Survivor’s Name. As in Example 3, A and B were married to each other more than 15
years. A died, survived by B. A’s will left nothing to B, and A made no
nonprobate transfers to B. A made nonprobate transfers to others in the amount
of $50,000 as defined in Section 2-205.
|
A’s net probate estate A’s nonprobate transfers to
others A’s nonprobate transfers to
B B’s assets and nonprobate
transfers to others Augmented
Estate |
Augmented Estate $150,000 $50,000 $0 $400,000 $600,000 |
Marital- Property Portion (100%) $150,000 $50,000 $0 $400,000 $600,000 |
|
Elective-Share Amount (50% of Marital-property
portion).... $300,000 Less Amount Already Satisfied.............................. $400,000 Unsatisfied Balance.............................................. $0 |
||
Under Section 2-209(a)(2), the full value of B’s assets
($400,000) counts first toward satisfying B’s entitlement. B, therefore, is
treated as already having received more than B’s ultimate entitlement of
$300,000. B has no claim on A’s net probate estate or nonprobate transfers to
others.
In a marriage that has lasted less than 15 years, only a portion
of the survivor’s assets—not all—count toward making up the elective-share
amount. This is because, in these shorter-term marriages, the marital-property
portion of the survivor’s assets under Section 2-203(b) is less than 100% and,
under Section 2-209(a)(2), the portion of the survivor’s assets that count
toward making up the elective-share amount is limited to the marital-property
portion of those assets.
To explain why this is appropriate requires further elaboration
of the underlying theory of the redesigned system. The system avoids the
classification and tracing-to-source problems in determining the
marital-property portion of the couple’s assets. This is accomplished under
Section 2-203(b) by applying an ever-increasing percentage, as the length of
the marriage increases, to the couple’s combined assets without regard to when
or how those assets were acquired. By approximation, the redesigned system equates
the marital-property portion of the couple’s combined assets with the couple’s
marital assets—assets subject to equalization under the
partnership/marital-sharing theory. Thus, in a marriage that has endured long
enough for the marital-property portion of their assets to be 60% under Section
2-203(b), 60% of each spouse’s assets are treated as marital assets. Section
2-209(a)(2) therefore counts only 60% of the survivor’s assets toward making up
the elective-share amount.
Example 5—Under 15-Year
Marriage under the Redesigned Elective Share; Marital Assets Disproportionately
Titled in Decedent’s Name. A and B
were married to each other more than 5 but less than 6 years. A died, survived
by B. A’s will left nothing to B, and A made no nonprobate transfers to B. A
made nonprobate transfers to others in the amount of $100,000 as defined in
Section 2-205.
|
A’s net probate estate A’s nonprobate transfers to
others A’s nonprobate transfers to
B B’s assets and nonprobate
transfers to others Augmented
Estate |
Augmented Estate $300,000 $100,000 $0 $200,000 $600,000 |
Marital-Property Portion (30%) $90,000 $30,000 $0 $60,000 $180,000 |
|
Elective-Share Amount (50% of Marital-property
portion)..... $90,000 Less Amount Already Satisfied............................... $60,000 Unsatisfied Balance......................................... $30,000 |
Under Section 2-209(a)(2), the marital-property portion of B’s
assets (30% of $200,000, or $60,000) counts first toward satisfying B’s
entitlement. B, therefore, is treated as already having received $60,000 of B’s
ultimate entitlement of $90,000. Under Section 2-209(c), B has a claim on A’s
net probate estate and nonprobate transfers to others of $30,000.
Deferred Marital-Property Alternative
By making the elective share percentage a flat 50 percent of the
marital-property portion of the augmented estate, the 2008 revision
disentangles the elective share percentage from the approximation schedule,
thus allowing the marital-property portion of the augmented estate to be
defined either by the approximation schedule or by the deferred-marital-property
approach. Although one of the benefits of the 2008 revision is added clarity,
an important byproduct of the revision is that it facilitates the inclusion of
an alternative provision for enacting states that prefer a deferred
marital-property approach. See Alan Newman, Incorporating the Partnership
Theory of Marriage into Elective-Share Law: the Approximation System of the
Uniform Probate Code and the Deferred-Community-Property Alternative, 49 Emory
L.J. 487 (2000).
The Support Theory
The
partnership/marital-sharing theory is not the only driving force behind
elective-share law. Another theoretical basis for elective-share law is that
the spouses’ mutual duties of support during their joint lifetimes should be
continued in some form after death in favor of the survivor, as a claim on the
decedent’s estate. Current elective-share law implements this theory poorly.
The fixed fraction, whether it is the typical one-third or some other fraction,
disregards the survivor’s actual need. A one-third share may be inadequate to
the surviving spouse’s needs, especially in a modest estate. On the other hand,
in a very large estate, it may go far beyond the survivor’s needs. In either a
modest or a large estate, the survivor may or may not have ample independent
means, and this factor, too, is disregarded in conventional elective-share law.
The redesigned elective share system implements the support theory by granting
the survivor a supplemental elective-share amount related to the survivor’s actual
needs. In implementing a support rationale, the length of the marriage is quite
irrelevant. Because the duty of support is founded upon status, it arises at
the time of the marriage.
Section
2-202(b)—the “Supplemental Elective-share Amount.” Section 2-202(b) is the
provision that implements the support theory by providing a supplemental
elective-share amount of $75,000. The $75,000 figure is bracketed to indicate
that individual states may wish to select a higher or lower amount.
In satisfying this $75,000 amount, the
surviving spouse’s own titled-based ownership interests count first toward
making up this supplemental amount; included in the survivor’s assets for this
purpose are amounts shifting to the survivor at the decedent’s death and amounts
owing to the survivor from the decedent’s estate under the accrual-type
elective-share apparatus discussed above, but excluded are (1) amounts going to
the survivor under the Code’s probate exemptions and allowances and (2) the
survivor’s Social Security benefits (and other governmental benefits, such as
Medicare insurance coverage). If the survivor’s assets are less than the
$75,000 minimum, then the survivor is entitled to whatever additional portion
of the decedent’s estate is necessary, up to 100 percent of it, to bring the
survivor’s assets up to that minimum level. In the case of a late marriage, in
which the survivor is perhaps aged in the mid-seventies, the minimum figure
plus the probate exemptions and allowances (which under the Code amount to a minimum
of another $64,500) is pretty much on target — in conjunction with Social
Security payments and other governmental benefits — to provide the survivor
with a fairly adequate means of support.
Example
6—Supplemental Elective-share Amount. After A’s death in Example 1, B married C. Five
years later, B died, survived by C. B’s will left nothing to C, and B made no
nonprobate transfers to C. B made no nonprobate transfers to others as defined
in Section 2-205.
|
B’s net probate estate B’s nonprobate transfers to
others B’s nonprobate transfers to
C C’s assets and nonprobate
transfers to others Augmented Estate |
Augmented Estate $ 90,000 $0 $0 $10,000 $100,000 |
Marital-Property Portion (30%) $27,000 $0 $0 $3,000 $30,000 |
|
Elective-Share Amount (50% of Marital-property
portion)..... $15,000 Less Amount Already Satisfied................................ $3,000 Unsatisfied Balance......................................... $12,000 |
||
Solution under Redesigned
Elective Share. Under Section 2-209(a)(2), $3,000 (30%) of C’s assets count first
toward making up C’s elective-share amount; under Section 2-209(c), the
remaining $12,000 elective-share amount would come from B’s net probate estate.
Application of Section 2-202(b) shows that
C is entitled to a supplemental elective-share amount. The calculation of C’s supplemental
elective-share amount begins by determining the sum of the amounts described in
sections:
2-207........................................................ $10,000
2-209(a)(1)........................................................ 0
Elective-share amount
payable from decedent’s probate estate
under Section 2-209(c)....................................... $12,000
Total........................................................ $22,000
The above calculation shows that C is
entitled to a supplemental elective-share amount under Section 2-202(b) of
$53,000 ($75,000 minus $22,000). The supplemental elective-share amount is
payable entirely from B’s net probate estate, as prescribed in Section
2-209(c).
The end result is that C is entitled to
$65,000 ($12,000 + $53,000) by way of elective share from B’s net probate
estate (and nonprobate transfers to others, had there been any). Sixty-five
thousand dollars is the amount necessary to bring C’s $10,000 in assets up to
$75,000.
Decedent’s Nonprobate
Transfers to Others
The original Code made great strides toward preventing “fraud on
the spouse’s share.” The problem of “fraud on the spouse’s share” arises when
the decedent seeks to evade the spouse’s elective share by engaging in various
kinds of nominal inter-vivos transfers. To render that type of behavior
ineffective, the original Code adopted the augmented-estate concept, which
extended the elective-share entitlement to property that was the subject of specified
types of inter-vivos transfer, such as revocable inter-vivos trusts.
In the redesign of the elective share, the augmented-estate
concept has been strengthened. The pre-1990 Code left several loopholes ajar in
the augmented estate—a notable one being life insurance the decedent buys,
naming someone other than his or her surviving spouse as the beneficiary. With
appropriate protection for the insurance company that pays off before receiving
notice of an elective-share claim, the redesigned elective-share system
includes these types of insurance policies in the augmented estate as part of
the decedent’s nonprobate transfers to others under Section 2-205.
Historical Note. This
General Comment was revised in 1993 and in 2008.
2008 Legislative Note. States that have previously
enacted the UPC elective share need not amend their enactment, except that (1)
the supplemental elective-share amount under Section 2-202(b) should be
increased to $75,000, (2) the amendment to Section 2-205(3) relating to gifts
within two years of death should be adopted, and (3) Section 2-209(e) should be
added so that the unsatisfied balance of the elective-share or supplemental
elective-share amount is treated as a general pecuniary devise for purposes of
Section 3-904.
Section 2‑201.
Definitions.
In this Part:
(1) As used in
sections other than Section 2‑205, "decedent's nonprobate transfers
to others" means the amounts that are included in the augmented estate
under Section 2‑205.
(2) "Fractional
interest in property held in joint tenancy with the right of
survivorship," whether the fractional interest is unilaterally severable
or not, means the fraction, the numerator of which is one and the denominator
of which, if the decedent was a joint tenant, is one plus the number of joint
tenants who survive the decedent and which, if the decedent was not a joint
tenant, is the number of joint tenants.
(3) "Marriage,"
as it relates to a transfer by the decedent
during marriage, means any marriage of the decedent to the decedent's
surviving spouse.
(4) "Nonadverse
party" means a person who does not have a substantial beneficial interest
in the trust or other property arrangement that would be adversely affected by
the exercise or nonexercise of the power that he [or she] possesses respecting
the trust or other property arrangement. A person having a general power of
appointment over property is deemed to have a beneficial interest in the
property.
(5) "Power"
or "power of appointment" includes a power to designate the
beneficiary of a beneficiary designation.
(6) "Presently
exercisable general power of appointment" means a power of appointment
under which, at the time in question, the decedent, whether or not he [or she]
then had the capacity to exercise the power, held a power to create a present
or future interest in himself [or herself], his [or her] creditors, his [or
her] estate, or creditors of his [or her] estate, and includes a power to
revoke or invade the principal of a trust or other property arrangement.
(7) "Property"
includes values subject to a beneficiary designation.
(8) "Right
to income" includes a right to payments under a commercial or private
annuity, an annuity trust, a unitrust, or a similar arrangement.
(9) "Transfer," as it relates to a transfer by or of the
decedent, includes (A) an exercise or release of a presently exercisable
general power of appointment held by the decedent, (B) a lapse at death of a
presently exercisable general power of appointment held by the decedent, and
(C) an exercise, release, or lapse of a general power of appointment that the
decedent created in himself [or herself] and of a power described in Section 2‑205(2)(ii)
that the decedent conferred on a nonadverse party.
Section 2‑202.
Elective Share.
(a) [Elective-Share
Amount.] The surviving spouse of a
decedent who dies domiciled in this State has a right of election, under the
limitations and conditions stated in this Part, to take an elective-share
amount equal to 50 percent of the value of the marital-property portion of the
augmented estate.
(b) [Supplemental
Elective-Share Amount.] If the sum of
the amounts described in Sections 2-207, 2-209(a)(1), and that part of the
elective-share amount payable from the decedent’s net probate estate and
nonprobate transfers to others under Section 2-209(c) and (d) is less than [$75,000],
the surviving spouse is entitled to a supplemental elective-share amount equal
to [$75,000], minus the sum of the amounts described in those sections. The
supplemental elective-share amount is payable from the decedent’s net probate
estate and from recipients of the decedent’s nonprobate transfers to others in
the order of priority set forth in Section 2-209(c) and (d).
(c) [Effect of Election on Statutory Benefits.] If the right of election is exercised by or on behalf
of the surviving spouse, the surviving spouse’s homestead allowance, exempt
property, and family allowance, if any, are not charged against but are in
addition to the elective-share and supplemental elective-share amounts.
(d) [Non-Domiciliary.] The right, if any, of the surviving spouse of a
decedent who dies domiciled outside this State to take an elective share in
property in this State is governed by the law of the decedent’s domicile at
death.
COMMENT
Pre-1990 Provision. The pre-1990 provisions
granted the surviving spouse a one-third share of the augmented estate. The
one-third fraction was largely a carry over from common-law dower, under which
a surviving widow had a one-third interest for life in her deceased husband’s
land.
Purpose and Scope of Revisions. The
revision of this section is the first step in the overall plan of implementing
a partnership or marital-sharing theory of marriage, with a support theory
back-up.
Subsection (a). Subsection (a)
implements the partnership theory by providing that the elective-share amount
is 50 percent of the value of the marital-property portion of the augmented
estate. The augmented estate is defined in Section 2-203(a) and the
marital-property portion of the augmented estate is defined in Section
2-203(b).
Subsection (b). Subsection (b)
implements the support theory of the elective share by providing a [$75,000]
supplemental elective-share amount, in case the surviving spouse’s assets and
other entitlements are below this figure.
2008 Cost-of-Living Adjustments. As
originally promulgated in 1990, the dollar amount in subsection (b) was
$50,000. To adjust for inflation, this amount was increased in 2008 to $75,000.
The dollar amount in this subsection is subject to annual cost-of-living
adjustments under Section 1-109.
Subsection (c). The homestead,
exempt property, and family allowances provided by Article II, Part 4, are not
charged to the electing spouse as a part of the elective share. Consequently,
these allowances may be distributed from the probate estate without reference
to whether an elective share right is asserted.
Cross Reference. To have the right
to an elective share under subsection (a), the decedent’s spouse must survive
the decedent. Under Section 2-702(a), the requirement of survivorship is
satisfied only if it can be established that the spouse survived the decedent
by 120 hours.
Historical Note. This Comment was
revised in 2008.
Section 2-203.
Composition of the Augmented Estate; Marital-Property Portion.
(a) Subject to Section 2-208,
the value of the augmented estate, to the extent provided in Sections 2-204,
2-205, 2-206, and 2-207, consists of the sum of the values of all property,
whether real or personal, movable or immovable, tangible or intangible,
wherever situated, that constitute:
(1)
the decedent’s net probate estate;
(2)
the decedent’s nonprobate transfers to others;
(3)
the decedent’s nonprobate transfers to the surviving spouse; and
(4)
the surviving spouse’s property and nonprobate transfers to others.
(b) The value of the
marital-property portion of the augmented estate consists of the sum of the
values of the four components of the augmented estate as determined under
subsection (a) multiplied by the following percentage:
If the decedent and the spouse The
percentage is:
were married to each other:
Less than 1 year........................................... 3%
1 year but less than 2 years............................... 6%
2 years but less than 3 years............................. 12%
3 years but less than 4 years............................. 18%
4 years but less than 5 years............................. 24%
5 years but less than 6 years............................. 30%
6 years but less than 7 years............................. 36%
7 years but less than 8 years............................. 42%
8 years but less than 9 years............................. 48%
9 years but less than 10 years............................ 54%
10 years but less than 11 years........................... 60%
11 years but less than 12 years........................... 68%
12 years but less than 13 years........................... 76%
13 years but less than 14 years........................... 84%
14 years but less than 15 years........................... 92%
15 years or more......................................... 100%
[Alternative Subsection (b) for States Preferring a
Deferred-Marital-Property System]
[(b) The value of the
marital-property portion of the augmented estate equals the value of that
portion of the augmented estate that would be marital property at the
decedent’s death under [the Model Marital Property Act] [copy in definition
from Model Marital Property Act, including the presumption that all property is
marital property] [copy in other definition chosen by the enacting state].
COMMENT
Subsection (a) operates as
an umbrella section identifying the augmented estate as consisting of the sum
of the values of four components. On the decedent’s side are the values of (1)
the decedent’s net probate estate (Section 2-204) and (2) the decedent’s
nonprobate transfers to others (Section 2-205). Straddling between the
decedent’s side and the surviving spouse’s side is the value of (3) the
decedent’s nonprobate transfers to the surviving spouse (Section 2-206). On the
surviving spouse’s side are the values of (4) the surviving spouse’s net assets
and the surviving spouse’s nonprobate transfers to others (Section 2-207).
Under Section 2-202(a), the elective-share
percentage is 50 percent of the value of the marital-property portion of the
augmented estate. Section 2-203(b) provides the schedule for determining the
marital-property portion of the value of the four components of the augmented
estate. The schedule deems by approximation that 100 percent of the components
of the augmented estate is marital property after 15 years of marriage. Government
data indicate that the median length of a first marriage that does not end in
divorce is 46.3 years, the median length of a post-divorce remarriage that does
not end in divorce is 35.1 years, and the median length of a post-widowhood
remarriage that does not end in divorce is 14.4 years. Enacting states may
determine that this data supports lengthening the schedule in subsection (b) to
20 or even 25 years. See Lawrence W. Waggoner, The Uniform Probate Code’s
Elective Share: Time for a Reassessment, 37 U. Mich. J. L. Reform 1, 11-29
(2003).
Alternative subsection (b) is provided for
states that decide not to define the marital-property portion of the augmented
estate by approximation, but rather in terms of property actually acquired
during the marriage other than by gift or inheritance. See Waggoner, supra, at
30-32.
Historical Note. This Comment was added in 1993 and revised in 2008.
Section 2‑204.
Decedent's Net Probate Estate.
The value of the augmented estate includes
the value of the decedent's probate estate, reduced by funeral and
administration expenses, homestead allowance, family allowances, exempt
property, and enforceable claims.
COMMENT
This
section, which in the 1990 version appeared as a paragraph of a single, long
section defining the augmented estate, establishes as the first component of
the augmented estate the value of the decedent's probate estate, reduced by
funeral and administration expenses, homestead allowance (Section 2‑402),
family allowances (Section 2‑404), exempt property (Section 2‑403),
and enforceable claims. The term "claims" is defined in Section 1‑201
as including "liabilities of the decedent or protected person whether
arising in contract, in tort, or otherwise, and liabilities of the estate which
arise at or after the death of the decedent or after the appointment of a
conservator, including funeral expenses and expenses of administration. The
term does not include estate or inheritance taxes, or demands or disputes
regarding title of a decedent or protected person to specific assets alleged to
be included in the estate."
Various aspects of Section 2-204 are
illustrated by Examples 10, 11, and 12 in the Comment to Section 2‑205,
below.
Historical
Note. This Comment was added in 1993.
Section 2‑205.
Decedent's Nonprobate Transfers to Others.
The value of the augmented
estate includes the value of the decedent's nonprobate transfers to others, not
included under Section 2‑204, of any of the following types, in the
amount provided respectively for each type of transfer:
(1) Property
owned or owned in substance by the decedent immediately before death that
passed outside probate at the decedent's death. Property included under this
category consists of:
(A) Property
over which the decedent alone, immediately before death, held a presently
exercisable general power of appointment. The amount included is the value of
the property subject to the power, to the extent the property passed at the
decedent's death, by exercise, release, lapse, in default, or otherwise, to or
for the benefit of any person other than the decedent's estate or surviving
spouse.
(B) The
decedent's fractional interest in property held by the decedent in joint
tenancy with the right of survivorship. The amount included is the value of the
decedent's fractional interest, to the extent the fractional interest passed by
right of survivorship at the decedent's death to a surviving joint tenant other
than the decedent's surviving spouse.
(C)The decedent's ownership interest in property or
accounts held in POD, TOD, or co‑ownership registration with the right of
survivorship. The amount included is the value of the decedent's ownership
interest, to the extent the decedent's ownership interest passed at the
decedent's death to or for the benefit of any person other than the decedent's
estate or surviving spouse.
(D) Proceeds of insurance, including accidental
death benefits, on the life of the decedent, if the decedent owned the
insurance policy immediately before death or if and to the extent the decedent
alone and immediately before death held a presently exercisable general power
of appointment over the policy or its proceeds. The amount included is the
value of the proceeds, to the extent they were payable at the decedent's death
to or for the benefit of any person other than the decedent's estate or
surviving spouse.
(2) Property
transferred in any of the following forms by the decedent during marriage:
(A) Any
irrevocable transfer in which the decedent retained the right to the possession
or enjoyment of, or to the income from, the property if and to the extent the
decedent's right terminated at or continued beyond the decedent's death. The
amount included is the value of the fraction of the property to which the
decedent's right related, to the extent the fraction of the property passed
outside probate to or for the benefit of any person other than the decedent's
estate or surviving spouse.
(B) Any
transfer in which the decedent created a power over income or property,
exercisable by the decedent alone or in conjunction with any other person, or
exercisable by a nonadverse party, to or for the benefit of the decedent,
creditors of the decedent, the decedent's estate, or creditors of the
decedent's estate. The amount included
with respect to a power over property is the value of the property
subject to the power, and the amount included with respect to a power over
income is the value of the property that produces or produced the income, to
the extent the power in either case was exercisable at the decedent's death to
or for the benefit of any person other than the decedent's surviving spouse or
to the extent the property passed at the decedent's death, by exercise,
release, lapse, in default, or otherwise, to or for the benefit of any person
other than the decedent's estate or surviving spouse. If the power is a power
over both income and property and the preceding sentence produces different
amounts, the amount included is the greater amount.
(3) Property
that passed during marriage and during the two‑year period next preceding
the decedent's death as a result of a transfer by the decedent if the transfer
was of any of the following types:
(A) Any
property that passed as a result of the termination of a right or interest in,
or power over, property that would have been included in the augmented estate
under paragraph (1)(A), (B), or (C), or under paragraph (2), if the right,
interest, or power had not terminated until the decedent's death. The amount
included is the value of the property that would have been included under those
paragraphs if the property were valued at the time the right, interest, or
power terminated, and is included only to the extent the property passed upon
termination to or for the benefit of any person other than the decedent or the
decedent's estate, spouse, or surviving spouse. As used in this subparagraph,
"termination," with respect to a right or interest in property,
occurs when the right or interest terminated by the terms of the governing
instrument or the decedent transferred or relinquished the right or interest,
and, with respect to a power over property, occurs when the power terminated by
exercise, release, lapse, default, or otherwise, but, with respect to a power
described in paragraph (1)(A), "termination" occurs when the power
terminated by exercise or release, but not otherwise.
(B) Any
transfer of or relating to an insurance policy on the life of the decedent if
the proceeds would have been included in the augmented estate under paragraph
(1)(iv) had the transfer not occurred. The amount included is the value of the
insurance proceeds to the extent the proceeds were payable at the decedent's
death to or for the benefit of any person other than the decedent's estate or
surviving spouse.
(C)Any transfer of property, to the extent not
otherwise included in the augmented estate, made to or for the benefit of a
person other than the decedent's surviving spouse. The amount included is the
value of the transferred property to the extent the aggregate transfers to any
one donee in either of the two years exceeded [$12,000] [the amount excludable from taxable gifts under 26 U.S.C.
Section 2503(b) [or its successor] on the date next preceding the date of the
decedent’s death].
Legislative Note: In paragraph (3)(C), use the first alternative in the
brackets if the second alternative is considered an unlawful delegation of
legislative power.
COMMENT
This
section, which in the 1990 version appeared in substance as a paragraph of a single,
long section defining the augmented estate, establishes as the second component
of the augmented estate the value of the decedent's nonprobate transfers to
others. In the 1990 version, the term "reclaimable estate" was used
rather than the term "nonprobate transfers to others".
This
component is divided into three basic categories: (1) property owned or owned
in substance by the decedent immediately before death that passed outside
probate to persons other than the surviving spouse; (2) property transferred by
the decedent during marriage that passed outside probate to persons other than
the surviving spouse; and (3) property transferred by the decedent during
marriage and during the two‑year period next preceding the decedent's
death. Various aspects of each category and each subdivision within each
category are discussed and illustrated below.
Paragraph (1)‑Property
Owned or Owned in Substance by the Decedent. This
category covers property that the decedent owned or owned in substance
immediately before death and that passed outside probate at the decedent's
death to a person or persons other than the surviving spouse.
Paragraph
(1) subdivides this category into four specific components:
(i) Property over which the decedent alone,
immediately before death, held a presently exercisable general power of
appointment. The amount included is the value of the property subject to the
power, to the extent the property passed at the decedent's death, by exercise,
release, lapse, in default, or otherwise, to or for the benefit of any person
other than the decedent's estate or surviving spouse.
(ii) The decedent's fractional interest in property
held by the decedent in joint tenancy with the right of survivorship. The amount included is the value of the decedent's
fractional interest, to the extent the fractional interest passed by right of
survivorship at the decedent's death to a surviving joint tenant other than the
decedent's surviving spouse.
(iii) The decedent's ownership interest in property
or accounts held in POD, TOD, or co‑ownership registration with the right
of survivorship. The amount included is the value of the decedent's ownership
interest, to the extent the decedent's ownership interest passed at the
decedent's death to or for the benefit of any person other than the decedent's
estate or surviving spouse.
(iv) Proceeds of insurance, including accidental
death benefits, on the life of the decedent, if the decedent owned the
insurance policy immediately before death or if and to the extent the decedent
alone and immediately before death held a presently exercisable general power
of appointment over the policy or its proceeds. The amount included is the
value of the proceeds, to the extent they were payable at the decedent's death
to or for the benefit of any person other than the decedent's estate or
surviving spouse.
With
one exception for nonseverable joint tenancies (see Example 4 of this Section), each of the above components covers
a type of asset of which the decedent could have become the full, technical
owner by merely exercising his or her power of appointment, incident of
ownership, or right of severance or withdrawal. Had the decedent exercised
these powers or rights to become the full, technical owner, the decedent could
have controlled the devolution of these assets by his or her will; by not
exercising these powers or rights, the decedent allowed the assets to pass
outside probate to persons other than the surviving spouse. Thus, in effect, property covered by these
components passes at the decedent's death by nonprobate transfer from the
decedent to others. This is what
justifies including these components in the augmented estate without regard to
the person who created the decedent's
substantive ownership interest, whether the decedent or someone else, and
without regard to when it was
created, whether before or after the decedent's marriage.
Although
the augmented estate under the pre‑1990 Code did not include life
insurance, annuities, etc., payable to other persons, the revisions do include
their value; this move recognizes that such arrangements were, under the pre‑1990
Code, used to deplete the estate and reduce the spouse's elective‑share
entitlement.
Various aspects of paragraph
(1) are illustrated by the following examples.
Other examples illustrating various aspects of this paragraph are
Example 19 in this Comment, below, and Examples 20 and 21 in the Comment to
Section 2-206, below. In each of the
following examples, G is the decedent and S is the decedent’s surviving spouse.
Example
1-General Testamentary Power.
G's mother, M, created a testamentary trust, providing for the income to
go to G for life, remainder in corpus to such persons, including G, G's
creditors, G's estate, or the creditors of G's estate, as G by will
appoints; in default of appointment, to
X. G died, survived by S and X. G's will did not exercise his power in favor
of S.
The value of the corpus of the trust at
G's death is not included in the augmented estate under paragraph (1)(i),
regardless of whether G exercised the power in favor of someone other than S or
let the power lapse, so that the trust corpus passed in default of appointment
to X. Section 2-205(1)(i) only applies
to presently exercisable general
powers; G's power was a general testamentary power. (Note that paragraph (2)(ii) does cover
property subject to a general testamentary
power, but only if the power was created by G during marriage. G's general testamentary power was created by
M and hence not covered by paragraph (2)(ii).)
Example
2-Nongeneral Power and "5-and-5" Power. G's father, F, created a testamentary
trust, providing for the income to go to G for life, remainder in corpus to
such persons, except G, G's creditors, G's estate, or the creditors of G's
estate, as G by will appoints; in
default of appointment, to X. G was also
given a noncumulative annual power to withdraw an amount equal to the greater
of $5,000 or five percent of the trust corpus.
G died, survived by S and X. G
did not exercise her power in favor of S.
G's power over the remainder interest
does not cause inclusion of the value of the full corpus in the augmented
estate under paragraph (1)(i) because that power was a nongeneral power.
The value of the greater of $5,000 or five
percent of the corpus of the trust at G's
death is included in the augmented estate under paragraph (1)(i), to the
extent that that property passed at G's death, by exercise, release, lapse, in
default, or otherwise, to or for the benefit of any person other than the
decedent's estate or surviving spouse, because that portion of the trust corpus
was subject to a presently exercisable
general power of appointment held by G immediately before G's death. No additional amount is included, however,
whether G exercised the withdrawal power or allowed it to lapse in the years
prior to G's death. (Note that paragraph
(3)(i) is inapplicable to this case.
That paragraph only applies to property subject to powers created by the decedent during marriage
that lapse within the two-year period next preceding the decedent's death.)
Example
3-Revocable Inter-Vivos Trust.
G created a revocable inter-vivos trust, providing for the income to go
to G for life, remainder in corpus to such persons, except G, G's creditors,
G's estate, or the creditors of G's estate, as G by will appoints; in default of appointment, to X. G died, survived by S and X. G never exercised his power to revoke, and
the corpus of the trust passed at G's death to X.
Regardless of whether G created the
trust before or after marrying S, the value of the corpus of the trust at G's
death is included in the augmented estate under paragraph (1)(i) because,
immediately before G's death, the trust corpus was subject to a presently
exercisable general power of appointment (the power to revoke: see Section 2-201(6)) held by G.
(Note that if G created the trust during
marriage, paragraph (2)(ii) also requires inclusion of the value of the trust
corpus. Because these two subparagraphs
overlap, and because both subparagraphs include the same value, Section
2-208(c) provides that the value of the trust corpus is included under one but
not both subparagraphs.)
Example
4-Joint Tenancy. G, X, and Y owned
property in joint tenancy. G died,
survived by S, X, and Y.
Because G's fractional interest in the
property immediately before death was one-third, and because that one-third
fractional interest passed by right of survivorship to X and Y at G's death,
one-third of the value of the property at G's death is included in the
augmented estate under paragraph (1)(ii).
This is the result whether or not under local law G had the unilateral
right to sever her fractional interest.
See Section 2-201(2).
Example
5-TOD Registered Securities and POD Account.
G registered securities that G owned in TOD form. G also contributed all the funds in a savings
account that G registered in POD Form. X
was designated to take the securities and Y was designated to take the savings
account on G's death. G died, survived
by S, X, and Y.
Because G was the sole owner of the
securities immediately before death (see Sections 6-302 and 6-306), and because
ownership of the securities passed to X upon G's death (see Section 6-307), the
full value of the securities at G's death is included in the augmented estate
under paragraph (1)(iii). Because G
contributed all the funds in the savings account, G's ownership interest in the
savings account immediately before death was 100 percent. See Section 6-211. Because that 100 percentage ownership
interest passed by right of survivorship to Y at G's death, the full value of
the account at G's death is included in the augmented estate under paragraph
(1)(iii).
Example
6-Joint Checking Account. G, X, and
Y were registered as co-owners of a joint checking account. G contributed 75 percent of the funds in the
account. G died, survived by S, X, and
Y.
G's ownership interest in the account
immediately before death, determined under Section 6-211, was 75 percent of the
account. Because that percentage
ownership interest passed by right of survivorship to X and Y at G's death, 75
percent of the value of the account at G's death is included in the augmented
estate under paragraph (1)(iii).
Example
7-Joint Checking Account. G's mother, M,
added G's name to her checking account so that G could pay her bills for
her. M contributed all the funds in the
account. The account was registered in
co-ownership form with right of survivorship.
G died, survived by S and M.
Because G had contributed none of his
own funds to the account, G's ownership interest in the account immediately
before death, determined under Section 6-211, was zero. Consequently, no part of the value of the
account at G's death is included in the augmented estate under paragraph (1)(iii).
Example
8-Life Insurance. G, as owner of a
life-insurance policy insuring her life, designated X and Y as the
beneficiaries of that policy. G died
owning the policy, survived by S, X, and Y.
The full value of the proceeds of that
policy is included in the augmented estate under paragraph (1)(iv).
Paragraph
(2)-Property Transferred by the Decedent During Marriage. This category covers property that the
decedent transferred in specified forms during "marriage" (defined in
Section 2-201(3) as "any marriage of the decedent to the decedent's
surviving spouse"). If the decedent
and the surviving spouse were married to each other more than once, transfers
that took place during any of their marriages to each other count as transfers
during marriage.
The word "transfer," as it relates to a transfer by or
of the decedent, is defined in Section 2-201(10), as including "(A) an
exercise or release of a presently exercisable general power of appointment
held by the decedent, (B) a lapse at death of a presently exercisable general
power of appointment held by the decedent, and (C) an exercise, release, or
lapse of a general power of appointment that the decedent created in himself
[or herself] and of a power described in Section 2-205(2)(ii) that the decedent
conferred on a nonadverse party."
Paragraph (2) covers the following specific forms of transfer:
(i) Any irrevocable transfer in which
the decedent retained the right to the possession or enjoyment of, or to the
income from, the property if and to the extent the decedent's right terminated
at or continued beyond the decedent's death.
The amount included is the value of the fraction of the property to
which the decedent's right related, to the extent the fraction of the property
passed outside probate to or for the benefit of any person other than the
decedent's estate or surviving spouse.
(ii) Any transfer in which the decedent
created a power over income or property, exercisable by the decedent alone or
in conjunction with any other person, or exercisable by a nonadverse party, to
or for the benefit of the decedent, creditors of the decedent, the decedent's
estate, or creditors of the decedent's estate.
The amount included with respect to a power over property is the value
of the property subject to the power, and the amount included with respect to a
power over income is the value of the property that produces or produced the
income, to the extent the power in either case was exercisable at the
decedent's death to or for the benefit of any person other than the decedent's
surviving spouse or to the extent the property passed at the decedent's death,
by exercise, release, lapse, in default, or otherwise, to or for the benefit of
any person other than the decedent's estate or surviving spouse. If the power is a power over both income and
property and the preceding sentence produces different amounts, the amount
included is the greater amount.
Various aspects of paragraph (2) are illustrated by the following
examples. Other examples illustrating
various aspects of this paragraph are Examples 1 and 3, above, and Example 22
in the Comment to Section 2-206, below.
In the following examples, as in the examples above, G is the decedent
and S is the decedent's surviving spouse.
Example
9-Retained Income Interest for Life.
Before death, and during marriage, G created an irrevocable inter-vivos
trust, providing for the income to be paid annually to G for life, then for the
corpus of the trust to go to X. G died,
survived by S and X.
The value of the corpus of the trust at
G's death is included in the augmented estate under paragraph (2)(i). This paragraph applies to a retained income
interest that terminates at the decedent's death, as here. The amount included is the value of the
property that passes outside probate to any person other than the decedent's
estate or surviving spouse, which in this case is the full value of the corpus
that passes outside probate to X.
Had G retained the right to only
one-half of the income, with the other half payable to Y for G's lifetime, only
one half of the value of the corpus at G's death would have been included under
paragraph (2)(i) because that paragraph specifies that "the amount
included is the value of the fraction of the property to which the decedent's
right related." Note, however, that
if G had created the trust within two years before death, paragraph (3)(iii)
would require the inclusion of the value at the date the trust was established
of the other half of the income interest for G's life and of the remainder
interest in the other half of the corpus, each value to be reduced by as much
as $10,000 as appropriate under the facts, taking into account other gifts made
to Y and to X in the same year, if any.
Example
10-Retained Unitrust Interest for a Term.
Before death, and during marriage, G created an irrevocable inter-vivos
trust, providing for a fixed percentage of the value of the corpus of the trust
(determined annually) to be paid annually to G for ten years, then for the
corpus of the trust (and any accumulated income) to go to X. G died six years after the trust was created,
survived by S and X.
The full value of the corpus at G's
death is included in the augmented estate under a combination of Sections 2-204
and 2-205(2)(i).
Section 2-205(2)(i) requires the
inclusion of the commuted value of X's remainder interest at G's death. This paragraph applies to a retained income
interest, which under Section 2-201(9) includes a unitrust interest. Moreover, Section 2-205(2)(i) not only
applies to a retained income interest that terminates at the decedent's death,
but also applies to a retained income interest that continues beyond the
decedent's death, as here. The amount
included is the value of the interest that passes outside probate to a person
other than the decedent's estate or surviving spouse, which in this case is the
commuted value of X's remainder interest at G's death.
Section 2-204 requires the inclusion of
the commuted value of the remaining four years of G's unitrust interest because
that interest passes through G's probate estate to G's devisees or heirs.
Because both the four-year unitrust
interest and the remainder interest that directly succeeds it are included in
the augmented estate, there is no need to derive separate values for X's remainder
interest and for G's remaining unitrust interest. The sum of the two values will equal the full
value of the corpus, and that is the value that is included in the augmented
estate. (Note, however, that for purposes of Section 2-209 (Sources from
Which Elective Share Payable), it might become necessary to derive separate
values for these two interests.)
Had the trust been revocable, the
end-result would have been the same. The
only difference would be that the revocabilty of the trust would cause paragraph
(2)(i) to be inapplicable, but would also cause overlapping application of
paragraphs (1)(i) and (2)(ii) to X's remainder interest. Because each of these paragraphs yields the
same value, Section 2-208(c) would require the commuted value of X's remainder
interest to be included in the augmented estate under any one, but only one, of
them. Note that neither paragraphs
(1)(i) nor (2)(ii) would apply to G's remaining four-year term because that
four-year term would have passed to G's estate by lapse of G's power to
revoke. As above, the commuted value of
G's remaining four-year term would be included in the augmented estate under
Section 2-204, obviating the need to derive separate valuations of G's
four-year term and X's remainder interest.
Example
11-Personal Residence Trust.
Before death, and during marriage, G created an irrevocable inter-vivos
trust of G's personal residence, retaining the right to occupy the residence
for ten years, then for the residence to go to X. G died six years after the trust was created,
survived by S and X.
The full value of the residence at G's
death is included in the augmented estate under a combination of Sections 2-204
and 2-205(2)(i).
Section 2-205(2)(i) requires the
inclusion of the commuted value of X's remainder interest at G's death. This paragraph applies to a retained right to
possession that continues beyond the decedent's death, as here. The amount included is the value of the
interest that passes outside probate to a person other than the decedent's
estate or surviving spouse, which in this case is the commuted value of X's
remainder interest at G's death.
Section 2-204 requires the inclusion of
the commuted value of G's remaining four-year term because that interest passes
through G's probate estate to G's devisees or heirs.
As in Example 10, there is no need to
derive separate valuations of the remaining four-year term and the remainder
interest that directly succeeds it. The
sum of the two values will equal the full value of the residence at G's death,
and that is the amount included in the augmented estate. (Note, however, that for purposes of Section 2-209 (Sources from Which Elective Share
Payable), it might become necessary to derive separate values for these two
interests.)
Example
12-Retained Annuity Interest for a Term.
Before death, and during marriage, G created an irrevocable inter-vivos
trust, providing for a fixed dollar amount to be paid annually to G for ten
years, then for half of the corpus of the trust to go to X; the other half was to remain in trust for an
additional five years, after which time the remaining corpus was to go to X. G
died fourteen years after the trust was created, survived by S and X.
The value of the one-half of the corpus
of the trust remaining at G's death is included in the augmented estate under a
combination of Sections 2-204 and 2-205(2)(i).
The other one-half of the corpus of the trust that was distributed to X
four years before G's death is not included in the augmented estate.
Section 2-205(2)(i) requires the
inclusion of the commuted value of X's remainder interest in half of the corpus
of the trust. This section applies to a
retained income interest, which under Section 2-201(9), includes an annuity
interest that continues beyond the decedent's death, as here. The amount included is the value of the
interest that passes outside probate to a person other than the decedent's
estate or surviving spouse, which in this case is the commuted value of X's
remainder interest at G's death.
Section 2-204 requires the inclusion of
the commuted value of the remaining one year of G's annuity interest in half of
the corpus of the trust, which passed through G's probate estate to G's
devisees of heirs.
There is no need to derive separate
valuations of G's remaining annuity interest and X's remainder interest that
directly succeeds it. The sum of the two
values will equal the full value of the remaining one-half of the corpus of the
trust at G's death, and that is the amount included in the augmented
estate. (Note, however, that for purposes of Section 2-209 (Sources from
Which Elective Share Payable), it might become necessary to derive separate
values for these two interests.)
Had G died eleven years after the trust
was created, so that the termination of half of the trust would have occurred
within the two-year period next preceding G's death, the value of the half of
the corpus of the trust that was distributed to X ten years after the trust was
created would also have been included in the augmented estate under Section
2-205(3)(i).
Example
13-Commercial Annuity. Before G's death,
and during marriage, G purchased three commercial annuities from an insurance
company. Annuity One was a single-life
annuity that paid a fixed sum to G annually and that contained a refund feature
payable to X if G died within ten years.
Annuity Two was a single-life annuity that paid a fixed sum to G
annually, but contained no refund feature.
Annuity Three was a self and survivor annuity that paid a fixed sum to G
annually for life, and then paid a fixed sum annually to X for life. G died six years after purchasing the
annuities, survived by S and X.
Annuity
One: The value of the refund
payable to X at G's death under Annuity One is included in the augmented estate
under paragraph (2)(i). G retained an
income interest, as defined in Section 2-201(9), that terminated at G's
death. The amount included is the value
of the interest that passes outside probate to a person other than the
decedent's estate or surviving spouse, which in this case is the refund amount
to which X is entitled.
Annuity
Two: Annuity Two does not cause
any value to be included in the augmented estate because it expired at G's
death; although G retained an income
interest, as defined in Section 2-201(9), that terminated at G's death, nothing
passed outside probate to any person other than G's estate or surviving spouse.
Annuity
Three: The commuted value at G's
death of the annuity payable to X under Annuity Three is included in the
augmented estate under paragraph (2)(i).
G retained an income interest, as defined in Section 2-201(9), that
terminated at G's death. The amount
included is the value of the interest that passes outside probate to a person
other than the decedent's estate or surviving spouse, which in this case is the
commuted value of X's right to the annuity payments for X's lifetime.
Example
14-Joint Power. Before death, and
during marriage, G created an inter-vivos trust, providing for the income to go
to X for life, remainder in corpus at X's death to X's then-living descendants,
by representation; if none, to a
specified charity. G retained a power,
exercisable only with the consent of X, allowing G to withdraw all or any
portion of the corpus at any time during G's lifetime. G died without exercising the power, survived
by S and X.
The value of the corpus of the trust at
G's death is included in the augmented estate under paragraph (2)(ii). This paragraph applies to a power created by
the decedent over the corpus of the trust that is exercisable by the decedent
"in conjunction with any other person," who in this case is X. Note that the fact that X has an interest in
the trust that would be adversely affected by the exercise of the power in
favor of G is irrelevant. The amount included
is the full value of the corpus of the trust at G's death because the power
related to the full corpus of the trust and the full corpus passed at the
decedent's death, by lapse or default of the power, to a person other than the
decedent's estate or surviving spouse-X, X's descendants, and the specified
charity.
Example
15-Power in Nonadverse Party.
Before death, and during marriage, G created an inter-vivos trust,
providing for the income to go to X for life, remainder in corpus to X's
then-living descendants, by representation;
if none, to a specified charity.
G conferred a power on the trustee, a bank, to distribute, in the
trustee's complete and uncontrolled discretion, all or any portion of the trust
corpus to G or to X. One year before G's
death, the trustee distributed $50,000 of trust corpus to G and $40,000 of
trust corpus to X. G died, survived by S
and X.
The full value of the portion of the
corpus of the trust remaining at G's death is included in the augmented estate
under paragraph (2)(ii). This paragraph
applies to a power created by the decedent over the corpus of the trust that is
exercisable by a "nonadverse party."
As defined in Section 2-201(4), the term "nonadverse party" is
"a person who does not have a substantial beneficial interest in the trust
or other property arrangement that would be adversely affected by the exercise
or nonexercise of the power that he [or she] possesses respecting the trust or
other property arrangement. "The trustee in this case is a nonadverse party. The amount included is the full value of the
corpus of the trust at G's death because the trustee's power related to the
full corpus of the trust and the full corpus passed at the decedent's death, by
lapse or default of the power, to a person other than the decedent's estate or
surviving spouse-X, X's descendants, and the specified charity.
In addition to the full value of the
remaining corpus at G's death, an additional amount is included in the
augmented estate because of the $40,000 distribution of corpus to X within two
years before G's death. As defined in
Section 2-201(10), a transfer of the decedent includes the exercise "of a
power described in Section 2-205(2)(ii) that the decedent conferred on a
nonadverse party." Consequently,
the $40,000 distribution to X is considered to be a transfer of the decedent
within two years before death, and is included in the augmented estate under
paragraph (3)(iii) to the extent it exceeded $10,000 of the aggregate gifts to
X that year. If no other gifts were made
to X in that year, the amount included would be $30,000 ($40,000 l68 $10,000).
Paragraph
(3)-Property Transferred by the Decedent During Marriage and During the
Two-Year Period Next Preceding the Decedent's Death. This paragraph-called the two-year
rule-requires inclusion in the augmented estate of the value of property that
the decedent transferred in specified forms during marriage and within two
years of death. The word
"transfer," as it relates to a transfer by or of the decedent, is
defined in Section 2-201(10), as including "(A) an exercise or release of
a presently exercisable general power of appointment held by the decedent, (B)
a lapse at death of a presently exercisable general power of appointment held
by the decedent, and (C) an exercise, release, or lapse of a general power of
appointment that the decedent created in himself [or herself] and of a power
described in Section 2-205(2)(ii) that the decedent conferred on a nonadverse
party."
The two-year rule of paragraph (3) covers the following specific
forms of transfer:
(i) Any property that passed as a result
of the termination of a right or interest in, or power over, property that
would have been included in the augmented estate under paragraph (1)(i), (ii),
or (iii), or under paragraph (2), if the right, interest, or power had not
terminated until the decedent's death.
The amount included is the value of the property that would have been
included under those paragraphs if the property were valued at the time the
right, interest, or power terminated, and is included only to the extent the
property passed upon termination to or for the benefit of any person other than
the decedent or the decedent's estate, spouse, or surviving spouse. As used in this subparagraph
"termination," with respect to a right or interest in property,
occurs when the right or interest terminated by the terms of the governing
instrument or the decedent transferred or relinquished the right or interest,
and, with respect to a power over property, occurs when the power terminated by
exercise, release, lapse, default, or otherwise, but, with respect to a power
described in paragraph (1)(i), "termination" occurs when the power
terminated by exercise or release, but not otherwise.
(ii) Any transfer of or relating to an
insurance policy on the life of the decedent if the proceeds would have been
included in the augmented estate under paragraph (1)(iv) had the transfer not
occurred. The amount included is the
value of the insurance proceeds to the extent the proceeds were payable at the
decedent's death to or for the benefit of any person other than the decedent's
estate or surviving spouse.
(iii) Any transfer of property, to the
extent not otherwise included in the augmented estate, made to or for the
benefit of a person other than the decedent's surviving spouse. The amount included is the value of the
transferred property to the extent the aggregate transfers to any one donee in
either of the two years exceeded $10,000.
Various aspects of paragraph (3) are illustrated by the following
examples. Other examples illustrating
various aspects of this paragraph are Examples 2, 9, 12, 14, and 15, above, and
Examples 33 and 34 in the Comment to Section 2-207, below. In the following examples, as in the examples
above, G is the decedent and S is the decedent's surviving spouse.
Example
16-Retained Income Interest Terminating Within Two Years Before Death. Before death, and during marriage, G created
an irrevocable inter-vivos trust, providing for the income to go to G for ten
years, then for the corpus of the trust to go to X. G died 11 years after the trust was created,
survived by S and X. G was married to S
when the trust terminated.
The full value of the corpus of the
trust at the date of its termination is included in the augmented estate under
paragraph (3)(i). The full value of the
corpus at death would have been included in the augmented estate under
paragraph (2)(i) had G's income interest not terminated until death; G's income interest terminated within the
two-year period next preceding G's death;
G was married to S when the trust was created and when the income
interest terminated; and the trust
corpus upon termination passed to a person other than S, G, or G's estate.
Example
17-Personal Residence Trust Terminating Within Two Years Before Death. Before death, and during marriage, G created
an irrevocable inter-vivos trust of G's personal residence, retaining the right
to occupy the residence for ten years, then for the residence to go to X. G died eleven years after the trust was
created, survived by S and X. G was
married to S when the right to possession terminated.
The full value of the residence at the
date the trust terminated is included in the augmented estate under paragraph
(3)(i). The full value of the residence
would have been included in the augmented estate under paragraph (2)(i) had G's
right to possession not terminated until death;
G's right to possession terminated within the two-year period next
preceding G's death; G was married to S
when the trust was created and when the right to possession terminated; and the residence passed upon termination to
a person other than S, G, or G's estate.
Example
18-Irrevocable Assignment of Life-Insurance Policy Within Two Years Before
Death. In Example 8, G
irrevocably assigned the life-insurance policy to X and Y within two years
preceding G's death. G was married to S
when the policy was assigned. G died,
survived by S, X, and Y.
The full value of the proceeds are
included in the augmented estate under paragraph (3)(ii). The full value of the proceeds would have
been included in the augmented estate under paragraph (1)(iv) had G owned the
policy at death; G assigned the policy
within the two-year period next preceding G's death; G was married to S when the policy was
assigned; and the proceeds were payable
to a person other than S or G's estate.
Example
19-Property Purchased in Joint Tenancy Within Two Years Before Death. Within two years before death, and during
marriage, G and X purchased property in joint tenancy; G contributed $75,000 of the $100,000
purchase price and X contributed $25,000.
G died, survived by S and X.
Regardless of when or by whom the
property was purchased, the value at G's death of G's fractional interest of
one-half is included in the augmented estate under paragraph (1)(ii) because
G's half passed to X as surviving joint tenant.
Because the property was purchased within two years before death, and
during marriage, and because G's contribution exceeded the value of G's
fractional interest in the property, the excess contribution of $25,000
constitutes a gift to X within the two-year period next preceding G's
death. Consequently, an additional
$15,000 ($25,000 minus $10,000) is included in the augmented estate under
paragraph (3)(iii) as a gift to X.
Had G provided all of the $100,000
purchase price, then paragraph (3)(iii) would require $40,000 ($50,000 minus
$10,000) to be included in the augmented estate (in addition to the inclusion
of one-half the value of the property at G's death under paragraph (1)(ii).
Had G provided
one-half or less of the $100,000 purchase price, then G would not have made a
gift to X within the two-year period next preceding G's death. Half the value of the property at G's death
would still be included in the augmented estate under paragraph (1)(ii),
however.
Cross Reference. On obtaining written spousal
consent to assure qualification for the charitable deduction for charitable
remainder trusts or outright charitable donations, see the Comment to Section
2-208.
Historical Note. This Comment was added in 1993.
Section 2‑206.
Decedent's Nonprobate Transfers to the Surviving Spouse.
Excluding property passing
to the surviving spouse under the federal Social Security system, the value of
the augmented estate includes the value of the decedent's nonprobate transfers
to the decedent's surviving spouse, which consist of all property that passed
outside probate at the decedent's death from the decedent to the surviving
spouse by reason of the decedent's death, including:
(1) the
decedent's fractional interest in property held as a joint tenant with the
right of survivorship, to the extent that the decedent's fractional interest
passed to the surviving spouse as surviving joint tenant,
(2) the
decedent's ownership interest in property or accounts held in co‑ownership
registration with the right of survivorship, to the extent the decedent's
ownership interest passed to the surviving spouse as surviving co‑owner,
and
(3) all other property that would have been included in the augmented
estate under Section 2‑205(1) or (2) had it passed to or for the benefit
of a person other than the decedent's spouse, surviving spouse, the decedent,
or the decedent's creditors, estate, or estate creditors.
COMMENT
This
section, which in the 1990 version appeared in substance as a paragraph of a
single, long section defining the augmented estate, establishes as the third
component of the augmented estate the value of the decedent's nonprobate transfers
to the decedent's surviving spouse. Under this section, the decedent's
nonprobate transfers to the decedent's surviving spouse:
consist of all property that passed outside probate
at the decedent's death from the decedent to the surviving spouse by reason of
the decedent's death, including:
(1) the decedent's fractional interest in property
held as a joint tenant with the right of survivorship, to the extent that the
decedent's fractional interest passed to the surviving spouse as surviving
joint tenant,
(2) the decedent's ownership interest in property or
accounts held in co‑ownership registration with the right of
survivorship, to the extent the decedent's ownership interest passed to the
surviving spouse as surviving co‑owner, and
(3) all other property that would have been included
in the augmented estate under Section 2‑205(1) or (2) had it passed to or
for the benefit of a person other than the decedent's spouse, surviving spouse,
the decedent, or the decedent's creditors, estate, or estate creditors.
Property
passing to the surviving spouse under the federal Social Security system is
excluded.
Various
aspects of Section 2‑206 are illustrated by the following examples. In these examples, as in the examples in the
Comment to Section 2-205, above, G is the decedent and S is the decedent’s
surviving spouse.
Example
20-Tenancy by the Entirety. G and S own
property in tenancy by the entirety. G
died, survived by S.
Because the definition in Section 1-201
of "joint tenants with the right of survivorship" includes tenants by
the entirety, the provisions of Section 2-206 relating to joint tenancies with
right of survivorship apply to tenancies by the entirety.
In total, therefore, the full value of
the property is included in the augmented estate-G's one-half under Section
2-206(1) and S's one-half under Section 2-207(a)(1)(i).
Section 2-206(1) requires the inclusion
of the value of G's one-half fractional interest because it passed to S as
surviving joint tenant.
Section 2-207(a)(1)(i) requires the
inclusion of S's one-half fractional interest.
Because G was a joint tenant immediately before G's death, S's
fractional interest, for purposes of Section 2-207, is determined immediately
before G's death, disregarding the fact that G predeceased S. Immediately before G's death, S's fractional
interest was then a one-half fractional interest. Despite Section 2-205(1)(ii), none of S's
fractional interest is included under Section 2-207(a)(2) because that
provision does not apply to fractional interests that are included under
Section 2-207(a)(1)(i). Consequently,
the value of S's one-half interest is included under Section 2-207(a)(1)(i) but
not under Section 2-207(a)(2).
Example
21-Joint Tenancy. G, S, and X own
property in joint tenancy. G died more
than two years after the property was titled in that form, survived by S and X.
In total, two-thirds of the value of the
property at G's death is included in the augmented estate-one-sixth under
Section 2-205, one-sixth under Section 2-206, and one-third under Section
2-207.
Section 2-205(1)(ii) requires the
inclusion of half of the value of G's one-third fractional interest because
that half passed by right of survivorship to X.
Section 2-206(1) requires the inclusion
of the value of the other half of G's one-third fractional interest because
that half passed to S as surviving joint tenant.
Section 2-207(a)(1)(i) requires the
inclusion of the value of S's one-third interest. Because G was a joint tenant immediately
before G's death, S's fractional interest, for purposes of Section 2-207, is
determined immediately before G's death, disregarding the fact that G
predeceased S. Immediately before G's
death, S's fractional interest was then a one-third fractional interest. Despite Section 2-205(1)(ii), none of S's
fractional interest is included under Section 2-207(a)(2) because that
provision does not apply to fractional interests that are included under
Section 2-207(a)(1)(i). Consequently,
the value of S's one-third fractional interest is included in the augmented
estate under Section 2-207(a)(1)(i) but not under Section 2-207(a)(2).
Example
22-Income Interest Passing to Surviving Spouse. Before death, and during marriage, G created
an irrevocable inter-vivos trust, providing for the income to go to G for life,
then for the income to go to S for life, then for the corpus of the trust to go
to X. G died, survived by S and X.
The full value of the corpus of the
trust at G's death is included in the augmented estate under a combination of
Sections 2-205 and 2-206.
Section 2-206(3) requires the inclusion
of the commuted value of S's income interest.
Note that, although S owns the income interest as of G's death, the
value of S's income interest is not included under Section 2-207 because
Section 2-207 only includes property interests that are not included under
Section 2-206.
Section 2-205(2)(i) requires the
inclusion of the commuted value of X's remainder interest.
Example
23-Corpus Passing to Surviving Spouse. Before death, and
during marriage, G created an irrevocable inter-vivos trust, providing for the
income to go to G for life, then for the corpus of the trust to go to S. G died, survived by S.
The value of the corpus of the trust at
G's death is included in the augmented estate under Section 2-206(3). Note that, although S owns the corpus as of
G's death, the value of S's ownership interest in the corpus is not included
under Section 2-207 because Section 2-207 only includes property interests that
are not included under Section 2-206.
Example
24-TOD Registered Securities, POD Account, and Life Insurance Payable to
Surviving Spouse. In Examples 5
and 8 in the Comment to Section 2-205, G designated S to take the securities on
death, registered S as the beneficiary of the POD savings account, and named S
as the beneficiary of the life-insurance policy.
The same values that were included in
the augmented estate under Section 2-205(1) in those examples are included in
the augmented estate under Section 2-206.
Example
25-Joint Checking Account. G and S were
registered as co-owners of a joint checking account. G contributed 75 percent of the funds in the
account and S contributed 25 percent of the funds. G died, survived by S.
G's ownership interest in the account immediately before death,
determined under Section 6-211, was 75 percent of the account. Because that percentage ownership interest
passed by right of survivorship to S at G's death, 75 percent of the value of
the account at G's death is included in the augmented estate under Section
2-206. The remaining 25 percent of the
account is included in the augmented estate under Section 2-207.
Historical Note. This Comment was added in 1993.
Section 2‑207. Surviving Spouse's Property and Nonprobate
Transfers to Others.
(a) [Included Property.] Except to the extent included in the
augmented estate under Section 2‑204 or 2‑206, the value of the
augmented estate includes the value of:
(1) property
that was owned by the decedent's surviving spouse at the decedent's death,
including:
(i) the
surviving spouse's fractional interest in property held in joint tenancy with
the right of survivorship,
(ii) the
surviving spouse's ownership interest in property or accounts held in co‑ownership
registration with the right of survivorship, and
(iii)property that passed to the surviving spouse by
reason of the decedent's death, but not including the spouse's right to
homestead allowance, family allowance, exempt property, or payments under the
federal Social Security system; and
(2) property
that would have been included in the surviving spouse's nonprobate transfers to
others, other than the spouse's fractional and ownership interests included
under subsection (a)(1)(i) or (ii), had the spouse been the decedent.
(b) [Time of Valuation.] Property included under this section is
valued at the decedent's death, taking the fact that the decedent predeceased
the spouse into account, but, for purposes of subsection (a)(1)(i) and (ii),
the values of the spouse's fractional and ownership interests are determined
immediately before the decedent's death if the decedent was then a joint tenant
or a co‑owner of the property or accounts. For purposes of subsection (a)(2), proceeds
of insurance that would have been included in the spouse's nonprobate transfers
to others under Section 2‑205(1)(iv) are not valued as if he [or she]
were deceased.
(c) [Reduction for Enforceable
Claims.] The value of property
included under this section is reduced by enforceable claims against the
surviving spouse.
COMMENT
This
section, which in the 1990 version appeared in substance as a paragraph of a
single, long section defining the augmented estate, establishes as the fourth
component of the augmented estate the value of property owned by the surviving
spouse at the decedent's death plus the value of amounts that would have been
includible in the surviving spouse's nonprobate transfers to others had the
spouse been the decedent, reduced by enforceable claims against that property
or that spouse, as provided in Sections 2‑207(c) and 2‑208(b)(1). Property owned by the
decedent’s surviving spouse does not include the value of enhancements to the
surviving spouse’s earning capacity (e.g., the value of a law, medical, or
business degree).
Note
that amounts that would have been includible in the surviving spouse's
nonprobate transfers to others under Section 2‑205(1)(iv) are not valued
as if he or she were deceased. Thus, if, at the decedent's death, the surviving
spouse owns a $1 million life‑insurance policy on his or her life,
payable to his or her sister, that policy would not be valued at its face value
of $1 million, but rather could be valued under the method used in the federal
estate tax under Treas. Reg. § 20.2031‑8.
The
purpose of combining the estates and nonprobate transfers of both spouses is to
implement a partnership or marital‑sharing theory. Under that theory,
there is a fifty/fifty split of the property acquired by both spouses. Hence the
redesigned elective share includes the survivor's net assets in the augmented‑estate
entity. (Under a different rationale, no longer appropriate under the
redesigned system, the pre‑1990 version of Section 2‑202 also added
the value of property owned by the surviving spouse, but only to the extent the
owned property had been derived from the decedent. An incidental benefit of the
redesigned system is that this tracing‑to‑source feature of the pre‑1990
version is eliminated.)
Various
aspects of Section 2‑207 are illustrated by the following examples. Other examples illustrating various aspects
of this section are Examples 20, 21, 22, 23, and 25 in the Comment to Section
2-206. In the following examples, as in
the examples in the Comments to Sections 2-205 and 2-206, above, G is the
decedent and S is the decedent’s surviving spouse.
Example
26-Inter-Vivos Trust Created by Surviving Spouse; Corpus Payable to Spouse at Decedent's Death. Before G's death, and during marriage, S
created an irrevocable inter-vivos trust, providing for the income to go to G
for life, then for the corpus of the trust to go to S. G died, survived by S.
The value of the corpus of the trust at
G's death is included in the augmented estate under Section 2-207(a)(1) as
either an interest owned by S at G's death or as an interest that passed to the
spouse by reason of G's death.
Example
27-Inter-Vivos Trust Created by Another;
Income Payable to Spouse for Life.
Before G's death, X created an irrevocable inter-vivos trust,
providing for the income to go to S for life, then for the income to go to G
for life, then for the corpus of the trust to go to Y. G died, survived by S and Y.
The commuted value of S's income
interest as of G's death is included in the augmented estate under Section
2-207(a), as a property interest owned by the surviving spouse at the
decedent's death.
Example
28-Inter-Vivos Trust Created by Another;
Income Payable to Spouse for Life.
Before G's death, X created an irrevocable inter-vivos trust, providing
for the income to go to G for life, then for the income to go to S for life,
then for the corpus of the trust to go to Y.
G died, survived by S and Y.
The commuted value of S's income
interested at the decedent's death is included in the augmented estate under
Section 2-207(a)(1), as either a property interest owned by the surviving
spouse at the decedent's death or a property interest that passed to the
surviving spouse by reason of the decedent's death.
Example
29-Life Insurance on Decedent's Life Owned by Surviving Spouse; Proceeds Payable to Spouse. Before G's death, S bought a life-insurance
policy on G's life, naming S as the beneficiary. G died, survived by S.
The value of the proceeds of the
life-insurance policy is included in the augmented estate under Section 2-207(a)(1),
as property owned by the surviving spouse at the decedent's death.
Example
30-Life Insurance on Decedent's Life Owned by Another; Proceeds Payable to Spouse. Before G's death, X brought a life-insurance
policy on G's life, naming S as the beneficiary. G died, survived by S.
The value of the proceeds of the
life-insurance policy is included in the augmented estate under Section
2-207(a)(1)(iii), as property that passed to the surviving by reason of the
decedent's death.
Example
31-Joint Tenancy Between Spouse and Another.
S and Y own property in joint tenancy.
G died, survived by S and Y.
The value of S's one-half fractional
interest at G's death is included in the augmented estate under Section
2-207(a)(1)(i). Despite Section
2-205(1)(ii), none of S's fractional interest is included under Section
2-207(a)(2) because that provision does not apply to fractional interests
required to be included under Section 2-207(a)(1)(i). Consequently, the value of S's one-half is
included under Section 2-207(a)(1)(i) but not under Section 2-207(a)(2).
Example
32-Inter-Vivos Trust with Retained Income interest Created by Surviving Spouse. Before G's death, and during marriage, S
created an irrevocable inter-vivos trust, providing for the income to go to S
for life, then for the income to go to G for life, then for the corpus of the
trust to go to X. G died, survived by S
and X.
The value of the trust corpus at G's
death is included in the augmented estate under Section 2-207(a)(2) because, if
S were the decedent, that value would be included in the spouse's nonprobate
transfers to others under Section 2-205(2)(i).
Note that property included under Section 2-207 is valued at the
decedent's death, taking the fact that the decedent predeceased the spouse into
account. Thus, G's remainder in income
for life is extinguished, and the full value of the corpus is included in the
augmented estate under Section 2-207(a)(2).
The commuted value of S's income interest would also be included under
Section 2-207(a)(1) but for the fact that Section 2-208(c) provides that when
two provisions apply to the same property interest, the interest is not
included under both provisions, but is included under the provision yielding
the highest value. Consequently, since
Section 2-207(a)(2) yields a higher value (the full corpus) than Section
2-207(a)(1) (the income interest), and since the income interest is part of the
value of the corpus, and hence both provisions apply to the same property
interest, the full corpus is included under Section 2-207(a)(2) and nothing is
included under Section 2-207(a)(1).
Example
33-Inter-Vivos Trust Created by Decedent;
Income to Surviving Spouse.
More than two years before G's death, and during marriage, G created an
irrevocable inter-vivos trust, providing for the income to go to S for life,
then for the corpus of the trust to go to X.
G died, survived by S and X.
The commuted value of S's income
interest as of G's death is included in the augmented estate under Section
2-207. If G had created the trust within
the two-year period next preceding G's death, the commuted value of X's
remainder interest as of the date of the creation of the trust (less $10,000,
assuming G made no other gifts to X in that year) would also have been included
in the augmented estate under Section 2-205(3)(iii).
Example
34-Inter-Vivos Trust Created by Surviving Spouse; No Retained Interest or Power. More than two years before G's death, and
during marriage, S created an irrevocable inter-vivos trust, providing for the
income to go to G for life, then for the corpus of the trust to go to Y. G died, survived by S and Y.
The value of the trust is not included in the augmented
estate. If S had created the trust
within the two-year period next preceding G's death, the commuted value of Y's
remainder interest as of the date of the creation of the trust (less $10,000,
assuming no other gifts to Y in that year) would have been included in the
augmented estate under Section 2-207(a)(2) because if S were the decedent, the
value of the remainder interest would have been included in S's nonprobate
transfers to others under Section 2-205(3)(iii).
Historical Note. This Comment was added in 1993.
Section 2‑208.
Exclusions, Valuation, and Overlapping Application.
(a) [Exclusions.] The value of any property is excluded from the decedent’s nonprobate
transfers to others (i) to the extent the decedent received adequate and full
consideration in money or money’s worth for a transfer of the property or (ii)
if the property was transferred with the written joinder of, or if the transfer
was consented to in writing before or after the transfer by, the surviving
spouse.
(b) [Valuation.] The value of property:
(1) included
in the augmented estate under Section 2‑205, 2‑206, or 2‑207
is reduced in each category by enforceable claims against the included
property; and
(2) includes
the commuted value of any present or future interest and the commuted value of
amounts payable under any trust, life insurance settlement option, annuity
contract, public or private pension, disability compensation, death benefit or
retirement plan, or any similar arrangement, exclusive of the federal Social
Security system.
(c) [Overlapping Application; No
Double Inclusion.] In case of
overlapping application to the same property of the paragraphs or subparagraphs
of Section 2‑205, 2‑206, or 2‑207, the property is included
in the augmented estate under the provision yielding the greatest value, and
under only one overlapping provision if they all yield the same value.
COMMENT
Subsection (a). This subsection excludes
from the decedent’s nonprobate transfers to others the value of any property
(i) to the extent that the decedent received adequate and full consideration in
money or money’s worth for a transfer of the property or (ii) if the property
was transferred with the written joinder of, or if the transfer was consented
to in writing before or after the transfer by, the surviving spouse.
Consenting to Split-Gift
Treatment Not Consent to the Transfer. Spousal consent to split-gift
treatment under I.R.C. § 2513 does not constitute written joinder of or consent
to the transfer by the spouse for purposes of subsection (a).
Obtaining the Charitable
Deduction for Transfers Coming Within Section 2-205(2) or (3). Because,
under Section 2-201(10), the term “right to income” includes a right to
payments under an annuity trust or a unitrust, the value of a charitable
remainder trust established by a married grantor without written spousal
consent or joinder would be included in the decedent’s nonprobate transfers to
others under Section 2-205(2)(A). Consequently, a married grantor planning to
establish a charitable remainder trust is advised to obtain the written consent
of his or her spouse to the transfer, as provided in Section 2-208(a), in order
to be assured of qualifying for the charitable deduction.
Similarly, outright gifts
made by a married donor within two years preceding death are included in the
augmented estate under Section 2-205(3)(C) to the extent that the aggregate
gifts to any one donee exceed the amount excludable from taxable gifts under 26
U.S.C. Section 2503(b) [or its successor] on the date next preceding the date
of the decedent’s death (or, if referring to federal law is considered an
unlawful delegation of legislative power, $12,000) in either of the two years.
Consequently, a married donor planning to donate more than that amount to any
charitable organization within a twelve-month period is advised to obtain the
written consent of his or her spouse to the transfer, as provided in Section
2-208(a), in order to be assured of qualifying for the charitable deduction.
Spousal Waiver of ERISA
Benefits. Under the Employee Retirement Income Security Act (ERISA), death
benefits under an employee benefit plan subject to ERISA must be paid in the
form of an annuity to the surviving spouse. A married employee wishing to
designate someone other than the spouse must obtain a waiver from the spouse.
As amended in 1984 by the Retirement Equity Act, ERISA requires each employee
benefit plan subject to its provisions to provide that an election of a waiver
shall not take effect unless
(i) the spouse of the
participant consents in writing to such election,
(ii) such election
designates a beneficiary (or form of benefits) which may not be changed without
spousal consent (or the consent of the spouse expressly permits designation by
the participant without any requirement of further consent by the spouse), and
(iii) the spouse’s consent
acknowledges the effect of such election and is witnessed by a plan
representative or a notary public.
See 29 U.S.C. § 1055(c) (1988); Int.Rev.Code § 417(a). Any spousal
waiver that complies with these requirements would satisfy Section 2-208(a) and
would serve to exclude the value of the death benefits from the decedent’s
nonprobate transfers to others.
Cross Reference. See
also Section 2-213 and Comment.
Subsection (c). The
application of subsection (c) is illustrated in Example 32 in the Comment to
Section 2-207.
Historical Note. This Comment was added in 1993. Subsection (a) was
amended in 2008 by adding the phrase “before or after the transfer.”
Section 2‑209.
Sources from Which Elective Share Payable.
(a)
[Elective‑Share Amount
Only.] In a proceeding for an elective share, the
following are applied first to satisfy the elective‑share amount and to
reduce or eliminate any contributions due from the decedent's probate estate
and recipients of the decedent's nonprobate transfers to others:
(1) amounts
included in the augmented estate under Section 2‑204 which pass or have
passed to the surviving spouse by testate or intestate succession and amounts
included in the augmented estate under Section 2‑206; and
(2) the
marital-property portion of amounts included in the augmented estate under
Section 2-207.
(b) [Marital Property
Portion.] The marital-property
portion under subsection (a)(2) is computed by multiplying the value of the
amounts included in the augmented estate under Section 2-207 by the percentage
of the augmented estate set forth in the schedule in Section 2-203(b)
appropriate to the length of time the spouse and the decedent were married to
each other.
(c) [Unsatisfied Balance of Elective-Share
Amount; Supplemental Elective-Share Amount.] If, after the application of
subsection (a), the elective-share amount is not fully satisfied, or the
surviving spouse is entitled to a supplemental elective-share amount, amounts
included in the decedent’s net probate estate, other than assets passing to the
surviving spouse by testate or intestate succession, and in the decedent’s
nonprobate transfers to others under Section 2-205(1), (2), and (3)(B) are
applied first to satisfy the unsatisfied balance of the elective-share amount
or the supplemental elective-share amount. The decedent’s net probate estate
and that portion of the decedent’s nonprobate transfers to others are so
applied that liability for the unsatisfied balance of the elective-share amount
or for the supplemental elective-share amount is apportioned among the
recipients of the decedent’s net probate estate and of that portion of the
decedent’s nonprobate transfers to others in proportion to the value of their
interests therein.
(d) [Unsatisfied Balance of
Elective-Share and Supplemental Elective-Share Amount.] If, after the
application of subsections (a) and (c), the elective-share or supplemental
elective-share amount is not fully satisfied, the remaining portion of the
decedent’s nonprobate transfers to others is so applied that liability for the
unsatisfied balance of the elective-share or supplemental elective-share amount
is apportioned among the recipients of the remaining portion of the decedent’s
nonprobate transfers to others in proportion to the value of their interests
therein.
(e) [Unsatisfied Balance Treated as
General Pecuniary Devise.] The unsatisfied balance of the elective-share or
supplemental elective-share amount as determined under subsection (c) or (d) is
treated as a general pecuniary devise for purposes of Section 3-904.
COMMENT
Section 2-209 is an integral
part of the overall redesign of the elective share. It establishes the priority
to be used in determining the sources from which the elective-share amount is
payable.
Subsection (a). Subsection
(a) applies only to the elective-share amount determined under Section
2-202(a), not to the supplemental elective-share amount determined under
Section 2-202(b). Under subsection (a), the following are counted first toward
satisfying the elective-share amount (to the extent they are included in the
augmented estate):
(1) amounts included in the augmented estate under Section 2-204
which pass or have passed to the surviving spouse by testate or intestate
succession and amounts included in the augmented estate under Section 2-206,
i.e., the value of the decedent’s nonprobate transfers to the surviving spouse,
including the proceeds of insurance (including accidental death benefits) on
the life of the decedent and benefits payable under a retirement plan in which
the decedent was a participant, but excluding property passing under the
Federal Social Security system; and
(2) the marital-property portion of amounts included in the
augmented estate under Section 2-207.
Under subsection (b), the marital-property
portion of amounts included in the augmented estate under Section 2-207 is
computed by multiplying the value of the amounts included in the augmented
estate under Section 2-207 by the percentage of the augmented estate set forth
in the schedule in Section 2-203(b) appropriate to the length of time the
spouse and the decedent were married to each other.
If the combined value of the
amounts described in subsection (a)(1) and (2) equals or exceeds the
elective-share amount, the surviving spouse is not entitled to any further
amount from the decedent’s probate estate or recipients of the decedent’s
nonprobate transfers to others, unless the surviving spouse is entitled to a
supplemental elective-share amount under Section 2-202(b).
Subsections (c) and (d).
Subsections (c) and (d) apply to both the elective-share amount and the
supplemental elective-share amount, if any. As to the elective-share amount
determined under Section 2-202(a), the decedent’s probate estate and nonprobate
transfers to others become liable only if and to the extent that the amounts
described in subsection (a) are insufficient to satisfy the elective-share
amount. The decedent’s probate estate and nonprobate transfers to others are
fully liable for the supplemental elective-share amount determined under
Section 2-202(b), if any.
Subsections (c) and (d)
establish a layer of priority within the decedent’s net probate estate (other
than assets passing to the surviving spouse by testate or intestate succession)
and nonprobate transfers to others. The decedent’s probate estate and that
portion of the decedent’s nonprobate transfers to others that was not included
in the augmented estate under Section 2-205(1), (2), and 3(B) are liable first.
Only if and to the extent that those amounts are insufficient does the
remaining portion of the decedent’s nonprobate transfers to others become
liable.
Note that the exempt property
and allowances provided by Sections 2-401, 2-402, and 2-403 are not charged
against, but are in addition to, the elective-share and supplemental
elective-share amounts.
The provision that the spouse
is charged with amounts that would have passed to the spouse but were
disclaimed was deleted in 1993. That provision was introduced into the Code in
1975, prior to the addition of the QTIP provisions in the marital deduction of
the federal estate tax. At that time, most devises to the surviving spouse were
outright devises and did not require actuarial computation. Now, many if not
most devises to the surviving spouse are in the form of an income interest that
qualifies for the marital deduction under the QTIP provisions, and these
devises require actuarial computations that should be avoided whenever
possible.
The word “equitably” is eliminated from
subsections (c) and (d) because it has caused confusion about whether it grants
discretion to the court to apportion liability for the unsatisfied balance
among the recipients of the decedent’s net probate estate and of that portion
of the decedent’s nonprobate transfers to others in some proportion other than
in proportion to the value of their interests therein. The intent of including
that word in the earlier version was merely to describe the prescribed
apportionment as “equitable,” not to grant authority to vary the prescribed
apportionment.
Historical Note. This Comment was revised in 1993 and 2008.
Section 2‑210.
Personal Liability of Recipients.
(a) Only original recipients of the decedent's nonprobate transfers to
others, and the donees of the recipients of the decedent's nonprobate transfers
to others, to the extent the donees have the property or its proceeds, are
liable to make a proportional contribution toward satisfaction of the surviving
spouse's elective‑share or supplemental elective‑share amount. A
person liable to make contribution may choose to give up the proportional part
of the decedent's nonprobate transfers to him [or her] or to pay the value of
the amount for which he [or she] is liable.
(b) If any section or part of any section of this Part is preempted by
federal law with respect to a payment, an item of property, or any other
benefit included in the decedent's nonprobate transfers to others, a person
who, not for value, receives the payment, item of property, or any other
benefit is obligated to return the payment, item of property, or benefit, or is
personally liable for the amount of the payment or the value of that item of
property or benefit, as provided in Section 2‑209, to the person who would
have been entitled to it were that section or part of that section not
preempted.
Section 2‑211.
Proceeding for Elective Share; Time Limit.
(a) Except as provided in subsection (b), the election must be made by
filing in the Court and mailing or delivering to the personal representative,
if any, a petition for the elective share within nine months after the date of
the decedent's death, or within six months after the probate of the decedent's
will, whichever limitation later expires. The surviving spouse must give notice
of the time and place set for hearing to persons interested in the estate and
to the distributees and recipients of portions of the augmented estate whose
interests will be adversely affected by the taking of the elective share. Except
as provided in subsection (b), the decedent's nonprobate transfers to others
are not included within the augmented estate for the purpose of computing the
elective‑share, if the petition is filed more than nine months after the
decedent's death.
(b) Within nine months after the decedent's death, the surviving spouse
may petition the court for an extension of time for making an election. If,
within nine months after the decedent's death, the spouse gives notice of the
petition to all persons interested in the decedent's nonprobate transfers to
others, the court for cause shown by the
surviving spouse may extend the time for election. If the court grants the
spouse's petition for an extension, the decedent's nonprobate transfers to
others are not excluded from the augmented estate for the purpose of computing the
elective‑share and supplemental elective‑share amounts, if the
spouse makes an election by filing in the court and mailing or delivering to
the personal representative, if any, a petition for the elective share within
the time allowed by the extension.
(c) The surviving spouse may withdraw his [or her] demand for an
elective share at any time before entry of a final determination by the court.
(d) After notice and hearing, the court shall determine the elective-share and supplemental elective-share amounts, and shall order its payment from the assets of the augmented estate or by contribution as appears appropriate under Sections 2-209 and 2-210. If it appears that a fund or property included in the augmented estate has not come into the possession of the personal representative, or has been distributed by the personal representative, the court nevertheless shall fix the liability of any person who has any interest in the fund or property or who has possession thereof, whether as trustee or otherwise. The proceeding may be maintained against fewer than all persons against whom relief could be sought, but no person is subject to contribution in any greater amount than he [or she] would have been under Sections 2-209 and 2-210 had relief been secured against all persons subject to contribution.
(e) An order or judgment of the court may be enforced as necessary in
suit for contribution or payment in other courts of this State or other
jurisdictions.
COMMENT
This section is revised to
coordinate the terminology with that used in revised Section 2‑205 and
with the fact that an election can be made by a conservator, guardian, or agent
on behalf of a surviving spouse, as provided in Section 2‑212(a).
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 98 (Supp.
1992).
Section 2‑212.
Right of Election Personal to Surviving Spouse; Incapacitated Surviving Spouse.
(a) [Surviving Spouse Must Be
Living at Time of Election.] The
right of election may be exercised only by a surviving spouse who is living
when the petition for the elective share is filed in the court under Section 2‑211(a).
If the election is not exercised by the surviving spouse personally, it may be
exercised on the surviving spouse's behalf by his [or her] conservator,
guardian, or agent under the authority of a power of attorney.
(b) [Incapacitated Surviving
Spouse.] If the election is exercised on behalf of a surviving spouse who is an
incapacitated person, that portion of the elective-share and supplemental
elective-share amounts due from the decedent’s probate estate and recipients of
the decedent’s nonprobate transfers to others under Section 2-209(c) and (d)
must be placed in a custodial trust for the benefit of the surviving spouse
under the provisions of the [Enacting state] Uniform Custodial Trust Act,
except as modified below. For the purposes of this subsection, an election on
behalf of a surviving spouse by an agent under a durable power of attorney is
presumed to be on behalf of a surviving spouse who is an incapacitated person.
For purposes of the custodial trust established by this subsection, (i) the
electing guardian, conservator, or agent is the custodial trustee, (ii) the
surviving spouse is the beneficiary, and (iii) the custodial trust is deemed to
have been created by the decedent spouse by written transfer that takes effect
at the decedent spouse’s death and that directs the custodial trustee to
administer the custodial trust as for an incapacitated beneficiary.
(c) [Custodial Trust.] For the purposes of subsection (b), the
[Enacting state] Uniform Custodial Trust Act must be applied as if Section 6(b)
thereof were repealed and Sections 2(e), 9(b), and 17(a) were amended to read
as follows:
(1)
Neither an incapacitated beneficiary nor anyone acting on behalf of an
incapacitated beneficiary has a power to terminate the custodial trust; but if
the beneficiary regains capacity, the beneficiary then acquires the power to
terminate the custodial trust by delivering to the custodial trustee a writing
signed by the beneficiary declaring the termination. If not previously terminated, the custodial
trust terminates on the death of the beneficiary.
(2)
If the beneficiary is incapacitated, the custodial trustee shall expend
so much or all of the custodial trust property as the custodial trustee
considers advisable for the use and benefit of the beneficiary and individuals
who were supported by the beneficiary when the beneficiary became incapacitated,
or who are legally entitled to support by the beneficiary. Expenditures may be made in the manner, when,
and to the extent that the custodial trustee determines suitable and proper,
without court order but with regard to other support, income, and property of
the beneficiary [exclusive of] [and] benefits of medical or other forms of
assistance from any state or federal government or governmental agency for
which the beneficiary must qualify on the basis of need.
(3)
Upon the beneficiary’s death, the custodial trustee shall transfer the
unexpended custodial trust property in the following order: (i) under the residuary clause, if any, of
the will of the beneficiary’s predeceased spouse against whom the elective
share was taken, as if that predeceased spouse died immediately after the
beneficiary; or (ii) to that predeceased spouse’s heirs under Section 2-711 of
[this State’s] Uniform Probate Code.
[STATES THAT HAVE NOT
ADOPTED THE UNIFORM CUSTODIAL TRUST ACT
SHOULD ADOPT THE FOLLOWING
ALTERNATIVE SUBSECTION (b)
AND NOT ADOPT SUBSECTION (b)
OR (c) ABOVE]
[(b) [Incapacitated
Surviving Spouse.] If
the election is exercised on behalf of a surviving spouse who is an
incapacitated person, the court must set aside that portion of the
elective-share and supplemental elective-share amounts due from the decedent’s
probate estate and recipients of the decedent’s nonprobate transfers to others
under Section 2-209(c) and (d) and must appoint a trustee to administer that
property for the support of the surviving spouse. For the purposes of this
subsection, an election on behalf of a surviving spouse by an agent under a
durable power of attorney is presumed to be on behalf of a surviving spouse who
is an incapacitated person. The trustee must administer the trust in accordance
with the following terms and such additional terms as the court determines
appropriate:
(1) Expenditures
of income and principal may be made in the manner, when, and to the extent that
the trustee determines suitable and proper for the surviving spouse's support,
without court order but with regard to
other support, income, and property of the surviving spouse [exclusive of] [and] benefits
of medical or other forms of assistance from any state or federal government or
governmental agency for which the surviving spouse must qualify on the basis of
need.
(2) During the surviving spouse's incapacity, neither the surviving
spouse nor anyone acting on behalf of the surviving spouse has a power to
terminate the trust; but if the surviving spouse regains capacity, the
surviving spouse then acquires the power to terminate the trust and acquire
full ownership of the trust property free of trust, by delivering to the
trustee a writing signed by the surviving spouse declaring the termination.
(3)
Upon the surviving spouse's death, the trustee shall transfer the
unexpended trust property in the following order: (i) under the residuary
clause, if any, of the will of the predeceased spouse against whom the
elective share was taken, as if that
predeceased spouse died immediately after the surviving spouse; or (ii) to the
predeceased spouse's heirs under Section 2‑711.]
COMMENT
Subsection (a). Subsection (a) is revised
to make it clear that the right of election may be exercised only by or on
behalf of a living surviving spouse. If the election is not made by the
surviving spouse personally, it can be made on behalf of the surviving spouse
by the spouse’s conservator, guardian, or agent. In any case, the surviving spouse
must be alive when the election is made. The election cannot be made on behalf
of a deceased surviving spouse.
Subsections (b) and (c). If the election is made on
behalf of a surviving spouse who is an “incapacitated person”, as defined in
section 5-103(7), that portion of the elective-share and supplemental
elective-share amounts which, under Section 2-209(c) and (d), are payable from
the decedent’s probate estate and nonprobate transfers to others must go into a
custodial trust under the Uniform Custodial Trust Act, as adjusted in
subsection (c).
If the election is made on
behalf of the surviving spouse by his or her guardian or conservator, the
surviving spouse is by definition an “incapacitated person.” If the election is
made by the surviving spouse’s agent under a durable power of attorney, the
surviving spouse is presumed to be an “incapacitated person”; the presumption
is rebuttable.
The terms of the custodial
trust are governed by the Uniform Custodial Trust Act, except as adjusted in
subsection (c).
The custodial trustee is
authorized to expend the custodial trust property for the use and benefit of
the surviving spouse to the extent the custodial trustee considers it
advisable. In determining the amounts, if any, to be expended for the spouse’s
benefit, the custodial trustee is directed to take into account the spouse’s
other support, income, and property; these items would include governmental
benefits such as Social Security and Medicare.
Bracketed language in
subsection (c)(2) (and in Alternative subsection (b)(1)) gives enacting states
a choice as to whether governmental benefits for which the spouse must qualify
on the basis of need, such as Medicaid, are also to be considered. If so, the
enacting state should include the bracketed word “and” but not the bracketed
phrase “exclusive of” in its enactment; if not, the enacting state should
include the bracketed phrase “exclusive of” and not include the bracketed word
“and” in its enactment.
At the surviving spouse’s
death, the remaining custodial trust property does not go to the surviving
spouse’s estate, but rather under the residuary clause of the will of the
predeceased spouse whose probate estate and nonprobate transfers to others were
the source of the property in the custodial trust, as if the predeceased spouse
died immediately after the surviving spouse. In the absence of a residuary
clause, the property goes to the predeceased spouse’s heirs. See Section 2-711.
Alternative Subsection
(b). For states that have not enacted the Uniform Custodial Trust Act, an
Alternative subsection (b) is provided under which the court must set aside
that portion of the elective-share and supplemental elective-share amounts
which, under Section 2-209(c) and (d), are due from the decedent’s probate
estate and nonprobate transfers to others and must appoint a trustee to
administer that property for the support of the surviving spouse, in accordance
with the terms set forth in Alternative subsection (b).
Planning for an
Incapacitated Surviving Spouse Not Disrupted. Note that the portion of the
elective-share or supplemental elective-share amounts that go into the
custodial or support trust is that portion due from the decedent’s probate
estate and nonprobate transfers to others under Section 2-209(c) and (d). These
amounts constitute the involuntary transfers to the surviving spouse under the
elective-share system.
Amounts voluntarily transferred
to the surviving spouse under the decedent’s will, by intestacy, or by
nonprobate transfer, if any, do not go into the custodial or support trust.
Thus, estate planning measures deliberately established for a surviving spouse
who is incapacitated are not disrupted. For example, the decedent’s will might
establish a trust that qualifies for or that can be elected as qualifying for
the federal estate tax marital deduction. Although the value of the surviving
spouse’s interests in such a trust count toward satisfying the elective-share
amount under Section 2-209(a)(1), the trust itself is not dismantled by virtue
of Section 2-212(b) in order to force that property into the nonqualifying
custodial or support trust.
Rationale. The
approach of this section is based on a general expectation that most surviving
spouses are, at the least, generally aware of and accept their decedents’
overall estate plans and are not antagonistic to them. Consequently, to elect
the elective share, and not have the disposition of that part of it that is
payable from the decedent’s probate estate and nonprobate transfers to others
under Section 2-209(c) and (d) governed by subsections (b) and (c), the
surviving spouse must not be an incapacitated person. When the election is made
by or on behalf of a surviving spouse who is not an incapacitated person, the
surviving spouse has personally signified his or her opposition to the
decedent’s overall estate plan.
If the election is made on
behalf of a surviving spouse who is an incapacitated person, subsections (b)
and (c) control the disposition of that part of the elective-share amount or supplemental
elective-share amount payable under Section 2-209(c) and (d) from the
decedent’s probate estate and nonprobate transfers to others. The purpose of
subsections (b) and (c), generally speaking, is to assure that that part of the
elective share is devoted to the personal economic benefit and needs of the
surviving spouse, but not to the economic benefit of the surviving spouse’s
heirs or devisees.
Historical Note. This Comment was revised in 1993 and 2008.
Section 2‑213.
Waiver of Right to Elect and of Other Rights.
(a) The right of election of a surviving spouse and the rights of the
surviving spouse to homestead allowance, exempt property, and family allowance,
or any of them, may be waived, wholly or partially, before or after marriage,
by a written contract, agreement, or waiver signed by the surviving spouse.
(b) A surviving spouse's waiver is not enforceable if the surviving
spouse proves that:
(1) he [or
she] did not execute the waiver voluntarily; or
(2) the waiver
was unconscionable when it was executed and, before execution of the waiver, he
[or she]:
(i) was not
provided a fair and reasonable disclosure of the property or financial
obligations of the decedent;
(ii) did not
voluntarily and expressly waive, in writing, any right to disclosure of
the property or financial obligations of
the decedent beyond the disclosure provided; and
(iii)did not have, or reasonably could not have had,
an adequate knowledge of the property or financial obligations of the decedent.
(c) An issue of unconscionability of a waiver is for decision by the
court as a matter of law.
(d) Unless it provides to the contrary, a waiver of "all
rights," or equivalent language, in the property or estate of a present or
prospective spouse or a complete property settlement entered into after or in
anticipation of separation or divorce is a waiver of all rights of elective
share, homestead allowance, exempt property, and family allowance by each
spouse in the property of the other and a renunciation by each of all benefits
that would otherwise pass to him [or her] from the other by intestate
succession or by virtue of any will executed before the waiver or property
settlement.
COMMENT
This
section incorporates the standards by which the validity of a premarital
agreement is determined under the Uniform Premarital Agreement Act § 6.
The right to homestead
allowance, exempt property and family allowance are conferred by the provisions
of Part 4. The right to disclaim interests is recognized by Section 2-1105. The
provisions of this section, permitting a spouse or prospective spouse to waive
all statutory rights in the other spouse's property, seem desirable in view of
the common desire of parties to second and later marriages to insure that
property derived from the prior spouse passes at death to the joint children
(or descendants) of the prior marriage instead of to the later spouse. The
operation of a property settlement in anticipation of separation or divorce as
a waiver and renunciation takes care of most situations arising when a spouse
dies while a divorce suit is pending.
Effect of Premarital
Agreement or Waiver on ERISA Benefits. As amended in 1984 by the
Retirement Equity Act, ERISA requires each employee benefit plan subject to its
provisions to provide that an election of a waiver shall not take effect unless
(i) the spouse of the participant consents in writing to such election, (ii)
such election designates a beneficiary (or form benefits) which may not be
changed without spousal consent (or the
consent of the spouse expressly permits designation by the participant without
any requirement of further consent by the spouse), and (iii) the spouse's
consent acknowledges the effect of
election and is witnessed by a plan representative or a notary public.
See 29 U.S.C. § 1055(c) (1988);
Int. Rev. Code § 417(a).
In Hurwitz v. Sher, 982 F.2d 778 (2d
Cir.1992), the Court held that a premarital agreement was not an effective
waiver of a wife's claims to spousal death benefits under a qualified profit
sharing plan in which the deceased husband was the sole participant. The
premarital agreement provided, in part, that "each party hereby waives and
releases to the other party and to the other party's heirs, executor,
administrators and assigns any and all rights and causes of action which may
arise by reason of the marriage between the parties ... with respect to any
property, real or personal, tangible or intangible ... now owned or hereafter
acquired by the other party, as fully as though the parties had never
married...." The Court held that the premarital agreement was not an
effective waiver because it "did not designate a beneficiary and did not
acknowledge the effect of the waiver as required by ERISA." 982 F.2d at
781. Although the district Court had
held that the premarital agreement was also ineffective because the wife was
not married to the participant when she signed the agreement, the Second
Circuit "reserve[d] judgment on whether the [premarital] agreement might
have operated as an effective waiver if its only deficiency were that it had
been entered into before marriage."
Cross
Reference. See also Section 2‑208 and Comment.
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 97 (Supp.
1992).
2002 Amendment
Relating to Disclaimers. In 2002, the Code’s former disclaimer provision (§2-801) was replaced
by the Uniform Disclaimer of Property Interests Act, which is incorporated into
the Code as Part 11 of Article 2 (§§2-1001 – 2-1117). The statutory references in this Comment to
former section 2-801 have been replaced by appropriate references to Part
11. Updating these statutory references
has not changed the substance of this Comment.
Section 2‑214.
Protection of Payors and Other Third Parties.
(a) Although under Section 2‑205 a payment, item of property, or
other benefit is included in the decedent's nonprobate transfers to others, a
payor or other third party is not liable for having made a payment or transferred an item of
property or other benefit to a beneficiary designated in a governing
instrument, or for having taken any other action in good faith reliance on the
validity of a governing instrument, upon request and satisfactory proof of the
decedent's death, before the payor or other third party received written notice
from the surviving spouse or spouse's representative of an intention to file a
petition for the elective share or that a petition for the elective share has
been filed. A payor or other third party is liable for payments made or other
actions taken after the payor or other third party received written notice of
an intention to file a petition for the elective share or that a petition for
the elective share has been filed.
(b) A written notice of
intention to file a petition for the elective share or that a petition for the
elective share has been filed must be mailed to the payor's or other third
party's main office or home by registered or certified mail, return receipt
requested, or served upon the payor or other third party in the same manner as
a summons in a civil action. Upon receipt of written notice of intention to
file a petition for the elective share or that a petition for the elective
share has been filed, a payor or other third party may pay any amount owed or
transfer or deposit any item of property held by it to or with the court having
jurisdiction of the probate proceedings relating to the decedent's estate, or
if no proceedings have been commenced, to or with the court having jurisdiction
of probate proceedings relating to decedents' estates located in the county of
the decedent's residence. The court shall hold the funds or item of property,
and, upon its determination under Section 2‑211(d), shall order
disbursement in accordance with the determination. If no petition is filed in
the court within the specified time under Section 2‑211(a) or, if filed,
the demand for an elective share is withdrawn under Section 2‑211(c), the
court shall order disbursement to the
designated beneficiary. Payments or transfers to the court or deposits made
into court discharge the payor or other
third party from all claims for amounts so paid or the value of property so
transferred or deposited.
(c) Upon petition to the probate court by the beneficiary designated in
a governing instrument, the court may order that all or part of the property be
paid to the beneficiary in an amount and subject to conditions consistent with
this Part.
COMMENT
This
section provides protection to "payors" and other third parties who
made payments or took any other action before receiving written notice of the
spouse's intention to make an election under this Part or that an election has
been made. The term "payor" is
defined in Section 1‑201 as meaning "a trustee, insurer, business
entity, employer, government, governmental agency or subdivision, or any other
person authorized or obligated by law or a governing instrument to make
payments."
Historical Note. Although this Comment was added in 1993, the
substance of the Comment previously appeared as the last paragraph of the
Comment to Section 2-202, 8 U.L.A. 92, 93 (Supp. 1992).
PART 3
SPOUSE AND CHILDREN UNPROVIDED FOR IN WILLS
Section 2‑301.
Entitlement of Spouse; Premarital Will.
(a) If a testator's surviving spouse married the testator after the
testator executed his [or her] will, the surviving spouse is entitled to
receive, as an intestate share, no less than the value of the share of the
estate he [or she] would have received if the testator had died intestate as to
that portion of the testator's estate,
if any, that neither is devised to a child of the testator who was born before
the testator married the surviving spouse and who is not a child of the surviving
spouse nor is devised to a descendant of such a child or passes under Sections
2‑603 or 2‑604 to such a child or to a descendant of such a child,
unless:
(1) it appears
from the will or other evidence that the will was made in contemplation of the
testator's marriage to the surviving spouse;
(2) the will
expresses the intention that it is to be effective notwithstanding any
subsequent marriage; or
(3) the
testator provided for the spouse by transfer outside the will and the intent
that the transfer be in lieu of a testamentary provision is shown by the testator's statements or is reasonably
inferred from the amount of the transfer or other evidence.
(b) In satisfying the share provided by this section, devises made by
the will to the testator's surviving spouse, if any, are applied first, and
other devises, other than a devise to a child of the testator who was born
before the testator married the surviving spouse and who is not a child of the
surviving spouse or a devise or substitute gift under Section 2‑603 or 2‑604
to a descendant of such a child, abate as provided in Section 3‑902.
COMMENT
Purpose and Scope of the
Revisions. This section applies only to a premarital
will, a will executed prior to the testator's marriage to his or her surviving
spouse. If the decedent and the surviving spouse were married to each other
more than once, a premarital will is a will executed by the decedent at any
time when they were not married to each other but not a will executed during a
prior marriage. This section reflects the view that the intestate share of the
spouse in that portion of the testator's estate not devised to certain of the
testator's children, under trust or not, (or that is not devised to their
descendants, under trust or not, or does not pass to their descendants under
the antilapse statute) is what the testator would want the spouse to have if he
or she had thought about the relationship of his or her old will to the new
situation.
Under
this section, a surviving spouse who married the testator after the testator
executed his or her will may be entitled to a certain minimum amount of the
testator's estate. The surviving spouse's entitlement under this section, if
any, is granted automatically; it need not be elected. If the surviving spouse
exercises his or her right to take an elective share, amounts provided under
this section count toward making up the elective‑share amount by virtue
of the language in subsection (a) stating that the amount provided by this
section is treated as "an intestate share." Under Section 2‑209(a)(1),
amounts passing to the surviving spouse by intestate succession count first
toward making up the spouse's elective‑share amount.
Subsection (a). Subsection (a) is revised to make it clear
that a surviving spouse who, by a premarital will, is devised, under trust or
not, less than the share of the testator's estate he or she would have received
had the testator died intestate as to that part of the estate, if any, not
devised to certain of the testator's children, under trust or not, (or that is
not devised to their descendants, under trust or not, or does not pass to their
descendants under the antilapse statute) is entitled to be brought up to that
share. Subsection (a) was amended in
1993 to make it clear that any lapsed devise that passes under section 2‑604
to a child of the testator by a prior marriage, rather than only to a
descendant of such a child, is covered.
Example. G's will devised the residue of his estate
"to my two children, A and B, in equal shares." A and B are children of G's prior marriage. G is survived by A and by G's new spouse, X.
B predeceases G, without leaving any descendants who survived G by 120 hours.
Under Section 2‑604, B's half of the residue passes to G's child, A. A is
a child of the testator's prior marriage but not a descendant of B. X's rights
under Section 2‑301 are to take an intestate share in that portion of G's
estate not covered by the residuary clause.
The
pre‑1990 version of Section 2‑301 was titled "Omitted Spouse," and the section
used phrases such as "fails to
provide" and "omitted
spouse." The implication of the title and these phrases was that the
section was inapplicable if the person the decedent later married was a devisee
in his or her premarital will. It was clear, however, from the underlying
purpose of the section that this was not intended. The Courts recognized this
and refused to interpret the section that way, but in doing so they have been
forced to say that a premarital will containing a devise to the person to whom
the testator was married at death could still be found to "fail to
provide" for the survivor in the
survivor's capacity as spouse. See Estate of Christensen, 665 P.2d 646
(
Subsection (a)(1), (2), and
(3) Exceptions. The moving party has the burden
of proof on the exceptions contained in subsections (a)(1), (2), and (3). For a case interpreting the language of
subsection (a)(3), see Estate of Bartell,
776 P.2d 885 (
Subsection (b). Subsection (b) is also revised to provide
that the value of any premarital devise to the surviving spouse, equitable or
legal, is used first to satisfy the spouse's entitlement under this section,
before any other devises suffer abatement. This revision is made necessary by
the revision of subsection (a): If the existence or amount of a premarital
devise to the surviving spouse is irrelevant, any such devise must be counted
toward and not be in addition to the ultimate share to which the spouse is
entitled. Normally, a devise in favor of the person whom the testator later marries will be a specific or
general devise, not a residuary devise. The effect under the pre‑1990
version of subsection (b) was that the surviving spouse could take the
intestate share under Section 2‑301, which in the pre‑1990 version
was satisfied out of the residue (under the rules of abatement in Section 3‑902),
plus the devise in his or her favor.
The revision of subsection (b) prevents this "double dipping," so to
speak.
Reference. The theory of this section
is discussed in Waggoner, "Spousal
Rights in Our Multiple‑Marriage Society: The Revised Uniform Probate
Code," 26 Real Prop. Prob. & Tr. J. 683, 748‑51 (1992).
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 101
(Supp. 1992).
Section 2‑302.
Omitted Children.
(a) Except as provided in subsection (b), if a testator fails to
provide in his [or her] will for any of his [or her] children born or adopted
after the execution of the will, the omitted after-born or after-adopted child
receives a share in the estate as follows:
(1) If the
testator had no child living when he [or she] executed the will, an omitted
after‑born or after‑adopted child receives a share in the estate
equal in value to that which the child would have received had the testator
died intestate, unless the will devised all or substantially all of the estate
to the other parent of the omitted child and that other parent survives the
testator and is entitled to take under the will.
(2) If the
testator had one or more children living when he [or she] executed the will,
and the will devised property or an interest in property to one or more of the
then‑living children, an omitted after‑born or after‑adopted
child is entitled to share in the testator's estate as follows:
(i) The
portion of the testator's estate in which the omitted after-born or after-adopted
child is entitled to share is limited to devises made to the testator's then-living
children under the will.
(ii) The
omitted after‑born or after‑adopted child is entitled to receive
the share of the testator's estate, as limited in subparagraph (i), that the
child would have received had the testator included all omitted after‑born
and after‑adopted children with the children to whom devises were made
under the will and had given an equal share of the estate to each child.
(iii)To the extent feasible, the interest granted an
omitted after‑born or after‑adopted child under this section must
be of the same character, whether equitable or legal, present or future, as
that devised to the testator's then‑living children under the will.
(iv) In
satisfying a share provided by this paragraph, devises to the testator's
children who were living when the will was executed abate ratably. In abating
the devises of the then‑living children, the court shall preserve to the
maximum extent possible the character of the testamentary plan adopted by the
testator.
(b) Neither subsection (a)(1) nor subsection (a)(2) applies if:
(1) it appears
from the will that the omission was intentional; or
(2) the
testator provided for the omitted after-born or after-adopted child by transfer
outside the will and the intent that the transfer be in lieu of a testamentary
provision is shown by the testator's statements or is reasonably inferred from
the amount of the transfer or other evidence.
(c) If at the time of execution of the will the testator fails to
provide in his [or her] will for a living child solely because he [or she]
believes the child to be dead, the child is entitled to share in the estate as
if the child were an omitted after‑born or after‑adopted child.
(d) In satisfying a share provided by subsection (a)(1), devises made
by the will abate under Section 3‑902.
COMMENT
This
section provides for both the case where a child was born or adopted after the
execution of the will and not foreseen at the time and thus not provided for in
the will, and the rare case where a testator omits one of his or her children
because of the mistaken belief that the child is dead.
Basic Purposes and Scope of
Revisions. This section is substantially revised. The
revisions have two basic objectives. The first basic objective is to provide
that a will that devised, under trust or not, all or substantially all of the
testator's estate to the other parent of the omitted child prevents an after‑born
or after‑adopted child from taking an intestate share if none of the
testator's children was living when he or she executed the will. (Under this
rule, the other parent must survive the testator and be entitled to take under
the will.)
Under
the pre‑1990 Code, such a will prevented the omitted child's entitlement
only if the testator had one or more children living when he or she executed
the will. The rationale for the revised rule is found in the empirical evidence
(cited in the Comment to section 2‑102) that suggests that even testators
with children tend to devise their entire estates to their surviving spouses,
especially in smaller estates. The testator's purpose is not to disinherit the
children; rather, such a will evidences a purpose to trust the surviving parent
to use the property for the benefit of the children, as appropriate. This
attitude of trust of the surviving parent carries over to the case where none
of the children have been born when the will is executed.
The
second basic objective of the revisions is to provide that if the testator had
children when he or she executed the will, and if the will made provision for
one or more of the then‑living children, an omitted after‑born or
after‑adopted child does not take a full intestate share (which might be
substantially larger or substantially smaller than given to the living
children). Rather, the omitted after‑born or after‑adopted child
participates on a pro rata basis in the property devised, under trust or not,
to the then‑living children.
A
more detailed description of the revised rules follows.
No Child Living When Will
Executed. If the testator had no child living when he
or she executed the will, subsection (a)(1) provides that an omitted after‑born
or after‑adopted child receives the share he or she would have received
had the testator died intestate, unless the will devised, under trust or not,
all or substantially all of the estate to the other parent of the omitted
child. If the will did devise all or substantially all of the estate to the
other parent of the omitted child, and if that other parent survives the
testator and is entitled to take under the will, the omitted after‑born
or after‑adopted child receives no share of the estate. In the case of an
after‑adopted child, the term "other parent" refers to the
other adopting parent. (The other parent of the omitted child might survive the
testator, but not be entitled to take under the will because, for example, that
devise to the other parent was revoked under Section 2‑803 or 2‑804.)
One or More Children Living
When Will Executed. If the testator had one or more
children living when the will was executed, subsection (a)(2), which implements
the second basic objective stated above, provides that an omitted after‑born
or after‑adopted child only receives a share of the testator's estate if
the testator's will devised property or an equitable or legal interest in
property to one or more of the children living at the time the will was
executed; if not, the omitted after‑born or after‑adopted child
receives nothing.
Subsection
(a)(2) is modeled on N.Y. Est. Powers & Trusts Law § 5‑3.2. Subsection (a)(2) is illustrated by the
following example.
Example. When G executed her will, she had two living
children, A and B. Her will devised $7,500 to each child. After G executed her will, she had another
child, C.
C is entitled to $5,000. $2,500 (1/3 of $7,500) of
C's entitlement comes from A's $7,500 devise (reducing it to $5,000); and
$2,500 (1/3 of $7,500) comes from B's $7,500 devise (reducing it to $5,000).
Variation. If G's will had devised $10,000 to A and
$5,000 to B, C would be entitled to $5,000. $3,333 (1/3 of $10,000) of C's
entitlement comes from A's $10,000 devise (reducing it to $6,667); and $1,667
(1/3 of $5,000) comes from B's $5,000 devise (reducing it to $3,333).
Subsection (b) Exceptions. To preclude operation of subsection (a)(1) or
(a)(2), the testator's will need not make any provision, even nominal in
amount, for a testator's present or future children; under subsection (b)(1), a
simple recital in the will that the testator intends to make no provision for
then living children or any the testator thereafter may have would be
sufficient.
For
a case applying the language of subsection (b)(2), in the context of the
omitted spouse provision, see Estate of
Bartell, 776 P.2d 885 (
The
moving party has the burden of proof on the elements of subsections (b)(1) and
(b)(2).
Subsection (c). Subsection (c) addresses the problem that
arises if at the time of execution of the will the testator fails to provide in
his or her will for a living child solely because he or she believes the child
to be dead. Extrinsic evidence is
admissible to determine whether the testator omitted the living child solely
because he or she believed the child to be dead. Cf. Section 2‑601, Comment. If the
child was omitted solely because of that belief, the child is entitled to share
in the estate as if the child were an omitted after‑born or after‑adopted
child.
Abatement
Under Subsection (d). Under subsection (d) and
Section 3‑902, any intestate estate would first be applied to satisfy the
intestate share of an omitted after‑born or after‑adopted child
under subsection (a)(1).
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 103
(Supp. 1992).
PART 4
EXEMPT PROPERTY AND ALLOWANCES
GENERAL
COMMENT
For
decedents who die domiciled in this State, this part grants various allowances
to the decedent's surviving spouse and certain children. The allowances have
priority over unsecured creditors of the estate and persons to whom the estate
may be devised by will. If there is a surviving spouse, all of the allowances
described in this Part, which (as revised to adjust for inflation) total
$25,000, plus whatever is allowed to the spouse for support during
administration, normally pass to the spouse. If the surviving spouse and minor
or dependent children live apart from one another, the minor or dependent
children may receive some of the support allowance. If there is no surviving
spouse, minor or dependent children become entitled to the homestead exemption
of $15,000 and to support allowances. The exempt property section confers
rights on the spouse, if any, or on all children, to $10,000 in certain
chattels, or funds if the unencumbered value of chattels is below the $10,000
level. This provision is designed in part to relieve a personal representative
of the duty to sell household chattels when there are children who will have
them.
These
family protection provisions supply the basis for the important small estate
provisions of Article III, Part 12.
States
adopting the Code may see fit to alter the dollar amounts suggested in these
sections, or to vary the terms and conditions in other ways so as to
accommodate existing traditions. Although creditors of estates would be aided
somewhat if all family exemption provisions relating to probate estates were
the same throughout the country, there is probably less need for uniformity of
law regarding these provisions than for any of the other parts of this article.
Still, it is quite important for all states to limit their homestead, support
allowance and exempt property provisions, if any, so that they apply only to
estates of decedents who were domiciliaries of the state.
Cross Reference. Notice that under Section 2‑104 a
spouse or child claiming under this Part must survive the decedent by 120
hours.
Section 2‑401.
Applicable Law.
This Part applies to the estate of a decedent
who dies domiciled in this State. Rights to homestead allowance, exempt property,
and family allowance for a decedent who dies not domiciled in this State are
governed by the law of the decedent's domicile at death.
Section 2‑402.
A decedent's surviving spouse is entitled to
a homestead allowance of [$22,500]. If there is no surviving spouse, each minor
child and each dependent child of the decedent is entitled to a homestead
allowance amounting to [$22,500] divided by the number of minor and dependent
children of the decedent. The homestead allowance is exempt from and has
priority over all claims against the estate.
COMMENT
As originally adopted in 1969, the bracketed dollar amount was $5,000. To adjust for inflation, the bracketed amount was increased to $15,000 in 1990 and to $22,500 in 2008. The dollar amount in this section is subject to annual cost-of-living adjustments under Section 1-109.
See Section 2‑802 for the
definition of "spouse," which controls in this Part. Also, see Section 2‑104. Waiver of
homestead is covered by Section 2‑204. "Election" between a provision
of a will and homestead is not required unless the will so provides.
A
set dollar amount for homestead allowance was dictated by the desirability of
having a certain level below which administration may be dispensed with or be
handled summarily, without regard to the size of allowances under Section
2-404. The “small estate” line is controlled largely, though not entirely, by
the size of the homestead allowance.
This is because Part 12 of Article III dealing with small estates rests
on the assumption that the only justification for keeping a decedent’s assets
from his creditors is to benefit the decedent’s spouse and children.
Another reason for a set amount is related to the
fact that homestead allowance may prefer a decedent's minor or dependent
children over his or her other children. It was felt desirable to minimize the
consequence of application of an arbitrary age line among children of the
decedent.
Historical Note. This Comment was revised in
2008.
[Section 2‑402A.
Constitutional
The value of any constitutional right of homestead in the family home received by a surviving spouse or child must be charged against the spouse or child's homestead allowance to the extent the family home is part of the decedent's estate or would have been but for the homestead provision of the constitution.]
COMMENT
This optional section is designed for
adoption only in states with a constitutional homestead provision. The value of the surviving spouse’s
constitutional right of homestead may be considerably less than the full value
of the family home if the constitution gives him or her only a terminable life
estate enjoyable in common with minor children.
Section 2‑403.
Exempt Property.
In addition to the homestead allowance, the
decedent's surviving spouse is entitled from the estate to a value, not
exceeding $15,000 in excess of any security interests therein, in household
furniture, automobiles, furnishings, appliances, and personal effects. If there
is no surviving spouse, the decedent's children are entitled jointly to the
same value. If encumbered chattels are selected and the value in excess of
security interests, plus that of other exempt property, is less than $15,000,
or if there is not $15,000 worth of exempt property in the estate, the spouse
or children are entitled to other assets of the estate, if any, to the extent
necessary to make up the $15,000 value. Rights to exempt property and assets
needed to make up a deficiency of exempt property have priority over all claims
against the estate, but the right to any assets to make up a deficiency of
exempt property abates as necessary to permit earlier payment of homestead
allowance and family allowance. These rights are in addition to any benefit or
share passing to the surviving spouse or children by the decedent's will,
unless otherwise provided, by intestate succession, or by way of elective
share.
COMMENT
As originally adopted in 1969, the dollar amount exempted was set at $3,500. To adjust for inflation, the amount was increased to $10,000 in 1990 and to $15,000 in 2008. The dollar amount in this section is subject to annual cost-of-living adjustments under Section 1-109.
Unlike
the exempt amount described in Sections 2‑402 and 2‑404, the exempt
amount described in this section is available in a case in which the decedent
left no spouse but left only adult children. The provision in this section that
establishes priorities is required because of possible difference between
beneficiaries of the exemptions described in this section and those described
in Sections 2‑402 and 2‑404.
Section
2‑204 covers waiver of exempt property rights. This section indicates
that a decedent's will may put a spouse to an election with reference to
exemptions, but that no election is presumed to be required.
Historical Note. This Comment was revised in 2008.
Section 2‑404.
Family Allowance.
(a) In addition to the right to homestead allowance and exempt
property, the decedent's surviving spouse and minor children whom the decedent
was obligated to support and children who were in fact being supported by the
decedent are entitled to a reasonable allowance in money out of the estate for
their maintenance during the period of administration, which allowance may not
continue for longer than one year if the estate is inadequate to discharge allowed
claims. The allowance may be paid as a lump sum or in periodic installments. It
is payable to the surviving spouse, if living, for the use of the surviving spouse
and minor and dependent children; otherwise to the children, or persons having their
care and custody. If a minor child or dependent child is not living with the
surviving spouse, the allowance may be made partially to the child or his [or her]
guardian or other person having the child's care and custody, and partially to
the spouse, as their needs may appear. The family allowance is exempt from and
has priority over all claims except the homestead allowance.
(b) The family allowance is not chargeable against any benefit or share
passing to the surviving spouse or children by the will of the decedent, unless
otherwise provided, by intestate succession or by way of elective share. The
death of any person entitled to family allowance terminates the right to
allowances not yet paid.
COMMENT
The
allowance provided by this section does not qualify for the marital deduction
under the federal estate tax because the interest is a non‑deductible
terminable interest. A broad code must be drafted to provide the best possible
protection for the family in all cases, even though this may not provide
desired tax advantages for certain larger estates. In the estates falling in
the federal estate tax bracket where careful planning may be expected, it is
important to the operation of formula clauses that the family allowance be
clearly deductible or clearly non‑deductible. With the section clearly
creating a non‑deductible interest, estate planners can create a plan
that will operate with certainty.
Finally, in order to facilitate administration of this allowance without
Court supervision it is necessary to provide a fairly simple and definite
framework.
In
determining the amount of the family allowance, account should be taken of both
the previous standard of living and the nature of other resources available to
the family to meet current living expenses until the estate can be administered
and assets distributed. While the death of the principal income producer may
necessitate some change in the standard of living, there must also be a period
of adjustment. If the surviving spouse has a substantial income, this may be
taken into account. Whether life insurance proceeds payable in a lump sum or
periodic installments were intended by the decedent to be used for the period
of adjustment or to be conserved as capital may be considered. A living trust
may provide the needed income without resorting to the probate estate.
Obviously, need is relative to the
circumstances, and what is reasonable must be decided on the basis of the facts
of each individual case. Note, however, that under the next section the
personal representative may not determine an allowance of more that $1500 per
month for one year; a Court Order would be necessary if a greater allowance is
reasonably necessary.
Section 2‑405.
Source, Determination, and Documentation.
(a) If the estate is otherwise sufficient, property
specifically devised may not be use to satisfy rights to homestead allowance or
exempt property. Subject to this restriction, the surviving spouse, guardians
of minor children, or children who are adults may select property of the estate
as homestead allowance and exempt property. The personal representative may
make those selections if the surviving spouse, the children, or the guardians
of the minor children are unable or fail to do so within a reasonable time or
there is no guardian of a minor child. The personal representative may execute
an instrument or deed of distribution to establish the ownership of property
taken as homestead allowance or exempt property. The personal representative
may determine the family allowance in a lump sum not exceeding $27,000 or
periodic installments not exceeding $2,250 per month for one year, and may
disburse funds of the estate in payment of the family allowance and any part of
the homestead allowance payable in cash. The personal representative or an
interested person aggrieved by any selection, determination, payment, proposed
payment, or failure to act under this section may petition the court for
appropriate relief, which may include a family allowance other than that which
the personal representative determined or could have determined.
(b) If the right to an elective share is exercised on behalf of a
surviving spouse who is an incapacitated person, the personal representative
may add any unexpended portions payable under the homestead allowance, exempt
property, and family allowance to the trust established under Section 2‑212(b).
COMMENT
Scope and Purpose of 1990
Revision.
As originally adopted in 1969, the maximum family allowance the personal
representative was authorized to determine without court order was a lump sum
of $6,000 or periodic installments of $500 per month for one year. To adjust
for inflation, the amounts were increased in 1990 to $18,000 and $1,500
respectively and in 20087 to $22,500 and $2,250. The dollar amount in this
section is subject to annual cost-of-living adjustments under Section 1-109.
A new subsection (b) was added to provide for the case where the right
to an elective share is exercised on behalf of a surviving spouse who is an
incapacitated person. In that case, the personal representative is authorized
to add any unexpended portions under the homestead allowance, exempt property,
and family allowance to the custodial trust established by Section 2-212(b).
If Domiciliary Assets Insufficient. Note that a domiciliary
personal representative can collect against out of state assets if domiciliary
assets are insufficient.
Cross References. See Sections 3-902, 3-906,
and 3-907.
Historical Note. This Comment was revised in
1993 and 2008.
PART 5
WILLS, WILL CONTRACTS, AND CUSTODY AND
DEPOSIT OF WILLS
GENERAL
COMMENT
Part 5 of Article II is
retitled to reflect the fact that it now includes the provisions on will
contracts (pre‑1990 section 2‑701) and on custody and deposit of
wills (pre‑1990 sections 2‑901 and 2‑902).
Part
5 deals with capacity and formalities for execution and revocation of wills.
The basic intent of the pre‑1990 sections was to validate wills whenever
possible. To that end, the minimum age for making wills was lowered to
eighteen, formalities for a written and attested will were reduced, holographic
wills written and signed by the testator were authorized, choice of law as to
validity of execution was broadened, and revocation by operation of law was
limited to divorce or annulment. In addition, the statute also provided for an
optional method of execution with acknowledgment before a public officer (the
self‑proved will).
These measures have been
retained, and the purpose of validating wills whenever possible has been
strengthened by the addition of a new section, section 2‑503, which
allows a will to be upheld despite a harmless error in it execution.
Section 2‑501.
Who May Make Will.
An individual 18 or more years of age who is
of sound mind may make a will.
COMMENT
This section states a uniform minimum age of
eighteen for capacity to execute a will.
"Minor" is defined in Section 1‑201, and may involve an
age different from that prescribed here.
Section 2-502.
Execution; Witnessed or Notarized Wills; Holographic Wills.
(a) [Witnessed or
Notarized Wills.] Except as otherwise
provided in subsection (b) and in Sections 2-503, 2-506, and 2-513, a will must
be:
(1)
in writing;
(2)
signed by the testator or in the testator’s name by some other individual in
the testator’s conscious presence and by the testator’s direction; and
(3)
either:
(A)
signed by at least two individuals, each of whom signed within a reasonable
time after the individual witnessed either the signing of the will as described
in paragraph (2) or the testator’s acknowledgment of that signature or
acknowledgment of the will; or
(B)
acknowledged by the testator before a notary public or other individual
authorized by law to take acknowledgments.
(b) [Holographic Wills.] A will that does not comply with subsection (a) is
valid as a holographic will, whether or not witnessed, if the signature and
material portions of the document are in the testator’s handwriting.
(c) [Extrinsic Evidence.] Intent that a document constitute the testator’s will
can be established by extrinsic evidence, including, for holographic wills,
portions of the document that are not in the testator’s handwriting.
COMMENT
Subsection (a): Witnessed or Notarized Wills. Three
formalities for execution of a witnessed or notarized will are imposed.
Subsection (a)(1) requires the will to be in writing. Any reasonably permanent
record is sufficient. See Restatement (Third) of Property: Wills and Other
Donative Transfers § 3.1 cmt. i (1999).
Under subsection (a)(2), the testator must sign the will or some other
individual must sign the testator’s name in the testator’s presence and by the
testator’s direction. If the latter procedure is followed, and someone else
signs the testator’s name, the so-called “conscious presence” test is codified,
under which a signing is sufficient if it was done in the testator’s conscious
presence, i.e., within the range of the testator’s senses such as hearing; the
signing need not have occurred within the testator’s line of sight. For
application of the “conscious-presence” test, see Restatement (Third) of
Property: Wills and Other Donative Transfers § 3.1 cmt. n (1999); Cunningham v.
Cunningham, 83 N.W. 58 (Minn. 1900) (conscious-presence requirement held
satisfied where “the signing was within the sound of the testator’s voice; he
knew what was being done ...”); Healy v. Bartless, 59 A. 617 (N.H. 1904) (individuals
are in the decedent’s conscious presence “whenever they are so near at hand
that he is conscious of where they are and of what they are doing, through any
of his senses, and where he can readily see them if he is so disposed.”);
Demaris’ Estate, 110 P.2d 571 (Or. 1941) (“[W]e do not believe that sight is
the only test of presence. We are convinced that any of the senses that a
testator possesses, which enable him to know whether another is near at hand
and what he is doing, may be employed by him in determining whether [an
individual is] in his [conscious] presence ...”).
Signing may be by mark, nickname, or initials, subject to the general
rules relating to that which constitutes a “signature.” See Restatement (Third)
of Property: Wills and Other Donative Transfers § 3.1 cmt. j (1999). There is
no requirement that the testator “publish” the document as his or her will, or
that he or she request the witnesses to sign, or that the witnesses sign in the
presence of the testator or of each other. The testator may sign the will
outside the presence of the witnesses, if he or she later acknowledges to the
witnesses that the signature is his or hers (or that his or her name was signed
by another) or that the document is his or her will. An acknowledgment need not
be expressly stated, but can be inferred from the testator’s conduct. Norton v.
Georgia Railroad Bank & Tr. Co., 285 S.E.2d 910 (Ga. 1982).
There is no requirement that the testator’s signature be at the end of
the will; thus, if the testator writes his or her name in the body of the will
and intends it to be his or her signature, the statute is satisfied. See See
Restatement (Third) of Property: Wills and Other Donative Transfers § 3.1 cmts.
j & k (1999).
Subsection
(a)(3) requires that the will either be (A) signed by at least two individuals,
each of whom witnessed at least one of the following: (i) the signing of the
will; (ii) the testator’s acknowledgment of the signature; or (iii) the
testator’s acknowledgment of the will; or (B) acknowledged by the testator
before a notary public or other individual authorized by law to take
acknowledgments. Subparagraph (B) was added in 2008 in order to recognize the
validity of notarized wills.
Under
subsection (a)(3)(A), the witnesses must sign as witnesses (see, e.g., Mossler
v. Johnson, 565 S.W.2d 952 (Tex. Civ.App. 1978)), and must sign within a
reasonable time after having witnessed the testator’s act of signing or
acknowledgment. There is, however, no requirement that the witnesses sign
before the testator’s death. In a particular case, the reasonable-time
requirement could be satisfied even if the witnesses sign after the testator’s
death.
Under
subsection (a)(3)(B), a will, whether or not it is properly witnessed under
subsection (a)(3)(A), can be acknowledged by the testator before a notary
public or other individual authorized by law to take acknowledgments. Note that
a signature guarantee is not an acknowledgment before a notary public or other
person authorized by law to take acknowledgments. The signature guarantee
program, which is regulated by federal law, is designed to facilitate
transactions relating to securities. See 17 C.F.R. § 240.17Ad-15.
Allowing
notarized wills as an optional method of execution addresses cases that have
begun to emerge in which the supervising attorney, with the client and all
witnesses present, circulates one or more estate-planning documents for
signature, and fails to notice that the client or one of the witnesses has
unintentionally neglected to sign one of the documents. See, e.g., Dalk v.
Allen, 774 So.2d 787 (Fla. Dist. Ct. App. 2000); Sisson v. Park Street Baptist
Church, 24 E.T.R.2d 18 (Ont. Gen. Div. 1998) . This often, but not
always, arises when the attorney prepares multiple estate-planning documents — a
will, a durable power of attorney, a health-care power of attorney, and perhaps
a revocable trust. It is common practice, and sometimes required by
state law, that the documents other than the will be notarized. It would reduce
confusion and chance for error if all of these documents could be executed with
the same formality.
In
addition, lay people (and, sad to say, some lawyers) think that a will is valid
if notarized, which is not true under non-UPC law. See, e.g., Estate of
Saueressig, 136 P.3d 201 (Cal. 2006). In Estate of Hall, 51 P.3d 1134 (Mont.
2002), a notarized but otherwise unwitnessed will was upheld, but not under the
pre-2008 version of Section 2-502, which did not authorize notarized wills. The
will was upheld under the harmless-error rule of Section 2-503. There are also
cases in which a testator went to his or her bank to get the will executed, and
the bank’s notary notarized the document, mistakenly thinking that notarization
made the will valid. Cf., e.g., Orrell v. Cochran, 695 S.W.2d 552 (Tex. 1985).
Under non-UPC law, the will is usually held invalid in such cases, despite the
lack of evidence raising any doubt that the will truly represented the
decedent’s wishes.
Other
uniform acts affecting property or person do not require either attesting
witnesses or notarization. See, e.g., Uniform Trust Code § 402(a)(2); Power of
Attorney Act § 105; Uniform Health-Care Decisions Act § 2(f).
A will that does not meet the requirements of subsection (a) may be
valid under subsection (b) as a holograph or under the harmless-error rule of
Section 2-503.
Subsection (b): Holographic Wills. This subsection authorizes
holographic wills. On holographic wills, see Restatement (Third) of Property:
Wills and Other Donative Transfers § 3.2 (1999). Subsection (b) enables a
testator to write his or her own will in handwriting. There need be no
witnesses. The only requirement is that the signature and the material portions
of the document be in the testator’s handwriting.
By requiring only the “material portions of the document” to be in the
testator’s handwriting (rather than requiring, as some existing statutes do,
that the will be “entirely” in the decedent’s handwriting), a holograph may be
valid even though immaterial parts such as date or introductory wording are
printed, typed, or stamped.
A valid holograph can also be executed on a printed will form if the
material portions of the document are handwritten. The fact, for example, that
the will form contains printed language such as “I give, devise, and bequeath
to _______” does not disqualify the document as a holographic will, as long as
the testator fills out the remaining portion of the dispositive provision in
his or her own hand.
Subsection (c): Extrinsic Evidence. Under subsection (c),
testamentary intent can be shown by extrinsic evidence, including for
holographic wills the printed, typed, or stamped portions of the form or
document.
Handwritten alterations, if signed, of a validly executed nonhandwritten will
can operate as a holographic codicil to the will. If necessary, the handwritten
codicil can derive meaning, and hence validity as a holographic codicil, from
nonhandwritten portions of the document. See Restatement (Third) of Property:
Wills and Other Donative Transfers § 3.2 cmt. g (1999). This position
intentionally contradicts Estate of Foxley, 575 N.W.2d 150 (Neb. 1998), a
decision condemned in Reporter’s Note No. 4 to the Restatement as a decision
that “reached a manifestly unjust result”.
2008
Revisions. In
2008, this section was amended by adding subsection (a)(3)(B). Subsection
(a)(3)(B) and its rationale are discussed in Waggoner, The UPC Authorizes
Notarized Wills, 34 ACTEC J. 58 (2008).
Historical Note. This Comment was revised in
2008.
Section 2‑503.
Harmless Error
Although a document or writing added upon a
document was not executed in
compliance with Section 2‑502, the document or writing is treated as if
it had been executed in compliance with that section if the proponent of the
document or writing establishes by clear and convincing evidence that the
decedent intended the document or writing to constitute (i) the decedent's will, (ii) a
partial or complete revocation of the will, (iii) an addition to or an alteration of the will, or (iv) a partial or complete revival of his
[or her] formerly revoked will or of a formerly revoked portion of the will.
COMMENT
Purpose of New Section. By way of dispensing power, this new section
allows the probate Court to excuse a harmless error in complying with the
formal requirements for executing or revoking a will. The measure accords with
legislation in force in the Canadian
Legislation
of this sort was enacted in the state of
Consistent
with the general trend of the revisions of the UPC, Section 2‑503 unifies
the law of probate and nonprobate transfers, extending to will formalities the
harmless error principle that has long been applied to defective compliance
with the formal requirements for nonprobate transfers. See, e.g., Annot., 19 A.L.R.2d 5 (1951) (life insurance beneficiary
designations).
Evidence
from
The
other recurrent class of case in which the dispensing power has been invoked in
By
placing the burden of proof upon the proponent of a defective instrument, and
by requiring the proponent to discharge that burden by clear and convincing
evidence (which Courts at the trial and appellate levels are urged to police
with rigor), Section 2‑503 imposes procedural standards appropriate to
the seriousness of the issue. Experience in
The
larger the departure from Section 2‑502 formality, the harder it will be
to satisfy the Court that the instrument reflects the testator's intent. Whereas the South Australian and Israeli
Courts lightly excuse breaches of the attestation requirements, they have never
excused noncompliance with the requirement that a will be in writing, and they
have been extremely reluctant to excuse noncompliance with the signature
requirement. See Langbein, supra, at
23‑29, 49‑50. The main
circumstance in which the South Australian Courts have excused signature errors
has been in the recurrent class of cases in which two wills are prepared for
simultaneous execution by two testators, typically husband and wife, and each
mistakenly signs the will prepared for the other. E.g., Estate
of Blakely, 32 S.A.S.R. 473 (1983). Recently, the New York Court of Appeals
remedied such a case without aid of statute, simply on the ground "what has
occurred is so obvious, and what was intended so clear." In re
Snide, 52 N.Y.2d 193, 196, 418 N.E.2d 656, 657, 437 N.Y.S.2d 63, 64 (1981).
Section
2‑503 means to retain the intent‑serving benefits of Section 2‑502
formality without inflicting intent‑defeating outcomes in cases of
harmless error.
Reference. The rule of this section is supported by the
Restatement (Third) of Property: Wills and Other Donative Transfers § 3.3
(1999)
Section 2‑504.
Self‑Proved Will.
(a) A will that is executed with attesting witnesses may be simultaneously
executed, attested, and made self-proved, by acknowledgment thereof by the
testator and affidavits of the witnesses, each made before an officer
authorized to administer oaths under the laws of the state in which execution
occurs and evidenced by the officer’s certificate, under official seal, in
substantially the following form:
I, _______, the testator, sign my name to
this instrument this ____ day of _______, and being first duly sworn, do hereby
declare to the undersigned authority that I sign and execute this instrument as
my will and that I sign it willingly (or willingly direct another to sign for
me), that I execute it as my free and voluntary act for the purposes therein
expressed, and that I am [18] years of age or older, of sound mind, and under
no constraint or undue influence.
_________________
Testator
We, _______, _______, the witnesses, sign our
names to this
(name) (name)
instrument, being first duly sworn, and do hereby declare to the undersigned authority that the testator
signs and executes this instrument as (his)(her) will and that (he)(she) signs
it willingly (or willingly directs another to sign for (him)(her)), and that
each of us, in the presence and hearing of the testator, hereby signs this will
as witness to the testator’s signing, and that to the best of our knowledge the
testator is [18] years of age or older, of sound mind, and under no constraint
or undue influence.
_________________
Witness
_________________
Witness
State of ______________
County of _________________
Subscribed, sworn to and acknowledged before
me by _______, the testator, and subscribed and sworn to before me by _______,
and _______, witnesses, this ____ day of _______.
(Seal)
(Signed) ______________________________
______________________________
(Official capacity of officer)
(b) A will that is executed with attesting witnesses may be made self-proved at any time after its execution by the acknowledgment thereof by the testator and the affidavits of the witnesses, each made before an officer authorized to administer oaths under the laws of the state in which the acknowledgment occurs and evidenced by the officer’s certificate, under official seal, attached or annexed to the will in substantially the following form:
State of ______________
County of _________________
We, _______, _______, and
_______, the testator and the
(name)
(name) (name)
witnesses, respectively, whose names are signed to the attached or foregoing instrument, being
first duly sworn, do hereby declare to the undersigned authority that the
testator signed and executed the instrument as the testator’s will and that
(he)(she) had signed willingly (or willingly directed another to sign for
(him)(her)), and that (he)(she) executed it as (his)(her) free and
voluntary act for the purposes therein expressed, and that each of the
witnesses, in the presence and hearing of the testator, signed the will as
witness and that to the best of (his)(her) knowledge the testator was at that
time [18] years of age or older, of sound mind, and under no constraint or
undue influence.
_________________
Testator
_________________
Witness
_________________
Witness
Subscribed, sworn to and acknowledged before
me by _______, the testator, and subscribed and sworn to before me by _______,
and _______, witnesses, this ____, day of _______.
(Seal)
(Signed) ______________________________
______________________________
(Official capacity of
officer)
(c) A
signature affixed to a self‑proving affidavit attached to a will is
considered a signature affixed to the will, if necessary to prove the will's
due execution.
COMMENT
A self-proved will may be
admitted to probate as provided in Sections 3-303, 3-405, and 3-406 without the
testimony of any attesting witness, but otherwise it is treated no differently
from a will not self proved. Thus, a self-proved will may be contested (except
in regard to questions of proper execution), revoked, or amended by a codicil
in exactly the same fashion as a will not self proved. The procedural advantage
of a self-proved will is limited to formal testacy proceedings because Section
3-303, which deals with informal probate, dispenses with the necessity of
testimony of witnesses even though the instrument is not self proved under this
section.
Subsection
(c) was added in 1990 to counteract an unfortunate judicial interpretation of similar
self-proving will provisions in a few states, under which a signature on the
self-proving affidavit was held not to constitute a signature on the will,
resulting in invalidity of the will in cases in which the testator or witnesses
got confused and only signed on the self-proving affidavit. See Mann,
Self-proving Affidavits and Formalism in Wills Adjudication, 63 Wash. U. L.Q.
39 (1985); Estate of Ricketts, 773 P.2d 93 (Wash.Ct.App.1989).
2008
Revision. Section
2-502(a) was amended in 2008 to add an optional method of execution by having a
will notarized rather than witnessed by two attesting witnesses. The amendment
to Section 2-502 necessitated amending this section so that it only applies to
a will that is executed with attesting witnesses.
Historical Note. This Comment was revised in
2008.
Section 2‑505.
Who May Witness.
(a) An individual generally competent to be a witness may act as a
witness to a will.
(b) The signing of a will by an interested witness does not invalidate
the will or any provision of it.
COMMENT
This
section carries forward the position of the pre‑1990 Code. The position
adopted simplifies the law relating to interested witnesses. Interest no longer
disqualifies a person as a witness, nor does it invalidate or forfeit a gift
under the will. Of course, the purpose of this change is not to foster use of
interested witnesses, and attorneys will continue to use disinterested
witnesses in execution of wills. But the rare and innocent use of a member of
the testator's family on a home‑drawn will is not penalized.
This
approach does not increase appreciably the opportunity for fraud or undue
influence. A substantial devise by will
to a person who is one of the witnesses to the execution of the will is itself
a suspicious circumstance, and the device might be challenged on grounds of
undue influence. The requirement of
disinterested witnesses has not succeeded in preventing fraud and undue
influence; and in most cases of undue influence, the influencer is careful not
to sign as a witness, but to procure disinterested witnesses.
Under
Section 3-406, an interested witness is competent to testify to prove execution
of the will.
Section 2‑506.
Choice of Law as to Execution.
A written will is valid if executed in compliance with Section 2‑502 or 2‑503 or if its execution complies with the law at the time of execution of the place where the will is executed, or of the law of the place where at the time of execution or at the time of death the testator is domiciled, has a place of abode, or is a national.
COMMENT
This
section permits probate of wills in this state under certain conditions even if
they are not executed in accordance with the formalities of Section 2‑502
or 2‑503. Such wills must be in writing but otherwise are valid if they
meet the requirements for execution of the law of the place where the will is
executed (when it is executed in another state or country) or the law of testator's domicile, abode or
nationality at either the time of execution or at the time of death. Thus, if
testator is domiciled in state 1 and executes a typed will merely by signing it
without witnesses in state 2 while on vacation there, the Court of this State
would recognize the will as valid if the law of either state 1 or state 2
permits execution by signature alone. Or, if a national of
Section 2‑507.
Revocation by Writing or by Act.
(a) A will or any part thereof is revoked:
(1) by
executing a subsequent will that revokes the previous will or part expressly or
by inconsistency; or
(2) by
performing a revocatory act on the will, if the testator performed the act with
the intent and for the purpose of revoking the will or part or if another
individual performed the act in the testator's conscious presence and by the
testator's direction. For purposes of this paragraph, "revocatory act on
the will" includes burning, tearing, canceling, obliterating, or
destroying the will or any part of it. A burning, tearing, or canceling is a
"revocatory act on the will," whether or not the burn, tear, or
cancellation touched any of the words on the will.
(b) If a subsequent will does not expressly revoke a previous will, the
execution of the subsequent will wholly revokes the previous will by inconsistency
if the testator intended the subsequent will to replace rather than supplement
the previous will.
(c) The testator is presumed to have intended a subsequent will to
replace rather than supplement a previous will if the subsequent will makes a
complete disposition of the testator's estate. If this presumption arises and
is not rebutted by clear and convincing evidence, the previous will is revoked;
only the subsequent will is operative on the testator's death.
(d) The testator is presumed to have intended a subsequent will to
supplement rather than replace a previous will if the subsequent will does not
make a complete disposition of the testator's estate. If this presumption
arises and is not rebutted by clear and convincing evidence, the subsequent will
revokes the previous will only to the extent the subsequent will is
inconsistent with the previous will; each will is fully operative on the
testator's death to the extent they are not inconsistent.
COMMENT
Purpose and Scope of
Revisions. Revocation of a will may be by either a
subsequent will or an authorized act done to the document. Revocation by
subsequent will cannot be effective unless the subsequent will is valid.
Revocation by Inconsistency. As originally promulgated, this section
provided no standard by which the Courts were to determine whether in a given
case a subsequent will with no revocation clause revokes a prior will, wholly
or partly, by inconsistency. Some Courts seem to have been puzzled about the
standard to be applied. New subsections (b), (c), and (d) codify the workable
and common‑sense standards set forth in the Restatement (Second) of
Property (Donative Transfers) § 34.2 comment b (1991). Under these subsections,
the question whether the subsequent will was intended to replace rather than
supplement the previous will depends upon whether the second will makes a
complete disposition of the testator's estate.
If the second will does make a complete disposition of the testator's
estate, a presumption arises that the second will was intended to replace the
previous will. If the second will does not make a complete disposition of the
testator's estate, a presumption arises that the second will was intended to
supplement rather than replace the previous will. The rationale is that, when
the second will does not make a complete disposition of the testator's estate,
the second will is more in the nature of a codicil to the first will. This
standard has been applied in the cases without the benefit of a statutory
provision to this effect. E.g., Gilbert v. Gilbert, 652 S.W.2d 663 (Ky.
Ct. App. 1983).
Example. Five years before her
death, G executed a will (Will # 1), devising her antique desk to A; $20,000 to B; and the residue of her estate
to C. Two years later, A died, and G executed another will (Will # 2), devising
her antique desk to A's spouse, X; $10,000 to B; and the residue of her estate
to C. Will # 2 neither expressly revoked Will # 1 nor made any other reference
to it. G's net probate estate consisted of her antique desk (worth $10,000) and
other property (worth $90,000). X, B,
and C survived G by 120 hours.
Solution. Will # 2 was presumptively
intended by G to replace Will # 1 because Will # 2 made a complete disposition
of G's estate. Unless this presumption is rebutted by clear and convincing
evidence, Will # 1 is wholly revoked; only Will # 2 is operative on G’s death.
If however, Will #2 had not contained a residuary
clause, and hence had not made a complete disposition of G’s estate, “Will #2”
is more in the nature of a codicil to Will #1, and solution would be
different. Now, Will #2 would
presumptively be treated as having been intended to supplement rather than
replace Will #1. In the absence of
evidence clearly and convincingly rebutting this presumption, Will #1 would be
revoked only to the extent Will #2 is consistent with it; both wills would be
operative on G’s death, to the extent they are not inconsistent. As to the devise of the antique desk, Will #
2 is inconsistent with Will # 1, and the antique desk would go to X. There
being no residuary clause in Will # 2, there is nothing in Will # 2 that is
inconsistent with the residuary clause in Will # 1, and so the residue would go
to C. The more difficult question relates to the cash devises in the two wills.
The question whether they are inconsistent with one another is a question of
interpretation in the individual case. Section 2‑507 does not establish a
presumption one way or the other on that question. If the Court finds that the
cash devises are inconsistent with one another, i.e., if the Court finds that
the cash devise in Will # 2 was intended to replace rather than supplement the
cash devise in Will # 1, then B takes $10,000. But if the Court finds that the
cash devises are not inconsistent with one another, B would take $30,000.
Revocatory
Act. In the case of an act of revocation done to
the document, subsection (a)(2) is revised to provide that a burning, tearing,
or canceling is a sufficient revocatory act even though the act does not touch
any of the words on the will. This is consistent with cases on burning or
tearing (e.g., White v.Casten, 46 N.C. 197 (1853) (burning); Crampton
v.Osburn, 356 Mo. 125, 201 S.W.2d 336 (1947) (tearing)), but inconsistent
with most, but not all, cases on cancellation (e.g., Yont v. Eads, 317
Mass. 232, 57 N.E.2d 531 (1944); Kronauge v. Stoecklein, 33 Ohio App.2d
229, 293 N.E.2d 320 (1972); Thompson v. Royall, 163 Va. 492, 175
S.E. 748 (1934); contra, Warner v. Warner's Estate, 37 Vt. 356
(1864)). By substantial authority, it is held that removal of the testator's
signature‑by, for example, lining it through, erasing or obliterating it,
tearing or cutting it out of the document, or removing the entire signature
page‑constitutes a sufficient revocatory act to revoke the entire will. Board of Trustees of the University of
Alabama v. Calhoun, 514 So.2d 895 (Ala.1987) and cases cited therein.
Subsection (a)(2) is also
revised to codify the "conscious‑presence" test. As revised, subsection (a)(2) provides that,
if the testator does not perform the revocatory act, but directs another to
perform the act, the act is a sufficient revocatory act if the other individual
performs it in the testator's conscious presence. The act need not be performed
in the testator's line of sight. See
the Comment to Section 2‑502 for a discussion of the "conscious‑presence"
test.
Revocatory Intent. To effect a revocation, a revocatory act must
be accompanied by revocatory intent. Determining whether a revocatory act was
accompanied by revocatory intent may involve exploration of extrinsic evidence,
including the testator's statement as to intent.
Partial Revocation. This section specifically permits partial
revocation.
Dependent Relative
Revocation. Each Court is free to apply its own doctrine
of dependent relative revocation. See generally Palmer, "Dependent
Relative Revocation and Its Relation to Relief for Mistake," 69 Mich.
L. Rev. 989 (1971). Note, however, that dependent relative revocation should
less often be necessary under the revised provisions of the Code. Dependent
relative revocation is the law of second best, i.e., its application does not
produce the result the testator actually intended, but is designed to come as
close as possible to that intent. A
precondition to the application of dependent relative revocation is, or should
be, good evidence of the testator's actual intention; without that, the Court
has no basis for determining which of several outcomes comes the closest to
that actual intention.
When
there is good evidence of the testator's actual intention, however, the revised
provisions of the Code would usually facilitate the effectuation of the result
the testator actually intended. If, for example, the testator by revocatory act
revokes a second will for the purpose of reviving a former will, the evidence
necessary to establish the testator's intent to revive the former will should
be sufficient under Section 2‑509 to effect a revival of the former will,
making the application of dependent relative revocation as to the second will
unnecessary. If, by revocatory act, the testator revokes a will in conjunction
with an effort to execute a new will, the evidence necessary to establish the
testator's intention that the new will be valid should, in most cases, be
sufficient under Section 2‑503 to give effect to the new will, making the
application of dependent relative revocation as to the old will
unnecessary. If the testator lines out
parts of a will or dispositive provision in conjunction with an effort to alter
the will's terms, the evidence necessary to establish the testator's intention
that the altered terms be valid should be sufficient under Section 2‑503
to give effect to the will as altered, making dependent relative revocation as
to the lined‑out parts unnecessary.
Section 2‑508.
Revocation by Change of Circumstances.
Except as provided in Sections 2‑803
and 2‑804, a change of circumstances does not revoke a will or any part
of it.
Section 2‑509.
Revival of Revoked Will.
(a) If a subsequent will that wholly revoked a previous will is
thereafter revoked by a revocatory act under Section 2‑507(a)(2), the
previous will remains revoked unless it is revived. The previous will is
revived if it is evident from the circumstances of the revocation of the
subsequent will or from the testator's contemporary or subsequent declarations
that the testator intended the previous will to take effect as executed.
(b) If a subsequent will that partly revoked a previous will is
thereafter revoked by a revocatory act under Section 2‑507(a)(2), a
revoked part of the previous will is revived unless it is evident from the
circumstances of the revocation of the subsequent will or from the testator's
contemporary or subsequent declarations that the testator did not intend the
revoked part to take effect as executed.
(c) If a subsequent will that revoked a previous will in whole or in part is thereafter revoked by another, later, will, the previous will remains revoked in whole or in part, unless it or its revoked part is revived. The previous will or its revoked part is revived to the extent it appears from the terms of the later will that the testator intended the previous will to take effect.
COMMENT
Purpose and Scope of
Revisions. Although a will takes effect as a revoking
instrument when it is executed, it takes effect as a dispositive instrument at
death. Once revoked, therefore, a will is ineffective as a dispositive
instrument unless it has been revived. This section covers the standards to be
applied in determining whether a will (Will # 1) that was revoked by a
subsequent will (Will # 2), either expressly or by inconsistency, has been
revived by the revocation of the subsequent will, i.e., whether the revocation
of Will # 2 (the revoking will) revives Will # 1 (the will that Will # 2
revoked).
As
revised, this section is divided into three subsections. Subsections (a) and
(b) cover the effect of revoking Will # 2 (the revoking will) by a revocatory
act under Section 2‑507(a)(2). Under subsection (a), if Will # 2 (the
revoking will) wholly revoked Will # 1, the revocation of Will # 2 does not
revive Will # 1 unless "it is evident from the circumstances of the
revocation of [Will # 2] or from the testator's contemporary or subsequent
declarations that the testator intended [Will # 1] to take effect as
executed." This standard places the burden of persuasion on the proponent
of Will # 1 to establish that the decedent's intention was that Will # 1 is to
be his or her valid will. Testimony
regarding the decedent's statements at the time he or she revokes Will # 2 or
at a later date can be admitted. Indeed, all relevant evidence of intention is
to be considered by the Court on this question; the open‑ended statutory
language is not to be undermined by translating it into discrete subsidiary
elements, all of which must be met, as the Court did in Estate of Boysen, 309 N.W.2d 45 (Minn. 1981). See Langbein to Waggoner, "Reforming the Law of Gratuitous
Transfers: The New Uniform Probate Code," 55 Alb. L. Rev. 871, 885‑87
(1992).
The
pre‑1990 version of this section did not distinguish between complete and
partial revocation. Regardless of whether Will # 2 wholly or partly revoked
Will # 1, the pre‑1990 version presumed against revival of Will # 1 when
Will # 2 was revoked by act.
As
revised, this section properly treats the two situations as distinguishable.
The presumption against revival imposed by subsection (a) is justified because
where Will # 2 wholly revoked Will # 1, the testator understood or should have
understood that Will # 1 had no continuing effect. Consequently, subsection (a) properly
presumes that the testator's act of revoking Will # 2 was not accompanied by an
intent to revive Will # 1.
Subsection
(b) establishes the opposite presumption where Will # 2 (the revoking will)
revoked Will # 1 only in part. In this
case, the revocation of Will # 2 revives the revoked part or parts of Will # 1
unless "it is evident from the circumstances of the revocation of [Will #
2] or from the testator's contemporary or subsequent declarations that the
testator did not intend the revoked part to take effect as executed." This
standard places the burden of persuasion on the party arguing that the revoked
part or parts of Will # 1 were not revived. The justification is that where
Will # 2 only partly revoked Will # 1, Will # 2 is only a codicil to Will # 1,
and the testator knows (or should know) that Will # 1 does have continuing
effect. Consequently, subsection (b) properly presumes that the testator's act
of revoking Will # 2 (the codicil) was accompanied by an intent to revive or
reinstate the revoked parts of Will # 1.
Subsection
(c) covers the effect on Will # 1 of revoking Will # 2 (the revoking will) by
another, later, will (Will # 3). Will # 1 remains revoked except to the extent
that Will # 3 shows an intent to have Will # 1 effective.
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 118
(Supp. 1992).
Section 2‑510.
Incorporation by Reference.
A writing in existence when a will is
executed may be incorporated by reference if the language of the will manifests
this intent and describes the writing sufficiently to permit its
identification.
COMMENT
This
section codifies the common‑law doctrine of incorporation by reference,
except that the sometimes troublesome requirement that the will refer to the
document as being in existence when the will was executed has been eliminated.
Section 2‑511.
Testamentary Additions to Trusts.
(a) A will may validly devise property to the trustee of a trust established or to be established (i) during the testator's lifetime by the testator, by the testator and some other person, or by some other person, including a funded or unfunded life insurance trust, although the settlor has reserved any or all rights of ownership of the insurance contracts, or (ii) at the testator's death by the testator's devise to the trustee, if the trust is identified in the testator's will and its terms are set forth in a written instrument, other than a will, executed before, concurrently with, or after the execution of the testator's will or in another individual's will if that other individual has predeceased the testator, regardless of the existence, size, or character of the corpus of the trust. The devise is not invalid because the trust is amendable or revocable, or because the trust was amended after the execution of the will or the testator's death.
(b) Unless the testator's will provides otherwise, property devised to
a trust described in subsection (a) is not held under a testamentary trust of
the testator, but it becomes a part of the trust to which it is devised, and
must be administered and disposed of in accordance with the provisions of the
governing instrument setting forth the terms of the trust, including any amendments
thereto made before or after the testator's death.
(c) Unless the testator's will provides otherwise, a revocation or
termination of the trust before the testator's death causes the devise to
lapse.
COMMENT
Purpose and Scope of
Revisions. In addition to making a few stylistic
changes, several substantive changes in this section are made.
As
revised, it has been made clear that the "trust" need not have been
established (funded with a trust res) during the decedent's lifetime, but can
be established (funded with a res) by the devise itself. The pre‑1990
version probably contemplated this result and reasonably could be so
interpreted (because of the phrase "regardless of the existence . . . of the corpus of the trust"). Indeed, a few
cases have expressly stated that statutory language like the pre‑1990
version of this section authorizes pour‑over devises to unfunded trusts. E.g., Clymer v. Mayo, 473 N.E.2d 1084 (
Additional revisions of this section are
designed to remove obstacles to carrying out the decedent's intention that were
contained in the pre‑1990 version. These revisions allow the trust terms
to be set forth in a written instrument executed after as well as before or
concurrently with the execution of the will; require the devised property to be
administered in accordance with the terms of the trust as amended after as well
as before the decedent's death, even though the decedent's will does not so
provide; and allow the decedent's will to provide that the devise is not to
lapse even if the trust is revoked or terminated before the decedent's death.
Revision of
Uniform Testamentary Additions to Trusts Act. The
freestanding Uniform Testamentary Additions to Trusts Act (UTATA) was revised
in 1991 in accordance with the revisions to UPC §2-511. States
that enact Section 2-511 need not enact the UTATA as revised in 1991 and should
repeal the original version of UTATA if previously enacted in the state.
Section 2‑512.
Events of Independent Significance.
A will may dispose of property by reference
to acts and events that have significance apart from their effect upon the
dispositions made by the will, whether they occur before or after the execution
of the will or before or after the testator's death. The execution or
revocation of another individual's will is such an event.
Section 2‑513.
Separate Writing Identifying Devise of Certain Types of Tangible Personal
Property.
Whether or not the provisions relating to
holographic wills apply, a will may refer to a written statement or list to
dispose of items of tangible personal property not otherwise specifically
disposed of by the will, other than money. To be admissible under this section
as evidence of the intended disposition, the writing must be signed by the
testator and must describe the items and the devisees with reasonable certainty.
The writing may be referred to as one to be in existence at the time of the
testator's death; it may be prepared before or after the execution of the will;
it may be altered by the testator after its preparation; and it may be a
writing that has no significance apart from its effect on the dispositions made
by the will.
COMMENT
Purpose and Scope of
Revision. As part of the broader policy of effectuating
a testator's intent and of relaxing formalities of execution, this section
permits a testator to refer in his or her will to a separate document disposing
of tangible personalty other than money. The pre‑1990 version precluded
the disposition of "evidences of indebtedness, documents of title, and
securities, and property used in a trade or business." These limitations
are deleted in the revised version, partly to remove a source of confusion in
the pre‑1990 version, which arose because evidences of indebtedness,
documents of title, and securities are not items of tangible personal property
to begin with, and partly to permit the disposition of a broader range of items
of tangible personal property.
The
language "items of tangible personal property" does not require that
the separate document specifically itemize each item of tangible personal
property covered. The only requirement is that the document describe the items
covered "with reasonable certainty." Consequently, a document
referring to "all my tangible personal property other than money" or
to "all my tangible personal property located in my office" or using
similar catch‑all type of language would normally be sufficient.
The
separate document disposing of an item or items of tangible personal property
may be prepared after execution of the will, so would not come within Section 2‑510
on incorporation by reference. It may even be altered from time to time. The
only requirement is that the document be signed by the testator. The pre‑1990
version of this section gave effect to an unsigned document if it was in the
testator's handwriting. The revisions remove the language giving effect to such
an unsigned document. The purpose is to prevent a mere handwritten draft from
becoming effective without sufficient indication that the testator intended it
to be effective. The signature requirement is designed to prevent mere drafts
from becoming effective against the testator's wishes. An unsigned document
could still be given effect under Section 2‑503, however, if the
proponent could carry the burden of proving by clear and convincing evidence
that the testator intended the document to be effective.
The
typical case covered by this section would be a list of personal effects and
the persons whom the decedent desired to take specified items.
Sample Clause. Section 2‑513 might be utilized by a
clause in the decedent's will such as the following:
I might leave a written statement or list disposing
of items of tangible personal property. If I do and if my written statement or
list is found and is identified as such by my Personal Representative no later
than 30 days after the probate of this will, then my written statement or list
is to be given effect to the extent authorized by law and is to take precedence
over any contrary devise or devises of the same item or items of property in
this will.
Section
2‑513 only authorizes disposition of tangible personal property "not
otherwise specifically disposed of by the will." The sample clause above
is consistent with this restriction. By providing that the written statement or
list takes precedence over any contrary devise in the will, a contrary devise
is made conditional upon the written statement or list not contradicting it; if
the written statement or list does contradict a devise in the will, the will
does not otherwise specifically dispose of the property.
If, however, the clause in the testator's
will does not provide that the written statement or list is to take precedence
over any contrary devise in the will (or contain a provision having similar
effect), then the written statement or list is ineffective to the extent it
purports to dispose of items of property that were otherwise specifically
disposed of by the will.
Section 2‑514.
Contracts Concerning Succession.
A contract to make a will or devise, or not
to revoke a will or devise, or to die intestate, if executed after the
effective date of this Article, may be established only by (i) provisions of a
will stating material provisions of the contract, (ii) an express reference in
a will to a contract and extrinsic evidence proving the terms of the contract,
or (iii) a writing signed by the decedent evidencing the contract. The execution of a joint will or mutual wills
does not create a presumption of a contract not to revoke the will or wills.
COMMENT
Section Relocated. No substantive revision of this section is
made, but the section is relocated and renumbered to make room for new Part 7.
The
purpose of this section is to tighten the methods by which contracts concerning
succession may be proved. Oral contracts not to revoke wills have given rise to
much litigation in a number of states; and in many states if two persons
execute a single document as their joint will, this gives rise to a presumption
that the parties had contracted not to revoke the will except by consent of
both.
This
section requires that either the will must set forth the material provisions of
the contract, or the will must make express reference to the contract and
extrinsic evidence prove the terms of the contract, or there must be a separate
writing signed by the decedent evidencing the contract. Oral testimony
regarding the contract is permitted if the will makes reference to the
contract, but this provision of the statute is not intended to affect normal
rules regarding admissibility of evidence.
This section does not preclude recovery in
quantum meruit for the value of services rendered the testator.
Section 2‑515.
Deposit of Will with Court in Testator's Lifetime.
A will may be deposited by the testator or
the testator's agent with any court for safekeeping, under rules of the court.
The will must be sealed and kept confidential. During the testator's lifetime,
a deposited will must be delivered only to the testator or to a person
authorized in writing signed by the testator to receive the will. A conservator
may be allowed to examine a deposited will of a protected testator under
procedures designed to maintain the confidential character of the document to
the extent possible, and to ensure that it will be resealed and kept on deposit
after the examination. Upon being informed of the testator's death, the court
shall notify any person designated to receive the will and deliver it to that
person on request; or the court may deliver the will to the appropriate court.
COMMENT
Many
states already have statutes permitting deposit of wills during a testator's
lifetime. Most of these statutes have elaborate provisions governing purely
administrative matters: how the will is to be enclosed in a sealed wrapper,
what is to be endorsed on the wrapper, the form of receipt or certificate given
to the testator, the fee to be charged, how the will is to be opened after
testator's death and who is to be notified. Under this section, details have
been left to Court rule, except as other relevant statutes such as one
governing fees may apply.
It
is, of course, vital to maintain the confidential nature of deposited wills.
However, this obviously does not prevent the opening of the will after the
death of the testator if necessary in order to determine the executor or other
interested persons to be notified. Nor should it prevent opening the will to
microfilm for confidential record storage, for example. These matters could
again be regulated by Court rule.
The provision permitting examination of a
will of a protected person by the conservator supplements Section 5‑427.
Section 2‑516.
Duty of Custodian of Will; Liability.
After the death of a testator and on request
of an interested person, a person having custody of a will of the testator
shall deliver it with reasonable promptness to a person able to secure its
probate and if none is known, to an appropriate court. A person who willfully
fails to deliver a will is liable to any person aggrieved for any damages that
may be sustained by the failure. A person
who willfully refuses or fails to deliver a will after being ordered by the
court in a proceeding brought for the purpose of compelling delivery is subject
to penalty for contempt of court.
COMMENT
In addition to a registrar or clerk, a person
authorized to accept delivery of a will from a custodian may be a universal
successor or other person authorized under the law of another nation to carry
out the terms of a will.
Section 2‑517.
Penalty Clause for Contest.
A provision in a will purporting to penalize
an interested person for contesting the will or instituting other proceedings
relating to the estate is unenforceable if probable cause exists for
instituting proceedings.
COMMENT
This
section replicates Section 3‑905.
PART 6
RULES OF CONSTRUCTION APPLICABLE ONLY TO WILLS
GENERAL COMMENT
Parts
6 and 7 address a variety of construction problems that commonly occur in
wills, trusts, and other types of governing instruments. All of the
"rules" set forth in these parts yield to a finding of a contrary
intention and are therefore rebuttable presumptions.
The
rules of construction set forth in Part 6 apply only to wills. The rules of
construction set forth in Part 7 apply to wills and other governing
instruments.
The sections in Part 6 deal with such
problems as death before the testator (lapse), the inclusiveness of the will as
to property of the testator, effect of failure of a gift in the will, change in
form of securities specifically devised, ademption by reason of fire, sale and
the like, exoneration, and exercise of a power of appointment by general
language in the will.
Section 2‑601.
Scope.
In the absence of a finding of a contrary
intention, the rules of construction in this Part control the construction of a
will.
COMMENT
Purpose and Scope of 1990
Revisions.
Common-law rules of construction yield to a finding of a contrary intention.
The pre-1990 version of this section provided that the rules of construction in
Part 6 yielded only to a “contrary intention indicated by the will.” To align
the statutory rules of construction in Part 6 with those established at common
law, this section was revised in 1990 so that the rules of construction yield
to a “finding of a contrary intention.” As revised, evidence extrinsic to the
will as well as the content of the will itself is admissible for the purpose of
rebutting the rules of construction in Part 6.
As originally promulgated, this section began with the sentence: “The
intention of a testator as expressed in his will controls the legal effect of
his dispositions.” This sentence was removed primarily because it was
inappropriate and unnecessary in a part of the Code containing rules of
construction. Deleting this sentence did not signify a retreat from the widely
accepted proposition that a testator’s intention controls the legal effect of
his or her dispositions.
A further reason for deleting this sentence is that a possible, though
unintended, reading of the sentence might have been that it prevented the
judicial adoption of a general reformation doctrine for wills, as approved by
the American Law Institute in the Restatement (Third) of Property: Wills and
Other Donative Transfers § 12.1 (2003), and as advocated in Langbein &
Waggoner, “Reformation of Wills on the Ground of Mistake: Change of Direction in
American Law?”, 130 U.Pa.L.Rev. 521 (1982). Striking this sentence removed that
possible impediment to the judicial adoption of a general reformation doctrine
for wills as approved by the American Law Institute, as advocated in the
Langbein-Waggoner article, and (as of 2008) codified in Section 2-805.
Cross
Reference.
See Section 8-101(b) for the application of the rules of construction in this
Part to documents executed prior to the effective date of this Article.
Historical Note. This Comment was revised in 2008.
Section 2‑602.
Will
A will may provide for the passage of all
property the testator owns at death and all property acquired by the estate
after the testator's death.
COMMENT
Purpose and Scope of
Revision. This section is revised to assure that, for
example, a residuary clause in a will not only passes property owned at death
that is not otherwise devised, even though the property was acquired by the
testator after the will was executed, but also passes property acquired by a
testator's estate after his or her death. This reverses a case like Braman Estate, 435 Pa. 573, 258 A.2d 492
(1969), where the Court held that Mary's residuary devise to her sister Ruth
"or her estate," which had passed to Ruth's estate where Ruth
predeceased Mary by about a year, could not go to Ruth's residuary legatee. The
Court held that Ruth's will had no power to control the devolution of property
acquired by Ruth's estate after her death; such property passed, instead, by
intestate succession from Ruth. This section, applied to the Braman Estate case, would mean that the
property acquired by Ruth's estate after her death would pass under her
residuary clause.
The
added language also makes it clear that items such as bonuses awarded to an
employee after his or her death pass under his or her will.
Section 2‑603. Antilapse; Deceased Devisee; Class Gifts.
(a) [Definitions.] In this section:
(1) "Alternative
devise" means a devise that is expressly created by the will and, under
the terms of the will, can take effect instead of another devise on the
happening of one or more events, including survival of the testator or failure
to survive the testator, whether an event is expressed in condition‑precedent,
condition‑subsequent, or any other form. A residuary clause constitutes
an alternative devise with respect to a nonresiduary devise only if the will
specifically provides that, upon lapse or failure, the nonresiduary devise, or
nonresiduary devises in general, pass under the residuary clause.
(2) "Class
member" includes an individual who fails to survive the testator but who
would have taken under a devise in the form of a class gift had he [or she]
survived the testator.
(3) “Descendant of a grandparent”, as used in subsection (b), means an
individual who qualifies as a descendant of a grandparent of the testator or of
the donor of a power of appointment under the (i) rules of construction
applicable to a class gift created in the testators will if the devise or
exercise of the power is in the form of a class gift or (ii) rules for
intestate succession if the devise or exercise of the power is not in the form
of a class gift.
(4)
“Descendants”, as used in the phrase “surviving descendants” of a deceased
devisee or class member in subsections (b)(1) and (2), mean the descendants of
a deceased devisee or class member who would take under a class gift created in
the testator’s will.
(5)
“Devise” includes an alternative devise, a devise in the form of a class gift,
and an exercise of a power of appointment.
(6)
“Devisee” includes (i) a class member if the devise is in the form of a class
gift, (ii) an individual or class member who was deceased at the time the
testator executed his [or her] will as well as an individual or class member
who was then living but who failed to survive the testator, and (iii) an
appointee under a power of appointment exercised by the testator’s will.
(7)
“Stepchild” means a child of the surviving, deceased, or former spouse of the
testator or of the donor of a power of appointment, and not of the testator or
donor.
(8)
“Surviving”, in the phrase “surviving devisees” or “surviving descendants”,
means devisees or descendants who neither predeceased the testator nor are deemed
to have predeceased the testator under Section 2-702.
(9)
“Testator” includes the donee of a power of appointment if the power is
exercised in the testator’s will.
(b) [Substitute Gift.] If a devisee fails to survive the testator and is a
grandparent, a descendant of a grandparent, or a stepchild of either the
testator or the donor of a power of appointment exercised by the testator’s
will, the following apply:
(1)
Except as provided in paragraph (4), if the devise is not in the form of a
class gift and the deceased devisee leaves surviving descendants, a substitute
gift is created in the devisee’s surviving descendants. They take by
representation the property to which the devisee would have been entitled had
the devisee survived the testator.
(2)
Except as provided in paragraph (4), if the devise is in the form of a class
gift, other than a devise to “issue,” “descendants,” “heirs of the body,”
“heirs,” “next to kin,” “relatives,” or “family,” or a class described by
language of similar import, a substitute gift is created in the surviving
descendants of any deceased devisee. The property to which the devisees would
have been entitled had all of them survived the testator passes to the
surviving devisees and the surviving descendants of the deceased devisees. Each
surviving devisee takes the share to which he [or she] would have been entitled
had the deceased devisees survived the testator. Each deceased devisee’s
surviving descendants who are substituted for the deceased devisee take by
representation the share to which the deceased devisee would have been entitled
had the deceased devisee survived the testator. For the purposes of this
paragraph, “deceased devisee” means a class member who failed to survive the
testator and left one or more surviving descendants.
(3)
For the purposes of Section 2-601, words of survivorship, such as in a devise
to an individual “if he survives me,” or in a devise to “my surviving
children,” are not, in the absence of additional evidence, a sufficient
indication of an intent contrary to the application of this section.
(4)
If the will creates an alternative devise with respect to a devise for which a
substitute gift is created by paragraph (1) or (2), the substitute gift is
superseded by the alternative devise if:
(A)
the alternative devise is in the form of a class gift and one or more members
of the class is entitled to take under the will; or
(B)
the alternative devise is not in the form of a class gift and the expressly
designated devisee of the alternative devise is entitled to take under the
will.
(5)
Unless the language creating a power of appointment expressly excludes the
substitution of the descendants of an appointee for the appointee, a surviving
descendant of a deceased appointee of a power of appointment can be substituted
for the appointee under this section, whether or not the descendant is an
object of the power.
(c) [More Than One Substitute Gift; Which One Takes.] If, under subsection (b), substitute
gifts are created and not superseded with respect to more than one devise and
the devises are alternative devises, one to the other, the determination of
which of the substitute gifts takes effect is resolved as follows:
(1)
Except as provided in paragraph (2), the devised property passes under the primary
substitute gift.
(2)
If there is a younger-generation devise, the devised property passes under the
younger-generation substitute gift and not under the primary substitute gift.
(3)
In this subsection:
(A)
“Primary devise” means the devise that would have taken effect had all the
deceased devisees of the alternative devises who left surviving descendants
survived the testator.
(B)
“Primary substitute gift” means the substitute gift created with respect to the
primary devise.
(C)
“Younger-generation devise” means a devise that (i) is to a descendant of a
devisee of the primary devise, (ii) is an alternative devise with respect to
the primary devise, (iii) is a devise for which a substitute gift is created,
and (iv) would have taken effect had all the deceased devisees who left
surviving descendants survived the testator except the deceased devisee or
devisees of the primary devise.
(D) “Younger-generation substitute gift” means the substitute gift
created with respect to the younger-generation devise.
COMMENT
Purpose and Scope. Section 2-603 is a
comprehensive antilapse statute that resolves a variety of interpretive
questions that have arisen under standard antilapse statutes, including the
antilapse statute of the pre-1990 Code.
Theory of Lapse. As
explained in Restatement (Third) of Property: Wills and Other Donative
Transfers § 1.2 (1999), the common-law rule of lapse is predicated on the
principle that a will transfers property at the testator’s death, not when the
will was executed, and on the principle that property cannot be transferred to
a deceased individual. Under the rule of lapse, all devises are automatically
and by law conditioned on survivorship of the testator. A devise to a devisee
who predeceases the testator fails (lapses); the devised property does not pass
to the devisee’s estate, to be distributed according to the devisee’s will or
pass by intestate succession from the devisee. (Section 2-702 modifies the rule
of lapse by presumptively conditioning devises on a 120-hour period of
survival.)
“Antilapse”
Statutes—Rationale of Section 2-603. Statutes such as Section 2-603 are
commonly called “antilapse” statutes. An antilapse statute is remedial in
nature, tending to preserve equality of treatment among different lines of
succession. Although Section 2-603 is a rule of construction, and hence under
Section 2-601 yields to a finding of a contrary intention, the remedial
character of the statute means that it should be given the widest possible
latitude to operate in considering whether the testator had formed a contrary
intent.
See Restatement (Third) of Property: Wills and Other Donative Transfers § 5.5
cmt. f (1999).
The 120-hour Survivorship
Period. In effect, the requirement of survival of the testator’s death
means survival of the 120-hour period following the testator’s death. This is
because, under Section 2-702(a), “an individual who is not established to have
survived an event ... by 120 hours is deemed to have predeceased the event”. As
made clear by subsection (a)(8), for the purposes of Section 2-603, the “event”
to which Section 2-702(a) relates is the testator’s death.
General Rule of Section
2-603—Subsection (b). Subsection (b) states the general rule of Section
2-603. Subsection (b)(1) applies to individual devises; subsection (b)(2)
applies to devises in class gift form. For the distinction between an
individual devise and a devise in class gift form, see Restatement (Third) of
Property: Wills and Other Donative Transfers §§ 13.1, 13.2 (2008). Together,
subsections (b)(1) and (b)(2) show that the “antilapse” label is somewhat
misleading. Strictly speaking, these subsections do not reverse the common-law
rule of lapse. They do not abrogate the law-imposed condition of survivorship,
so that devised property passes to the estates of predeceasing devisees.
Subsections (b)(1) and (b)(2) leave the law-imposed condition of survivorship
intact, but modify the devolution of lapsed devises by providing a statutory
substitute gift in the case of specified relatives. The statutory substitute
gift is to the devisee’s descendants who survive the testator by 120 hours;
they take the property to which the devisee would have been entitled had the
devisee survived the testator by 120 hours.
Class Gifts. In line
with modern policy, subsection (b)(2) continues the pre-1990 Code’s approach of
expressly extending the antilapse protection to class gifts. Subsection (b)(2)
applies to single-generation class gifts (see Restatement (Third) of Property:
Wills and Other Donative Transfers §§ 14.1, 14.2 (2008)) in which one or more
class members fail to survive the testator (by 120 hours) leaving descendants
who survive the testator (by 120 hours); in order for the subsection to apply,
it is not necessary that any of the class members survive the testator (by 120
hours). Multiple-generation class gifts, i.e., class gifts to “issue”,
“descendants”, “heirs of the body”, “heirs”, “next of kin”, “relatives”,
“family”, or a class described by language of similar import, are excluded,
however, because antilapse protection is unnecessary in class gifts of these
types. They already contain within themselves the idea of representation, under
which a deceased class member’s descendants are substituted for him or her. See
Sections 2-708, 2-709, 2-711; Restatement (Third) of Property: Wills and Other
Donative Transfers §§ 14.3, 14.4 (2008).
“Void” Gifts. By
virtue of subsection (a)(6), subsection (b) applies to the so-called “void”
gift, where the devisee is dead at the time of execution of the will. Though
contrary to some decisions, it seems likely that the testator would want the
descendants of a person included, for example, in a class term but dead when
the will is made to be treated like the descendants of another member of the class
who was alive at the time the will was executed but who dies before the
testator.
Protected Relatives.
The specified relatives whose devises are protected by this section are the
testator’s grandparents and their descendants and the testator’s stepchildren
or, in the case of a testamentary exercise of a power of appointment, the
testator’s (donee’s) or donor’s grandparents and their descendants and the
testator’s or donor’s stepchildren. Subsection (a)(3), added by technical amendment in
2008, defines “descendant of a grandparent” as an individual who qualifies as a
descendant of a grandparent of the testator or of the donor of a power of
appointment under the (i) rules of construction applicable to a class gift
created in the testators will if the devise or exercise of the power is in the
form of a class gift or (ii) rules for intestate succession if the devise or
exercise of the power is not in the form of a class gift.
Section 2-603 extends the
“antilapse” protection to devises to the testator’s own stepchildren. The term
“stepchild” is defined in subsection (a)(7). Antilapse protection is not
extended to devises to descendants of the testator’s stepchildren or to
stepchildren of any of the testator’s relatives. As to the testator’s own
stepchildren, note that under Section 2-804 a devise to a stepchild might be
revoked if the testator and the stepchild’s adoptive or genetic parent become
divorced; the antilapse statute does not, of course, apply to a deceased
stepchild’s devise if it was revoked by Section 2-804. Subsections (b)(1) and
(b)(2) give this result by providing that the substituted descendants take the
property to which the deceased devisee or deceased class member would have been
entitled if he or she had survived the testator. If a deceased stepchild whose
devise was revoked by Section 2-804 had survived the testator, that stepchild
would not have been entitled to his or her devise, and so his or her
descendants take nothing, either.
Other than stepchildren,
devisees related to the testator by affinity are not protected by this section.
Section 2-603 Applicable
to Testamentary Exercise of a Power of Appointment Where Appointee Fails to
Survive the Testator. Subsections (a)(5), (6), (7), (9), and (b)(5) extend
the protection of this section to appointees under a power of appointment
exercised by the testator’s will. The extension of the antilapse statute to
powers of appointment is a step long overdue. The extension is supported by the
Restatement (Third) of Property: Wills and Other Donative Transfers § 19.12
(2008).
Substitute Gifts. The
substitute gifts provided for by subsections (b)(1) and (b)(2) are to the
deceased devisee’s descendants. Subsection (a)(4), added by technical amendment in
2008, defines “descendants” as the descendants of a deceased devisee or class
member who would take under a class gift created in the testator’s will. As
such, the rules of construction in Section 2-705 are applicable. The rules of
construction in Section 2-705 are subject to a finding of a contrary intent as
described in Section 2-701. A contrary intent to the rules of construction in
Section 2-705 could be found, for example, in the definitions section of the
testator’s will.
The 120-hour survival
requirement stated in Section 2-702 does not require descendants who would be
substituted for their parent by this section to survive their parent by any set
period.
Thus, if a devisee who is a protected relative survives the testator by less
than 120 hours, the substitute gift is to the devisee’s descendants who survive
the testator by 120 hours; survival of the devisee by 120 hours is not
required.
The statutory substitute gift
is divided among the devisee’s descendants “by representation”, a phrase
defined in Section 2-709(b).
Section 2-603 Restricted
to Wills. Section 2-603 is applicable only when a devisee of a will
predeceases the testator. It does not apply to beneficiary designations in
life-insurance policies, retirement plans, or transfer-on-death accounts, nor
does it apply to inter-vivos trusts, whether revocable or irrevocable. See,
however, Sections 2-706 and 2-707 for rules of construction applicable when the
beneficiary of a life-insurance policy, a retirement plan, or a
transfer-on-death account predeceases the decedent or when the beneficiary of a
future interest is not living when the interest is to take effect in possession
or enjoyment.
Contrary Intention—the
Rationale of Subsection (b)(3). An antilapse statute is a rule of
construction, designed to carry out presumed intention. In effect, Section
2-603 declares that when a testator devises property “to A (a specified
relative)”, the testator (if he or she had thought further about it) is
presumed to have wanted to add: “but if A is not alive (120 hours after my
death), I devise the property in A’s stead to A’s descendants (who survive me
by 120 hours)”.
Under Section 2-601, the rule
of Section 2-603 yields to a finding of a contrary intention. A foolproof means
of expressing a contrary intention is to add to a devise the phrase “and not to
[the devisee’s] descendants”. See Restatement (Third) of Property: Wills and
Other Donative Transfers § 5.5 cmt. i (1999). In the case of a power of
appointment, the phrase “and not to an appointee’s descendants” can be added by
the donor of the power in the document creating the power of appointment, if
the donor does not want the antilapse statute to apply to an appointment under
a power. See Restatement (Third) of Property: Wills and Other Donative
Transfers § 19.12 cmts. c & g (2008). In addition, adding to the residuary
clause a phrase such as “including all lapsed or failed devises”, adding to a
nonresiduary devise a phrase such as “if the devisee does not survive me, the
devise is to pass under the residuary clause”, or adding a separate clause
providing generally that “if the devisee of any nonresiduary devise does not
survive me, the devise is to pass under the residuary clause” makes the
residuary clause an “alternative devise”. Under subsection (b)(4), as clarified
by technical amendment in 2008, an alternative devise supersedes a substitute
gift created by subsection (b)(1) or (b)(2) if: (A) the alternative devise is
in the form of a class gift and one or more members of the class is entitled to
take under the will; or (B) the alternative devise is not in the form of a
class gift and the expressly designated devisee of the alternative devise is
entitled to take under the will. See infra Example 3.
A much-litigated question is
whether mere words of survivorship—such as in a devise “to my daughter, A, if A
survives me” or “to my surviving children”—automatically defeat the antilapse
statute. Lawyers who believe that the attachment of words of survivorship to a
devise is a foolproof method of defeating an antilapse statute are mistaken.
The very fact that the question is litigated so frequently is itself proof that
the use of mere words of survivorship is far from foolproof. In addition, the
results of the litigated cases are divided on the question. To be sure, many
cases hold that mere words of survivorship do automatically defeat the
antilapse statute. E.g., Estate of Stroble, 636 P.2d 236 (Kan.Ct.App.1981);
Annot., 63 A.L.R.2d 1172, 1186 (1959); Annot., 92 A.L.R. 846, 857 (1934). Other
cases, however, and the Restatement (Third) of Property: Wills and Other
Donative Transfers § 5.5 cmt. h (1999), reach the opposite conclusion. E.g.,
Ruotolo v. Tietjen, 890 A.2d 166 (Conn. App. Ct. 2006), aff’d per curiam, 916
A.2d 1 (Conn. 2007) (residuary devise of half of the residue to testator’s stepdaughter
“if she survives me”; stepdaughter predeceased testator leaving a dsughter who
survived testator; citing this section and the Restatement, court held that the
survival language did not defeat the antilapse statute); Estate of Ulrikson,
290 N.W.2d 757 (Minn. 1980) (residuary devise to testator’s brother Melvin and
sister Rodine, and “in the event that either one of them shall predecease me,
then to the other surviving brother or sister”; Melvin and Rodine predeceased
testator, Melvin but not Rodine leaving descendants who survived testator;
court held residue passed to Melvin’s descendants under antilapse statute);
Detzel v. Nieberding, 219 N.E.2d 327 (Ohio P. Ct. 1966) (devise of $5,000 to
sister “provided she be living at the time of my death”; sister predeceased
testator; court held $5,000 devise passed under antilapse statute to sister’s
descendants); Henderson v. Parker, 728 S.W.2d 768 (Tex. 1987) (devise of all of
testator’s property “unto our surviving children of this marriage”; two of testator’s
children survived testator, but one child, William, predeceased testator
leaving descendants who survived testator; court held that share William would
have taken passed to William’s descendants under antilapse statute; words of
survivorship found ineffective to counteract antilapse statute because court
interpreted those words as merely restricting the devisees to those living at
the time the will was executed). It may also be noted that the antilapse
statutes in some other common-law countries expressly provide that words of
survivorship do not defeat the statute. See, e.g., Queensland Succession Act
1981, § 33(2) (“A general requirement or condition that [protected relatives]
survive the testator or attain a specified age is not a contrary intention for
the purposes of this section”).
Subsection (b)(3) adopts the
position that mere words of survivorship do not—by themselves, in the absence
of additional evidence—lead to automatic defeat of the antilapse statute. As
noted in French, “Antilapse Statutes Are Blunt Instruments: A Blueprint for
Reform”, 37 Hastings L. J. 335, 369 (1985) “courts have tended to accord too
much significance to survival requirements when deciding whether to apply
antilapse statutes”.
A formalistic argument
sometimes employed by courts adopting the view that words of survivorship
automatically defeat the antilapse statute is that, when words of survivorship
are used, there is nothing upon which the antilapse statute can operate; the
devise itself, it is said, is eliminated by the devisee’s having predeceased
the testator. The language of subsection (b)(1) and (b)(2), however, nullify
this formalistic argument by providing that the predeceased devisee’s
descendants take the property to which the devisee would have been entitled had
the devisee survived the testator.
Another objection to applying
the antilapse statute is that mere words of survivorship somehow establish a
contrary intention. The argument is that attaching words of survivorship
indicates that the testator thought about the matter and intentionally did not
provide a substitute gift to the devisee’s descendants. At best, this is an
inference only, which may or may not accurately reflect the testator’s actual
intention. An equally plausible inference is that the words of survivorship are
in the testator’s will merely because the testator’s lawyer used a will form
with words of survivorship. The testator who went to lawyer X and ended up with
a will containing devises with a survivorship requirement could by chance have
gone to lawyer Y and ended up with a will containing devises with no
survivorship requirement—with no different intent on the testator’s part from
one case to the other.
Even a lawyer’s deliberate
use of mere words of survivorship to defeat the antilapse statute does not
guarantee that the lawyer’s intention represents the client’s intention. Any
linkage between the lawyer’s intention and the client’s intention is
speculative unless the lawyer discussed the matter with the client. Especially
in the case of younger-generation devisees, such as the client’s children or
nieces and nephews, it cannot be assumed that all clients, on their own, have
anticipated the possibility that the devisee will predecease the client and
will have thought through who should take the devised property in case the
never-anticipated event happens.
If, however, evidence
establishes that the lawyer did discuss the question with the client, and that
the client decided that, for example, if the client’s child predeceases the client,
the deceased child’s children (the client’s grandchildren) should not take the
devise in place of the deceased child, then the combination of the words of
survivorship and the extrinsic evidence of the client’s intention would support
a finding of a contrary intention under Section 2-601. See Example 1, below.
For this reason, Sections 2-601 and 2-603 will not expose lawyers to
malpractice liability for the amount that, in the absence of the finding of the
contrary intention, would have passed under the antilapse statute to a deceased
devisee’s descendants. The success of a malpractice claim depends upon
sufficient evidence of a client’s intention and the lawyer’s failure to carry
out that intention. In a case in which there is evidence that the client did
not want the antilapse statute to apply, that evidence would support a finding
of a contrary intention under Section 2-601, thus preventing the client’s
intention from being defeated by Section 2-603 and protecting the lawyer from
liability for the amount that, in the absence of the finding of a contrary
intention, would have passed under the antilapse statute to a deceased
devisee’s descendants.
Any inference about actual
intention to be drawn from mere words of survivorship is especially problematic
in the case of will substitutes such as life insurance, where it is less likely
that the insured had the assistance of a lawyer in drafting the beneficiary
designation. Although Section 2-603 only applies to wills, a companion
provision is Section 2-706, which applies to will substitutes, including life
insurance. Section 2-706 also contains language similar to that in subsection
(b)(3), directing that words of survivorship do not, in the absence of
additional evidence, indicate an intent contrary to the application of this
section. It would be anomalous to provide one rule for wills and a different
rule for will substitutes.
The basic operation of
Section 2-603 is illustrated in the following example:
Example 1. G’s will devised “$10,000
to my surviving children”. G had two children, A and B. A predeceased G,
leaving a child, X, who survived G by 120 hours. B also survived G by 120
hours.
Solution: Under subsection (b)(2), X
takes $5,000 and B takes $5,000. The substitute gift to A’s descendant, X, is
not defeated by the fact that the devise is a class gift nor, under subsection
(b)(3), is it automatically defeated by the fact that the word “surviving” is
used.
Note that subsection (b)(3) provides that
words of survivorship are not by themselves to be taken as expressing a
contrary intention for purposes of Section 2-601. Under Section 2-601, a
finding of a contrary intention could appropriately be based on affirmative
evidence that G deliberately used the words of survivorship to defeat the
antilapse statute. In the case of such a finding, B would take the full $10,000
devise. Relevant evidence tending to support such a finding might be a
pre-execution letter or memorandum to G from G’s attorney stating that G’s
attorney used the word “surviving” for the purpose of assuring that if one of
G’s children were to predecease G, that child’s descendants would not take the
predeceased child’s share under any statute or rule of law.
In the absence of persuasive
evidence of a contrary intent, however, the antilapse statute, being remedial
in nature, and tending to preserve equality among different lines of
succession, should be given the widest possible chance to operate and should be
defeated only by a finding of intention that directly contradicts the substitute
gift created by the statute. Mere words of survivorship—by themselves—do not
directly contradict the statutory substitute gift to the descendants of a
deceased devisee. The common law of lapse already conditions all devises on
survivorship (and Section 2-702 presumptively conditions all devises on
survivorship by 120 hours). As noted above, the antilapse statute does not
reverse the law-imposed requirement of survivorship in any strict sense; it
merely alters the devolution of lapsed devises by substituting the deceased
devisee’s descendants in place of those who would otherwise take. Thus, mere
words of survivorship merely duplicate the law-imposed survivorship requirement
deriving from the rule of lapse, and do not contradict the statutory substitute
gift created by subsection (b)(1) or (b)(2).
Subsection (b)(4).
Under subsection (b)(4), as clarified by technical amendment in 2008, a
statutory substitute gift is superseded if the testator’s will expressly
provides for its own alternative devisee and if: (A) the alternative devise is
in the form of a class gift and one or more members of the class is entitled to
take under the will; or (B) the alternative devise is not in the form of a
class gift and the expressly designated devisee of the alternative devise is
entitled to take under the will. For example, the statute’s substitute gift
would be superseded in the case of a devise “to A if A survives me; if not, to
B”, where B survived the testator but A predeceased the testator leaving
descendants who survived the testator. Under subsection (b)(4), B, not A’s
descendants, would take. In the same example, however, it should be noted that
A’s descendants would take under the statute if B as well as A predeceased the
testator, for in that case B (the “expressly designated devisee of the
alternative devise”) would not be entitled to take under the will. This would
be true, even if B left descendants who survived the testator; B’s descendants
are not “expressly designated devisees of the alternative devise”.
It should also be noted that,
for purposes of Section 2-601, an alternative devise might indicate a contrary
intention even if subsection (b)(4) is inapplicable. To illustrate this point,
consider a variation of Example 1. Suppose that in Example 1, G’s will devised
“$10,000 to my surviving children, but if none of my children survives me,
to the descendants of deceased children”. The alternative devise to the
descendants of deceased children would not cause the substitute gift to X to be
superseded under subsection (b)(4) because the condition precedent to the
alternative devise—“if none of my children survives me”—was not satisfied; one
of G’s children, B, survived G. Hence the alternative devisees would not be
entitled to take under the will. Nevertheless, the italicized language would
indicate that G did not intend to substitute descendants of deceased children
unless all of G’s children failed to survive G. Thus, although A predeceased G
leaving a child, X, who survived G by 120 hours, X would not be substituted for
A. B, G’s surviving child, would take the whole $10,000 devise.
The above variation of
Example 1 is to be distinguished from other variations, such as one in which
G’s will devised “$10,000 to my surviving children, but if none of my children
survives me, to my brothers and sisters”. The italicized language in this
variation would not indicate that G did not intend to substitute descendants of
deceased children unless all of G’s children failed to survive G. In addition,
even if one or more of G’s brothers and sisters survived G, the alternative
devise would not cause the substitute gift to X to be superseded under
subsection (b)(4); the alternative devisees would not be entitled to take under
the will because the alternative devise is expressly conditioned on none of G’s
children surviving G. Thus X would be substituted for A, allowing X and B to
divide the $10,000 equally (as in the original version of Example 1).
Subsection (b)(4) is further
illustrated by the following examples:
Example 2. G’s will devised “$10,000
to my sister, S” and devised “the rest, residue, and remainder of my estate to
X-Charity”. S predeceased G, leaving a child, N, who survived G by 120 hours.
Solution: S’s $10,000 devise goes to
N, not to X-Charity. The residuary clause does not create an “alternative
devise”, as defined in subsection (a)(1), because neither it nor any other
language in the will specifically provides that S’s $10,000 devise or lapsed or
failed devises in general pass under the residuary clause.
Example 3. Same facts as Example 2,
except that G’s residuary clause devised “the rest, residue, and remainder of
my estate, including all failed and lapsed devises, to X-Charity”.
Solution: S’s $10,000 devise goes to
X-Charity, not to N. Under subsection (b)(4), the substitute gift to N created
by subsection (b)(1) is superseded. The residuary clause expressly creates an
“alternative devise”, as defined in subsection (a)(1), in favor of X-Charity
and that alternative devisee, X-Charity, is entitled to take under the will.
Example 4. G’s will devised “$10,000
to my two children, A and B, or to the survivor of them”. A predeceased G,
leaving a child, X, who survived G by 120 hours. B also survived G by 120
hours.
Solution: B takes the full $10,000.
Because the takers of the $10,000 devise are both named and numbered (“my two
children, A and B”), the devise is not in the form of a class gift. See
Restatement (Third) of Property: Wills and Other Donative Transfers § 13.2
(2008). The substance of the devise is as if it read “half of $10,000 to A, but
if A predeceases me, that half to B if B survives me and the other half of
$10,000 to B, but if B predeceases me, that other half to A if A survives me”.
With respect to each half, A and B have alternative devises, one to the other.
Subsection (b)(1) creates a substitute gift to A’s descendant, X, with respect
to A’s alternative devise in each half. Under subsection (b)(4), however, that
substitute gift to X with respect to each half is superseded by the alternative
devise to B because the alternative devisee, B, survived G by 120 hours and is
entitled to take under G’s will.
Example 5. G’s will devised “$10,000
to my two children, A and B, or to the survivor of them”. A and B predeceased
G. A left a child, X, who survived G by 120 hours; B died childless.
Solution: X takes the full $10,000.
Because the devise itself is in the same form as the one in Example 4, the
substance of the devise is as if it read “half of $10,000 to A, but if A
predeceases me, that half to B if B survives me and the other half of $10,000
to B, but if B predeceases me, that other half to A if A survives me”. With
respect to each half, A and B have alternative devises, one to the other. As in
Example 4, subsection (b)(1) creates a substitute gift to A’s descendant, X,
with respect to A’s alternative devise in each half. Unlike the situation in
Example 4, however, neither substitute gift to X is superseded under subsection
(b)(4) by the alternative devise to B because, in this case, the alternative
devisee, B, failed to survive G by 120 hours and is therefore not entitled to
take either half under G’s will.
Note that the order of deaths as between A
and B is irrelevant. The phrase “or to the survivor” does not mean the survivor
as between them if they both predecease G; it refers to the one who survives G
if one but not the other survives G.
Example 6. G’s will devised “$10,000
to my son, A, if he is living at my death; if not, to A’s children”. A
predeceased G. A’s child, X, also predeceased G. A’s other child, Y and X’s
children, M and N, survived G by 120 hours.
Solution: Half of the devise
($5,000) goes to Y. The other half ($5,000) goes to M and N.
Because A failed to survive G
by 120 hours and left descendants who survived G by 120 hours, subsection
(b)(1) substitutes A’s descendants who survived G by 120 hours for A. But that
substitute gift is superseded under subsection (b)(4) by the alternative devise
to A’s children. Under subsection (b)(4), as clarified by technical amendment
in 2008, an alternative devise supersedes a substitute gift if the alternative
devise is in the form of a class gift and one or more members of the class is
entitled to take under the will. Because the alternative devise is in the form of a
class gift (see Restatement (Third) of Property: Wills and Other Donative
Transfers § 13.1 (2008), and because one member of the class, Y, survived the
testator and is entitled to take, the substitute gift under subsection (b)(1)
is superseded.
Because the alternative
devise to A’s children is in the form of a class gift, however, and because one
of the class members, X, failed to survive G by 120 hours and left descendants
who survived G by 120 hours, subsection (b)(2) applies and substitutes M and N
for X.
Subsection (c).
Subsection (c) is necessary because there can be cases in which subsections
(b)(1) or (b)(2) create substitute gifts with respect to two or more
alternative devises of the same property, and those substitute gifts are not
superseded under the terms of subsection (b)(4). Subsection (c) provides the
tie-breaking mechanism for such situations.
The initial step is to
determine which of the alternative devises would take effect had all the
devisees themselves survived the testator (by 120 hours). In subsection (c),
this devise is called the “primary devise”. Unless subsection (c)(2) applies,
subsection (c)(1) provides that the devised property passes under substitute
gift created with respect to the primary devise. This substitute gift is called
the “primary substitute gift”. Thus, the devised property goes to the
descendants of the devisee or devisees of the primary devise.
Subsection (c)(2) provides an
exception to this rule. Under subsection (c)(2), the devised property does not
pass under the primary substitute gift if there is a “younger-generation
devise”—defined as a devise that (i) is to a descendant of a devisee of the
primary devise, (ii) is an alternative devise with respect to the primary
devise, (iii) is a devise for which a substitute gift is created, and (iv)
would have taken effect had all the deceased devisees who left surviving
descendants survived the testator except the deceased devisee or devisees of
the primary devise. If there is a younger-generation devise, the devised property
passes under the “younger- generation substitute gift”—defined as the
substitute gift created with respect to the younger-generation devise.
Subsection (c) is illustrated
by the following examples:
Example 7. G’s will devised “$5,000
to my son, A, if he is living at my death; if not, to my daughter, B” and
devised “$7,500 to my daughter, B, if she is living at my death; if not, to my
son, A”. A and B predeceased G, both leaving descendants who survived G by 120
hours.
Solution: A’s descendants take the
$5,000 devise as substitute takers for A, and B’s descendants take the $7,500
devise as substitute takers for B. In the absence of a finding based on
affirmative evidence such as described in the solution to Example 1, the mere
words of survivorship do not by themselves indicate a contrary intent.
Both devises require application of
subsection (c). In the case of both devises, the statute produces a substitute
gift for the devise to A and for the devise to B, each devise being an
alternative devise, one to the other. The question of which of the substitute
gifts takes effect is resolved by determining which of the devisees themselves
would take the devised property if both A and B had survived G by 120 hours.
With respect to the devise of
$5,000, the primary devise is to A because A would have taken the devised
property had both A and B survived G by 120 hours. Consequently, the primary
substitute gift is to A’s descendants and that substitute gift prevails over
the substitute gift to B’s descendants.
With respect to the devise of
$7,500, the primary devise is to B because B would have taken the devised
property had both A and B survived G by 120 hours, and so the substitute gift
to B’s descendants is the primary substitute gift and it prevails over the
substitute gift to A’s descendants.
Subsection (c)(2) is
inapplicable because there is no younger-generation devise. Neither A nor B is
a descendant of the other.
Example 8. G’s will devised “$10,000
to my son, A, if he is living at my death; if not, to A’s children, X and Y”. A
and X predeceased G. A’s child, Y, and X’s children, M and N, survived G by 120
hours.
Solution: Half of the devise
($5,000) goes to Y. The other half ($5,000) goes to M and N. The disposition of
the latter half requires application of subsection (c).
Subsection (b)(1) produces
substitute gifts as to that half for the devise of that half to A and for the
devise of that half to X, each of these devises being alternative devises, one
to the other. The primary devise is to A. But there is also a
younger-generation devise, the alternative devise to X. X is a descendant of A,
X would take if X but not A survived G by 120 hours, and the devise is one for
which a substitute gift is created by subsection (b)(1). So, the younger-generation
substitute gift, which is to X’s descendants (M and N), prevails over the
primary substitute gift, which is to A’s descendants (Y, M, and N).
Note that the outcome of this
example is the same as in Example 6.
Example 9. Same facts as Example 5,
except that both A and B predeceased the testator and both left descendants who
survived the testator by 120 hours.
Solution: A’s descendants take half
($5,000) and B’s descendants take half ($5,000).
As to the half devised to A, subsection
(b)(1) produces a substitute gift to A’s descendants and a substitute gift to
B’s descendants (because the language “or to the survivor of them” created an
alternative devise in B of A’s half). As to the half devised to B, subsection
(b)(1) produces a substitute gift to B’s descendants and a substitute gift to
A’s descendants (because the language “or to the survivor of them” created an
alternative devise in A of B’s half). Thus, with respect to each half, resort
must be had to subsection (c) to determine which substitute gift prevails.
Under subsection (c)(1), each half passes
under the primary substitute gift. The primary devise as to A’s half is to A
and the primary devise as to B’s half is to B because, if both A and B had
survived G by 120 hours, A would have taken half ($5,000) and B would have
taken half ($5,000). Neither A nor B is a descendant of the other, so
subsection (c)(2) does not apply. Only if one were a descendant of the other
would the other’s descendant take it all, under the rule of subsection (c)(2).
Technical Amendments. Technical
amendments in 2008 added definitions of “descendant of a grandparent” and
“descendants” as used in subsections (b)(1) and (2) and clarified subsection
(b)(4). The two new definitions resolve questions of status previously
unanswered. The technical amendment of subsection (b)(4) makes that subsection
easier to understand but does not change its substance.
Reference. This
section is discussed in Halbach & Waggoner, “The UPC’s New Survivorship and
Antilapse Provisions”, 55 Alb.L.Rev. 1091 (1992).
Historical Note. This
Comment was revised in 1993 and 2008.
Section 2‑604.
Failure of Testamentary Provision.
(a) Except as provided in Section 2‑603, a devise, other than a
residuary devise, that fails for any reason becomes a part of the residue.
(b) Except as provided in Section 2‑603, if the residue is
devised to two or more persons, the share of a residuary devisee that fails for
any reason passes to the other residuary devisee, or to other residuary
devisees in proportion to the interest of each in the remaining part of the
residue.
COMMENT
This section applies only if
Section 2‑603 does not produce a substitute taker for a devisee who fails
to survive the testator by 120 hours. There is also a special rule for disclaimers
contained in Section 2-1106(b)(3)(A); a disclaimed devise may be governed by
either Section 2‑603 or the present section, depending on the
circumstances.
A devise of "all of my estate," or
a devise using words of similar import, constitutes a residuary devise for
purposes of this section.
Historical
Note. This Comment was revised in 1993, For the
prior version, see 8 U.L.A. 132 (Supp. 1992).
2002 Amendment
Relating to Disclaimers. In 2002, the Code’s former disclaimer provision (§2-801) was replaced
by the Uniform Disclaimer of Property Interests Act, which is incorporated into
the Code as Part 11 of Article 2 (§§2-1001 – 2-1117). The statutory references in this Comment to
former section 2-801 have been replaced by appropriate references to Part
11. Updating these statutory references
has not changed the substance of this Comment.
Section 2‑605.
Increase in Securities; Accessions.
(a) If a testator executes a will that devises securities and the
testator then owned securities that meet the description in the will, the
devise includes additional securities owned by the testator at death to the
extent the additional securities were acquired by the testator after the will
was executed as a result of the testator's ownership of the described securities
and are securities of any of the
following types:
(1) securities
of the same organization acquired by reason of action initiated by the
organization or any successor, related, or acquiring organization, excluding
any acquired by exercise of purchase options;
(2) securities
of another organization acquired as a result of a merger, consolidation,
reorganization, or other distribution by the organization or any successor, related,
or acquiring organization; or
(3) securities
of the same organization acquired as a result of a plan of reinvestment.
(b) Distributions in cash before death with respect to a described
security are not part of the devise.
COMMENT
Purpose and Scope of
Revisions.
The rule of subsection (a), as revised, relates to a devise of securities (such
as a devise of 100 shares of XYZ Company), regardless of whether that devise is
characterized as a general or specific devise. If the testator executes a will
that makes a devise of securities and if the testator then owned securities that
meet the description in the will, then the devisee is entitled not only to the
described securities to the extent they are owned by the testator at death; the
devisee is also entitled to any additional securities owned by the testator at
death that were acquired by the testator during his or her lifetime after the
will was executed and were acquired as a result of the testator's ownership of
the described securities by reason of an action specified in subsections
(a)(1), (a)(2), or (a)(3), such as the declaration of stock splits or stock
dividends or spinoffs of a subsidiary.
The
impetus for these revisions derives from the rule on stock splits enunciated by
Bostwick v. Hurstel, 364 Mass. 282,
304 N.E.2d 186 (1973), and now codified in Massachusetts as to actions covered
by subsections (a)(1) and (a)(2). Mass. Gen. Laws c. 191, § 1A(4).
Subsection (a) Not
Exclusive. Subsection (a) is not exclusive, i.e., it is
not to be understood as setting forth the only conditions under which
additional securities of the types described in paragraphs (1), (2), and (3)
are included in the devise. For example, the express terms of subsection (a) do
not apply to a case in which the testator owned the described securities when
he or she executed the will, but later sold (or otherwise disposed of) those
securities, and then later purchased (or otherwise acquired) securities that
meet the description in the will, following which additional securities of the
type or types described in paragraphs (1), (2), or (3) are acquired as a result
of the testator's ownership of the later‑acquired securities. Nor do the express terms of subsection (a)
apply to a similar (but less likely) case in which the testator did not own the
described securities when he or she executed the will, but later purchased (or
otherwise acquired) such securities. Subsection (a) does not preclude a Court,
in an appropriate case, from deciding that additional securities of the type
described in paragraphs (1), (2), or (3) acquired as a result of the testator's
ownership of the later‑acquired securities pass under the devise in
either of these two cases, or in other cases if appropriate.
Subsection
(b) codifies existing law that distributions in cash, such as interest, accrued
rent, or cash dividends declared and payable as of a record date before the
testator's death, do not pass as a part of the devise. It makes no difference
whether such cash distributions were paid before or after death. See
Section 4 of the Revised Uniform Principal and Income Act.
Cross Reference. The term "organization" is defined
in Section 1‑201.
Section 2‑606.
Nonademption of Specific Devises; Unpaid Proceeds of
(a) A specific devisee has a right to specifically devised property in
the testator's estate at the testator’s death and to:
(1) any
balance of the purchase price, together with any security agreement, owed by a
purchaser at the testator’s death by reason of sale of the property;
(2) any amount
of a condemnation award for the taking of the property unpaid at death;
(3) any
proceeds unpaid at death on fire or casualty insurance on or other recovery for
injury to the property;
(4) any
property owned by the testator at death and acquired as a result of foreclosure,
or obtained in lieu of foreclosure, of the security interest for a specifically
devised obligation;
(5) any real
property or tangible personal property owned by the testator at death which the
testator acquired as a replacement for specifically devised real property or tangible
personal property; and
(6) if not
covered by paragraphs (1) through (5), a pecuniary devise equal to the value as
of its date of disposition of other specifically devised property disposed of
during the testator’s lifetime but only to the extent it is established that
ademption would be inconsistent with the testator's manifested plan of
distribution or that at the time the will was made, the date of disposition or
otherwise, the testator did not intend ademption of the devise.
(b) If specifically devised property is sold or mortgaged by a conservator or by an agent acting
within the authority of a durable power of attorney for an incapacitated
principal or a condemnation award, insurance proceeds, or recovery for injury
to the property is paid to a conservator or to an agent acting within the
authority of a durable power of attorney for an incapacitated principal the specific devisee has the right to a
general pecuniary devise equal to the net sale price, the amount of the unpaid
loan, the condemnation award, the insurance proceeds, or the recovery.
(c) The right of a specific devisee under subsection (b) is reduced by
any right the devisee has under subsection (a).
(d) For the purposes of the references in subsection (b) to a conservator,
subsection (b) does not apply if after the sale, mortgage, condemnation, casualty, or recovery, it was adjudicated that the
testator's incapacity ceased and the testator survived the adjudication for at
least one year.
(e) For the purposes of the references in subsection (b) to an agent
acting within the authority of a durable power of attorney an incapacitated
principal, (i)"incapacitated principal" means a principal who is an
incapacitated person, (ii)
no adjudication of incapacity before death is necessary, and (iii) the acts of an agent within the authority of
a durable power of attorney are presumed to be for an incapacitated principal.
COMMENT
Purpose and Scope of
Revisions.
Under the "identity" theory followed by most Courts, the common‑law
doctrine of ademption by extinction is that a specific devise is adeemed‑rendered
ineffective‑if the specifically devised property is not owned by the
testator at death. In applying the "identity" theory, Courts do not
inquire into the testator's intent to determine whether the testator's
objective in disposing of the specifically devised property was to revoke the
devise. The only thing that matters is that the property is no longer owned at
death. The application of the "identity" theory of ademption has
resulted in harsh results in a number of cases, where it was reasonable clear
that the testator did not intend to revoke the devise. Notable examples include
McGee v. McGee, 413 A.2d 72
(R.I.1980); Estate of Dungan, 73 A.2d
776 (Del.Ch.1950).
Recently,
some Courts have begun to break away from the "identity" theory and
adopt instead the so‑called "intent" theory. E.g., Estate of
Subsection
(a)(5) does not import a tracing principle into the question of ademption, but
rather should be seen as a sensible "mere change in form" principle.
Example 1. G's will devised to X "my 1984
Ford." After she executed her will,
she sold her 1984 Ford and bought a 1988 Buick; later, she sold the 1988 Buick
and bought a 1993 Chrysler. She still owned the 1993 Chrysler when she died.
Under subsection (a)(5), X takes the 1993 Chrysler.
Variation. If G had sold her 1984 Ford (or any of the
replacement cars) and used the proceeds to buy shares in a mutual fund, which
she owned at death, subsection (a)(5) does not give X the shares in the mutual
fund. If G owned an automobile at death as a replacement for her 1984 Ford,
however, X would be entitled to that automobile, even though it was bought with
funds other than the proceeds of the sale of the 1984 Ford.
Subsection
(a)(6) applies only to the extent the specifically devised property is not in
the testator's estate at death and its value or its replacement is not covered
by the provisions of paragraphs (1) through (5). In that event, subsection
(a)(6) creates a mild presumption against ademption by extinction, imposing on
the party claiming that an ademption has occurred the burden of establishing
that the facts and circumstances indicate that ademption of the devise was
intended by the testator or that ademption of the devise is consistent with the
testator's manifested plan of distribution.
Example 2. G's will devised to his son, A, "that
diamond ring I inherited from grandfather" and devised to his daughter, B,
"that diamond brooch I inherited from grandmother." After G executed his will, a burglar entered
his home and stole the diamond ring (but not the diamond brooch, as it was in
G's safety deposit box at his bank).
Under subsection (a)(6), the party claiming that A's
devise was adeemed would be unlikely to be able to establish that G intended
A's devise to be adeemed or that ademption is consistent with G's manifested
plan of distribution. In fact, G's equalizing devise to B affirmatively
indicates that ademption is inconsistent with G's manifested plan of
distribution. The likely result is that, under subsection (a)(6), A would be
entitled to the value of the diamond ring.
Example 3. G's will devised her painting titled The Bar by Edouard Manet to X. After
executing her will, G donated the painting to a museum. G's deliberate act of
giving away the specifically devised property is a fact and circumstance
indicating that ademption of the devise was intended. In the absence of
persuasive evidence to the contrary, therefore, X would not be entitled to the
value of the painting.
Reference. Section 2‑606 is discussed in
Alexander, "Ademption and the Domain
of Formality in Wills Law," 55 Alb. L. Rev. 1067 (1992).
Historical
Note. The above Comment was revised in 1993 and
1997. For the prior version, see 8
U.L.A. 134 (Supp. 1992).
1997 Technical
Amendment. By technical amendment effective
(a) A
specific devisee has a right to the specifically devised property in the
testator’s estate at death and:
******************************
(6) unless the facts and circumstances
indicate that ademption of the devise was intended by the testator or ademption
of the devise is consistent with the testator’s manifested plan of
distribution, the value of the specifically devised property to the extent the
specifically devised property is not in the testator’s estate at death and its
value of its replacement is not covered by paragraphs (1) through (5).
Of the seven enactments of section 2-606 as
of early 1997, five omitted subsection (a)(6).
Attorneys accustomed to the concept that a specific devise automatically
fails if the devised property is not in the testator’s estate at death, were
confused by the reverse assumption, stated in original (a)(6). The confusion was heightened by the fact that
(a)(6), stating a general rule, followed five carefully tailored safe
harbors. The replacement provision, like
the other exceptions, places the burden on the devisee to establish that an
ademption has not occurred.
Section 2‑607.
Nonexoneration.
A specific devise passes subject to any
mortgage interest existing at the date of death, without right of exoneration,
regardless of a general directive in the will to pay debts.
COMMENT
See Section 3‑814
empowering the personal representative to pay an encumbrance under some circumstances;
the last sentence of that section makes it clear that such payment does not
increase the right of the specific devisee.
The present section governs the substantive rights of the devisee. The
common‑law rule of exoneration of the specific devise is abolished by
this section, and the contrary rule is adopted.
For
the rule as to exempt property, see
Section 2‑403.
The rule of this section is not inconsistent
with Section 2‑606(b). If a conservator or agent for an incapacitated
principal mortgages specifically devised property, Section 2‑606(b)
provides that the specific devisee is entitled to a pecuniary devise equal to
the amount of the unpaid loan. Section 2‑606(b) does not contradict this
section, which provides that the specific devise passes subject to any mortgage
interest existing at the date of death, without right of exoneration.
Section 2‑608.
Exercise of Power of Appointment.
In the absence of a requirement that a power
of appointment be exercised by a reference, or by an express or specific
reference, to the power, a general residuary clause in a will, or a will making
general disposition of all of the testator's property, expresses an intention
to exercise a power of appointment held by the testator only if (i) the power
is a general power and the creating instrument does not contain a gift if the
power is not exercised or (ii) the testator's will manifests an intention to
include the property subject to the power.
COMMENT
General Residuary Clause. As revised, this section,
in conjunction with Section 2‑601, provides that a general residuary
clause (such as "All the rest, residue, and remainder of my estate, I
devise to . . ..") in the testator's will or a will making general
disposition of all of the testator's property (such as "All of my estate,
I devise to . . ..") is presumed to express an intent to exercise a power
of appointment held by the donee of the power only if one or the other of two
circumstances or sets of circumstances are satisfied. One such circumstance
(whether the power is general or nongeneral) is if the testator's will
manifests an intention to include the property subject to the power. A simple
example of a residuary clause that manifests such an intention is a so‑called
"blending" or "blanket‑exercise" clause, such as
"All the rest, residue, and remainder of my estate, including any property
over which I have a power of appointment, I devise to . . .."
The
other circumstance under which a general residuary clause or a will making
general disposition of all of the testator's property is presumed to express an
intent to exercise a power is if the power is a general power and the
instrument that created the power does not contain a gift over in the event the
power is not exercised (a "gift in default"). In well planned
estates, a general power of appointment will be accompanied by a gift in
default. The gift‑in‑default clause is ordinarily expected to take
effect; it is not merely an after‑thought just in case the power is not
exercised. The power is not expected to be exercised, and in fact is often
conferred mainly to gain a tax benefit‑the federal estate‑tax
marital deduction under section 2056(b)(5) of the Internal Revenue Code or,
now, inclusion of the property in the gross estate of a younger‑generation
beneficiary under Section 2041 of the Internal Revenue Code, in order to avoid
the possibly higher rates imposed by the new federal generation‑skipping
tax. See Blattmachr & Pennell,
"Adventures in Generation Skipping, Or How We Learned to Love the '
In
poorly planned estates, on the other hand, there may be no gift‑in‑default
clause. In the absence of a gift‑in‑default clause, it seems better
to let the property pass under the donee's will than force it to return to the
donor's estate, for the reason that the donor died before the donee died and it
seems better to avoid forcing a reopening of the donor's estate.
Cross
Reference. See
also Section 2‑704 for a provision governing the meaning of a
requirement that a power of appointment be exercised by a reference (or by an
express or specific reference) to the power.
Section 2‑609.
Ademption by Satisfaction.
(a) Property a testator gave in his [or her] lifetime to a person is
treated as a satisfaction of a devise in whole or in part, only if (i) the will
provides for deduction of the gift, (ii) the testator declared in a
contemporaneous writing that the gift is in satisfaction of the devise or that
its value is to be deducted from the
value of the devise, or (iii) the devisee acknowledged in writing that the gift
is in satisfaction of the devise or that its value is to be deducted from the
value of the devise.
(b) For purposes of partial satisfaction, property given during
lifetime is valued as of the time the devisee came into possession or enjoyment
of the property or at the testator's death, whichever occurs first.
(c) If the devisee fails to survive the testator, the gift is treated
as a full or partial satisfaction of the devise, as appropriate, in applying
Sections 2‑603 and 2‑604, unless the testator's contemporaneous
writing provides otherwise.
COMMENT
Scope and Purpose of
Revisions. In addition to minor stylistic changes, this
section is revised to delete the requirement that the gift in satisfaction of a
devise be made to the devisee. The purpose is to allow the testator to satisfy
a devise to A by making a gift to B. Consider why this might be desirable. G's
will made a $20,000 devise to his child, A. G was a widower. Shortly before his death, G in consultation
with his lawyer decided to take advantage of the $10,000 annual gift tax
exclusion and sent a check for $10,000 to A and another check for $10,000 to
A's spouse, B. The checks were accompanied by a letter from G explaining that
the gifts were made for tax purposes and were in lieu of the $20,000 devise to
A. The removal of the phrase "to that person" from the statute allows the $20,000
devise to be fully satisfied by the gifts to A and B.
This
section parallels Section 2‑109 on advancements and follows the same
policy of requiring written evidence that lifetime gifts are to be taken into
account in the distribution of an estate, whether testate or intestate. Although Courts traditionally call this
"ademption by satisfaction" when a will is involved, and
"advancement" when the estate is intestate, the difference in
terminology is not significant.
Some
wills expressly provide for lifetime advances by a hodgepodge clause. Where the will contains no such clause, this
section requires either the testator to declare in writing that the gift is in
satisfaction of the devise or its value is to be deducted from the value of the
devise or the devisee to acknowledge the same in writing.
To be a gift in
satisfaction, the gift need not be an outright gift; it can be in the form of a
will substitute, such as designating the devisee as the beneficiary of the
testator's life‑insurance policy or the beneficiary of the remainder
interest in a revocable inter‑vivos trust.
Subsection
(b) on value accords with Section 2‑109 and applies if, for example,
property such as stock is given. If the devise is specific, a gift of the
specific property to the devisee during lifetime adeems the devise by
extinction rather than by satisfaction, and this section would be
inapplicable. Unlike the common law of
satisfaction, however, specific devises are not excluded from the rule of this
section. If, for example, the testator makes a devise of a specific item of
property, and subsequently makes a gift of cash or other property to the
devisee, accompanied by the requisite written intent that the gift satisfies
the devise, the devise is satisfied under this section even if the subject of
the specific devise is still in the testator's estate at death (and hence would
not be adeemed under the doctrine of ademption by extinction).
Under subsection (c), if a devisee to whom a
gift in satisfaction is made predeceases the testator and his or her
descendants take under Section 2‑603 or 2‑604, they take the same
devise as their ancestor would have taken had the ancestor survived the
testator; if the devise is reduced by reason of this section as to the
ancestor, it is automatically reduced as to the devisee's descendants. In this
respect, the rule in testacy differs from that in intestacy; see Section 2‑109(c).
PART 7
RULES OF CONSTRUCTION APPLICABLE TO WILLS
AND OTHER GOVERNING INSTRUMENTS
GENERAL
COMMENT
Part
7 contains rules of construction applicable to wills and other governing
instruments, such as deeds, trusts, appointments, beneficiary designations, and
so on. Like the rules of construction in Part 6 (which apply only to wills),
the rules of construction in this Part yield to a finding of a contrary
intention.
Some
of the sections in Part 7 are revisions of sections contained in Part 6 of the
pre‑1990 Code. Although these sections originally applied only to wills,
their restricted scope was inappropriate.
Some
of the sections in Part 7 are new, having been added to the Code as desirable
means of carrying out common intention.
Application to Pre‑Existing
Governing Instruments. Under Section 8‑101(b),
for decedents dying after the effective date of enactment, the provisions of
this Code apply to governing instruments executed prior to as well as on or
after the effective date of enactment.
The Joint Editorial Board for the Uniform Probate Code has issued a
statement concerning the constitutionality under the Contracts Clause of this
feature of the Code. The statement, titled "Joint
Editorial Board Statement Regarding the Constitutionality of Changes in Default
Rules as Applied to Pre‑Existing Documents," can be found at 17
Am. C. Tr. & Est. Couns. Notes 184 (1991) or can be obtained from the
headquarters office of the National Conference of Commissioners on Uniform
State Laws, 676 N. St. Clair St., Suite 1700, Chicago, IL 60611, Phone 312/915‑0195,
FAX 312/915‑0187.
Historical
Note. This General Comment was revised in
1993. For the prior version, see 8
U.L.A. 137 (Supp. 1992).
Section 2‑701.
Scope.
In the absence of a finding of a contrary
intention, the rules of construction in this Part control the construction of a
governing instrument. The rules of construction in this Part apply to a
governing instrument of any type, except as the application of a particular
section is limited by its terms to a specific type or types of provision or
governing instrument.
COMMENT
The
rules of construction in this Part apply to governing instruments of any type,
except as the application of a particular section is limited by its terms to a
specific type or types of provision or governing instrument.
The
term "governing instrument" is defined in Section 1‑201 as
"a deed, will, trust, insurance or annuity policy, account with POD
designation, security registered in beneficiary form (TOD), pension, profit‑sharing,
retirement, or similar benefit plan, instrument creating or exercising a power
of appointment or a power of attorney, or a dispositive, appointive, or
nominative instrument of any similar type."
Certain
of the sections in this Part are limited in their application to donative
dispositions or governing instruments of a certain type or types. Section 2‑704, for example, applies
only to a governing instrument creating a power of appointment. Section 2‑706
applies only to governing instruments that are "beneficiary
designations," a term defined in Section 1‑201 as referring to
"a governing instrument naming a beneficiary of an insurance or annuity
policy, of an account with POD designation, of a security registered in
beneficiary form (TOD), or of a pension, profit‑sharing, retirement, or
similar benefit plan, or other nonprobate transfer at death." Section 2‑707
applies only to governing instruments creating a future interest under the
terms of a trust.
Cross
References. See
the Comment to Section 2‑601.
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 138
(Supp. 1992).
Section 2‑702.
Requirement of Survival by 120 Hours.
(a) [Requirement of Survival by 120
Hours Under Probate Code.] For the
purposes of this Code, except as provided in subsection (d), an individual who
is not established by clear and convincing evidence to have survived an event,
including the death of another individual, by 120 hours is deemed to have
predeceased the event.
(b) [Requirement of Survival by 120
Hours under Governing Instrument.]
Except as provided in subsection (d), for purposes of a provision of a
governing instrument that relates to an individual surviving an event,
including the death of another individual, an individual who is not established
by clear and convincing evidence to have survived the event by 120 hours is
deemed to have predeceased the event.
(c) [Co‑owners With Right of
Survivorship; Requirement of Survival by 120 Hours.] Except as provided in subsection (d), if (i)
it is not established by clear and convincing evidence that one of two co‑owners
with right of survivorship survived the other co‑owner by 120 hours, one‑half
of the property passes as if one had survived by 120 hours and one‑half
as if the other had survived by 120 hours and (ii) there are more than two co‑owners
and it is not established by clear and convincing evidence that at least one of
them survived the others by 120 hours, the property passes in the proportion
that one bears to the whole number of co‑owners. For the purposes of this
subsection, "co‑owners with right of survivorship" includes
joint tenants, tenants by the entireties, and other co‑owners of property
or accounts held under circumstances that entitles one or more to the whole of
the property or account on the death of the other or others.
(d) [Exceptions.] Survival
by 120 hours is not required if:
(1) the
governing instrument contains language dealing explicitly with simultaneous
deaths or deaths in a common disaster and that language is operable under the facts
of the case;
(2) the
governing instrument expressly indicates that an individual is not required to
survive an event, including the death of another individual, by any specified
period or expressly requires the individual to survive the event by a specified
period; but survival of the event or the specified period must be established
by clear and convincing evidence;
(3) the
imposition of a 120‑hour requirement of survival would cause a nonvested
property interest or a power of appointment to fail to qualify for validity
under Section 2‑901(a)(1), (b)(1), or (c)(1) or to become invalid under
Section 2‑901(a)(2), (b)(2), or (c)(2); but survival must be established
by clear and convincing evidence; or
(4) the
application of a 120‑hour requirement of survival to multiple governing
instruments would result in an unintended failure or duplication of a
disposition; but survival must be established by clear and convincing evidence.
(e) [Protection of Payors and Other
Third Parties.]
(1) A payor or
other third party is not liable for having made a payment or transferred an
item of property or any other benefit to a beneficiary designated in a
governing instrument who, under this section, is not entitled to the payment or
item of property, or for having taken any other action in good faith reliance
on the beneficiary's apparent entitlement under the terms of the governing
instrument, before the payor or other third party received written notice of a
claimed lack of entitlement under this section. A payor or other third party is
liable for a payment made or other action taken after the payor or other third
party received written notice of a claimed lack of entitlement under this
section.
(2) Written
notice of a claimed lack of entitlement under paragraph (1) must be mailed to
the payor's or other third party's main office or home by registered or
certified mail, return receipt requested, or served upon the payor or other
third party in the same manner as a summons in a civil action. Upon receipt of
written notice of a claimed lack of entitlement under this section, a payor or
other third party may pay any amount owed or transfer or deposit any item of
property held by it to or with the Court having jurisdiction of the probate
proceedings relating to the decedent's estate, or if no proceedings have been
commenced, to or with the Court having jurisdiction of probate proceedings
relating to decedents' estates located in the county of the decedent's
residence. The Court shall hold the funds or item of property and, upon its
determination under this section, shall order disbursement in accordance with
the determination. Payments, transfers, or deposits made to or with the Court
discharge the payor or other third party from all claims for the value of
amounts paid to or items of property transferred to or deposited with the
Court.
(f) [Protection of Bona Fide
Purchasers; Personal Liability of Recipient.]
(1) A person
who purchases property for value and without notice, or who receives a payment
or other item of property in partial or full satisfaction of a legally
enforceable obligation, is neither obligated under this section to return the
payment, item of property, or benefit nor is liable under this section for the
amount of the payment or the value of the item of property or benefit. But a
person who, not for value, receives a payment, item of property, or any other benefit
to which the person is not entitled under this section is obligated to return
the payment, item of property, or benefit, or is personally liable for the
amount of the payment or the value of the item of property or benefit, to the
person who is entitled to it under this section.
(2) If this
section or any part of this section is preempted by federal law with respect to
a payment, an item of property, or any other benefit covered by this section, a
person who, not for value, receives the payment, item of property, or any other
benefit to which the person is not entitled under this section is obligated to
return the payment, item of property, or benefit, or is personally liable for
the amount of the payment or the value of the item of property or benefit, to
the person who would have been entitled to it were this section or part of this
section not preempted.
COMMENT
Scope and Purpose of
Revision. This section parallels Section 2‑104,
which requires an heir to survive the intestate by 120 hours in order to
inherit.
The
scope of this section is expanded to cover all provisions of a governing
instrument and this Code that relate to an individual surviving an event
(including the death of another individual). As expanded, this section imposes
the 120‑hour requirement of survival in the areas covered by the Uniform
Simultaneous Death Act. By 1993 technical amendment, an anomalous provision
exempting securities registered under Part 3 of Article VI (Uniform TOD
Security Registration Act) from the 120‑hour survival requirement was
eliminated. The exemption reflected a temporary concern attributable to
UTODSRA's preparation prior to discussion of inserting a 120‑hour
survival requirement in the freestanding Uniform Simultaneous Death Act (USDA).
In
the case of a multiple‑party account such as a joint checking account
registered in the name of the decedent and his or her spouse with right of
survivorship, the 120‑hour requirement of survivorship will not, under
the facility‑of‑payment provision of Section 6‑222(1),
interfere with the surviving spouse's ability to withdraw funds from the
account during the 120‑hour period following the decedent's death.
Note
that subsection (d)(1) provides that the 120‑hour requirement of survival
is inapplicable if the governing instrument "contains language dealing
explicitly with simultaneous deaths or deaths in a common disaster and that
language is operable under the facts of the case." The application of this
provision is illustrated by the following example.
Example. G died leaving a will devising her entire estate to
her husband, H, adding that "in the event he dies before I do, at the same
time that I do, or under circumstances as to make it doubtful who died
first," my estate is to go to my brother Melvin. H died about 38 hours
after G's death, both having died as a result of injuries sustained in an
automobile accident.
Under subsection (b), G's estate passes under the
alternative devise to Melvin because H's failure to survive G by 120 hours
means that H is deemed to have predeceased G. The language in the governing
instrument does not, under subsection (d)(1), nullify the provision that causes
H, because of his failure to survive G by 120 hours, to be deemed to have
predeceased G. Although the governing instrument does contain language dealing
with simultaneous deaths, that language is not operable under the facts of the
case because H did not die before G, at the same time as G, or under
circumstances as to make it doubtful who died first.
Note
that subsection (d)(4) provides that the 120‑hour requirement of survival
is inapplicable if "the application of this section to multiple governing
instruments would result in an unintended failure or duplication of a
disposition." The application of this provision is illustrated by the
following example.
Example. Pursuant to a common plan,
H and W executed mutual wills with reciprocal provisions. Their intention was
that a $50,000 charitable devise would be made on the death of the survivor. To
that end, H's will devised $50,000 to the charity if W predeceased him. W's
will devised $50,000 to the charity if H predeceased her. Subsequently, H and W were involved in a
common accident. W survived H by 48 hours.
Were it not for subsection (d)(4), not only would
the charitable devise in W's will be effective, because H in fact predeceased
W, but the charitable devise in H's will would also be effective, because W's
failure to survive H by 120 hours would result in her being deemed to have
predeceased H. Because this would result in an unintended duplication of the
$50,000 devise, subsection (d)(4) provides that the 120‑hour requirement
of survival is inapplicable. Thus, only the $50,000 charitable devise in W's
will is effective.
Subsection (d)(4) also renders the 120‑hour
requirement of survival inapplicable had H and W died in circumstances in which
it could not be established by clear and convincing evidence that either
survived the other. In such a case, an appropriate result might be to give
effect to the common plan by paying half of the intended $50,000 devise from
H's estate and half from W's estate.
ERISA Preemption of State
Law. The Employee Retirement Income Security Act
of 1974 (ERISA) federalizes pension and employee benefit law. Section 514(a) of
ERISA, 29 U.S.C. § 1144(a), provides that the provisions of Titles I and IV of
ERISA "shall supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan" governed by ERISA. See
the Comment to Section 2‑804 for a discussion of the ERISA preemption
question.
Revision of Uniform
Simultaneous Death Act. The freestanding Uniform
Simultaneous Death Act (USDA) was revised in 1991 in accordance witht he
revisions of this section. States that
enact Sections 2-104 and 2-702 need not enact the USDA as revised in 1991 and
should repeal the original version of the USDA if previously enacted in the
state.
Reference. This section is discussed in Halbach & Waggoner, "The UPC's New
Survivorship and Antilapse Provisions," 55 Alb. L. Rev. 1091 (1992).
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 140
(Supp. 1992).
Section 2‑703.
Choice of Law as to Meaning and Effect of Governing Instrument.
The meaning and legal effect of a governing
instrument is determined by the local law of the state selected in the governing instrument, unless the application of
that law is contrary to the provisions relating to the elective share described
in Part 2, the provisions relating to exempt property and allowances described
in Part 4, or any other public policy of this State otherwise applicable to the
disposition.
COMMENT
Purpose and Scope of
Revisions.
The scope of this section is expanded to cover all governing instruments, not
just wills. As revised, this section enables the law of a particular state to
be selected in the governing instrument for purposes of interpreting the
instrument without regard to the location of property covered thereby. So long
as local public policy is accommodated, the section should be accepted as
necessary and desirable.
Cross
Reference. Choice of law rules regarding formal validity
of a will are in Section 2‑506. See
also Sections 3‑202 and 3‑408.
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 141
(Supp. 1992).
Section 2‑704.
Power of Appointment; Meaning of Specific Reference Requirement.
If a governing instrument creating a power of
appointment expressly requires that the power be exercised by a reference, an
express reference, or a specific reference, to the power or its source, it is
presumed that the donor's intention, in requiring that the donee exercise the
power by making reference to the particular power or to the creating
instrument, was to prevent an inadvertent exercise of the power.
COMMENT
Rationale of New Section. In the creation of powers of appointment, it
has become common estate‑planning practice to require that the donee of
the power can exercise the power only by making reference (or express or
specific reference)to it. The question of whether the donee has made a
sufficiently specific reference is much litigated. The precise question often
is whether a so‑called blanket‑exercise clause (also called a
blending clause)‑a clause referring to "any property over which I have
a power of appointment"‑constitutes a sufficient reference to a
particular power to exercise that power. E.g., First National Bank v. Walker, 607 S.W.2d 469 (
Section 2‑704 sets forth the presumption that the donor's purpose in imposing a reference requirement was to prevent an inadvertent exercise of the power by the donee. Under this section, mere use by the donee of a blanket‑exercise clause would be ineffective to exercise the power because such a clause would not make a sufficient reference to the particular power. If, however, it could be shown that the donee had knowledge of and intended to exercise the power, the blanket‑exercise clause would be sufficient to exercise the power, unless the presumption of this section is overcome. Under Section 2‑701, the presumption of this section would be overcome if it could be shown that the donor's intention was not merely to prevent an inadvertent exercise of the power but was to prevent any exercise of the power, intentional or inadvertent, that failed to identify in explicit terms the specific power or the creating instrument.
Reference. See
Langbein & Waggoner, "Reformation of Wills on the Ground of
Mistake: Change of Direction in American
Law?," 130 U. Pa. L. Rev. 521, 583 n.223 (1982), suggesting that a
donee's will that omits a sufficiently specific reference to a particular power
can be reformed to include the necessary reference if it can be shown by clear
and convincing evidence that the omission was caused by a scrivener's mistake.
This approach is not inconsistent with Section 2‑704. See Sections 2‑601
(and accompanying
Comment); 2‑701. See also
Motes/Henes Trust v. Mote, 297
Cross
Reference. See
Section 2‑608 for a provision governing whether a general residuary
clause in the donee's will exercises a power of appointment that does not
require a reference (or an express or specific reference) by the donee of the
power.
Section 2‑705.
Class Gifts Construed to Accord With Intestate Succession; Exceptions.
(a) [Definitions.] In this section:
(1)
“Adoptee” has the meaning set forth in Section 2-115.
(2)
“Child of assisted reproduction” has the meaning set forth in Section 2-120.
(3)
“Distribution date” means the date when an immediate or postponed class gift
takes effect in possession or enjoyment.
(4)
“Functioned as a parent of the adoptee” has the meaning set forth in Section
2-115, substituting “adoptee” for “child” in that definition.
(5)
“Functioned as a parent of the child” has the meaning set forth in Section
2-115.
(6)
“Genetic parent” has the meaning set forth in Section 2-115.
(7)
“Gestational child” has the meaning set forth in Section 2-121.
(8)
“Relative” has the meaning set forth in Section 2-115.
(b) [Terms of
Relationship.] A class gift that uses
a term of relationship to identify the class members includes a child of
assisted reproduction, a gestational child, and, except as otherwise provided
in subsections (e) and (f), an adoptee and a child born to
parents who are not married to each other, and their respective
descendants if appropriate to the class, in accordance with the rules for
intestate succession regarding parent-child relationships.
(c) [Relatives by
Marriage.] Terms of relationship in a
governing instrument that do not differentiate relationships by blood from
those by marriage, such as uncles, aunts, nieces, or nephews, are construed to
exclude relatives by marriage, unless:
(1)
when the governing instrument was executed, the class was then and foreseeably
would be empty; or
(2)
the language or circumstances otherwise establish that relatives by marriage
were intended to be included.
(d) [Half-Blood
Relatives.] Terms of relationship in
a governing instrument that do not differentiate relationships by the half blood
from those by the whole blood, such as brothers, sisters, nieces, or nephews,
are construed to include both types of relationships.
(e) [Transferor Not
Genetic Parent.] In construing a
dispositive provision of a transferor who is not the genetic parent, a child of
a genetic parent is not considered the child of the genetic parent unless the
genetic parent, a relative of the genetic parent, or the spouse or surviving
spouse of the genetic parent or of a relative of the genetic parent functioned
as a parent of the child before the child reached [18] years of age.
(f) [Transferor Not
Adoptive Parent.] In construing a
dispositive provision of a transferor who is not the adoptive parent, an
adoptee is not considered the child of the adoptive parent unless:
(1)
the adoption took place before the adoptee reached [18] years of age;
(2)
the adoptive parent was the adoptee’s stepparent or foster parent; or
(3)
the adoptive parent functioned as a parent of the adoptee before the adoptee
reached [18] years of age.
(g) [Class-Closing Rules.] The following rules apply for purposes of the
class-closing rules:
(1)
A child in utero at a particular time is treated as living at that time if the
child lives 120 hours after birth.
(2)
If a child of assisted reproduction or a gestational child is conceived
posthumously and the distribution date is the deceased parent’s death, the
child is treated as living on the distribution date if the child lives 120
hours after birth and was in utero not later than 36 months after the deceased
parent’s death or born not later than 45 months after the deceased parent’s
death.
(3)
An individual who is in the process of being adopted when the class closes is
treated as adopted when the class closes if the adoption is subsequently granted.
COMMENT
This section facilitates a
modern construction of gifts that identify the recipient by reference to a
relationship to someone; usually these gifts will be class gifts. The rules of
construction contained in this section are substantially consistent with the
rules of construction contained in the Restatement (Third) of Property: Wills
and Other Donative Transfers §§ 14.5 through 14.9. These sections of the
Restatement apply to the treatment for class-gift purposes of an adoptee, a
nonmarital child, a child of assisted reproduction, a gestational child, and a
relative by marriage.
The
rules set forth in this section are rules of construction, which under Section
2-701 are controlling in the absence of a finding of a contrary intention. With
two exceptions, Section 2-705 invokes the rules pertaining to intestate
succession as rules of construction for interpreting terms of relationship in
private instruments.
Subsection
(a): Definitions. With one exception, the definitions in subsection (a) rely on
definitions contained in intestacy sections. The one exception is the
definition of “distribution date,” which is relevant to the class-closing rules
contained in subsection (g). Distribution date is defined as the date
when an immediate or postponed class gift takes effect in possession or
enjoyment.
Subsection
(b): Terms of Relationship. Subsection (b) provides that a class gift that uses
a term of relationship to identify the takers includes a child of assisted
reproduction and a gestational child, and their
respective descendants if appropriate to the class, in accordance with the
rules for intestate succession regarding parent-child relationships. As
provided in subsection (g), inclusion of a child of assisted reproduction or a
gestational child in a class is subject to the class-closing rules. See
Examples 11 through 15.
Subsection
(b) also provides that, except as otherwise provided in subsections (e) and
(f), an adoptee and a child born to parents who are not married
to each other, and their respective descendants if appropriate to the
class, are included in class gifts and other terms of relationship in
accordance with the rules for intestate succession regarding parent-child
relationships. The subsection (e) exception relates to situations in which the
transferor is not the genetic parent of the child. The subsection (f) exception
relates to situations in which the transferor is not the adoptive parent of the
adoptee. Consequently, if the transferor is the genetic or adoptive
parent of the child, neither exception applies, and the class gift or other
term of relationship is construed in accordance with the rules for intestate
succession regarding parent-child relationships. As provided in subsection (g),
inclusion of an adoptee or a child born to parents who are not married to each
other in a class is subject to the class-closing rules. See Examples 9 and 10.
Subsection
(c): Relatives by Marriage. Subsection (c) provides that terms of relationship
that do not differentiate relationships by blood from those by marriage, such
as “uncles”, “aunts”, “nieces”, or “nephews”, are construed to exclude
relatives by marriage, unless (i) when the governing instrument was executed,
the class was then and foreseeably would be empty or (ii) the language or
circumstances otherwise establish that relatives by marriage were intended to
be included. The Restatement (Third) of Property: Wills and Other Donative
Transfers § 14.9 adopts a similar rule of construction. As recognized in both subsection
(c) and the Restatement, there are situations in which the circumstances would
tend to include a relative by marriage. As provided in subsection (g),
inclusion of a relative by marriage in a class is subject to the class-closing
rules.
One
situation in which the circumstances would tend to establish an intent to
include a relative by marriage is the situation in which, looking at the facts
existing when the governing instrument was executed, the class was then and
foreseeably would be empty unless the transferor intended to include relatives
by marriage.
Example
1. G’s will devised property in trust, directing the trustee to pay the
income in equal shares “to G’s children who are living on each income payment
date and on the death of G’s last surviving child, to distribute the trust
property to G’s issue then living, such issue to take per stirpes, and if no
issue of G is then living, to distribute the trust property to the X Charity.”
When G executed her will, she was past the usual childbearing age, had no
children of her own, and was married to a man who had four children by a
previous marriage. These children had lived with G and her husband for many
years, but G had never adopted them. Under these circumstances, it is
reasonable to conclude that when G referred to her “children” in her will she
was referring to her stepchildren. Thus her stepchildren should be included in
the presumptive meaning of the gift “to G’s children” and the issue of her
stepchildren should be included in the presumptive meaning of the gift “to G’s
issue.” If G, at the time she executed her will, had children of her own, in
the absence of additional facts, G’s stepchildren should not be included in the
presumptive meaning of the gift to “G’s children” or in the gift to “G’s
issue.”
Example
2. G’s will devised property in trust, directing the trustee to pay the
income to G’s wife W for life, and on her death, to distribute the trust
property to “my grandchildren.” W had children by a prior marriage who were G’s
stepchildren. G never had any children of his own and he never adopted his
stepchildren. It is reasonable to conclude that under these circumstances G
meant the children of his stepchildren when his will gave the future interest
under the trust to G’s “grandchildren.”
Example
3. G’s will devised property in trust, directing the trustee to pay the
income “to my daughter for life and on her death, to distribute the trust
property to her children.” When G executed his will, his son had died, leaving
surviving the son’s wife, G’s daughter-in-law, and two children. G had no
daughter of his own. Under these circumstances, the conclusion is justified
that G’s daughter-in-law is the “daughter” referred to in G’s will.
Another
situation in which the circumstances would tend to establish an intent to
include a relative by marriage is the case of reciprocal wills, as illustrated
in Example 4, which is based on Martin v. Palmer, 1 S.W.3d 875 (Tex. Ct. App.
1999).
Example
4. G’s will devised her entire estate “to my husband if he survives me, but
if not, to my nieces and nephews.” G’s husband H predeceased her. H’s will
devised his entire estate “to my wife if she survives me, but if not, to my
nieces and nephews.” Both G and H had nieces and nephews. In these circumstances,
“my nieces and nephews” is construed to include G’s nieces and nephews by
marriage. Were it otherwise, the combined estates of G and H would pass only to
the nieces and nephews of the spouse who happened to survive.
Still
another situation in which the circumstances would tend to establish an intent
to include a relative by marriage is a case in which an ancestor participated
in raising a relative by marriage other than a stepchild.
Example
5. G’s will devised property in trust, directing the trustee to pay the
income in equal shares “to my nieces and nephews living on each income payment
date until the death of the last survivor of my nieces and nephews, at which
time the trust shall terminate and the trust property shall be distributed to
the X Charity.” G’s wife W was deceased when G executed his will. W had one
brother who predeceased her. G and W took the brother’s children, the wife’s
nieces and nephews, into their home and raised them. G had one sister who
predeceased him, and G and W were close to her children, G’s nieces and
nephews. Under these circumstances, the conclusion is justified that the
disposition “to my nieces and nephews” includes the children of W’s brother as
well as the children of G’s sister.
The
language of the disposition may also establish an intent to include relatives
by marriage, as illustrated in Examples 6, 7, and 8.
Example
6. G’s will devised half of his estate to his wife W and half to “my
children.” G had one child by a prior marriage, and W had two children by a prior
marriage. G did not adopt his stepchildren. G’s relationship with his
stepchildren was close, and he participated in raising them. The use of the
plural “children” is a factor indicating that G intended to include his
stepchildren in the class gift to his children.
Example
7. G’s will devised the residue of his estate to “my nieces and nephews
named herein before.” G’s niece by marriage was referred to in two earlier
provisions as “my niece.” The previous reference to her as “my niece” indicates
that G intended to include her in the residuary devise.
Example
8. G’s will devised the residue of her estate “in twenty-five (25) separate
equal shares, so that there shall be one (1) such share for each of my nieces
and nephews who shall survive me, and one (1) such share for each of my nieces
and nephews who shall not survive me but who shall have left a child or
children surviving me.” G had 22 nieces and nephews by blood or adoption and
three nieces and nephews by marriage. The reference to twenty-five nieces and
nephews indicates that G intended to include her three nieces and nephews by
marriage in the residuary devise.
Subsection
(d): Half Blood Relatives. In providing that terms of relationship that do not differentiate
relationships by the half blood from those by the whole blood, such as
“brothers”, “sisters”, “nieces”, or “nephews”, are construed to include both
types of relationships, subsection (d) is consistent with the rules for
intestate succession regarding parent-child relationships. See Section 2-107
and the phrase “or either of them” in Section 2-103(3) and (4). As provided in
subsection (g), inclusion of a half blood relative in a class is subject to the
class-closing rules.
Subsection
(e): Transferor Not Genetic Parent. The general theory of subsection (e) is that a
transferor who is not the genetic parent of a child would want the child to be
included in a class gift as a child of the genetic parent only if the
genetic parent (or one or more of the specified relatives of the child’s genetic
parent functioned as a parent of the child before the child reached the age of
[18]. As provided in subsection (g), inclusion of a genetic child in a class is
subject to the class-closing rules.
Example 9. G’s will created a trust, income to G’s son, A, for
life, remainder in corpus to A’s descendants who survive A, by representation.
A fathered a child, X; A and X’s mother, D, never married each other, and A
never functioned as a parent of the child, nor did any of A’s relatives or
spouses or surviving spouses of any of A’s relatives. D later married E; D and
E raised X as a member of their household. Because neither A nor any of A’s
specified relatives ever functioned as a parent of X, X would not be included
as a member of the class of A’s descendants who take the corpus of G’s trust on
A’s death.
If, however, A executed a will containing a devise
to his children or designated his children as beneficiary of his life insurance
policy, X would be included in the class. Under Section 2-117, X would be A’s
child for purposes of intestate succession. Subsection (c) is inapplicable
because the transferor, A, is the genetic parent.
Subsection
(f): Transferor Not Adoptive Parent. The general theory of subsection (f) is that a
transferor who is not the adoptive parent of an adoptee would want the child to
be included in a class gift as a child of the adoptive parent only if (i) the
adoption took place before the adoptee reached the age of [18]; (ii) the
adoptive parent was the adoptee’s stepparent or foster parent; or (iii) the
adoptive parent functioned as a parent of the adoptee before the adoptee
reached the age of [18]. As provided in subsection (g), inclusion of an adoptee
in a class is subject to the class-closing rules.
Example 10. G’s will created a trust, income to G’s daughter,
A, for life, remainder in corpus to A’s descendants who survive A, by
representation. A and A’s husband adopted a 47-year old man, X. Because the
adoption did not take place before X reached the age of [18], A was not X’s stepparent
or foster parent, and A did not function as a parent of X before X reached the
age of [18]. X would not be included as a member of the class of A’s
descendants who take the corpus of G’s trust on A’s death.
If, however, A executed a will containing a devise
to her children or designated her children as beneficiary of her life insurance
policy, X would be included in the class. Under Section 2-118, X would be A’s
child for purposes of intestate succession. Subsection (d) is inapplicable
because the transferor, A, is an adoptive parent.
Subsection
(g): Class-Closing Rules. In order for an individual to be a taker under a class gift that uses a
term of relationship to identify the class members, the individual must (i)
qualify as a class member under subsection (b), (c), (d), (e), or (f) and (ii)
not be excluded by the class-closing rules. For an exposition of the
class-closing rules, see Restatement (Third) of Property: Wills and Other
Donative Transfers § 15.1. Section 15.1 provides that, “unless the language or
circumstances establish that the transferor had a different intention, a class
gift that has not yet closed physiologically closes to future entrants on the
distribution date if a beneficiary of the class gift is then entitled to
distribution.”
Subsection
(g)(1): Child in Utero. Subsection (g)(1) codifies the well-accepted rule that a child in utero
at a particular time is treated as living at that time if the child lives 120
hours after birth.
Subsection
(g)(2): Children of Assisted Reproduction and Gestational Children; Class Gift
in Which Distribution Date Arises At Deceased Parent’s Death. Subsection (g)(2) changes
the class-closing rules in one respect. If a child of assisted reproduction (as
defined in Section 2-120) or a gestational child (as defined in Section 2-121)
is conceived posthumously, and if the distribution date arises at the deceased
parent’s death, then the child is treated as living on the distribution date if
the child lives 120 hours after birth and was either (i) in utero no later than
36 months after the deceased parent’s death or (ii) born no later than 45
months after the deceased parent’s death.
The
36-month period in subsection (g)(2) is designed to allow a surviving spouse or
partner a period of grieving, time to make up his or her mind about whether to
go forward with assisted reproduction, and a reasonable allowance for
unsuccessful attempts to achieve a pregnancy. The 36-month period also
coincides with Section 3-1006, under which an heir is allowed to recover
property improperly distributed or its value from any distributee during the
later of three years after the decedent’s death or one year after distribution.
If the assisted-reproduction procedure is performed in a medical facility, the
date when the child is in utero will ordinarily be evidenced by medical
records. In some cases, however, the procedure is not performed in a medical
facility, and so such evidence may be lacking. Providing an alternative of
birth within 45 months is designed to provide certainty in such cases. The
45-month period is based on the 36-month period with an additional nine months
tacked on to allow for a normal period of pregnancy.
Example
11. G, a member of the armed forces, executed a military will under 10
U.S.C. § 1044d shortly before being deployed to a war zone. G’s will devised
“90 percent of my estate to my wife W and 10 percent of my estate to my
children.” G also left frozen sperm at a sperm bank in case he should be killed
in action. G consented to be treated as the parent of the child within the
meaning of § 2-120(f). G was killed in action. After G’s death, W decided to
become inseminated with his frozen sperm so she could have his child. If the
child so produced was either (i) in utero within 36 months after G’s death or
(ii) born within 45 months after G’s death, and if the child lived 120 hours
after birth, the child is treated as living at G’s death and is included in the
class.
Example 12. G, a member of the armed forces, executed a military
will under 10 U.S.C. § 1044d shortly before being deployed to a war zone. G’s
will devised “90 percent of my estate to my husband H and 10 percent of my
estate to my issue by representation.” G also left frozen embryos in case she
should be killed in action. G consented to be the parent of the child within
the meaning of § 2-120(f). G was killed in action. After G’s death, H arranged
for the embryos to be implanted in the uterus of a gestational carrier. If the
child so produced was either (i) in utero within 36 months after G’s death or
(ii) born within 45 months after the G’s death, and if the child lived 120
hours after birth, the child is treated as living at G’s death and is included
in the class.
Example
13. The will of G’s mother created a testamentary trust, directing the
trustee to pay the income to G for life, then to distribute the trust principal
to G’s children. When G’s mother died, G was married but had no children.
Shortly after being diagnosed with leukemia, G feared that he would be rendered
infertile by the disease or by the treatment for the disease, so he left frozen
sperm at a sperm bank. G consented to be the parent of the child within the
meaning of § 2-120(f). After G’s death, G’s widow decided to become inseminated
with his frozen sperm so she could have his child. If the child so produced was
either (i) in utero within 36 months after G’s death or (ii) born within 45
months after the G’s death, and if the child lived 120 hours after birth, the
child is treated as living at G’s death and is included in the class under the
rule of convenience.
Subsection
(g)(2) Inapplicable Unless Child of Assisted Reproduction or Gestational Child
is Conceived Posthumously and Distribution Date Arises At Deceased Parent’s
Death. Subsection
(g)(2) only applies if a child of assisted reproduction or a gestational child
is conceived posthumously and the distribution date arises at the deceased
parent’s death. Subsection (g)(2) does not apply if a child of assisted
reproduction or a gestational child is not conceived posthumously. It also does
not apply if the distribution date arises before or after the deceased parent’s
death. In cases to which subsection (g)(2) does not apply, the ordinary
class-closing rules apply. For purposes of the ordinary class-closing rules,
subsection (g)(1) provides that a child in utero at a particular time is
treated as living at that time if the child lives 120 hours after birth.
This
means, for example, that, with respect to a child of assisted reproduction or a
gestational child, a class gift in which the distribution date arises after the
deceased parent’s death is not limited to a child who is born before or in
utero at the deceased parent’s death or, in the case of posthumous conception,
either (i) in utero within 36 months after the deceased parent’s death or (ii)
born within 45 months after the deceased parent’s death. The ordinary
class-closing rules would only exclude a child of assisted reproduction or a
gestational child if the child was not yet born or in utero on the distribution
date (or who was then in utero but who failed to live 120 hours after birth).
A
case that reached the same result that would be reached under this section is
In re Martin B., 841 N.Y.S.2d 207 (Sur. Ct. 2007). In that case, two children
(who were conceived posthumously and were born to a deceased father’s widow
around three and five years after his death) were included in class gifts to
the deceased father’s “issue” or “descendants”. The children would be included
under this section because (i) the deceased father signed a record that would
satisfy Section 2-120(f)(1), (ii) the distribution dates arose after the
deceased father’s death, and (iii) the children were living on the distribution
dates, thus satisfying subsection (g)(1).
Example
14. G
created a revocable inter vivos trust shortly before his death. The trustee was
directed to pay the income to G for life, then “to pay the income to my wife,
W, for life, then to distribute the trust principal by representation to my
descendants who survive W.” When G died, G and W had no children. Shortly
before G’s death and after being diagnosed with leukemia, G feared that he
would be rendered infertile by the disease or by the treatment for the disease,
so he left frozen sperm at a sperm bank. G consented to be the parent of the
child within the meaning of § 2-120(f). After G’s death, W decided to become
inseminated with G’s frozen sperm so that she could have his child. The child,
X, was born five years after G’s death. W raised X. Upon W’s death many years
later, X was a grown adult. X is entitled to receive the trust principal,
because a parent-child relationship between G and X existed under § 2-120(f)
and X was living on the distribution date.
Example
15. The will of G’s mother created a testamentary trust, directing the
trustee to pay the income to G for life, then “to pay the income by
representation to G’s issue from time to time living, and at the death of G’s
last surviving child, to distribute the trust principal by representation to G’s
descendants who survive G’s last surviving child.” When G’s mother died, G was
married but had no children. Shortly after being diagnosed with leukemia, G
feared that he would be rendered infertile by the disease or by the treatment
for the disease, so he left frozen sperm at a sperm bank. G consented to be the
parent of the child within the meaning of § 2-120(f). After G’s death, G’s
widow decided to become inseminated with his frozen sperm so she could have his
child. If the child so produced was either (i) in utero within 36 months after
G’s death or (ii) born within 45 months after the G’s death, and if the child
lived 120 hours after birth, the child is treated as living at G’s death and is
included in the class-gift of income under the rule of convenience. If G’s widow
later decides to use his frozen sperm to have another child or children, those
children would be included in the class-gift of income (assuming they live 120
hours after birth) even if they were not in utero within 36 months after G’s
death or born within 45 months after the G’s death. The reason is that an
income interest in class-gift form is treated as creating separate class gifts
in which the distribution date is the time of payment of each subsequent income
payment. See Restatement (Third) of Property: Wills and Other Donative
Transfers § 15.1 cmt. p. Regarding the remainder interest in principal that
takes effect in possession on the death of G’s last living child, the issue of
the posthumously conceived children who are then living would take the trust
principal.
Subsection
(g)(3). For
purposes of the class-closing rules, an individual who is in the process of
being adopted when the class closes is treated as adopted when the class closes
if the adoption is subsequently granted. An individual is “in the process of
being adopted” if a legal proceeding to adopt the individual had been filed
before the class closed. However, the phrase “in the process of being adopted”
is not intended to be limited to the filing of a legal proceeding, but is
intended to grant flexibility to find on a case by case basis that the process
commenced earlier.
Historical Note. This Comment was revised in 1993 and 2008.
Section 2‑706.
Life Insurance; Retirement Plan; Account With POD Designation; Transfer‑on‑Death
Registration; Deceased Beneficiary.
(a) [Definitions.] In this section:
(1) "Alternative
beneficiary designation" means a beneficiary designation that is expressly
created by the governing instrument and, under the terms of the governing
instrument, can take effect instead of another beneficiary designation on the
happening of one or more events, including survival of the decedent or failure
to survive the decedent, whether an event is expressed in condition‑precedent,
condition‑subsequent, or any other form.
(2) "Beneficiary"
means the beneficiary of a beneficiary designation under which the beneficiary
must survive the decedent and includes (i) a class member if the beneficiary
designation is in the form of a class gift and (ii) an individual or class
member who was deceased at the time the beneficiary designation was executed as
well as an individual or class member who was then living but who failed to
survive the decedent, but excludes a joint tenant of a joint tenancy with the
right of survivorship and a party to a joint and survivorship account.
(3) "Beneficiary
designation" includes an alternative beneficiary designation and a
beneficiary designation in the form of a class gift.
(4) "Class
member" includes an individual who fails to survive the decedent but who
would have taken under a beneficiary designation in the form of a class gift
had he [or she] survived the decedent.
(5) “Descendant of a grandparent”, as used in subsection (b), means an
individual who qualifies as a descendant of a grandparent of the decedent under
the (i) rules of construction applicable to a class gift created in the
decedent’s beneficiary designation if the beneficiary designation is in the
form of a class gift or (ii) rules for intestate succession if the beneficiary
designation is not in the form of a class gift.
(6)
“Descendants”, as used in the phrase “surviving descendants” of a deceased
beneficiary or class member in subsections (b)(1) and (2), mean the descendants
of a deceased beneficiary or class member who would take under a class gift
created in the beneficiary designation.
(7)
“Stepchild” means a child of the decedent’s surviving, deceased, or former
spouse, and not of the decedent.
(8)
“Surviving”, in the phrase “surviving beneficiaries” or “surviving
descendants”, means beneficiaries or descendants who neither predeceased the
decedent nor are deemed to have predeceased the decedent under Section 2-702.
(b)
[Substitute Gift.]
If a beneficiary fails to survive the decedent and is a grandparent, a descendant
of a grandparent, or a stepchild of the decedent, the following apply:
(1)
Except as provided in paragraph (4), if the beneficiary designation is not in
the form of a class gift and the deceased beneficiary leaves surviving
descendants, a substitute gift is created in the beneficiary’s surviving
descendants. They take by representation the property to which the beneficiary
would have been entitled had the beneficiary survived the decedent.
(2)
Except as provided in paragraph (4), if the beneficiary designation is in the
form of a class gift, other than a beneficiary designation to “issue,”
“descendants,” “heirs of the body,” “heirs,” “next of kin,” “relatives,” or
“family,” or a class described by language of similar import, a substitute gift
is created in the surviving descendants of any deceased beneficiary. The
property to which the beneficiaries would have been entitled had all of them
survived the decedent passes to the surviving beneficiaries and the surviving
descendants of the deceased beneficiaries. Each surviving beneficiary takes the
share to which he [or she] would have been entitled had the deceased
beneficiaries survived the decedent. Each deceased beneficiary’s surviving
descendants who are substituted for the deceased beneficiary take by
representation the share to which the deceased beneficiary would have been
entitled had the deceased beneficiary survived the decedent. For the purposes
of this paragraph, “deceased beneficiary” means a class member who failed to
survive the decedent and left one or more surviving descendants.
(3)
For the purposes of Section 2-701, words of survivorship, such as in a
beneficiary designation to an individual “if he survives me,” or in a
beneficiary designation to “my surviving children,” are not, in the absence of
additional evidence, a sufficient indication of an intent contrary to the
application of this section.
(4)
If a governing instrument creates an alternative beneficiary designation with
respect to a beneficiary designation for which a substitute gift is created by
paragraph (1) or (2), the substitute gift is superseded by the alternative
beneficiary designation if:
(A)the
alternative beneficiary designation is in the form of a class gift and one or
more members of the class is entitled to take; or
(B)
the alternative beneficiary designation is not in the form of a class gift and
the expressly designated beneficiary of the alternative beneficiary designation
is entitled to take.
(c) [More
Than One Substitute Gift; Which One Takes.] If, under subsection (b), substitute gifts are
created and not superseded with respect to more than one beneficiary
designation and the beneficiary designations are alternative beneficiary
designations, one to the other, the determination of which of the substitute gifts
takes effect is resolved as follows:
(1)
Except as provided in paragraph (2), the property passes under the primary
substitute gift.
(2)
If there is a younger-generation beneficiary designation, the property passes
under the younger-generation substitute gift and not under the primary
substitute gift.
(3)
In this subsection:
(A)
“Primary beneficiary designation” means the beneficiary designation that would
have taken effect had all the deceased beneficiaries of the alternative
beneficiary designations who left surviving descendants survived the decedent.
(B)
“Primary substitute gift” means the substitute gift created with respect to the
primary beneficiary designation.
(C)
“Younger-generation beneficiary designation” means a beneficiary designation
that (i) is to a descendant of a beneficiary of the primary beneficiary
designation, (ii) is an alternative beneficiary designation with respect to the
primary beneficiary designation, (iii) is a beneficiary designation for which a
substitute gift is created, and (iv) would have taken effect had all the
deceased beneficiaries who left surviving descendants survived the decedent
except the deceased beneficiary or beneficiaries of the primary beneficiary
designation.
(D)
“Younger-generation substitute gift” means the substitute gift created with
respect to the younger-generation beneficiary designation.
(d)
[Protection of Payors.]
(1)
A payor is protected from liability in making payments under the terms of the
beneficiary designation until the payor has received written notice of a claim
to a substitute gift under this section. Payment made before the receipt of
written notice of a claim to a substitute gift under this section discharges
the payor, but not the recipient, from all claims for the amounts paid. A payor
is liable for a payment made after the payor has received written notice of the
claim. A recipient is liable for a payment received, whether or not written
notice of the claim is given.
(2)
The written notice of the claim must be mailed to the payor’s main office or
home by registered or certified mail, return receipt requested, or served upon
the payor in the same manner as a summons in a civil action. Upon receipt of
written notice of the claim, a payor may pay any amount owed by it to the court
having jurisdiction of the probate proceedings relating to the decedent’s
estate or, if no proceedings have been commenced, to the court having
jurisdiction of probate proceedings relating to decedents’ estates located in
the county of the decedent’s residence. The court shall hold the funds and,
upon its determination under this section, shall order disbursement in
accordance with the determination. Payment made to the court discharges the
payor from all claims for the amounts paid.
(e)
[Protection of Bona Fide Purchasers; Personal Liability of Recipient.]
(1)
A person who purchases property for value and without notice, or who receives a
payment or other item of property in partial or full satisfaction of a legally
enforceable obligation, is neither obligated under this section to return the
payment, item of property, or benefit nor is liable under this section for the
amount of the payment or the value of the item of property or benefit. But a
person who, not for value, receives a payment, item of property, or any other
benefit to which the person is not entitled under this section is obligated to
return the payment, item of property, or benefit, or is personally liable for
the amount of the payment or the value of the item of property or benefit, to
the person who is entitled to it under this section.
(2) If this section or any part of this section is
preempted by federal law with respect to a payment, an item of property, or any
other benefit covered by this section, a person who, not for value, receives
the payment, item of property, or any other benefit to which the person is not
entitled under this section is obligated to return the payment, item of
property, or benefit, or is personally liable for the amount of the payment or
the value of the item of property or benefit, to the person who would have been
entitled to it were this section or part of this section not preempted.
COMMENT
Purpose. This section provides an
antilapse statute for “beneficiary designations” under which the beneficiary
must survive the decedent. The term “beneficiary designation” is defined in
Section 1-201 as “a governing instrument naming a beneficiary of an insurance
or annuity policy, of an account with POD designation, of a security registered
in beneficiary form (TOD), or of a pension, profit-sharing, retirement, or
similar benefit plan, or other nonprobate transfer at death”.
The terms of this section parallel those of Section 2-603, except that
the provisions relating to payor protection and personal liability of
recipients have been added. The Comment to Section 2-603 contains an elaborate
exposition of Section 2-603, together with examples illustrating its
application. That Comment, in addition to the examples given below, should aid
understanding of Section 2-706. For a discussion of the reasons why Section
2-706 should not be preempted by federal law with respect to retirement plans
covered by ERISA, see the Comment to Section 2-804. See also Rayho, Note, 106
Mich. L. Rev. 373 (2007).
Example
1. G is the
owner of a life-insurance policy. When the policy was taken out, G was married
to S; G and S had two young children. A and B. G died 45 years after the policy
was taken out. S predeceased G, A survived G by 120 hours and B predeceased G
leaving three children (X, Y, and Z) who survived G by 120 hours. G’s policy
names S as the primary beneficiary of the policy, but because S predeceased G,
the secondary (contingent) beneficiary designation became operative. The
secondary (contingent) beneficiary designation of G’s policy states: “equally
to the then living children born of the marriage of G and S”.
The
printed terms of G’s policy provide:
“If
two or more persons are designated as beneficiary, the beneficiary will be the
designated person or persons who survive the Insured, and if more than one
survive, they will share equally”.
Solution: The printed clause
constitutes an “alternative beneficiary designation” for purposes of subsection
(b)(4), which supersedes the substitute gift to B’s descendants created by
subsection (b)(2). A is entitled to all of the proceeds of the policy.
Example
2. The
facts are the same as in Example 1, except that G’s policy names “A and B” as
secondary (contingent) beneficiaries. The printed terms of the policy provide:
“If
any designated Beneficiary predeceases the Insured, the interest of such
Beneficiary will terminate and shall be shared equally by such of the
Beneficiaries as survive the Insured”.
Solution: The printed clause
constitutes an “alternative beneficiary designation” for purposes of subsection
(b)(4), which supersedes the substitute gift to B’s descendants created by
subsection (b)(1). A is entitled to all of the proceeds of the policy.
Example
3. The
facts are the same as Examples 1 or 2, except that the printed terms of the
policy do not contain either quoted clause or a similar one.
Solution: Under Section 2-706, A
would be entitled to half of the policy proceeds and X, Y, and Z would divide
the other half equally.
Example
4. The
facts are the same as Example 3, except that the policy has a beneficiary
designation that provides that, if the adjacent box is checked, the share of
any deceased beneficiary shall be paid “in one sum and in equal shares to the
children of that beneficiary who survive”. G did not check the box adjacent to
this option.
Solution: G’s deliberate decision not
to check the box providing for the share of any deceased beneficiary to go to
that beneficiary’s children constitutes a clear indication of a contrary
intention for purposes of Section 2-701. A would be entitled to all of the
proceeds of the policy.
Example
5. G’s
life-insurance policy names her niece, A, as primary beneficiary, and provides
that if A does not survive her, the proceeds are to go to her niece B, as contingent
beneficiary. A predeceased G, leaving children who survived G by 120 hours, B
survived G by 120 hours.
Solution: The contingent beneficiary
designation constitutes an “alternative beneficiary designation” for purposes
of subsection (b)(4), which supersedes the substitute gift to A’s descendants
created by subsection (b)(1). The proceeds go to B, not to A’s children.
Example
6. G’s
life-insurance policy names her niece, A, as primary beneficiary, and provides
that if A does not survive her, the proceeds are to go to her niece B, as
contingent beneficiary. The printed terms of the policy specifically state that
if neither the primary nor secondary beneficiaries survive the policyholder,
the proceeds are payable to the policyholder’s estate. A predeceased G, leaving
children who survived G by 120 hours, B also predeceased G, leaving children
who survived G by 120 hours.
Solution: The second contingent
beneficiary designation to G’s estate constitutes an “alternative beneficiary
designation” for purposes of subsection (b)(4), which supersedes the substitute
gifts to A’s and B’s descendants created by subsection (b)(1). The proceeds go
to G’s estate, not to A’s children or to B’s children.
References. This section is discussed in Halbach &
Waggoner, “The UPC’s New Survivorship and Antilapse Provisions”, 55 Alb.L.Rev.
1091 (1992). See also Restatement (Third) of Property: Wills and Other Donative
Transfers § 5.5 cmt. p (1999); § 7.2 cmt. k (2003); Lebolt, “Making the Best of
Egelhoff: Federal Common Law for ERISA-Preempted Beneficiary
Designations”, 28 J. Pension Planning & Compliance 29 (Fall 2002);
Gallanis, “ERISA and the Law of Succession”, 60 Ohio St. L.J. 185 (2004);
Rayho, Note, 106 Mich. L. Rev. 373 (2007).
Technical
Amendments. Technical
amendments in 1993 added language specifically excluding joint and survivorship
accounts and joint tenancies with the right of survivorship; this amendment is
consistent with the original purpose of the section. Technical amendments in
2008 added definitions of “descendant of a grandparent” and “descendants” as
used in subsections (b)(1) and (2) and clarified subsection (b)(4). The two new
definitions resolve questions of status previously unanswered. The technical
amendment of subsection (b)(4) makes that subsection easier to understand but
does not change its substance.
Historical Note. This Comment was revised in 1993 and 2008.
Section 2‑707.
Survivorship with Respect to Future Interests
under Terms of Trust; Substitute Takers.
(a) [Definitions.] In this section:
(1) "Alternative
future interest" means an expressly created future interest that can take
effect in possession or enjoyment instead of another future interest on the
happening of one or more events, including survival of an event or failure to
survive an event, whether an event is expressed in condition‑precedent,
condition‑subsequent, or any other form. A residuary clause in a will
does not create an alternative future interest with respect to a future
interest created in a nonresiduary devise in the will, whether or not the will
specifically provides that lapsed or failed devises are to pass under the
residuary clause.
(2) "Beneficiary"
means the beneficiary of a future interest and includes a class member if the
future interest is in the form of a class gift.
(3) "Class
member" includes an individual who fails to survive the distribution date
but who would have taken under a future interest in the form of a class gift
had he [or she] survived the distribution date.
(4) “Descendants”, in the phrase “surviving descendants” of a deceased
beneficiary or class member in subsections (b)(1) and (b)(2), mean the
descendants of a deceased beneficiary or class member who would take under a
class gift created in the trust.
(5)
“Distribution date,” with respect to a future interest, means the time when the
future interest is to take effect in possession or enjoyment. The distribution
date need not occur at the beginning or end of a calendar day, but can occur at
a time during the course of a day.
(6)
“Future interest” includes an alternative future interest and a future interest
in the form of a class gift.
(7)
“Future interest under the terms of a trust” means a future interest that was
created by a transfer creating a trust or to an existing trust or by an
exercise of a power of appointment to an existing trust, directing the
continuance of an existing trust, designating a beneficiary of an existing
trust, or creating a trust.
(8)
“Surviving”, in the phrase “surviving beneficiaries” or “surviving
descendants”, means beneficiaries or a descendants who neither predeceased the
distribution date nor are deemed to have predeceased the distribution date
under Section 2-702.
(b)
[Survivorship Required; Substitute Gift.] A future interest under the terms of a trust is
contingent on the beneficiary’s surviving the distribution date. If a
beneficiary of a future interest under the terms of a trust fails to survive
the distribution date, the following apply:
(1)
Except as provided in paragraph (4), if the future interest is not in the form
of a class gift and the deceased beneficiary leaves surviving descendants, a
substitute gift is created in the beneficiary’s surviving descendants. They
take by representation the property to which the beneficiary would have been
entitled had the beneficiary survived the distribution date.
(2)
Except as provided in paragraph (4), if the future interest is in the form of a
class gift, other than a future interest to “issue,” “descendants,” “heirs of
the body,” “heirs,” “next of kin,” “relatives,” or “family,” or a class
described by language of similar import, a substitute gift is created in the
surviving descendants of any deceased beneficiary. The property to which the
beneficiaries would have been entitled had all of them survived the
distribution date passes to the surviving beneficiaries and the surviving
descendants of the deceased beneficiaries. Each surviving beneficiary takes the
share to which he [or she] would have been entitled had the deceased beneficiaries
survived the distribution date. Each deceased beneficiary’s surviving
descendants who are substituted for the deceased beneficiary take by
representation the share to which the deceased beneficiary would have been
entitled had the deceased beneficiary survived the distribution date. For the
purposes of this paragraph, “deceased beneficiary” means a class member who
failed to survive the distribution date and left one or more surviving
descendants.
(3)
For the purposes of Section 2-701, words of survivorship attached to a future
interest are not, in the absence of additional evidence, a sufficient
indication of an intent contrary to the application of this section. Words of
survivorship include words of survivorship that relate to the distribution date
or to an earlier or an unspecified time, whether those words of survivorship
are expressed in condition-precedent, condition-subsequent, or any other form.
(4)
If the governing instrument creates an alternative future interest with respect
to a future interest for which a substitute gift is created by paragraph (1) or
(2), the substitute gift is superseded by the alternative future interest if:
(A)
the alternative future interest is in the form of a class gift and one or more
members of the class is entitled to take in possession or enjoyment; or
(B)
the alternative future interest is not in the form of a class gift and the
expressly designated beneficiary of the alternative future interest is entitled
to take in possession or enjoyment.
(c) [More
Than One Substitute Gift; Which One Takes.] If, under subsection (b), substitute gifts are
created and not superseded with respect to more than one future interest and
the future interests are alternative future interests, one to the other, the
determination of which of the substitute gifts takes effect is resolved as
follows:
(1)
Except as provided in paragraph (2), the property passes under the primary
substitute gift.
(2)
If there is a younger-generation future interest, the property passes under the
younger-generation substitute gift and not under the primary substitute gift.
(3)
In this subsection:
(A)
“Primary future interest” means the future interest that would have taken
effect had all the deceased beneficiaries of the alternative future interests who
left surviving descendants survived the distribution date.
(B)
“Primary substitute gift” means the substitute gift created with respect to the
primary future interest.
(C)
“Younger-generation future interest” means a future interest that (i) is to a descendant
of a beneficiary of the primary future interest, (ii) is an alternative future
interest with respect to the primary future interest, (iii) is a future
interest for which a substitute gift is created, and (iv) would have taken
effect had all the deceased beneficiaries who left surviving descendants
survived the distribution date except the deceased beneficiary or beneficiaries
of the primary future interest.
(D)
“Younger-generation substitute gift” means the substitute gift created with
respect to the younger-generation future interest.
(d) [If No
Other Takers, Property Passes Under Residuary Clause or to Transferor’s Heirs.] Except as provided in subsection (e),
if, after the application of subsections (b) and (c), there is no surviving
taker, the property passes in the following order:
(1)
if the trust was created in a nonresiduary devise in the transferor’s will or
in a codicil to the transferor’s will, the property passes under the residuary
clause in the transferor’s will; for purposes of this section, the residuary
clause is treated as creating a future interest under the terms of a trust.
(2)
if no taker is produced by the application of paragraph (1), the property
passes to the transferor’s heirs under Section 2-711.
(e) [If No
Other Takers and If Future Interest Created by Exercise of Power of
Appointment.]
If, after the application of subsections (b) and (c), there is no surviving
taker and if the future interest was created by the exercise of a power of
appointment:
(1)
the property passes under the donor’s gift-in-default clause, if any, which
clause is treated as creating a future interest under the terms of a trust; and
(2) if no taker is produced by the application of paragraph (1), the
property passes as provided in subsection (d). For purposes of subsection (d),
“transferor” means the donor if the power was a nongeneral power and means the
donee if the power was a general power.
COMMENT
Rationale. The objective of this
section is to project the antilapse idea into the area of future interests,
thus preventing disinheritance of a descending line that has one or more
members living on the distribution date and preventing a share from passing
down a descending line that has died out by the distribution date.
Scope. This section applies only to
future interests under the terms of a trust. For shorthand purposes, references
in this Comment to the term “future interest” refer to a future interest under
the terms of a trust The rationale for restricting this section to future
interests under the terms of a trust is that legal life estates in land,
followed by indefeasibly vested remainder interests, are still created in some
localities, often with respect to farmland. In such cases, the legal life
tenant and the person holding the remainder interest can, together, give good
title in the sale of the land. If the antilapse idea were injected into this
type of situation, the ability of the parties to sell the land would be
impaired if not destroyed because the antilapse idea would, in effect, create a
contingent substitute remainder interest in the present and future descendants
of the person holding the remainder interest.
Structure. The structure of this section substantially
parallels the structure of the regular antilapse statute, Section 2-603, and
the antilapse-type statute relating to beneficiary designations, Section 2-706.
Common-law Background. At common
law, conditions of survivorship are not implied with respect to future
interests. The rule against implying a condition of survivorship applies
whether the future interest is created in trust or otherwise and whether the
future interest is or is not in the form of a class gift. The only exception,
where a condition of survivorship is implied at common law, is in the case of a
multiple-generation class gift. See Restatement (Third) of Property: Wills and
Other Donative Transfers §§ 15.3, 15.4 (2008). For example, in the simple case
of a trust, “income to husband, A, for life, remainder to daughter, B”, B’s
interest is not defeated at common law if she predeceases A; B’s interest would
pass through her estate to her successors in interest (probably either her
residuary legatees or heirs: see Waggoner, “The Uniform Probate Code Extends
Antilapse-Type Protection to Poorly Drafted Trusts”, 94 Mich. L. Rev. 2309,
2331-32 (1996)), who would become entitled to possession when A died. If any of
B’s successors in interest died before A, the interest held by that deceased
successor in interest would likewise pass through his or her estate to his or
her successors in interest; and so on. Thus, a benefit of a statutory provision reversing the common-law rule
and providing substitute takers is that it prevents cumbersome and costly
distributions to and through the estates of deceased beneficiaries of future
interests, who may have died long before the distribution date.
Subsection (b). Subsection (b)
imposes a condition of survivorship on future interests to the distribution
date—defined as the time when the future interest is to take effect in
possession or enjoyment. The
requirement of survivorship imposed by subsection (b) applies whether or not
the deceased beneficiary leaves descendants who survive the distribution date
and are takers of a substitute gift provided by subsections (b)(1) or (b)(2).
Imposing a condition of survivorship on a future interest when the deceased
beneficiary did not leave descendants who survive the distribution date
prevents a share from passing down a descending line that has died out by the
distribution date. Imposing a condition of survivorship on a future interest
when the deceased beneficiary did leave descendants who survive the
distribution date, and providing a substitute gift to those descendants,
prevents disinheritance of a descending line that has one or more living
members on the distribution date.
The 120-hour Survivorship Period. In
effect, the requirement of survival of the distribution date means survival of
the 120-hour period following the distribution date. This is because, under
Section 2-702(a), “an individual who is not established to have survived an
event ... by 120 hours is deemed to have predeceased the event”. As made clear
by subsection (a)(8), for the purposes of section 2-707, the “event” to which
section 2-702(a) relates is the distribution date.
Note that the “distribution date” need not
occur at the beginning or end of a calendar day, but can occur at a time during
the course of a day, such as the time of death of an income beneficiary.
References in Section 2-707 and in this Comment
to survival of the distribution date should be understood as referring to
survival of the distribution date by 120 hours.
Ambiguous Survivorship Language.
Subsection (b) serves another purpose. It resolves a frequently litigated
question arising from ambiguous language of survivorship, such as in a trust,
“income to A for life, remainder in corpus to my surviving children”. Although
some case law interprets the word “surviving” as merely requiring survival of
the testator (e.g., Nass’ Estate, 182 A. 401 (Pa.1936)), the predominant
position at common law interprets “surviving” as requiring survival of the life
tenant, A. Hawke v. Lodge, 77 A. 1090 (Del.Ch.1910); Restatement (Third) of
Property: Wills and Other Donative Transfers §§ 15.3 cmt. f; 15.4 cmt. g
(2008). The first sentence of subsection (b), in conjunction with paragraph
(3), codifies the predominant common-law/Restatement position that survival
relates to the distribution date.
The first sentence of subsection (b), in
combination with paragraph (3), imposes a condition of survivorship to the
distribution date (the time of possession or enjoyment) even when an express
condition of survivorship to an earlier time has been imposed. Thus, in a trust
like “income to A for life, remainder in corpus to B, but if B predeceases A,
to B’s children who survive B”, the first sentence of subsection (b) combined
with paragraph (3) requires B’s children to survive (by 120 hours) the death of
the income beneficiary, A.
Rule of Construction. Note that
Section 2-707 is a rule of construction. It is qualified by the rule set forth
in Section 2-701, and thus it yields to a finding of a contrary intention.
Consequently, in trusts like “income to A for life, remainder in corpus to B
whether or not B survives A”, or “income to A for life, remainder in corpus to
B or B’s estate”, this section would not apply and, should B predecease A, B’s
future interest would pass through B’s estate to B’s successors in interest,
who would become entitled to possession or enjoyment at A’s death.
Classification. Subsection (b)
renders a future interest “contingent” on the beneficiary’s survival of the
distribution date. As a result, future interests are “nonvested” and subject to
the Rule Against Perpetuities. To prevent an injustice from resulting because
of this, the Uniform Statutory Rule Against Perpetuities, which has a
wait-and-see element, is incorporated into the Code as Part 9.
Substitute Gifts. Section 2-707 not
only imposes a condition of survivorship to the distribution date; like its
antilapse counterparts, Sections 2-603 and 2-706, it provides substitute takers
in cases of a beneficiary’s failure to survive the distribution date.
The statutory substitute gift is divided
among the devisee’s descendants “by representation”, a phrase defined in
Section 2-709(b). A technical amendment adopted in 2008 added subsection
(a)(4), defining the term “descendants”.
Subsection (b)(1)—Future Interests Not
in the Form of a Class Gift. Subsection (b)(1) applies to non-class gifts,
such as the “income to A for life, remainder in corpus to B” trust discussed
above. If B predeceases A, subsection (b)(1) creates a substitute gift with
respect to B’s future interest; the substitute gift is to B’s descendants who
survive A (by 120 hours).
Subsection (b)(2)—Class Gift Future
Interests. Subsection (b)(2) applies to single-generation class gifts, such
as in a trust “income to A for life, remainder in corpus to A’s children”. See
Restatement (Third) of Property: Wills and Other Donative Transfers §§ 14.1,
14.2 (2008). Suppose that A had two children, X and Y. X predeceases A; Y
survives A. Subsection (b)(2) creates a substitute gift with respect to any of
A’s children who fail to survive A (by 120 hours) leaving descendants who
survive A (by 120 hours). Thus, if X left descendants who survived A (by 120
hours), those descendants would take X’s share; if X left no descendants who
survived A (by 120 hours), Y would take it all.
Subsection (b)(2) does not apply to future
interests to multiple-generation classes such as “issue”, “descendants”, “heirs
of the body”, “heirs”, “next of kin”, “distributees”, “relatives”, “family”, or
the like. The reason is that these types of class gifts have their own internal
systems of representation, and so the substitute gift provided by subsection
(b)(1) would be out of place with respect to these types of future interests.
See Restatement (Third) of Property: Wills and Other Donative Transfers §§
14.3, 14.4, 15.3 (2008). The first sentence of subsection (b) and subsection
(d) do apply, however. For example, suppose a nonresiduary devise “to A for
life, remainder to A’s issue, by representation”. If A leaves issue surviving
him (by 120 hours), they take. But if A leaves no issue surviving him (by 120
hours), the testator’s residuary devisees are the takers.
Subsection (b)(4). Subsection
(b)(4), as clarified by technical amendment in 2008, provides that, if a governing instrument
creates an alternative future interest with respect to a future interest for
which a substitute gift is created by paragraph (1) or (2), the substitute gift
is superseded by the alternative future interest if: (A) the alternative future
interest is in the form of a class gift and one or more members of the class is
entitled to take in possession or enjoyment; or (B) the alternative future
interest is not in the form of a class gift and the expressly designated
beneficiary of the alternative future interest is entitled to take in
possession or enjoyment. Consider, for example, a trust under which the income
is to be paid to A for life, remainder in corpus to B if B survives A, but if
not to C if C survives A. If B predeceases A, leaving descendants who survive A
(by 120 hours), subsection (b)(1) creates a substitute gift to those descendants.
But, if C survives A (by 120 hours), the alternative future interest in C
supersedes the substitute gift to B’s descendants. Upon A’s death, the trust
corpus passes to C.
Subsection (c). Subsection (c) is
necessary because there can be cases in which subsections (b)(1) or (b)(2)
create substitute gifts with respect to two or more alternative future
interests, and those substitute gifts are not superseded under the terms of
subsection (b)(4). Subsection (c) provides the tie-breaking mechanism for such
situations.
The initial step is to determine which of
the alternative future interests would take effect had all the beneficiaries
themselves survived the distribution date (by 120 hours). In subsection (c),
this future interest is called the “primary future interest”. Unless subsection
(c)(2) applies, subsection (c)(1) provides that the property passes under
substitute gift created with respect to the primary future interest. This
substitute gift is called the “primary substitute gift”. Thus, the property
goes to the descendants of the beneficiary or beneficiaries of the primary
future interest.
Subsection (c)(2) provides an exception to
this rule. Under subsection (c)(2), the property does not pass under the
primary substitute gift if there is a “younger-generation future
interest”—defined as a future interest that (i) is to a descendant of a
beneficiary of the primary future interest, (ii) is an alternative future
interest with respect to the primary future interest, (iii) is a future
interest for which a substitute gift is created, and (iv) would have taken
effect had all the deceased beneficiaries who left surviving descendants
survived the distribution date except the deceased beneficiary or beneficiaries
of the primary future interest. If there is a younger-generation future
interest, the property passes under the “younger-generation substitute
gift”—defined as the substitute gift created with respect to the
younger-generation future interest.
Subsection (d). Since it is possible
that, after the application of subsections (b) and (c), there are no substitute
gifts, a back-stop set of substitute takers is provided in subsection (d)—the
transferor’s residuary devisees or heirs. Note that the transferor’s residuary
clause is treated as creating a future interest and, as such, is subject to
this section. Note also that the meaning of the back-stop gift to the
transferor’s heirs is governed by Section 2-711, under which the gift is to the
transferor’s heirs determined as if the transferor died when A died. Thus there
will always be a set of substitute takers, even if it turns out to be the
State. If the transferor’s surviving spouse has remarried after the
transferor’s death but before A’s death, he or she would not be a taker under
this provision.
Examples. The application of Section
2-707 is illustrated by the following examples. Note that, in each example, the
“distribution date” is the time of the income beneficiary’s death. Assume, in
each example, that an individual who is described as having “survived” the
income beneficiary’s death survived the income beneficiary’s death by 120 hours
or more.
Example 1. A nonresiduary devise in G’s will created a
trust, income to A for life, remainder in corpus to B if B survives A. G
devised the residue of her estate to a charity. B predeceased A. At A’s death,
B’s child, X, is living.
Solution: On A’s death, the trust property goes to X, not
to the charity. Because B’s future interest is not in the form of a class gift,
subsection (b)(1) applies, not (b)(2). Subsection (b)(1) creates a substitute
gift with respect to B’s future interest; the substitute gift is to B’s child,
X. Under subsection (b)(3), the words of survivorship attached to B’s future
interest (“to B if B survives A”) do not indicate an intent contrary to the
creation of that substitute gift. Nor, under subsection (b)(4), is that
substitute gift superseded by an alternative future interest because, as
defined in subsection (a)(1), G’s residuary clause does not create an
alternative future interest. In the normal lapse situation, a residuary clause
does not supersede the substitute gift created by the antilapse statute, and
the same analysis applies to this situation as well.
Example 2. Same as Example 1, except that B left no
descendants who survived A.
Solution: Subsection (b)(1) does not create a substitute
gift with respect to B’s future interest because B left no descendants who
survived A. This brings subsection (d) into operation, under which the trust
property passes to the charity under G’s residuary clause.
Example 3. G created an irrevocable inter-vivos trust,
income to A for life, remainder in corpus to B if B survives A. B predeceased
A. At A’s death, G and X, B’s child, are living.
Solution: X takes the trust property. Because B’s future
interest is not in the form of a class gift, subsection (b)(1) applies, not
(b)(2). Subsection (b)(1) creates a substitute gift with respect to B’s future
interest; the substitute gift is to B’s child, X. Under subsection (b)(3), the
words of survivorship (“to B if B survives A”) do not indicate an intent
contrary to the creation of that substitute gift. Nor, under subsection (b)(4),
is the substitute gift superseded by an alternative future interest; G’s
reversion is not an alternative future interest as defined in subsection (a)(1)
because it was not expressly created.
Example 4. G created an irrevocable inter-vivos trust,
income to A for life, remainder in corpus to B if B survives A; if not, to C. B
predeceased A. At A’s death, C and B’s child are living.
Solution: C takes the trust property. Because B’s future
interest is not in the form of a class gift, subsection (b)(1) applies, not
(b)(2). Subsection (b)(1) creates a substitute gift with respect to B’s future
interest; the substitute gift is to B’s child, X. Under subsection (b)(3), the
words of survivorship (“to B if B survives A”) do not indicate an intent
contrary to the creation of that substitute gift. But, under subsection (b)(4),
the substitute gift to B’s child is superseded by the alternative future
interest held by C because C, having survived A (by 120 hours), is entitled to
take in possession or enjoyment.
Example 5. G created an irrevocable inter-vivos trust
income to A for life, remainder in corpus to B, but if B predeceases A, to the
person B appoints by will. B predeceased A. B’s will exercised his power of
appointment in favor of C. C survives A. B’s child, X, also survives A.
Solution: B’s appointee, C, takes the trust property, not
B’s child, X. Because B’s future interest is not in the form of a class gift,
subsection (b)(1) applies, not (b)(2). Subsection (b)(1) creates a substitute
gift with respect to B’s future interest; the substitute gift is to B’s child,
X. Under subsection (b)(3), the words of survivorship (“to B if B survives A”)
do not indicate an intent contrary to the creation of that substitute gift.
But, under subsection (b)(4), the substitute gift to B’s child is superseded by
the alternative future interest held by C because C, having survived A (by 120
hours), is entitled to take in possession or enjoyment. Because C’s future
interest was created in “a” governing instrument (B’s will), it counts as an
“alternative future interest”.
Example 6. G creates an irrevocable inter-vivos trust,
income to A for life, remainder in corpus to A’s children who survive A; if
none, to B. A’s children predecease A, leaving descendants, X and Y, who
survive A. B also survives A.
Solution: On A’s death, the trust property goes to B, not
to X and Y. Because the future interest in A’s children is in the form of a
class gift (see Restatement (Third) of Property: Wills and Other Donative
Transfers § 13.1 (2008)), subsection (b)(2) applies, not (b)(1). Subsection
(b)(2) creates a substitute gift with respect to the future interest in A’s
children; the substitute gift is to the descendants of A’s children, X and Y.
Under subsection (b)(3), the words of survivorship (“to A’s children who
survive A”) do not indicate an intent contrary to the creation of that
substitute gift. But, under subsection (b)(4), the alternative future interest
to B supersedes the substitute gift to the descendants of A’s children because
B survived A.
Alternative Facts: One of A’s children, J, survives A;
A’s other child, K, predeceases A, leaving descendants, X and Y, who survive A.
B also survives A.
Solution: J takes half the trust property and X and Y
split the other half. Although there is an alternative future interest (in B)
and although B did survive A, the alternative future interest was conditioned
on none of A’s children surviving A. Because that condition was not satisfied,
the expressly designated beneficiary of that alternative future interest, B, is
not entitled to take in possession or enjoyment. Thus, the alternative future
interest in B does not supersede the substitute gift to K’s descendants, X and
Y.
Example 7. G created an irrevocable inter-vivos trust,
income to A for life, remainder in corpus to B if B survives A; if not, to C. B
and C predecease A. At A’s death, B’s child and C’s child are living.
Solution: Subsection (b)(1) produces substitute gifts
with respect to B’s future interest and with respect to C’s future interest.
B’s future interest and C’s future interest are alternative future interests,
one to the other. B’s future interest is expressly conditioned on B’s surviving
A. C’s future interest is conditioned on B’s predeceasing A and C’s surviving
A. The condition that C survive A does not arise from express language in G’s
trust but from the first sentence of subsection (b); that sentence makes C’s
future interest contingent on C’s surviving A. Thus, because neither B nor C
survived A, neither B nor C is entitled to take in possession or enjoyment. So,
under subsection (b)(4), neither substitute gift, created with respect to the
future interests in B and C, is superseded by an alternative future interest.
Consequently, resort must be had to subsection (c) to break the tie to
determine which substitute gift takes effect.
Under subsection (c), B is the beneficiary of the “primary
future interest” because B would have been entitled to the trust property had
both B and C survived A. Unless subsection (c)(2) applies, the trust property
passes to B’s child as the taker under the “primary substitute gift”.
Subsection (c)(2) would only apply if C’s future interest
qualifies as a “younger-generation future interest”. This depends upon whether
C is a descendant of B, for C’s future interest satisfies the other
requirements necessary to make it a younger-generation future interest. If C
was a descendant of B, the substitute gift to C’s child would be a
“younger-generation substitute gift” and would become effective instead of the
“primary substitute gift” to B’s descendants. But if C was not a descendant of
B, the property would pass under the “primary substitute gift” to B’s
descendants.
Example 8. G created an irrevocable inter-vivos trust,
income to A for life, remainder in corpus to A’s children who survive A; if
none, to B. All of A’s children predecease A. X and Y, who are descendants of
one or more of A’s children, survive A. B predeceases A, leaving descendants, M
and N, who survive A.
Solution: On A’s death, the trust property passes to X
and Y under the “primary substitute gift”, unless B was a descendant of any of A’s
children.
Subsection (b)(2) produces substitute gifts with respect to A’s
children who predeceased A leaving descendants who survived A. Subsection
(b)(1) creates a substitute gift with respect to B’s future interest. A’s
children’s future interest and B’s future interest are alternative future
interests, one to the other. A’s children’s future interest is expressly
conditioned on surviving A. B’s future interest is conditioned on none of A’s
children surviving A and on B’s surviving A. The condition of survivorship as
to B’s future interest does not arise because of express language in G’s trust
but because of the first sentence of subsection (b); that sentence makes B’s
future interest contingent on B’s surviving A. Thus, because none of A’s children
survived A, and because B did not survive A, none of A’s children nor B is
entitled to take in possession or enjoyment. So, under subsection (b)(4),
neither substitute gift—i.e., neither the one created with respect to the
future interest in A’s children nor the one created with respect to the future
interest in B—is superseded by an alternative future interest. Consequently,
resort must be had to subsection (c) to break the tie to determine which
substitute gift takes effect.
Under subsection (c), A’s children are the beneficiaries of the
“primary future interest” because they would have been entitled to the trust
property had all of them and B survived A. Unless subsection (c)(2) applies,
the trust property passes to X and Y as the takers under the “primary
substitute gift”. Subsection (c)(2) would only apply if B’s future interest
qualifies as a “younger-generation future interest”. This depends upon whether
B is a descendant of any of A’s children, for B’s future interest satisfies the
other requirements necessary to make it a “younger-generation future interest”.
If B was a descendant of one of A’s children, the substitute gift to B’s
children, M and N, would be a “younger-generation substitute gift” and would
become effective instead of the “primary substitute gift” to X and Y. But if B
was not a descendant of any of A’s children, the property would pass under the
“primary substitute gift” to X and Y.
Example 9. G’s will devised property in trust, income to
niece Lilly for life, corpus on Lilly’s death to her children; should Lilly die
without leaving children, the corpus shall be equally divided among my nephews
and nieces then living, the child or children of nieces who may be deceased to
take the share their mother would have been entitled to if living.
Lilly never had any children. G had 3 nephews and 2 nieces in
addition to Lilly. All 3 nephews and both nieces predeceased Lilly. A child of
one of the nephews survived Lilly. One of the nieces had 8 children, 7 of whom
survived Lilly. The other niece had one child, who did not survive Lilly. (This
example is based on the facts of Bomberger’s Estate, 32 A.2d 729 (Pa.1943).)
Solution: The trust property goes to the 7 children of
the nieces who survived Lilly. The substitute gifts created by subsection
(b)(2) to the nephew’s son or to the nieces’ children are superseded under
subsection (b)(4) because there is an alternative future interest (the “child
or children of nieces who may be deceased”) and expressly designated
beneficiaries of that alternative future interest (the 7 children of the
nieces) are living at Lilly’s death and are entitled to take in possession or
enjoyment.
Example 10. G devised the residue of his estate in trust,
income to his wife, W, for life, remainder in corpus to their children, John
and Florence; if either John or Florence should predecease W, leaving
descendants, such descendants shall take the share their parent would have
taken if living.
G’s son, John, survived W. G’s daughter, Florence, predeceased
W. Florence never had any children. Florence’s husband survived W. (This
example is based on the facts of Matter of Kroos, 99 N.E.2d 222 (N.Y.1951).)
Solution: John, of course, takes his half of the trust
property. Because Florence left no descendants who survived W, subsection
(b)(1) does not create a substitute gift with respect to Florence’s future
interest in her half. Subsection (d)(1) is inapplicable because G’s trust was
not created in a nonresiduary devise or in a codicil to G’s will. Subsection
(d)(2) therefore becomes applicable, under which Florence’s half goes to G’s
heirs determined as if G died when W died, i.e., John. See Section 2-711.
Subsection (e). Subsection (e) was
added in 1993 to clarify the passing of the property in cases in which the
future interest is created by the exercise of a power of appointment.
Technical Amendments. Technical amendments in 2008 added
a definition of “descendants” as used in subsections (b)(1) and (2) and
clarified subsection (b)(4). The new definition resolves questions of status
previously unanswered. The technical amendment of subsection (b)(4) makes that
subsection easier to understand but does not change its substance.
Reference. This section is discussed
in Halbach & Waggoner, “The UPC’s New Survivorship and Antilapse
Provisions”, 55 Alb.L.Rev. 1091 (1992).
Historical Note. This Comment was revised in 1993 and 2008.
Section 2‑708.
Class Gifts to "Descendants," "Issue," or "Heirs of
the Body"; Form of Distribution if None Specified.
If a class gift in favor of
"descendants," "issue," or "heirs of the body"
does not specify the manner in which the property is to be distributed among
the class members, the property is distributed among the class members who are
living when the interest is to take effect in possession or enjoyment, in such
shares as they would receive, under the applicable law of intestate succession,
if the designated ancestor had then died intestate owning the subject matter of
the class gift.
COMMENT
Purpose of New Section. This new section tracks Restatement (1st) of
Property § 303(1), and does not accept the position taken in Restatement
(Second) of Property, Donative Transfers § 28.2 (1988), under which a per
stirpes form of distribution is presumed, regardless of the form of distribution
used in the applicable law of intestate succession.
Section 2‑709.
Representation; Per Capita at Each Generation; Per Stirpes.
(a) [Definitions.] In this section:
(1) "Deceased
child" or "deceased descendant" means a child or a descendant
who either predeceased the distribution date or is deemed to have predeceased
the distribution date under Section 2‑702.
(2) "Distribution
date," with respect to an interest, means the time when the interest is to
take effect in possession or enjoyment. The distribution date need not occur at
the beginning or end of a calendar day, but can occur at a time during the
course of a day.
(3) "Surviving
ancestor," "surviving child," or "surviving
descendant" means an ancestor, a child, or a descendant who neither
predeceased the distribution date nor is deemed to have predeceased the
distribution date under Section 2‑702.
(b) [Representation; Per Capita at
Each Generation.] If an applicable
statute or a governing instrument calls for
property to be distributed "by representation" or "per
capita at each generation," the
property is divided into as many equal shares as there are (i) surviving
descendants in the generation nearest to the designated ancestor which contains
one or more surviving descendants (ii)
and deceased descendants in the same generation who left surviving descendants,
if any. Each surviving descendant in the nearest generation is allocated one
share. The remaining shares, if any, are combined and then divided in the same
manner among the surviving descendants of the deceased descendants as if the
surviving descendants who were allocated a share and their surviving
descendants had predeceased the distribution date.
(c) [Per Stirpes.] If a
governing instrument calls for property to be distributed "per stripes,"
the property is divided into as many equal shares as there are (i) surviving
children of the designated ancestor and (ii) deceased children who left
surviving descendants. Each surviving child, if any, is allocated one share.
The share of each deceased child with surviving descendants is divided in the
same manner, with subdivision repeating at each succeeding generation until the
property is fully allocated among surviving descendants.
(d) [Deceased Descendant With No
Surviving Descendant Disregarded.] For the purposes of subsections (b) and
(c), an individual who is deceased and left no surviving descendant is
disregarded, and an individual who leaves a surviving ancestor who is a
descendant of the designated ancestor is not entitled to a share.
COMMENT
Purpose of New Section. This new section provides statutory
definitions of "representation," "per capita at each
generation," and "per stirpes."
Subsection (b) applies to both private instruments and to provisions of
applicable statutory law (such as Sections 2‑603, 2‑706, and 2‑707)
that call for property to be divided "by representation." The system
of representation employed is the same as that which is adopted in Section 2‑106
for intestate succession.
Subsection
(c)'s definition of "per stirpes" accords with the predominant
understanding of the term. In 1993, the phrase "if any" was added to
subsection (c) to clarify the point that, under per stirpes, the initial
division of the estate is made at the children generation even if no child
survives the ancestor.
Historical Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 154
(Supp. 1992).
Section 2‑710.
Worthier‑Title Doctrine Abolished.
The doctrine of worthier title is abolished
as a rule of law and as a rule of construction. Language in a governing
instrument describing the beneficiaries of a disposition as the transferor's
"heirs," "heirs at law," "next of kin,"
"distributees," "relatives," or "family," or
language of similar import, does not create or presumptively create a
reversionary interest in the transferor.
COMMENT
Purpose of New Section. This new section abolishes the doctrine of
worthier title as a rule of law and as a rule of construction.
Cross Reference. See Section
2‑711 for a rule of construction concerning the meaning of a disposition
to the heirs, etc., of a designated person.
Section 2‑711.
Interests in "Heirs" and Like.
If an applicable statute or a governing
instrument calls for a present or future distribution to or creates a present or
future interest in a designated individual's "heirs," "heirs at
law," "next of kin," "relatives," or
"family," or language of similar import, the property passes to those
persons, including the state, and in such shares as would succeed to the
designated individual's intestate estate under the intestate succession law of
the designated individual's domicile if the designated individual died when the
disposition is to take effect in possession or enjoyment. If the designated
individual's surviving spouse is living but is remarried at the time the
disposition is to take effect in possession or enjoyment, the surviving spouse
is not an heir of the designated individual.
COMMENT
Purpose of New Section. This new section provides a statutory
definition of "heirs," etc., when contained in a dispositive
provision or a statute (such as Section 2‑707(h)). This section was
amended in 1993 to make it applicable to present as well as future interests in
favor of heirs and the like. Application of this section to present interests
codifies the position of the Restatement (Second) of Property § 29.4 cmts. c
& g (1987).
Cross
Reference. See
Section 2‑710, abolishing the doctrine of worthier title.
Historical
Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 155
(Supp. 1992).
PART 8
GENERAL PROVISIONS CONCERNING PROBATE AND NONPROBATE TRANSFERS
GENERAL COMMENT
Part 8 contains five general
provisions that cut across probate and nonprobate transfers. Part 8 previously
contained a sixth provision, Section 2-801, which dealt with disclaimers.
Section 2-801 was replaced in 2002 by the Uniform Disclaimer of Property
Interests Act, which is incorporated into the Code as Part 11 of Article 2 (§§
2-1101 to 2-1117). To avoid renumbering the other sections in this Part,
Section 2-801 is reserved for possible future use.
Section 2-802 deals with the effect of divorce and separation on the
right to elect against a will, exempt property and allowances, and an intestate
share.
Section 2-803 spells out the legal consequence of intentional and
felonious killing on the right of the killer to take as heir and under wills
and revocable inter-vivos transfers, such as revocable trusts and
life-insurance beneficiary designations.
Section 2-804 deals with the consequences of a divorce on the right of
the former spouse (and relatives of the former spouse) to take under wills and
revocable inter-vivos transfers, such as revocable trusts and life-insurance
beneficiary designations.
Sections
2-805 and 2-806, added in 2008, bring the reformation provisions in the Uniform
Trust Code into the UPC.
Application to Pre-Existing Governing Instruments. Under Section
8-101(b), for decedents dying after the effective date of enactment, the
provisions of this Code apply to governing instruments executed prior to as
well as on or after the effective date of enactment. The Joint Editorial Board
for the Uniform Probate Code has issued a statement concerning the
constitutionality under the Contracts Clause of this feature of the Code. The
statement, titled “Joint Editorial Board Statement Regarding the
Constitutionality of Changes in Default Rules as Applied to Pre-Existing
Documents”, can be found at 17 ACTEC Notes 184 (1991) or can be obtained from
the headquarters office of the National Conference of Commissioners on Uniform
State Laws, 676 N. St. Clair St., Suite 1700, Chicago, IL 60611, Phone
312/915-0195, FAX 312/915-0187.
Historical Note. This General Comment was revised in 1993 and
2008.
2002 Amendment Relating to Disclaimers. In 2002, the Code’s former disclaimer provision (§ 2-801) was replaced by the Uniform Disclaimer of Property Interests Act, which is incorporated into the Code as Part 11 of Article 2 (§§ 2-1101 to 2-1117). The statutory references in this Comment to former Section 2-801 have been replaced by appropriate references to Part 11. Updating these statutory references has not changed the substance of this Comment.
Section 2‑801.
[Reserved.]
Section 2‑802.
Effect of Divorce, Annulment, and Decree of Separation.
(a) An individual who is divorced from the decedent or whose marriage
to the decedent has been annulled is not a surviving spouse unless, by virtue
of a subsequent marriage, he [or she] is married to the decedent at the time of
death. A decree of separation that does
not terminate the status of husband and wife is not a divorce for purposes of
this section.
(b) For purposes of Parts 1, 2, 3, and 4 of this Article, and of Section
3‑203, a surviving spouse does not include:
(1) an
individual who obtains or consents to a final decree or judgment of divorce
from the decedent or an annulment of their marriage, which decree or judgment
is not recognized as valid in this State, unless subsequently they participate
in a marriage ceremony purporting to marry each to the other or live together
as husband and wife;
(2) an
individual who, following an invalid decree or judgment of divorce or annulment
obtained by the decedent, participates in a marriage ceremony with a third
individual; or
(3) an
individual who was a party to a valid proceeding concluded by an order
purporting to terminate all marital property rights.
COMMENT
Clarifying Revision. The only substantive revision of this section
is a clarifying revision of subsection (b)(2), making it clear that this
subsection refers to an invalid
decree of divorce or annulment.
Rationale. Although some existing statutes bar the
surviving spouse for desertion or adultery, the present section requires some
definitive legal act to bar the surviving spouse. Normally, this is divorce.
Subsection (a) states an obvious proposition, but subsection (b) deals with the
difficult problem of invalid divorce or annulment, which is particularly
frequent as to foreign divorce decrees but may arise as to a local decree where
there is some defect in jurisdiction; the basic principle underlying these
provisions is estoppel against the surviving spouse. Where there is only a
legal separation, rather than a divorce, succession patterns are not affected;
but if the separation is accompanied by a complete property settlement, this
may operate under Section 2‑213 as a waiver or renunciation of benefits
under a prior will and by intestate succession.
Cross Reference. See
Section 2‑804 for similar provisions relating to the effect of divorce to
revoke devises and other revocable provisions to a former spouse.
Historical Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 159
(Supp. 1992).
Section 2‑803.
Effect of Homicide on Intestate Succession, Wills, Trusts, Joint Assets, Life
Insurance, and Beneficiary Designations.
(a) [Definitions.] In this section:
(1) "Disposition
or appointment of property" includes a transfer of an item of property or
any other benefit to a beneficiary designated in a governing instrument.
(2) "Governing
instrument" means a governing instrument executed by the decedent.
(3) "Revocable,"
with respect to a disposition, appointment, provision, or nomination, means one
under which the decedent, at the time of or immediately before death, was alone
empowered, by law or under the governing instrument, to cancel the designation,
in favor of the killer, whether or not the decedent was then empowered to
designate himself [or herself] in place of his [or her] killer and whether or
not the decedent then had capacity to exercise the power.
(b) [Forfeiture of Statutory
Benefits.] An individual who
feloniously and intentionally kills the decedent forfeits all benefits under
this Article with respect to the decedent's estate, including an intestate
share, an elective share, an omitted spouse's or child's share, a homestead
allowance, exempt property, and a family allowance. If the decedent died
intestate, the decedent's intestate estate passes as if the killer disclaimed his
[or her] intestate share.
(c) [Revocation of Benefits Under
Governing Instruments.] The
felonious and intentional killing of the decedent:
(1) revokes
any revocable (i) disposition or appointment of property made by the decedent
to the killer in a governing instrument, (ii) provision in a governing
instrument conferring a general or nongeneral power of appointment on the
killer, and (iii) nomination of the killer in a
governing instrument, nominating or appointing the killer to serve in
any fiduciary or representative capacity, including a personal representative,
executor, trustee, or agent; and
(2) severs the
interests of the decedent and killer in property held by them at the time of
the killing as joint tenants with the right of survivorship transforming the
interests of the decedent and killer into equal tenancies in common.
(d) [Effect of Severance.] A severance under subsection (c)(2) does not
affect any third‑party interest in property acquired for value and in
good faith reliance on an apparent title by survivorship in the killer unless a
writing declaring the severance has been noted, registered, filed, or recorded
in records appropriate to the kind and location of the property which are
relied upon, in the ordinary course of transactions involving such property, as
evidence of ownership.
(e) [Effect of Revocation.] Provisions of a governing instrument are
given effect as if the killer disclaimed all provisions revoked by this section
or, in the case of a revoked nomination in a fiduciary or representative
capacity, as if the killer predeceased the decedent.
(f) [Wrongful Acquisition of
Property.] A wrongful acquisition of
property or interest by a killer not covered by this section must be treated in
accordance with the principle that a killer cannot profit from his [or her]
wrong.
(g) [Felonious and Intentional
Killing; How Determined.] After all
right to appeal has been exhausted, a judgment of conviction establishing
criminal accountability for the felonious and intentional killing of the decedent
conclusively establishes the convicted individual as the decedent's killer for
purposes of this section. In the absence of a conviction, the court, upon the
petition of an interested person, must determine whether, under the
preponderance of evidence standard, the individual would be found criminally
accountable for the felonious and intentional killing of the decedent. If the
court determines that, under that standard, the individual would be found
criminally accountable for the felonious and intentional killing of the
decedent, the determination conclusively establishes that individual as the
decedent's killer for purposes of this section.
(h) [Protection of Payors and Other
Third Parties.]
(1) A payor or
other third party is not liable for having made a payment or transferred an
item of property or any other benefit to a beneficiary designated in a
governing instrument affected by an intentional and felonious killing, or for
having taken any other action in good faith reliance on the validity of the
governing instrument, upon request and satisfactory proof of the decedent's
death, before the payor or other third party received written notice of a
claimed forfeiture or revocation under this section. A payor or other third
party is liable for a payment made or other action taken after the payor or
other third party received written notice of a claimed forfeiture or revocation
under this section.
(2) Written
notice of a claimed forfeiture or revocation under paragraph (1) must be mailed
to the payor's or other third party's main office or home by registered or
certified mail, return receipt requested, or served upon the payor or other
third party in the same manner as a summons in a civil action. Upon receipt of
written notice of a claimed forfeiture or revocation under this section, a
payor or other third party may pay any amount owed or transfer or deposit any
item of property held by it to or with the court having jurisdiction of the
probate proceedings relating to the decedent's estate, or if no proceedings
have been commenced, to or with the court having jurisdiction of probate
proceedings relating to decedents' estates located in the county of the
decedent's residence. The court shall hold the funds or item of property and,
upon its determination under this section, shall order disbursement in
accordance with the determination. Payments, transfers, or deposits made to or
with the court discharge the payor or other third party from all claims for the
value of amounts paid to or items of property transferred to or deposited with
the court.
(i) [Protection of Bona Fide
Purchasers; Personal Liability of Recipient.]
(1) A person
who purchases property for value and without notice, or who receives a payment
or other item of property in partial or full satisfaction of a legally
enforceable obligation, is neither obligated under this section to return the
payment, item of property, or benefit nor is liable under this section for the
amount of the payment or the value of the item of property or benefit. But a person
who, not for value, receives a payment, item of property, or any other benefit
to which the person is not entitled under this section is obligated to return
the payment, item of property, or benefit, or is personally liable for the
amount of the payment or the value of the item of property or benefit, to the
person who is entitled to it under this section.
(2) If this
section or any part of this section is preempted by federal law with respect to
a payment, an item of property, or any other benefit covered by this section, a
person who, not for value, receives the payment, item of property, or any other
benefit to which the person is not entitled under this section is obligated to
return the payment, item of property, or benefit, or is personally liable for
the amount of the payment or the value of the item of property or benefit, to
the person who would have been entitled to it were this section or part of this
section not preempted.
COMMENT
Purpose and Scope of
Revisions. This section is substantially revised. Although the revised version does make a few
substantive changes in certain subsidiary rules (such as the treatment of
multiple party accounts, etc.), it does not alter the main thrust of the pre‑1990
version. The major change is that the revised version is more comprehensive
than the pre‑1990 version. The structure of the section is also changed
so that it substantially parallels the structure of Section 2‑804, which
deals with the effect of divorce on revocable benefits to the former spouse.
The
pre‑1990 version of this section was bracketed to indicate that it may be
omitted by an enacting state without difficulty. The revised version omits the
brackets because the Joint Editorial Board/Article II Drafting Committee
believes that uniformity is desirable on the question.
As
in the pre‑1990 version, this section is confined to felonious and
intentional killing and excludes the accidental manslaughter killing. Subsection (g) leaves no doubt that, for
purposes of this section, a killing can be "felonious and
intentional," whether or not the killer has actually been convicted in a
criminal prosecution. Under subsection (g), after all right to appeal has been
exhausted, a judgment of conviction establishing criminal accountability for the
felonious and intentional killing of the decedent conclusively establishes the
convicted individual as the decedent's killer for purposes of this section.
Acquittal, however, does not preclude the acquitted individual from being
regarded as the decedent's killer for purposes of this section. This is because
different considerations as well as a different burden of proof enter into the
finding of criminal accountability in the criminal prosecution. Hence it is
possible that the defendant on a murder charge may be found not guilty and
acquitted, but if the same person claims as an heir, devisee, or beneficiary of
a revocable beneficiary designation, etc. of the decedent, the probate Court,
upon the petition of an interested person, may find that, under a preponderance
of the evidence standard, he or she would be found criminally accountable for
the felonious and intentional killing of the decedent and thus be barred under
this section from sharing in the affected property. In fact, in many of the
cases arising under this section there may be no criminal prosecution because
the killer has committed suicide.
It
is now well accepted that the matter dealt with is not exclusively criminal in
nature but is also a proper matter for probate Courts. The concept that a
wrongdoer may not profit by his or her own wrong is a civil concept, and the
probate Court is the proper forum to determine the effect of killing on
succession to the decedent's property covered by this section. There are
numerous situations where the same conduct gives rise to both criminal and
civil consequences. A killing may result in criminal prosecution for murder and
civil litigation by the decedent's family under wrongful death statutes.
Another analogy exists in the tax field, where a taxpayer may be acquitted of
tax fraud in a criminal prosecution but found to have committed the fraud in a
civil proceeding.
The
phrases "criminal accountability" and "criminally
accountable" for the felonious and intentional killing of the decedent not
only include criminal accountability as an actor or direct perpetrator, but
also as an accomplice or co‑conspirator.
Unlike
the pre‑1990 version, the revised version contains a subsection
protecting payors who pay before receiving written notice of a claimed
forfeiture or revocation under this section, and imposing personal liability on
the recipient or killer.
The
pre‑1990 version's provision on the severance of joint tenancies and
tenancies by the entirety also extended to "joint and multiple party
accounts in banks, savings and loan associations, credit unions and other
institutions, and any other form of co‑ownership with survivorship
incidents." Under subsection (c)(2) of the revised version, the severance
applies only to "property held by [the decedent and killer] as joint
tenants with the right of survivorship [or as community property with the right
of survivorship]." The terms "joint tenants with the right of
survivorship" and "community property with the right of
survivorship" are defined in Section 1‑201. That definition includes
tenancies by the entirety, but excludes "forms of co‑ownership
registration in which the underlying ownership of each party is in proportion
to that party's contribution." Under subsection (c)(1), any portion of the
decedent's contribution to the co‑ownership registration running in favor
of the killer would be treated as a revocable and revoked disposition.
Subsection
(e) was amended in 1993 to make it clear that the antilapse statute applies in
appropriate cases in which the killer is treated as having disclaimed.
ERISA Preemption of State
Law. The Employee Retirement Income Security Act
of 1974 (ERISA) federalizes pension and employee benefit law. Section 514(a) of
ERISA, 29 U.S.C. § 1144(a), provides that the provisions of Titles I and IV of
ERISA "shall supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan" governed by ERISA. See the Comment to Section 2‑804
for a discussion of the ERISA preemption question.
Cross References. See
Section 1‑201 for definitions of "beneficiary designated in a
governing instrument," "governing instrument," "joint
tenants with the right of survivorship," "community property with the
right of survivorship," and "payor."
Historical Note. The above Comment was revised in 1993. For the prior version, see 8 U.L.A. 161
(Supp. 1992).
1997 Technical Amendment. By technical amendment effective July 31,
1997, the word “equal” was added to subsection (c)(2) to make it clear that the
effect of severing the interests of the decedent and killer is to transform
their interest into equal tenancies in common, without regard to the percentage
of consideration furnished by either.
Although this was the intent of this subsection, the court in Estate of Garland, 928 P.2d 928 (Mont.
1996), misconstrued the original language and held that once the interests were
severed and transformed into tenancies in common, the shares “depend on the
decedent’s and the [killer’s] individual contributions to the acquisition and
maintenance of the property.” This
percentage-of-consideration rule is inconsistent with both the general
principle of section 2-803 and with the statutory language. Section 2-803 is based on the principle that
while the killer should not gain from the killing, neither should the killer be
deprived of the killer’s own property.
In the case of a joint tenancy, neither the killer nor the victim could
by a lawful, unilateral act have severed and become owner of more than his or
her fractional interest. This is true
even if one joint tenant provided more consideration than another joint
tenant. Once property is titled in joint
tenancy, any excess consideration provided by one joint tenant constitutes an
irrevocable gift to the other joint tenant or tenants. The original statutory language established a
fractional-interest rule by providing that the interests that are transformed
into tenancies in common are “the [severed] interests of the decedent and
killer.” The statutory language, as
revived, confirms this strict fractioning.
Section 2‑804.
Revocation of Probate and Nonprobate Transfers by Divorce; No Revocation by
other Changes of Circumstances.
(a) [Definitions.] In this section:
(1) "Disposition
or appointment of property" includes a transfer of an item of property or
any other benefit to a beneficiary designated in a governing instrument.
(2) "Divorce
or annulment" means any divorce or annulment,or any dissolution or
declaration of invalidity of a marriage, that would exclude the spouse as a
surviving spouse within the meaning of Section 2‑802. A decree of
separation that does not terminate the status of husband and wife is not a
divorce for purposes of this section.
(3) "Divorced
individual" includes an individual whose marriage has been annulled.
(4) "Governing
instrument" means a governing instrument executed by the divorced
individual before the divorce or annulment of his [or her] marriage to his [or
her] former spouse.
(5) "Relative
of the divorced individual's former spouse" means an individual who is related
to the divorced individual's former spouse by blood, adoption, or affinity and
who, after the divorce or annulment, is not related to the divorced individual
by blood, adoption, or affinity.
(6) "Revocable,"
with respect to a disposition, appointment, provision, or nomination, means one
under which the divorced individual, at the time of the divorce or annulment,
was alone empowered, by law or under the governing instrument, to cancel the
designation in favor of his [or her] former spouse or former spouse's relative,
whether or not the divorced individual was then empowered to designate himself
[or herself] in place of his [or her] former spouse or in place of his [or her]
former spouse's relative and whether or not the divorced individual then had
the capacity to exercise the power.
(b) [Revocation Upon Divorce.] Except as provided by the express terms of a
governing instrument, a Court Order, or a contract relating to the division of
the marital estate made between the divorced individuals before or after the
marriage, divorce, or annulment, the divorce or annulment of a marriage:
(1) revokes
any revocable (i) disposition or appointment of property made by a divorced
individual to his [or her] former spouse in a governing instrument and any
disposition or appointment created by law or in a governing instrument to a
relative of the divorced individual's former spouse, (ii) provision in a
governing instrument conferring a general or nongeneral power of appointment on
the divorced individual's former spouse or on a relative of the divorced
individual's former spouse, and (iii) nomination in a governing instrument,
nominating a divorced individual's former spouse or a relative of the divorced
individual's former spouse to serve in any fiduciary or representative
capacity, including a personal representative, executor, trustee, conservator,
agent, or guardian; and
(2) severs the
interests of the former spouses in property held by them at the time of the
divorce or annulment as joint tenants with the right of survivorship
transforming the interests of the former spouses into equal tenancies in
common.
(c) [Effect of Severance.] A severance under subsection (b)(2) does not
affect any third‑party interest in property acquired for value and in
good faith reliance on an apparent title by survivorship in the survivor of the
former spouses unless a writing declaring the severance has been noted,
registered, filed, or recorded in records appropriate to the kind and location
of the property which are relied upon, in the ordinary course of transactions
involving such property, as evidence of ownership.
(d) [Effect of Revocation.] Provisions of a governing instrument are
given effect as if the former spouse and relatives of the former spouse
disclaimed all provisions revoked by this section or, in the case of a revoked
nomination in a fiduciary or representative capacity, as if the former spouse
and relatives of the former spouse died immediately before the divorce or
annulment.
(e) [Revival if Divorce
Nullified.] Provisions revoked
solely by this section are revived by the divorced individual's remarriage to
the former spouse or by a nullification of the divorce or annulment.
(f) [No Revocation for Other
Change of Circumstances.] No change
of circumstances other than as described in this section and in Section 2‑803
effects a revocation.
(g) [Protection of Payors and Other
Third Parties.]
(1) A payor or
other third party is not liable for having made a payment or transferred an
item of property or any other benefit to a beneficiary designated in a
governing instrument affected by a divorce, annulment, or remarriage, or for
having taken any other action in good faith reliance on the validity of the
governing instrument, before the payor or other third party received written
notice of the divorce, annulment, or remarriage. A payor or other third party
is liable for a payment made or other action taken after the payor or other
third party received written notice of a claimed forfeiture or revocation under
this section.
(2) Written
notice of the divorce, annulment, or remarriage under subsection (g)(2) must be
mailed to the payor's or other third party's main office or home by registered
or certified mail, return receipt requested, or served upon the payor or other
third party in the same manner as a summons in a civil action. Upon receipt of
written notice of the divorce, annulment, or remarriage, a payor or other third
party may pay any amount owed or transfer or deposit any item of property held
by it to or with the court having jurisdiction of the probate proceedings
relating to the decedent's estate or, if no proceedings have been commenced, to
or with the court having jurisdiction of probate proceedings relating to
decedents' estates located in the county of the decedent's residence. The court
shall hold the funds or item of property and, upon its determination under this
section, shall order disbursement or transfer in accordance with the
determination. Payments, transfers, or deposits made to or with the court
discharge the payor or other third party from all claims for the value of
amounts paid to or items of property transferred to or deposited with the
Court.
(h) [Protection of Bona Fide
Purchasers; Personal Liability of Recipient.]
(1) A person
who purchases property from a former spouse, relative of a former spouse, or
any other person for value and without notice, or who receives from a former
spouse, relative of a former spouse, or any other person a payment or other
item of property in partial or full satisfaction of a legally enforceable
obligation, is neither obligated under this section to return the payment, item
of property, or benefit nor is liable under this section for the amount of the
payment or the value of the item of property or benefit. But a former spouse,
relative of a former spouse, or other person who, not for value, received a
payment, item of property, or any other benefit to which that person is not
entitled under this section is obligated to return the payment, item of
property, or benefit, or is personally liable for the amount of the payment or
the value of the item of property or benefit, to the person who is entitled to
it under this section.
(2) If this
section or any part of this section is preempted by federal law with respect to
a payment, an item of property, or any other benefit covered by this section, a
former spouse, relative of the former spouse, or any other person who, not for
value, received a payment, item of property, or any other benefit to which that
person is not entitled under this section is obligated to return that payment,
item of property, or benefit, or is personally liable for the amount of the
payment or the value of the item of property or benefit, to the person who
would have been entitled to it were this section or part of this section not
preempted.
COMMENT
Purpose and Scope of
Revision.
The revisions of this section, pre‑1990 Section 2‑508, intend to
unify the law of probate and nonprobate transfers. As originally promulgated,
pre‑1990 Section 2‑508 revoked a predivorce devise to the
testator's former spouse. The revisions expand the section to cover "will
substitutes" such as revocable inter‑vivos trusts, life‑insurance
and retirement‑plan beneficiary designations, transfer‑on‑death
accounts, and other revocable dispositions to the former spouse that the
divorced individual established before the divorce (or annulment). As revised,
this section also effects a severance of the interests of the former spouses in
property that they held at the time of the divorce (or annulment) as joint
tenants with the right of survivorship; their co‑ownership interests
become tenancies in common.
As
revised, this section is the most comprehensive provision of its kind, but many
states have enacted piecemeal legislation tending in the same direction. For
example,
The
Courts have also come under increasing pressure to use statutory construction
techniques to extend statutes like the pre‑1990 version of Section 2‑508
to various will substitutes. In Clymer v.
Mayo, 473 N.E.2d 1084 (Mass.1985), the Massachusetts Court held the statute
applicable to a revocable inter‑vivos trust, but restricted its
"holding to the particular facts of this case‑specifically the
existence of a revocable pour‑over trust funded entirely at the time of
the decedent's death." 473 N.E.2d at 1093. The trust in that case was an
unfunded life‑insurance trust; the life insurance was employer‑paid
life insurance. In Miller v. First Nat'l
Bank & Tr. Co., 637 P.2d 75 (
Revoking Benefits of the
Former Spouse's Relatives. In several cases, including Clymer v. Mayo, 473 N.E.2d 1084 (Mass.
1985), and Estate of Coffed, 387
N.E.2d 1209 (N.Y. 1979), the result of treating the former spouse as if he or
she predeceased the testator was that a gift in the governing instrument was
triggered in favor of relatives of the former spouse who, after the divorce,
were no longer relatives of the testator. In the
Consequence of Revocation. The effect of revocation by
this section is that the provisions of the governing instrument are given
effect as if the divorced individual's former spouse (and relatives of the
former spouse) disclaimed all provisions revoked by this section (see Section 2‑1106 for the effect
of a disclaimer). Note that this means that the antilapse statute applies in
appropriate cases in which the divorced individual or relative is treated as
having disclaimed. In the case of a revoked nomination in a fiduciary or
representative capacity, the provisions of the governing instrument are given
effect as if the former spouse and relatives of the former spouse died immediately
before the divorce or annulment. If the divorced individual (or relative of the
divorced individual) is the donee of an unexercised power of appointment that
is revoked by this section, the gift‑in‑default clause, if any, is
to take effect, to the extent that the gift‑in‑default clause is
not itself revoked by this section.
ERISA Preemption of State
Law. The Employee Retirement Income Security Act
of 1974 (ERISA) federalizes pension and employee benefit law. Section 514(a) of
ERISA, 29 U.S.C. § 1144(a), provides that the provisions of Titles I and IV of
ERISA "shall supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan" governed by ERISA.
ERISA's
preemption clause is extraordinarily broad. ERISA Section 514(a) does not
merely preempt state laws that conflict with specific provisions in ERISA.
Section 514(a) preempts "any and all State laws" insofar as they
"relate to" any ERISA‑governed employee benefit plan.
A
complex case law has arisen concerning the question of whether to apply ERISA
Section 514(a) to preempt state law in circumstances in which ERISA supplies no
substantive regulation. For example, until 1984, ERISA contained no
authorization for the enforcement of state domestic relations decrees against
pension accounts, but the federal Courts were virtually unanimous in refusing
to apply ERISA preemption against such state decrees. See,
e.g., American Telephone & Telegraph Co. v. Merry, 592 F.2d 118 (2d
Cir. 1979). The Retirement Equity Act of
1984 amended ERISA to add Sections 206(d)(3) and 514(b)(7), confirming the
judicially created exception for state domestic relations decrees.
The
federal Courts have been less certain about whether to defer to local probate
law. In Board of Trustees of Western
Conference of Teamsters Pension Trust Fund v. H.F. Johnson, Inc., 830 F.2d
1009 (9th Cir.1987), the Court held that ERISA preempted the Montana nonclaim
statute (which is Section 3‑803 of the Uniform Probate Code). On the
other hand, in Mendez‑Bellido v.
Board of Trustees, 709 F.Supp. 329 (E.D.N.Y.1989), the Court applied the
It
is to be hoped that the federal Courts will continue to show sensitivity to the
primary role of state law in the field of probate and nonprobate transfers. To
the extent that the federal Courts think themselves unable to craft exceptions
to ERISA's preemption language, it is open to them to apply local law concepts
as federal common law. Because the Uniform Probate Code contemplates multistate
applicability, it is well suited to be the model for federal common law
absorption.
Another
avenue of reconciliation between ERISA preemption and the primacy of state law
in this field is envisioned in subsection (h)(2) of this section. It imposes a personal liability for pension
payments that pass to a former spouse or relative of a former spouse. This
provision respects ERISA's concern that federal law govern the administration
of the plan, while still preventing unjust enrichment that would result if an
unintended beneficiary were to receive the pension benefits. Federal law has no
interest in working a broader disruption of state probate and nonprobate
transfer law than is required in the interest of smooth administration of
pension and employee benefit plans.
Cross References. See Section 1‑201 for definitions of "beneficiary
designated in a governing instrument," "governing instrument,"
"joint tenants with the right of survivorship," "community
property with the right of survivorship," and "payor."
References. The theory of this section is discussed in
Waggoner, "Spousal Rights in Our
Multiple‑Marriage Society: The
Revised Uniform Probate Code," 26 Real Prop. Prob. & Tr. J. 683,
689‑701 (1992). See also
Langbein, "The Nonprobate Revolution
and the Future of the Law of Succession," 97 Harv.L.Rev. 1108 (1984).
2002 Amendment
Relating to Disclaimers. In 2002, the Code’s former disclaimer provision (§2-801) was replaced
by the Uniform Disclaimer of Property Interests Act, which is incorporated into
the Code as Part 11 of Article 2 (§§2-1001 – 2-1117). The statutory references in this Comment to
former section 2-801 have been replaced by appropriate references to Part
11. Updating these statutory references
has not changed the substance of this Comment.
Historical
Note. The above Comment was revised in 1993 and
2002.
Section 2-805.
Reformation to Correct Mistakes.
The court may reform the
terms of a governing instrument, even if unambiguous, to conform the terms to
the transferor’s intention if it is proved by clear and convincing evidence
that the transferor’s intent and the terms of the governing instrument were
affected by a mistake of fact or law, whether in expression or inducement.
Comment
Added
in 2008, Section 2-805 is based on Section 415 of the Uniform Trust Code, which
in turn was based on Section 12.1 of the Restatement (Third) of Property: Wills
and Other Donative Transfers (2003).
Section
2-805 is broader in scope than Section 415 of the Uniform Trust Code because
Section 2-805 applies but is not limited to trusts.
Section 12.1, and hence Section 2-805, is explained and illustrated in the Comments to Section 12.1 of the Restatement and also, in the case of a trust, in the Comment to Section 415 of the Uniform Trust Code.
Section 2-806.
Modification to Achieve Transferor’s Tax Objectives.
To achieve the transferor’s
tax objectives, the court may modify the terms of a governing instrument in a
manner that is not contrary to the transferor’s probable intention. The court
may provide that the modification has retroactive effect.
Comment
Added
in 2008, Section 2-806 is based on Section 416 of the Uniform Trust Code, which
in turn was based on Section 12.2 of the Restatement (Third) of Property: Wills
and Other Donative Transfers (2003).
Section
2-806 is broader in scope than Section 416 of the Uniform Trust Code because
Section 2-806 applies but is not limited to trusts.
Section 12.2, and hence Section 2-806, is
explained and illustrated in the Comments to Section 12.2 of the Restatement
and also, in the case of a trust, in the Comment to Section 416 of the Uniform
Trust Code.
PART 9
STATUTORY RULE AGAINST PERPETUITIES; HONORARY TRUSTS
GENERAL
COMMENT
Subpart
1 of this Part incorporates into the Code the Uniform Statutory Rule Against
Perpetuities (USRAP or Uniform Statutory Rule) and Subpart 2 contains an
optional section on honorary trusts and trusts for pets. Subpart 2 is under
continuing review and, after appropriate study, might subsequently be revised
to add provisions affecting certain types of commercial transactions respecting
land, such as options in gross, that directly or indirectly restrain
alienability.
In
codifying Subparts 1 and 2, enacting states may deem it appropriate to locate
them at some place other than in the probate code.
Subpart 1.
Statutory Rule Against Perpetuities
GENERAL
COMMENT
Simplified Wait‑and‑See/Deferred‑Reformation
Approach Adopted. The Uniform Statutory Rule reforms the common‑law Rule Against
Perpetuities (common‑law Rule) by adding a simplified wait‑and‑see
element and a deferred‑reformation element.
Wait‑and‑see
is a two‑step strategy. Step One (Section 2‑901(a)(1)) preserves
the validating side of the common‑law Rule. By satisfying the common‑law
Rule, a nonvested future interest in property is valid at the moment of its
creation. Step Two (Section 2‑901(a)(2)) is a salvage strategy for future
interests that would have been invalid at common law. Rather than invalidating
such interests at creation, wait‑and‑see allows a period of time,
called the permissible vesting period, during which the nonvested interests are
permitted to vest according to the trust's terms.
The
traditional method of measuring the permissible vesting period has been by reference
to lives in being at the creation of the interest (the measuring lives) plus 21
years. There are, however, various difficulties and costs associated with
identifying and tracing a set of actual measuring lives to see which one is the
survivor and when he or she dies. In addition, it has been documented that the
use of actual measuring lives plus 21 years does not produce a period of time
that self‑adjusts to each disposition, extending dead‑hand control
no further than necessary in each case; rather, the use of actual measuring
lives (plus 21 years) generates a permissible vesting period whose length
almost always exceeds by some arbitrary margin the point of actual vesting in
cases traditionally validated by the wait‑and‑see strategy. The
actual‑measuring‑lives approach, therefore, performs a margin‑of‑safety
function. Given this fact, and given the costs and difficulties associated with
the actual‑measuring‑lives approach, the Uniform Statutory Rule
forgoes the use of actual measuring lives and uses instead a permissible
vesting period of a flat 90 years.
The
philosophy behind the 90‑year period is to fix a period of time that
approximates the average period of time that would traditionally be allowed by
the wait‑and‑see doctrine. The flat‑period‑of‑years
method was not used as a means of increasing permissible dead‑hand
control by lengthening the permissible vesting period beyond its traditional
boundaries. In fact, the 90‑year period falls substantially short of the
absolute maximum period of time that could theoretically be achieved under the
common‑law Rule itself, by the so‑called "twelve‑healthy‑babies
ploy"‑a ploy that would average out to a period of about 115 years,[1]
25 years or 27.8% longer than the 90 years allowed by USRAP. The fact
that the traditional period roughly averages out to a longish‑sounding 90
years is a reflection of a quite different phenomenon: the dramatic increase in
longevity that society as a whole has experienced in the course of the
twentieth century.
The
framers of the Uniform Statutory Rule derived the 90‑year period as
follows. The first point recognized was that if actual measuring lives were to
have been used, the length of the permissible vesting period would, in the
normal course of events, be governed by the life of the youngest measuring
life. The second point recognized was
that no matter what method is used to identify the measuring lives, the
youngest measuring life, in standard trusts, is likely to be the transferor's youngest
descendant living when the trust was created.[2]
The 90‑year period was premised on these propositions. Using four
hypothetical families deemed to be representative of actual families, the
framers of the Uniform Statutory Rule determined that, on average, the
transferor's youngest descendant in being at the transferor's death‑assuming
the transferor's death to occur between ages 60 and 90, which is when 73
percent of the population die‑is about 6 years old. See Waggoner, "Perpetuities: A Progress Report on the Draft Uniform
Statutory Rule Against Perpetuities," 20 U.
Acceptance of the 90‑year‑period
Approach under the Federal Generation‑skipping Transfer Tax. Federal regulations, to be promulgated by the
U.S. Treasury Department under the generation‑skipping transfer tax, will
accept the Uniform Statutory Rule's 90‑year period as a valid
approximation of the period that, on average, would be produced by lives in
being plus 21 years. See Temp. Treas.
Reg. § 26.2601‑1(b)(1)(v)(B)(2) (as to be revised). When originally
promulgated in 1988, this regulation was prepared without knowledge of the
Uniform Statutory Rule Against Perpetuities, which had been promulgated in 1986; as first promulgated,
the regulation only recognized a period measured by actual lives in being plus
21 years. After the 90‑year approach of the Uniform Statutory Rule was
brought to the attention of the U.S. Treasury Department, the Department issued
a letter of intent to amend the regulation to treat the 90‑year period as
the equivalent of a lives‑in‑being‑plus‑21‑years
period. Letter from Michael J. Graetz,
Deputy Assistant Secretary of the Treasury (Tax Policy), to
The 90‑year Period
Will Seldom be Used Up. Nearly all trusts (or other property arrangements) will terminate by
their own terms long before the 90‑year permissible vesting period
expires, leaving the permissible vesting period to extend unused (and ignored)
into the future long after the contingencies have been resolved and the
property distributed. In the unlikely event that the contingencies have not
been resolved by the expiration of the permissible vesting period, Section 2‑903
requires the disposition to be reformed by the Court so that all contingencies
are resolved within the permissible period.
In
effect, wait‑and‑see with deferred reformation operates similarly
to a traditional perpetuity saving clause, which grants a margin‑of‑safety
period measured by the lives of the transferor's descendants in being at the
creation of the trust or other property arrangement (plus 21 years).
No New Learning Required. The Uniform Statutory Rule
does not require the practicing bar to learn a new and unfamiliar set of
perpetuity principles. The effect of the Uniform Statutory Rule on the planning
and drafting of documents for clients should be distinguished from the effect
on the resolution of actual or potential perpetuity‑violation cases. The
former affects many more practicing lawyers than the latter.
With
respect to the planning and drafting end of the practice, the Uniform Statutory
Rule requires no modification of current practice and no new learning. Lawyers can and should continue to use the same
traditional perpetuity‑saving/termination clause, using specified lives
in being plus 21 years, they used before enactment. Lawyers should not shift to
a "later of" type clause that purports to operate upon the later of (A) 21 years after the death of
the survivor of specified lives in being or (B) 90 years. As explained in more
detail in the Comment to Section 2‑901, such a clause is not
effective. If such a "later
of" clause is used in a trust that contains a violation of the common‑law
rule against perpetuities, Section 2‑901(a), by itself, would render the
clause ineffective, limit the maximum permissible vesting period to 90 years,
and render the trust vulnerable to a reformation suit under Section 2‑903. Section 2‑901(e), however, saves
documents using this type of clause from this fate. By limiting the effect of
such clauses to the 21‑year period following the death of the survivor of
the specified lives, subsection (e) in effect transforms this type of clause
into a traditional perpetuity‑saving/termination clause, bringing the
trust into compliance with the common‑law rule against perpetuities and
rendering it invulnerable to a reformation suit under Section 2‑903.
Far fewer in number are
those lawyers (and judges) who have an actual or potential perpetuity‑violation
case. An actual or potential perpetuity‑violation case will arise very
infrequently under the Uniform Statutory Rule.
When such a case does arise, however, lawyers (or judges) involved in
the case will find considerable guidance for its resolution in the detailed
analysis contained in the commentary accompanying the Uniform Statutory Rule
itself. In short, the detailed analysis
in the commentary accompanying the Uniform Statutory Rule need not be part of
the general learning required of lawyers in the drafting and planning of
dispositive documents for their clients.
The detailed analysis is supplied in the commentary for the assistance
in the resolution of an actual violation. Only then need that detailed analysis
be consulted and, in such a case, it will prove extremely helpful.
General References. Fellows, "Testing
Perpetuity Reforms: A Study of
Perpetuity Cases 1984‑89," 25 Real Prop. Prob. & Tr. J. 597
(1991) (testing the various types of perpetuity reform measures and concluding,
on the basis of empirical evidence, that the Uniform Statutory Rule is the best
opportunity offered to date for a uniform perpetuity law that efficiently and
effectively achieves a fair balance between present and future property
owners); Waggoner, "The Uniform
Statutory Rule Against Perpetuities:
Oregon Joins Up," 26 Willamette L. Rev. 259 (1990) (explaining
the operation of the Uniform Statutory Rule);
Waggoner, "The Uniform
Statutory Rule Against Perpetuities: The
Rationale of the 90‑Year Waiting Period," 73 Cornell L. Rev. 157
(1988) (explaining the derivation of the 90‑year period); Waggoner, "The
Uniform Statutory Rule Against Perpetuities," 21 Real Prop., Prob.
& Tr. J. 569 (1986) (explaining the theory and operation of the Uniform
Statutory Rule).
Section 2‑901.
Statutory Rule Against Perpetuities.
(a) [Validity of Nonvested
Property Interest.] A nonvested
property interest is invalid unless:
(1) when the
interest is created, it is certain to vest or terminate no later than 21 years
after the death of an individual then alive; or
(2) the
interest either vests or terminates within 90 years after its creation.
(b) [Validity of General Power
of Appointment Subject to a Condition Precedent.] A general power of appointment not presently
exercisable because of a condition precedent is invalid unless:
(1) when the
power is created, the condition precedent is certain to be satisfied or becomes
impossible to satisfy no later than 21 years after the death of an individual
then alive; or
(2) the
condition precedent either is satisfied or becomes impossible to satisfy within
90 years after its creation.
(c) [Validity of Nongeneral or
Testamentary Power of Appointment.] A
nongeneral power of appointment or a general testamentary power of appointment
is invalid unless:
(1) when the
power is created, it is certain to be irrevocably exercised or otherwise to
terminate no later than 21 years after the death of an individual then alive;
or
(2) the power
is irrevocably exercised or otherwise terminates within 90 years after its
creation.
(d) [Possibility of Post‑death
Child Disregarded.] In determining
whether a nonvested property interest or a power of appointment is valid under
subsection (a)(1), (b)(1), or (c)(1), the possibility that a child will be born
to an individual after the individual's death is disregarded.
(e) [Effect of Certain
"Later‑of" Type Language.] If, in measuring a period from the creation of
a trust or other property arrangement, language in a governing instrument (i)
seeks to disallow the vesting or termination of any interest or trust beyond,
(ii) seeks to postpone the vesting or termination of any interest or trust
until, or (iii) seeks to operate in effect in any similar fashion upon, the
later of (A) the expiration of a period of time not exceeding 21 years after
the death of the survivor of specified lives in being at the creation of the
trust or other property arrangement or (B) the expiration of a period of time
that exceeds or might exceed 21 years after the death of the survivor of lives
in being at the creation of the trust or other property arrangement, that
language is inoperative to the extent it produces a period of time that exceeds
21 years after the death of the survivor of the specified lives.
COMMENT
Section
2‑901 codifies the validating side of the common‑law Rule and
implements the wait‑and‑see feature of the Uniform Statutory Rule
Against Perpetuities. As provided in Section 2‑906, this section and the
other sections in Subpart 1 of Part 9 supersede the common‑law Rule
Against Perpetuities (common‑law Rule) in jurisdictions previously
adhering to it (or repeals any statutory version or variation thereof
previously in effect in the jurisdiction). The common‑law Rule (or the
statutory version or variation thereof) is replaced by the Statutory Rule in
Section 2‑901 and by the other provisions of Subpart 1 of Part 9.
Section
2‑901(a) covers nonvested property interests, and will be the subsection
most often applicable. Subsections (b) and (c) cover powers of appointment.
Paragraph
(1) of subsections (a), (b), and (c) is a codified version of the validating
side of the common‑law Rule. In effect, paragraph (1) of these
subsections provides that nonvested property interests and powers of
appointment that are valid under the common‑law Rule Against
Perpetuities, including those that are rendered valid because of a perpetuity
saving clause, continue to be valid under the Statutory Rule and can be
declared so at their inceptions. This means that no new learning is required of
competent estate planners: The practice
of lawyers who competently draft trusts and other property arrangements for their
clients is undisturbed.
Paragraph
(2) of subsections (a), (b), and (c) establishes the wait‑and‑see
rule. Paragraph (2) provides that an
interest or a power of appointment that is not validated by paragraph (1), and
hence would have been invalid under the common‑law Rule, is given a
second chance: Such an interest is valid if it does not actually remain in
existence and nonvested when the 90‑year permissible vesting period
expires; such a power of appointment is valid if it ceases to be subject to a
condition precedent or is no longer exercisable when the permissible 90‑year
period expires.
Subsection (d). The rule established in
subsection (d) deserves a special comment. Subsection (d) declares that the
possibility that a child will be born to an individual after the individual's
death is to be disregarded. It is
important to note that this rule applies only for the purpose of determining
the validity of an interest (or a power of appointment) under paragraph (1) of
subsection (a), (b), or (c). The rule of subsection (d) does not apply, for
example, to questions such as whether a child who is born to an individual
after the individual's death qualifies as a taker of a beneficial interest‑as
a member of a class or otherwise. Neither subsection (d), nor any other
provision of Part 9, supersedes the widely accepted common‑law principle,
codified in Section 2‑109, that a child in gestation (a child sometimes
described as a child en ventre sa mere) who is later born alive (and, under
Section 2‑109, lives for 120 hours or more after birth) is regarded as
alive during gestation.
The
limited purpose of subsection (d) is to solve a perpetuity problem created by
advances in medical science. The problem is illustrated by a case such as
"to A for life, remainder to A's children who reach 21." When the
common‑law Rule was developing, the possibility was recognized, strictly
speaking, that one or more of A's children might reach 21 more than 21 years
after A's death. The possibility existed because A's wife (who might not be a
life in being) might be pregnant when A died. If she was, and if the child was
born viable a few months after A's death, the child could not reach his or her
21st birthday within 21 years after A's death. The device then invented to
validate the interest of A's children was to "extend" the allowable
perpetuity period by tacking on a period of gestation, if needed. As a result,
the common‑law perpetuity period was comprised of three components: (1) a
life in being (2) plus 21 years (3) plus a period of gestation, when needed.
Today, thanks to sperm banks, frozen embryos, and even the possibility of
artificially maintaining the body functions of a deceased pregnant woman long
enough to develop the fetus to viability‑advances in medical science unanticipated
when the common‑law Rule was in its developmental stages‑having a
pregnant wife at death is no longer the only way of having children after
death. These medical developments, and undoubtedly others to come, make the
mere addition of a period of gestation inadequate as a device to confer initial
validity under Section 2‑901(a)(1) on the interest of A's children in the
above example. The rule of subsection (d), however, does insure the initial
validity of the children's interest.
Disregarding the possibility that children of A will be born after his
death allows A to be the validating life. None of his children, under this
assumption, can reach 21 more than 21 years after his death.
Note
that subsection (d) subsumes not only the case of children conceived after
death, but also the more conventional case of children in gestation at
death. With subsection (d) in place, the
third component of the common‑law perpetuity period is unnecessary and
has been jettisoned. The perpetuity period recognized in paragraph (1) of
subsections (a), (b), and (c) has only two components: (1) a life in being (2)
plus 21 years.
As
to the legal status of conceived‑after‑death children, that
question has not yet been resolved. For example, if in the above example A
leaves sperm on deposit at a sperm bank and after A's death a woman (A's widow
or another) becomes pregnant as a result of artificial insemination, the child
or children produced thereby might not be included at all in the class gift.
Cf. Restatement (Second) of Property (Donative Transfers) Introductory Note to
Subsection (e)‑Effect
of Certain "Later‑of" Type Language. Subsection (e) was added to the Uniform
Statutory Rule in 1990. It primarily applies to a non‑traditional type of
"later of" clause (described below). Use of that type of clause might
have produced unintended consequences, which are now rectified by the addition
of subsection (e).
In
general, perpetuity saving or termination clauses can be used in either of two
ways. The predominant use of such clauses is as an override clause. That is, the clause is not an integral part
of the dispositive terms of the trust, but operates independently of the
dispositive terms; the clause provides that all interests must vest no later
than at a specified time in the future, and sometimes also provides that the
trust must then terminate, but only if any interest has not previously vested
or if the trust has not previously terminated. The other use of such a clause
is as an integral part of the dispositive terms of the trust; that is, the
clause is the provision that directly regulates the duration of the trust.
Traditional perpetuity saving or termination clauses do not use a "later
of" approach; they mark off the maximum time of vesting or termination
only by reference to a 21‑year period following the death of the survivor
of specified lives in being at the creation of the trust.
Subsection
(e) applies to a non‑traditional clause called a "later of” (or
"longer of") clause. Such a clause might provide that the maximum
time of vesting or termination of any interest or trust must occur no later
than the later of (A) 21 years after the death of the survivor of specified
lives in being at the creation of the trust or (B) 90 years after the creation
of the trust.
Under
the Uniform Statutory Rule as originally promulgated, this type of "later
of" clause would not achieve a "later of" result. If used as an
override clause in conjunction with a trust whose terms were, by themselves,
valid under the common‑law Rule against perpetuities (common‑law
Rule), the "later of" clause did no harm. The trust would be valid
under the common‑law Rule as codified in subsection (a)(1) because the
clause itself would neither postpone the vesting of any interest nor extend the
duration of the trust. But, if used either (1) as an override clause in
conjunction with a trust whose terms were not valid under the common‑law
Rule or (2) as the provision that directly regulated the duration of the trust,
the "later of" clause would not cure the perpetuity violation in case
(1) and would create a perpetuity violation in case (2). In neither case would the clause qualify the
trust for validity at common law under subsection (a)(1) because the clause
would not guarantee that all interests will be certain to vest or terminate no
later than 21 years after the death of an individual then alive.[3]
In any given case, 90 years can turn out to be longer than the period produced
by the specified‑lives‑in‑being‑plus‑21‑years
language.
Because
the clause would fail to qualify the trust for validity under the common‑law
Rule of subsection (a)(1), the nonvested interests in the trust would be
subject to the wait‑and‑see element of subsection (a)(2) and
vulnerable to a reformation suit under Section 2‑903. Under subsection
(a)(2), an interest that is not valid at common law is invalid unless it
actually vests or terminates within 90 years after its creation. Subsection
(a)(2) does not grant such nonvested interests a permissible vesting period of
either 90 years or a period of 21 years after the death of the survivor of
specified lives in being. Subsection
(a)(2) only grants such interest a period of 90 years in which to vest.
The
operation of subsection (a), as outlined above, is also supported by perpetuity
policy. If subsection (a) allowed a "later of" clause to achieve a
"later of" result, it would authorize an improper use of the 90‑year
permissible vesting period of subsection (a)(2). The 90‑year period of
subsection (a)(2) is designed to approximate the period that, on average, would be produced by using actual lives in being plus 21
years. Because in any given case the period actually produced by lives in being
plus 21 years can be shorter or longer than 90 years, an attempt to utilize a
90‑year period in a "later of" clause improperly seeks to turn
the 90‑year average into a minimum.
Set
against this background, the addition of subsection (e) is quite beneficial.
Subsection (e) limits the effect of this type of "later of" language
to 21 years after the death of the survivor of the specified lives, in effect
transforming the clause into a traditional perpetuity saving/termination
clause. By doing so, subsection (e)
grants initial validity to the trust under the common‑law Rule as
codified in subsection (a)(1) and precludes a reformation suit under Section 2‑903.
Note
that subsection (e) covers variations of the "later of" clause
described above, such as a clause that postpones vesting until the later or (A)
20 years after the death of the
survivor of specified lives in being or (B) 89
years. Subsection (e) does not, however, apply to all dispositions that
incorporate a "later of" approach. To come under subsection (e), the
specified‑lives prong must include a tack‑on period of up to 21
years. Without a tack‑on period, a
"later of" disposition, unless valid at common law, comes under
subsection (a)(2) and is given 90 years in which to vest. An example would be a
disposition that creates an interest that is to vest upon "the later of the death of my widow
or 30 years after my death."
Coordination of the Federal
Generation‑skipping Transfer Tax with the Uniform Statutory Rule. In 1990, the Treasury Department announced a
decision to coordinate the tax regulations under the "grandfathering"
provisions of the federal generation‑skipping transfer tax with the
Uniform Statutory Rule. Letter from
Michael J. Graetz, Deputy Assistant Secretary of the Treasury (Tax Policy), to
Lawrence J. Bugge, President, National Conference of Commissioners on Uniform
State Laws (Nov. 16, 1990) (hereinafter Treasury
Letter).
Section
1433(b)(2) of the Tax Reform Act of 1986 generally exempts
("grandfathers") trusts from the federal generation‑skipping
transfer tax that were irrevocable on
Because
the Uniform Statutory Rule was promulgated in 1986 and applies only
prospectively, any "grandfathered" trust would have become
irrevocable prior to the enactment of USRAP in any state. Nevertheless, the second sentence of Section
2‑905(a) extends USRAP's wait‑and‑see approach to post‑effective‑date
exercises of nongeneral powers even if the power itself was created prior to
USRAP's effective date. Consequently, a
post‑USRAP‑effective‑date exercise of a nongeneral power of
appointment created in a "grandfathered" trust could come under the
provisions of the Uniform Statutory Rule.
The
literal wording, then, of Temp. Treas. Reg. § 26.2601‑1(b)(1)(v)(B)(2)
(1988), as first promulgated, could have jeopardized the grandfathered status
of an exempt trust if (1) the trust created a nongeneral power of appointment,
(2) the donee exercised that nongeneral power, and (3) USRAP is the perpetuity
law applicable to the donee's exercise.
This possibility arose not only because the donee's exercise itself
might come under the 90‑year permissible vesting period of subsection
(a)(2) if it otherwise violated the common‑law Rule and hence was not
validated under subsection (a)(1). The possibility also arose in a less obvious
way if the donee's exercise created another nongeneral power. The last sentence
of the temporary regulation states that "if a power is exercised by
creating another power it will be deemed to be exercised to whatever extent the
second power may be exercised."
In late March 1990, the National Conference of Commissioners on Uniform State Laws (NCCUSL) and the Joint Editorial Board for the Uniform Probate Code (JEB‑UPC) filed a formal request with the Treasury Department asking that measures be taken to coordinate the regulation with USRAP. By the Treasury Letter referred to above, the Treasury Department responded by stating that it "will amend the temporary regulations to accommodate the 90‑year period under USRAP as originally promulgated [in 1986] or as amended [in 1990 by the addition of subsection (e)]." This should effectively remove the possibility of loss of grandfathered status under the Uniform Statutory Rule merely because the donee of a nongeneral power created in a grandfathered trust inadvertently exercises that power in violation of the common‑law Rule or merely because the donee exercises that power by creating a second nongeneral power that might, in the future, be inadvertently exercised in violation of the common‑law Rule.
The Treasury Letter states, however, that any effort by the donee of a nongeneral power in a grandfathered trust to obtain a "later of" specified‑lives‑in‑being‑plus‑21‑years or 90‑years approach will be treated as a constructive addition, unless that effort is nullified by state law. As explained above, the Uniform Statutory Rule, as originally promulgated in 1986 or as amended in 1990 by the addition of subsection (e), nullifies any direct effort to obtain a "later of" approach by the use of a "later of" clause.
The
Treasury Letter states that an
indirect effort to obtain a "later of" approach would also be treated
as a constructive addition that would bring grandfathered status to an end,
unless the attempt to obtain the later‑of approach is nullified by state
law. The Treasury Letter indicates that an indirect effort to obtain a
"later of" approach could arise if the donee of a nongeneral power
successfully attempts to prolong the duration of a grandfathered trust by
switching from a specified‑lives‑in‑being‑plus‑21‑years
perpetuity period to a 90‑year perpetuity period, or vice versa. Donees of nongeneral powers in grandfathered
trusts would therefore be well advised to resist any temptation to wait until
it becomes clear or reasonably predictable which perpetuity period will be longer
and then make a switch to the longer period if the governing instrument
creating the power utilized the shorter period.
No such attempted switch and no constructive addition will occur if in
each instance a traditional specified‑lives‑in‑being‑plus‑21‑years
perpetuity saving clause is used.
Any
such attempted switch is likely in any event to be nullified by state law and,
if so, the attempted switch will not be treated as a constructive addition. For
example, suppose that the original grandfathered trust contained a standard
perpetuity saving clause declaring that all interests in the trust must vest no
later than 21 years after the death of the survivor of specified lives in
being. In exercising a nongeneral power created in that trust, any indirect
effort by the donee to obtain a "later of" approach by adopting a 90‑year
perpetuity saving clause will likely be nullified by subsection (e). If that
exercise occurs at a time when it has become clear or reasonably predictable
that the 90‑year period will prove longer, the donee's exercise would
constitute language in a governing instrument that seeks to operate in effect
to postpone the vesting of any interest until the later of the specified‑lives‑in‑being‑plus‑21‑years
period or 90 years. Under subsection (e), "that language is inoperative to
the extent it produces a period of time that exceeds 21 years after the death
of the survivor of the specified lives."
Quite
apart from subsection (e), the relation‑back doctrine generally
recognized in the exercise of nongeneral powers stands as a doctrine that could
potentially be invoked to nullify an attempted switch from one perpetuity
period to the other perpetuity period. Under that doctrine, interests created
by the exercise of a nongeneral power are considered created by the donor of
that power. See, e.g., Restatement (Second) of
Property, Donative Transfers § 11.1 comment b (1986). As such, the maximum
vesting period applicable to interests created by the exercise of a nongeneral
power would apparently be covered by the perpetuity saving clause in the
document that created the power, notwithstanding any different period the donee
purports to adopt.
Reference. Section 2‑901 is Section 1 of the
Uniform Statutory Rule Against Perpetuities (Uniform Act). For further discussion of this section, with
numerous examples illustrating its application, see the Official Comment to Section 1 of the Uniform Act.
Section 2‑902.
When Nonvested Property Interest or Power of Appointment Created.
(a) Except as provided in subsections (b) and (c) and in Section 2‑905(a),
the time of creation of a nonvested property interest or a power of appointment
is determined under general principles of property law.
(b) For purposes of Subpart 1 of this Part, if there is a person who
alone can exercise a power created by a governing instrument to become the
unqualified beneficial owner of (i) a nonvested property interest or (ii)a
property interest subject to a power of appointment described in Section 2‑901(b)
or (c), the nonvested property interest or power of appointment is created when
the power to become the unqualified beneficial owner terminates. [For purposes
of Subpart 1 of this Part, a joint power with respect to community property or
to marital property under the Uniform Marital Property Act held by individuals
married to each other is a power exercisable by one person alone.]
(c) For purposes of Subpart 1 of this Part, a nonvested property
interest or a power of appointment arising from a transfer of property to a
previously funded trust or other existing property arrangement is created when
the nonvested property interest or power of appointment in the original
contribution was created.
COMMENT
Section
2‑902 defines the time when, for purposes of Subpart 1 of Part 9, a
nonvested property interest or a power of appointment is created. The period of
time allowed by Section 2‑901 is measured from the time of creation of
the nonvested property interest or power of appointment in question. Section 2‑905,
with certain exceptions, provides that Subpart 1 of Part 9 applies only to
nonvested property interests and powers of appointment created on or after the
effective date of Subpart 1 of Part 9.
Subsection (a). Subsection (a) provides
that, with certain exceptions, the time of creation of nonvested property
interests and powers of appointment is determined under general principles of
property law. Because a will becomes effective as a dispositive instrument upon
the decedent's death, not upon the execution of the will, general principles of
property law determine that a nonvested property interest or a power of
appointment created by will is created at the decedent's death. With respect to
an inter‑vivos transfer, an interest or power is created on the date the
transfer becomes effective for purposes of property law generally, normally the
date of delivery of the deed or the funding of the trust.
Nonvested Property Interests
and Powers of Appointment Created by the Exercise of a Power of Appointment. If a nonvested property interest or a power
of appointment was created by the testamentary or inter‑vivos exercise of
a power of appointment, general principles of property law adopt the
"relation‑back" doctrine. Under that doctrine, the appointed
interests or powers are created when the power was created, not when it was
exercised, if the exercised power was a nongeneral power or a general
testamentary power. If the nonvested property interest or power of appointment
was created by the exercise of a nongeneral or a testamentary power of
appointment that was itself created by the exercise of a nongeneral or a
testamentary power of appointment, the relation‑back doctrine is applied
twice and the nonvested property interest or power of appointment was created
when the first power of appointment was created, not when the second power was
created or exercised.
Example 1. G's will created a trust that provided for
the income to go to G's son, A, for life, remainder to such of A's descendants
as A shall by will appoint.
A died leaving a will that exercised his nongeneral
power of appointment, providing that the trust is to continue beyond A's death,
paying the income to A's daughter, X, for her lifetime, remainder in corpus to
such of X's descendants as X shall by will appoint; in default of appointment,
to X's descendants who survive X, by representation.
A's exercise of his nongeneral power of appointment
gave a nongeneral power of appointment to X and a nonvested property interest
to X's descendants. For purposes of
Section 2‑901, X's power of appointment and the nonvested property
interest in X's descendants is deemed to have been "created" at G's
death when A's nongeneral power of appointment was created, not at A's death
when he exercised his power of appointment.
Suppose that X subsequently dies leaving a will that
exercises her nongeneral power of appointment.
For purposes of Section 2‑901, any nonvested property interest or
power of appointment created by an exercise of X's nongeneral power of
appointment is deemed to have been "created" at G's death, not at A's
death or at X's death.
If
the exercised power was a presently exercisable general power, the relation‑back
doctrine is not followed; the time of creation of the appointed property
interests or appointed powers is regarded as the time when the power was
irrevocably exercised, not when the power was created.
Example 2. The same facts as Example 1, except that A's
will exercised his nongeneral power of appointment by providing that the trust
is to continue beyond A's death, paying the income to A's daughter, X, for her
lifetime, remainder in corpus to such person or persons, including X, her
estate, her creditors, and the creditors of her estate, as X shall appoint; in
default of appointment, to X's descendants who survive X, by representation.
A's exercise of his nongeneral power of appointment
gave a presently exercisable general power of appointment to X. For purposes of Section 2‑901, any
nonvested property interest or power of appointment created by an exercise of
X's presently exercisable general power of appointment is deemed to be
"created" when X irrevocably exercises her power of appointment, not
when her power of appointment or A's power of appointment was created.
A's exercise of his nongeneral power also granted a
nonvested property interest to X's descendants (under the gift‑in‑default
clause). Were it not for the presently exercisable general power granted to X,
the nonvested property interest in X's surviving descendants would, under the
relation‑back doctrine, be deemed "created" for purposes of
Section 2‑901 at the time of G's death.
However, under Section 2‑902(b), the fact that X is granted the
presently exercisable general power postpones the time of creation of the
nonvested property interest of X's descendants. Under Section 2‑902(b),
that nonvested property interest is deemed not to have been "created"
for purposes of Section 2‑901 at G's death but rather when X's presently
exercisable general power "terminates." Consequently, the time of
"creation" of the nonvested interest of X's descendants is postponed
as of the time that X was granted the presently exercisable general power (upon
A's death) and continues in abeyance until X's power terminates. X's power
terminates by the first to happen of the following: X's irrevocable exercise of
her power; X's release of her power; X's entering into a contract to exercise
or not to exercise her power; X's dying
without exercising her power; or any
other action or nonaction that would have the effect of terminating her power.
Subsection (b). Subsection (b) provides
that, if one person can exercise a power to become the unqualified beneficial
owner of a nonvested property interest (or a property interest subject to a
power of appointment described in Section 2‑901(b) or 2‑901(c)),
the time of creation of the nonvested property interest (or the power of
appointment) is postponed until the power to become the unqualified beneficial
owner ceases to exist. This is in accord
with existing common law. The standard example of the application of this
subsection is a revocable inter‑vivos trust. For perpetuity purposes,
both at common law and under Subpart 1 of Part 9, the nonvested property
interests and powers of appointment created in the trust are created when the
power to revoke expires, usually at the settlor's death. For another example of
the application of subsection (b), see
the last paragraph of Example 2, above.
Subsection (c). Subsection (c) provides that nonvested
property interests and powers of appointment arising out of transfers to a
previously funded trust or other existing property arrangement are created when
the nonvested property interest or power of appointment arising out of the
original contribution was created. This avoids an administrative difficulty
that can arise at common law when subsequent transfers are made to an existing
irrevocable inter‑vivos trust.
Arguably, at common law, each transfer starts the period of the Rule
running anew as to each transfer. The prospect of staggered periods is avoided
by subsection (c). Subsection (c) is in accord with the saving‑clause
principle of wait‑and‑see embraced by Part 9. If the irrevocable
inter‑vivos trust had contained a saving clause, the perpetuity‑period
component of the clause would be measured by reference to lives in being when
the original contribution to the trust was made, and the clause would cover
subsequent contributions as well.
Reference. Section 2‑902 is Section 2 of the
Uniform Statutory Rule Against Perpetuities (Uniform Act). For further discussion of this section, with
examples illustrating its application, see
the Official Comment to Section 2 of the Uniform Act.
Section 2‑903.
Reformation.
Upon the petition of an
interested person, a Court shall reform a disposition in the manner that most
closely approximates the transferor's manifested plan of distribution and is
within the 90 years allowed by Section 2‑901(a)(2), 2‑901(b)(2), or
2‑901(c)(2) if:
(1) a
nonvested property interest or a power of appointment becomes invalid under
Section 2‑901 (statutory rule against perpetuities);
(2) a class
gift is not but might become invalid under Section 2‑901 (statutory rule
against perpetuities) and the time has arrived when the share of any class
member is to take effect in possession or enjoyment; or
(3) a
nonvested property interest that is not validated by Section 2‑901(a)(1)
can vest but not within 90 years after its creation.
COMMENT
Section 2‑903 implements the deferred‑reformation feature of the Uniform Statutory Rule Against Perpetuities. Upon the petition of an interested person, the Court is directed to reform a disposition within the limits of the allowable 90‑year period, in the manner deemed by the Court most closely to approximate the transferor's manifested plan of distribution, in any one of three circumstances. The "interested person" who would frequently bring the reformation suit would be the trustee.
Section
2‑903 applies only to dispositions the validity of which is governed by
the wait‑and‑see element of Section 2‑901(a)(2), 2‑901(b)(2),
or 2‑901(c)(2); it does not apply to dispositions that are initially
valid under Section 2‑901(a)(1), 2‑901(b)(1), or 2‑901(c)(1)‑the
codified version of the validating side of the common‑law Rule.
Section
2‑903 will seldom be applied. Of the fraction of trusts and other property
arrangements that fail to meet the requirements for initial validity under the
codified version of the validating side of the common‑law Rule, almost
all of them will have been settled under their own terms long before any of the
circumstances requisite to reformation under Section 2‑903 arise.
If,
against the odds, one of the circumstances requisite to reformation does arise,
it will be found easier than perhaps anticipated to determine how best to
reform the disposition. The Court is given two criteria to work with: (i) the
transferor's manifested plan of distribution, and (ii) the allowable 90‑year
period. Because governing instruments are where transferors manifest their
plans of distribution, the imaginary horrible of Courts being forced to probe
the minds of long‑dead transferors will not materialize.
Subsection (1). The theory of Section 2‑903 is to defer
the right to reformation until reformation becomes truly necessary. Thus, the
basic rule of Section 2‑903(1) is that the right to reformation does not
arise until a nonvested property interest or a power of appointment becomes
invalid; under Section 2‑901, this does not occur until the expiration of
the 90‑year permissible vesting period. This approach is more efficient
than the "immediate cy pres" approach to perpetuity reform because it
substantially reduces the number of reformation suits. It also is consistent
with the saving‑clause principle embraced by the Statutory Rule.
Deferring the right to reformation until the permissible vesting period expires
is the only way to grant every reasonable opportunity for the donor's
disposition to work itself out without premature interference.
Subsection (2). Although, generally speaking, reformation is
deferred until an invalidity has occurred, Section 2‑903 grants an
earlier right to reformation when it becomes necessary to do so or when there
is no point in waiting the full 90‑year period out. Thus subsection (2),
which pertains to class gifts that are not yet but still might become invalid
under the Statutory Rule, grants a right to reformation whenever the share of
any class member whose share had vested within the permissible vesting period
might otherwise have to wait out the remaining part of the 90 years before
obtaining his or her share. Reformation
under this subsection will seldom be needed, however, because of the common
practice of structuring trusts to split into separate shares or separate trusts
at the death of each income beneficiary, one such separate share or separate
trust being created for each of the income beneficiary's then‑living
children; when this pattern is followed, the circumstances described in
subsection (2) will not arise.
Subsection (3). Subsection (3) also grants a right to
reformation before the 90‑year permissible vesting period expires. The circumstances giving rise to the right to
reformation under subsection (3) occurs if a nonvested property interest can
vest but not before the 90‑year period has expired. Though unlikely, such
a case can theoretically arise. If it
does, the interest‑unless it terminates by its own terms earlier‑is
bound to become invalid under Section 2‑901 eventually. There is no point
in deferring the right to reformation until the inevitable happens. Section 2‑903
provides for early reformation in such a case, just in case it arises.
Infectious Invalidity. Given the fact that this section makes
reformation mandatory, not discretionary with the Court, the common‑law
doctrine of infectious invalidity is superseded by this section. In a state in
which the Courts have been particularly zealous about applying the infectious‑invalidity
doctrine, however, an express codification of the abrogation of this doctrine
might be thought desirable. If so, the above section could be made subsection
(a), with the following new subsection (b) added:
(b) The common‑law rule known as the doctrine
of infectious invalidity is abolished.
Reference. Section 2‑903 is Section 3 of the
Uniform Statutory Rule Against Perpetuities (Uniform Act. For further discussion of this section, with
examples illustrating its application, see
the Official Comment to Section 3 of the Uniform Act.
Section 2‑904.
Exclusions from Statutory Rule Against Perpetuities.
Section 2‑901
(statutory rule against perpetuities) does not apply to:
(1) a
nonvested property interest or a power of appointment arising out of a
nondonative transfer, except a nonvested property interest or a power of
appointment arising out of (i) a premarital or postmarital agreement, (ii) a
separation or divorce settlement, (iii) a spouse's election, (iv) a similar
arrangement arising out of a prospective, existing, or previous marital
relationship between the parties, (v) a contract to make or not to revoke a
will or trust, (vi) a contract to exercise or not to exercise a power of
appointment, (vii) a transfer in satisfaction of a duty of support, or (viii) a
reciprocal transfer;
(2) a
fiduciary's power relating to the administration or management of assets,
including the power of a fiduciary to sell, lease, or mortgage property, and
the power of a fiduciary to determine principal and income;
(3) a power to
appoint a fiduciary;
(4) a
discretionary power of a trustee to distribute principal before termination of
a trust to a beneficiary having an indefeasibly vested interest in the income
and principal;
(5) a
nonvested property interest held by a charity, government, or governmental
agency or subdivision, if the nonvested property interest is preceded by an
interest held by another charity, government, or governmental agency or
subdivision;
(6) a
nonvested property interest in or a power of appointment with respect to a
trust or other property arrangement forming part of a pension, profit‑sharing,
stock bonus, health, disability, death benefit, income deferral, or other
current or deferred benefit plan for one or more employees, independent
contractors, or their beneficiaries or spouses, to which contributions are made
for the purpose of distributing to or for the benefit of the participants or
their beneficiaries or spouses the property, income, or principal in the trust
or other property arrangement, except a nonvested property interest or a power
of appointment that is created by an election of a participant or a beneficiary
or spouse; or
(7) a property
interest, power of appointment, or arrangement that was not subject to the
common‑law rule against perpetuities or is excluded by another statute of
this State.
COMMENT
This
section lists the interests and powers that are excluded from the Statutory
Rule Against Perpetuities. This section is in part declaratory of existing
common law but in part not. Under subsection (7), all the exclusions from the
common‑law Rule recognized at common law and by statute in the state are
preserved.
The
major departure from existing common law comes in subsection (1). In line with long‑standing scholarly
commentary, subsection (1) excludes nondonative transfers from the Statutory
Rule. The Rule Against Perpetuities is an inappropriate instrument of social
policy to use as a control of such arrangements. The period of the Rule‑a
life in being plus 21 years‑is suitable for donative transfers only, and
this point applies with equal force to the 90‑year allowable waiting
period under the wait‑and‑see element of Section 2‑901. That
period, as noted, represents an approximation of the period of time that would
be produced, on average, by tracing a set of actual measuring lives and adding
a 21‑year period following the death of the survivor.
Certain
types of transactions‑although in some sense supported by consideration,
and hence arguably nondonative‑arise out of a domestic situation, and
should not be excluded from the Statutory Rule. To avoid uncertainty with
respect to such transactions, subsection (1) lists and restores such
transactions, such as premarital or postmarital agreements, contracts to make
or not to revoke a will or trust, and so on, to the donative‑transfers
category that does not qualify for an exclusion.
Reference. Section 2‑904 is Section 4 of the
Uniform Statutory Rule Against Perpetuities (Uniform Act). For further discussion of this section, with
examples illustrating its application, see
the Official Comment to Section 4 of the Uniform Act.
Section 2‑905.
Prospective Application.
(a) Except as extended by subsection (b), Subpart 1 of this Part
applies to a nonvested property interest or a power of appointment that is
created on or after the effective date of Subpart 1 of this Part. For purposes
of this section, a nonvested property interest or a power of appointment
created by the exercise of a power of appointment is created when the power is
irrevocably exercised or when a revocable exercise becomes irrevocable.
(b) If a
nonvested property interest or a power of appointment was created before the
effective date of Subpart 1 of this Part and is determined in a judicial
proceeding, commenced on or after the effective date of Subpart 1 of this Part,
to violate this State’s rule against perpetuities as that rule existed before
the effective date of Subpart 1 of this Part, a Court upon the petition of an
interested person may reform the disposition in the manner that most closely
approximates the transferor's manifested plan of distribution and is within the
limits of the rule against perpetuities applicable when the nonvested property
interest or power of appointment was created.
COMMENT
Section
2‑905 provides that, except for Section 2‑905(b), this Part applies
only to nonvested property interests or powers of appointment created on or
after the effective date of this Subpart. The second sentence of subsection (a)
establishes a special rule for nonvested property interests (and powers of
appointment) created by the exercise of a power of appointment. The import of
this special rule, which applies to the exercise of all types of powers of
appointment (general testamentary powers and nongeneral powers as well as
presently exercisable general powers), is that all the provisions of this
Subpart except Section 2‑905(b) apply if the donee of a power of
appointment exercises the power on or after the effective date of this Subpart,
whether the donee's exercise is revocable or irrevocable. In addition, all the
provisions of Subpart 1 except Section 2‑905(b) apply if the donee
exercised the power before the effective date of this Subpart if (i) that pre‑effective‑date
exercise was revocable and (ii) that revocable exercise becomes irrevocable on
or after the effective date of this Subpart. The special rule, in other words,
prevents the common‑law doctrine of relation back from inappropriately
shrinking the reach of this Subpart.
Although
the Uniform Statutory Rule does not apply retroactively, Section 2‑905(b)
authorizes a Court to exercise its equitable power of reform instruments that
contain a violation of the state’s former rule against perpetuities and to
which the Uniform Statutory Rule does not apply because the offending property
interest or power of appointment was created before the effective date of this
Subpart. Courts are urged to consider reforming such dispositions by judicially
inserting a perpetuity saving clause, because a perpetuity saving clause would
probably have been used at the drafting stage of the disposition had it been
drafted competently. To obviate any possibility of an inequitable exercise of
the equitable power to reform, Section 2‑905(b) limits the authority to
reform to situations in which the violation of the former rule against
perpetuities is determined in a judicial proceeding that is commenced on or
after the effective date of this Subpart. The equitable power to reform would
typically be exercised in the same judicial proceeding in which the invalidity
is determined.
Reference. Section 2‑905 is Section 5 of the
Uniform Statutory Rule Against Perpetuities (Uniform Act). For further discussion of
this section, with examples illustrating its application, see the Official Comment to Section 5 of the Uniform Act.
Section 2‑906.
[Supersession][Repeal].
Subpart 1 of this Part [supersedes the rule
of the common law known as the rule against perpetuities][repeals(list statutes
to be repealed) ].
COMMENT
The first set of bracketed
text is provided for states that follow the common‑law Rule Against
Perpetuities. The second set of bracketed text is provided for the repeal of
statutory adoptions of the common‑law Rule Against Perpetuities,
statutory variations of the common‑law Rule Against Perpetuities, or
statutory prohibitions on the suspension of the power of alienation for more
than a certain period. Some states may find it appropriate to enact both sets
of bracketed text by joining them with the word "and." This would be appropriate in states having a
statute that declares that the common‑law Rule Against Perpetuities is in
force in that jurisdiction except as modified therein.
A
cautionary note for states repealing listed statutes: If the statutes to be repealed contain
exclusions from the rule against perpetuities, states should consider whether
to repeal or retain those exclusions, in light of Section 2‑904(7), which
excludes from the Uniform Statutory Rule property interests, powers of
appointment, and other arrangements "excluded by another statute of this
state."
Subpart 2. [Honorary Trusts]
GENERAL
COMMENT
Subpart
2 contains an optional provision on honorary trusts and trusts for pets. If this optional provision is enacted, a new
subsection (8) should be added to Section 2‑904 to avoid an overlap or
conflict between Subpart 1 of Part 9 (USRAP) and Subpart 2 of Part 9.
Subsection (8) makes it clear that Subpart 2 of Part 9 is the exclusive
provision applicable to the property interests or arrangements subjected to a
time limit by the provisions of Subpart 2.
Subsection (8) states:
(8) a property interest or arrangement subjected to
a time limit under Subpart 2 of Part 9.
Additionally,
the "or" at the end of Section 2‑904(6) should be removed and
placed after Section 2‑904(7).
[Optional provision for
validating and limiting the duration of so‑called honorary trusts and
trusts for pets.]
[Section 2‑907.
Honorary Trusts; Trusts for Pets.
(a) [Honorary Trust.] Subject to subsection (c), if (i) a trust is for a specific lawful
noncharitable purpose or for lawful noncharitable purposes to be selected by
the trustee and (ii) there is no definite or definitely ascertainable
beneficiary designated, the trust may be performed by the trustee for [21]
years but no longer, whether or not the terms of the trust contemplate a longer
duration.
(b) [Trust for Pets.] Subject to this subsection and subsection
(c), a trust for the care of a designated domestic or pet animal is valid. The trust terminates when no living animal is
covered by the trust. A governing
instrument must be liberally construed to bring the transfer within this
subsection, to presume against the merely precatory or honorary nature of the
disposition, and to carry out the general intent of the transferor. Extrinsic evidence is admissible in
determining the transferor's intent.
(c) [Additional Provisions
Applicable to Honorary Trusts and Trusts for Pets.] In addition to the provisions of subsection
(a) or (b), a trust covered by either of those subsections is subject to the
following provisions:
(1) Except as
expressly provided otherwise in the trust instrument, no portion of the
principal or income may be converted to the use of the trustee or to any use
other than for the trust's purposes or for the benefit of a covered animal.
(2) Upon
termination, the trustee shall transfer the unexpended trust property in the
following order:
(i) as
directed in the trust instrument;
(ii) if the
trust was created in a nonresiduary clause in the transferor's will or in a
codicil to the transferor's will, under the residuary clause in the
transferor's will; and
(iii)if no taker is produced by the application of
subparagraph (i) or (ii), to the transferor's heirs under Section 2‑711.
(3) For the
purposes of Section 2‑707, the residuary clause is treated as creating a
future interest under the terms of a trust.
(4) The
intended use of the principal or income can be enforced by an individual
designated for that purpose in the trust instrument or, if none, by an
individual appointed by a court upon application to it by an individual.
(5) Except as
ordered by the Court or required by the trust instrument, no filing, report,
registration, periodic accounting, separate maintenance of funds, appointment,
or fee is required by reason of the existence of the fiduciary relationship of
the trustee.
(7) If no
trustee is designated or no designated trustee is willing or able to serve, a
Court shall name a trustee.
COMMENT
Subsection
(a) of this section authorizes so‑called honorary trusts and places a 21‑year
limit on their duration. The figure
"21" is bracketed to indicate that an enacting state may select a
different figure.
Subsection
(b) provides more elaborate provisions for a particular type of honorary trust,
the trust for the care of domestic or pet animals. Under subsection (b), a trust for the care of
a designated domestic or pet animal is valid.
Subsection (b) meets a concern of many pet
owners by providing them a means for leaving funds to be used for the pet's
care.
Historical Note. This Comment was revised in 1993. For the prior version, see 8 U.L.A. 180 (Supp. 1992).
PART 10
UNIFORM INTERNATIONAL WILLS ACT
INTERNATIONAL WILL; INFORMATION REGISTRATION
PREFATORY NOTE
Introduction
The
purpose of the Washington Convention of 1973 concerning international wills is
to provide testators with a way of making wills that will be valid as to form
in all countries joining the Convention.
As proposed by the Convention, the objective would be achieved through
uniform local rules of form, rather than through local or international law
that makes recognition of foreign wills turn on choice of law rules involving
possible application of foreign law. The
international will provisions, prepared for the National Conference of Commissioners
on Uniform State Laws by the Joint Editorial Board for the Uniform Probate Code
which has functioned as a special committee of the Conference for the project,
should be enacted by all states, including those that have not accepted the
Uniform Probate Code. To that end, this
statute is framed both as a free‑standing act and as an added part of the
Uniform Probate Code. The bracketed
headings and numbers fit the proposal into UPC; the others present the proposal
as a free‑standing act.
Uniform
enactment of these provisions will permit the Washington Convention of 1973 to
be implemented through state legislation familiar to will draftsmen. Thus, local proof of foreign law and reliance
on federal legislation regarding wills can be avoided when foreign wills come
into our states to be implemented. Also,
the citizens of all states will have a will form available that should greatly
reduce perils of proof and risks of invalidity that attend proof of American
wills abroad.
History of the International Will
Discussions
about possible international accord on an acceptable form of will led the
Governing Council of UNIDROIT (International Institute for the Unification of
Private Law) in 1960 to appoint a small committee of experts from several
countries to develop proposals.
Following week‑long meetings at the Institute's quarters in
Encouraged
by support for the project from this country and several others, UNIDROIT
served as host for a 1971 meeting in
In
October 1973, pursuant to a commitment made earlier to UNIDROIT representatives
that it would provide leadership for the international will proposal if
sufficient interest from other countries became evident, the United States
served as host for the diplomatic Conference on Wills which met in Washington
from October 10 to 26, 1973. 42
governments were represented by delegations, 6 by observers. The
A
more detailed account of the UNIDROIT project and the 1973 Convention, together
with recommendations regarding United States implementation of the Convention,
appears in Nadelmann, "The Formal Validity of Wills and the Washington
Convention 1973 Providing the Form of an International Will", XXII The
American Journal of Comparative Law, 365 (1974).
Description of the Proposal
The
1973 Convention obligates countries becoming parties to make the annexed
uniform law a part of their local law.
The proposed uniform law contemplates the involvement in will executions
under this law of a state recognized expert who is referred to throughout the
proposals as the "authorized person".
Hence, the local law called for by the Convention must designate
authorized persons, and prescribe the formalities for an international will and
the role of authorized persons relating thereto. The Convention binds parties to respect the
authority of another party's authorized persons and this obligation, coupled
with local enactment of the common statute prescribing the role of such persons
and according finality to their certificates regarding due execution of wills,
assures recognition of international wills under local law in all countries
joining the Convention.
The
Convention and the annexed uniform law deal only with the formal validity of
wills. Thus, the proposal is entirely
neutral in relation to local laws dealing with revocation of wills, or those
defining the scope of testamentary power, or regulating the probate,
interpretation, and construction of wills, and the administration of decedents'
estates. The proposal describes a highly
formal mode of will execution; one that is sufficiently protective against
imposition and mistake to command international approval as being safe
enough. However, failure to meet the
requirements of an international will does not necessarily result in
invalidity, for the mode of execution described for an international will does
not pre‑empt or exclude other standards of testamentary validity.
The
details of the prescribed mode of execution reflect a blend of common and civil
law elements. Two attesting witnesses
are required in the tradition of the English Statute of Wills of 1837 and its
American counterparts. The authorized
person whose participation in the ceremony of execution is required, and whose
certificate makes the will self‑proved, plays a role not unlike that of
the civil law notary, though he is not required to retain custody of the will
as is customary with European notaries.
The
question of who should be given state recognition as authorized persons was
resolved by designation of all licensed attorneys. The reasons for this can be seen in the
observations about the role of Kurt H. Nadelmann, writing in The American
Journal of Comparative Law:
The
duties imposed by the Uniform Law upon the person doing the certifying go
beyond legalization of signatures, the domain of the notary public. At least paralegal training is a necessity. Abroad, in countries with the law trained
notary, the designation is likely to go to this class or at least to include
it. Similarly, in countries with a
closely supervised class of solicitors, their designation may be expected.
Attorneys
are subject to training and licensing requirements everywhere in this
country. The degree to which they are
supervised after qualification varies considerably from state to state, but the
trend is definitely in the direction of more rather than less supervision. Designation of attorneys in the uniform law
permits a state to bring the statute into its local law books without undue
delay.
Roles for Federal and State Law in Relation to
International Will
Several
alternatives are available for arranging federal and local laws on the subject
of international wills. The 1973
Convention obligates nations becoming parties to introduce the annexed uniform
law into their local law, and to recognize the authority, vis a vis will executions and certificates relating to wills, of
persons designated as authorized by other parties to the Convention. But, the Convention includes a clause for
federal states that may be used by the
1.
If a state has two or more territorial units in which different systems of law
apply in relation to matters respecting the form of wills, it may at the time
of signature, ratification, or accession, declare that this Convention shall
extend to all its territorial units or only to one or more of them, and may
modify its declaration by submitting another declaration at any time.
2.
These declarations shall be notified to the Depositary Government and shall
state expressly the territorial units to which the Convention applies.
One
alternative would be for the federal government to refrain from use of Article
XIV and to accept the Convention as applicable to all areas of the
country. The obligation to introduce the
uniform law into local law then could be met by passage of a federal statute incorporating
the uniform law and designating authorized persons who can assist testators
desiring to use the international format, possibly leaving it open for state
legislatures, if they wish, to designate other or additional groups of
authorized persons. As to
constitutionality, the federal statute on wills could be rested on the power of
the federal government to bind the states by treaty and to implement a treaty
obligation to bring agreed upon rules into local law by any appropriate
method.
One
disadvantage of this approach is that it would place a potentially important method
for validating wills in federal statutes where probate practitioners, long
accustomed to finding the statutes pertinent to their specialty in state
compilations, simply would not discover it.
Another, of course, relates to more generalized concerns that would
attend any move by the federal government into an area of law traditionally
reserved to the states and states.
Alternatively,
the federal government might accept the Convention and uniform law as
applicable throughout the land, so that international wills executed with the
aid of authorized persons of other countries would be good anywhere in this
country, but refrain from any designation of authorized persons, other than
possibly of some minimum federal cadre, or of those who could function within
the District of Columbia, leaving the selection of more useful groups of
authorized persons entirely to the local states. One result would be to greatly narrow the
advantage of international wills to American testators who wanted to execute
their instruments at home. In probable
consequence, there would be pressure on state legislatures to enact the uniform
law so as to make the advantages of the system available to local testators. Assuming some state legislatures respond to
the pressure affirmatively and others negatively, a crazy quilt pattern of
international will states would develop, leading possibly to some of the
confusion and risk of illegality feared by Prof. Nadelmann. On the other hand, since execution of an
international will involves use of an authorized person who derives authority
from (on this assumption) state legislation, it seem somewhat unlikely that
testators in those states which have not designated authorized persons will be
led to believe that they can make an international will unless they go to a
state where authorized persons have been designated. Hence, the confusion may not be as great as
if the Convention were inapplicable to portions of the country.
Finally,
the federal government might use Article XIV as suggested earlier, and
designate some but not all states as areas of the country in which the
Convention applied. This seems the least
desirable of all alternatives because it subjects international wills from
abroad to the risk of non‑recognition in some states, and offers the risk
of confusion of American testators regarding the areas of the country where
they can execute a will that will be received outside this country as an
international will.
Under
any of the approaches, the desirability of widespread enactment of state
statutes embodying the uniform law and designating authorized persons, seems
clear, as does the necessity for this project of the National Conference of
Commissioners on Uniform State Laws.
Style
In
preparing the International Will proposal, the special committee, after
considerable discussion and consideration of alternatives, decided to stick as
closely as possible to the wording of the Annex to the Convention of
Will Registration
A
bracketed section 10[2‑1010], is included in the International Will
proposal to aid survivors in locating international and other wills that have
been kept secret by testators during their lives. Differing from the section 2‑901 of the
Uniform Probate Code and the many existing statutes from which section 2‑901
was derived which constitute the probate Court as an agency for the safekeeping
of wills deposited by living testators, the bracketed proposal is for a system
of registering certain minimum information about wills, including where the
instrument will be kept pending the death of the testator. It can be separated or omitted from the rest
of the Act.
This
provision for a state will registration system is derived from recommendations
by the Council of Europe for common market countries. These recommendations were urged on the group
that assembled in Rome in 1971, and were received with interest by
representatives of United Kingdom, Canada and United States, where will‑making
laws and customs have not included any officially sanctioned system for
safekeeping of wills or for locating information about wills, other than
occasional statutes providing for ante‑mortem deposit of wills with
probate Courts. Interest was expressed
also by the notaries from civil law countries who have traditionally aided will‑making
both by formalizing execution and by being the source thereafter of official
certificates about wills, the originals of which are retained with the official
records of the notary and carefully protected and regulated by settled customs
of the profession. All recognized that
acceptance of the international will would tend to increase the frequency with
which owners of property in several different countries relied on a single will
to control all of their properties. This
prospect, plus increasing mobility of persons between countries, indicates that
new methods for safekeeping and locating wills after death should be developed. The Resolution adopted as the final act of
the 1973 Conference on Wills shows that the problem also attracted the interest
and attention of that assembly.
Apart
from problems of wills that may have effect in more than one country, Americans
are moving from state to state with
increasing frequency. As the
international will statute becomes enacted in most if not all states, our laws
will tend to induce persons to rely on a single will as sufficient even though
they may own land in two or more states, and to refrain from making new wills
when they change domicile from one state to another. The spread of the Uniform Probate Code,
tending as it does to give wills the same meaning and procedural status in all
states, will have a similar effect.
General
enactment of the will registration section should lead to development of new
state and interstate systems to meet the predictable needs of testators and
survivors that will follow as the law of wills is detached from provincial
restraints. It is offered with the
international will provisions because both meet obvious needs of the times.
Documents from 1973 Convention
Three
documents representing the work of the 1973 Convention are reproduced here for
the convenience of members of the Conference.
CONVENTION PROVIDING A
UNIFORM LAW
ON THE FORM OF AN
INTERNATIONAL WILL
The
DESIRING
to provide to a greater extent for the respecting of last wills by establishing
an additional form of will hereinafter to be called an "international
will" which, if employed, would dispense to some extent with the search
for the applicable law;
HAVE
RESOLVED to conclude a Convention for this purpose and have agreed upon the
following provisions:
Article I 1. Each Contracting Party undertakes that not
later than six months after the date of entry into force of this Convention in
respect of that Party it shall introduce into its law the rules regarding an
international will set out in the Annex to this Convention.
2.
Each Contracting Party may introduce the provisions of the Annex into its law
either by reproducing the actual text, or by translating it into its official
language or languages.
3.
Each Contracting Party may introduce into its law such further provisions as
are necessary to give the provisions of the Annex full effect in its territory.
4.
Each Contracting Party shall submit to the Depositary Government the text of
the rules introduced into its national law in order to implement the provisions
of this Convention.
Article II 1. Each Contracting Party shall implement the
provisions of the Annex in its law, within the period provided for in the
preceding article, by designating the persons who, in its territory, shall be
authorized to act in connection with international wills. It may also designate as a person authorized
to act with regard to its nationals its diplomatic or consular agents abroad
insofar as the local law does not prohibit it.
2.
The Party shall notify such designation, as well as any modifications thereof,
to the Depositary Government.
Article III The capacity of the authorized person to act
in connection with an international will, if conferred in accordance with the
law of a Contracting Party, shall be recognized in the territory of the other
Contracting Parties.
Article IV The effectiveness of the certificate provided
for in Article 10 of the Annex shall be recognized in the territories of all
Contracting Parties.
Article V 1. The conditions requisite to acting as a
witness of an international will shall be governed by the law under which the
authorized person was designated. The
same rule shall apply as regards an interpreter who is called upon to act.
2.
Nonetheless no one shall be disqualified to act as a witness of an
international will solely because he is an alien.
Article VI 1. The signature of the testator, of the
authorized person, and of the witnesses to an international will, whether on
the will or on the certificate, shall be exempt from any legalization or like
formality.
2.
Nonetheless, the competent authorities of any Contracting Party may, if
necessary, satisfy themselves as to the authenticity of the signature of the
authorized person.
Article VII The safekeeping of an international will
shall be governed by the law under which the authorized person was designated.
Article VIII No reservation shall be admitted to this
Convention or to its Annex.
Article IX 1. The present Convention shall be open for
signature at
2.
The Convention shall be subject to ratification.
3.
Instruments of ratification shall be deposited with the Government of the
Article X 1. The Convention shall be open indefinitely
for accession.
2.
Instruments of accession shall be deposited with the Depositary Government.
Article XI 1. The present Convention shall enter into
force six months after the date of deposit of the fifth instrument of
ratification or accession with the Depositary Government.
2.
In the case of each State which ratifies this Convention or accedes to it after
the fifth instrument of ratification or accession has been deposited, this
Convention shall enter into force six months after the deposit of its own
instrument of ratification or accession.
Article XII 1. Any Contracting Party may denounce this
Convention by written notification to the Depositary Government.
2.
Such denunciation shall take effect twelve months from the date on which the
Depositary Government has received the notification, but such denunciation
shall not affect the validity of any will made during the period that the
Convention was in effect for the denouncing State.
Article XIII 1. Any State may, when it deposits its
instrument of ratification or accession or at any time thereafter, declare, by
a notice addressed to the Depositary Government, that this Convention shall
apply to all or part of the territories for the international relations of
which it is responsible.
2.
Such declaration shall have effect six months after the date on which the
Depositary Government shall have received notice thereof or, if at the end of
such period the Convention has not yet come into force, from the date of its
entry into force.
3.
Each Contracting Party which has made a declaration in accordance with
paragraph 1 of this Article may, in accordance with Article XII, denounce this
Convention in relation to all or part of the territories concerned.
Article XIV 1. If a State has two or more territorial
units in which different systems of law apply in relation to matters respecting
the form of wills, it may at the time of signature, ratification, or accession,
declare that this Convention shall extend to all its territorial units or only
to one or more of them, and may modify its declaration by submitting another
declaration at any time.
2.
These declarations shall be notified to the Depositary Government and shall
state expressly the territorial units to which the Convention applies.
Article XV If a Contracting Party has
two or more territorial units in which different systems of law apply in
relation to matters respecting the form of wills, any reference to the internal
law of the place where the will is made or to the law under which the
authorized person has been appointed to act in connection with international
wills shall be construed in accordance with the constitutional system of the
Party concerned.
Article XVI 1. The original of the present Convention, in
the English, French, Russian and Spanish languages, each version being equally
authentic, shall be deposited with the Government of the United States of
America, which shall transmit certified copies thereof to each of the signatory
and acceding States and to the International Institute for the Unification of
Private Law.
2.
The Depositary Government shall give notice to the signatory and acceding
States, and to the International Institute for the Unification of Private Law,
of:
(a) any signature;
(b) the deposit of any instrument of ratification or
accession;
(c) any date on which this Convention enters into
force in accordance with Article XI;
(d) any communication received in accordance with
Article I, paragraph 4;
(e) any notice received in accordance with Article
II, paragraph 2;
(f) any declaration received in accordance with
Article XIII, paragraph 2, and the date on which such declaration takes effect;
(g) any denunciation received in accordance with
Article XII, paragraph 1, or Article XIII, paragraph 3, and the date on which
the denunciation takes effect;
(h) any declaration received in accordance with
Article XIV, paragraph 2, and the date on which the declaration takes effect.
IN
WITNESS WHEREOF, the undersigned Plenipotentiaries, being duly authorized to
that effect, have signed the present Convention.
DONE
at
Annex
UNIFORM LAW ON THE FORM OF
AN INTERNATIONAL WILL
Article 1 1. A will shall be valid as regards form,
irrespective particularly of the place where it is made, of the location of the
assets and of the nationality, domicile or residence of the testator, if it is
made in the form of an international will complying with the provisions set out
in Articles 2 to 5 hereinafter.
2.
The invalidity of the will as an international will shall not affect its formal
validity as a will of another kind.
Article 2 This law shall not apply to the form of
testamentary dispositions made by two or more persons in one instrument.
Article 3 1. The will shall be made in writing.
2.
It need not be written by the testator himself.
3.
It may be written in any language, by hand or by any other means.
Article 4 1. The testator shall declare in the presence
of two witnesses and of a person authorized to act in connection with international
wills that the document is his will and that he knows the contents thereof.
2.
The testator need not inform the witnesses, or the authorized person, of the
contents of the will.
Article 5 1. In the presence of the witnesses and of
the authorized person, the testator shall sign the will or, if he has
previously signed it, shall acknowledge his signature.
2.
When the testator is unable to sign, he shall indicate the reason therefor to
the authorized person who shall make note of this on the will. Moreover, the testator may be authorized by
the law under which the authorized person was designated to direct another
person to sign on his behalf.
3.
The witnesses and the authorized person shall there and then attest the will by
signing in the presence of the testator.
Article 6 1. The signatures shall be placed at the end
of the will.
2.
If the will consists of several sheets, each sheet shall be signed by the
testator or, if he is unable to sign, by the person signing on his behalf or,
if there is no such person, by the authorized person. In addition, each sheet shall be numbered.
Article 7 1. The date of the will shall be the date of
its signature by the authorized person.
2.
This date shall be noted at the end of the will by the authorized person.
Article 8 In the absence of any mandatory rule
pertaining to the safekeeping of the will, the authorized person shall ask the
testator whether he wishes to make a declaration concerning the safekeeping of
his will. If so and at the express
request of the testator the place where he intends to have his will kept shall
be mentioned in the certificate provided for in Article 9.
Article 9 The authorized person shall attach to the
will a certificate in the form prescribed in Article 10 establishing that the
obligations of this law have been complied with.
Article 10 The certificate drawn up by the authorized
person shall be in the following form or in a substantially similar form:
CERTIFICATE
(Convention of October 26,
1973)
1. I, ____________________ (name, address and capacity), a person
authorized to act in connection with international wills
2. Certify that on ________ (date) at __________ (place)
3. (testator) ____________________ (name, address, date and place of
birth) in my presence and that of the witnesses
4. (a)____________________ (name, address, date and place of birth)
(b)____________________ (name, address, date and place of birth)
has declared that the attached document is his will and that he knows the
contents thereof.
5. I furthermore certify that:
6. (a)in my presence and in that of the witnesses
(1) the testator has
signed the will or has acknowledged his signature previously affixed.
*(2) following a
declaration of the testator stating that he was unable to sign his will for the
following reason _____
‑I have mentioned this declaration on the will
*‑the signature has been affixed by
____________________
(name, address)
7. (b) the witnesses and I have
signed the will;
8. *(c) each page of
the will has been signed by ____________ and numbered;
9. (d) I have satisfied myself
as to the identity of the testator and of the witnesses as designated above;
10. (e) the witnesses met the
conditions requisite to act as such according to the law under which I am
acting;
11. *(f) the testator
has requested me to include the following statement concerning the safekeeping
of his will:
_________________________
_________________________
*To
be completed if appropriate
12. PLACE
13. DATE
14. SIGNATURE and, if necessary, SEAL
Article 11 The authorized person shall keep a copy of
the certificate and deliver another to the testator.
Article 12 In the absence of evidence to the contrary,
the certificate of the authorized person shall be conclusive of the formal
validity of the instrument as a will under this Law.
Article 13 The absence or irregularity of a certificate
shall not affect the formal validity of a will under this Law.
Article 14 The international will shall be subject to
the ordinary rules of revocation of wills.
Article 15 In interpreting and applying the provisions
of this law, regard shall be had to its international origin and to the need
for uniformity in its interpretation.
RESOLUTION
The
Conference
Considering
the importance of measures to permit the safeguarding of wills and to find them
after the death of the testator;
Emphasizing
the special interest in such measures with respect to the international will,
which is often made by the testator far from his home;
RECOMMENDS
to the States that participated in the present Conference
‑that
they establish an internal system, centralized or not, to facilitate the
safekeeping, search and discovery of an international will as well as the
accompanying certificate, for example, along the lines of the Convention on the
Establishment of a Scheme of Registration of Wills, concluded at Basel on May
16, 1972;
‑that
they facilitate the international exchange of information in these matters and,
to this effect, that they designate in each state an authority or a service to handle
such exchanges.
[Section 2‑1001. Definitions.
In this Part:
(1) "International will" means a will executed in conformity
with sections 2‑1002 through 2‑1005.
(2) "Authorized
person" and "person authorized to act in connection with
international wills" mean a person who by section 2‑1009, or by the
laws of the
COMMENT
The
term "international will" connotes only that a will has been executed
in conformity with this act. It does not
indicate that the will was planned for implementation in more than one country,
or that it relates to an estate that has or may have international
implications. Thus, it will be entirely
appropriate to use an "international will" whenever a will is
desired.
The
reference in subsection (2) to persons who derive their authority to act from
federal law, including Foreign Service Regulations, anticipates that the United
States will become a party to the 1973 Convention, and that Congress, pursuant
to the obligation of the Convention, will enact the annexed uniform law and
include therein some designation, possibly of a cadre only, of authorized
persons. See the discussion under
"Roles for Federal and State Law in Relation to International Will",
in the Prefatory Note, supra. If all states enact similar laws and designate
all attorneys as authorized persons, the need for testators to resort to those
designated by federal law may be minimal.
It seems desirable, nonetheless, to associate whoever may be designated
by federal law as suitable authorized persons for purposes of implementing state
enactments of the uniform act. The resulting
"borrowing" of those designated federally should minimize any
difficulties that might arise from variances in the details of execution of
international wills that may develop in the state and federal enactment
process.
In
the Explanatory Report of the 1973 Convention prepared by Mr. Jean‑Pierre
Plantard, Deputy Secretary‑General of the International Institute for the
Unification of Private Law (UNIDROIT) as published by the Institute in 1974,
the following paragraphs that are relevant to this section appear:
"The
Uniform Law gives no definition of the term will. The preamble of the Convention also uses the
expression 'last wills'. The material
contents of the document are of little importance as the Uniform Law governs
only its form. There is, therefore,
nothing to prevent this form being used to register last wishes that do not
involve the naming of an heir and which in some legal systems are called by a
special name, such as 'Kodizill' in Austrian Law (ABGB § 553).
"Although
it is given the qualification 'international', the will dealt with by the
Uniform Law can easily be used for a situation without any international
element, for example, by a testator disposing in his own country of his assets,
all of which are situated in that same country.
The adjective 'international', therefore, only indicates what was had in
mind at the time when this new will was conceived. Moreover, it would have been practically
impossible to define a satisfactory sphere of application, had one intended to
restrict its use to certain situations with an international element. Such an element could only be assessed by
reference to several factors (nationality, residence, domicile of the testator,
place where the will was drawn up, place where the assets are situated) and,
moreover, these might vary considerably between when the will was drawn up and
the beginning of the inheritance proceedings.
"Use
of the international will should, therefore, be open to all testators who
decide they want to use it. Nothing
should prevent it from competing with the traditional forms if it offers
advantages of convenience and simplicity over the other forms and guarantees
the necessary certainty."
Section 2‑1002.
International Will; Validity.
(a) A will shall be valid as regards form, irrespective particularly of
the place where it is made, of the location of the assets and of the
nationality, domicile, or residence of the testator, if it is made in the form
of an international will complying with the requirements of this Part.
(b) The invalidity of the will as an international will shall not
affect its formal validity as a will of another kind.
(c) This Part shall not apply to the form of testamentary dispositions
made by two or more persons in one instrument.
COMMENT
This
section combines what appears in Articles 1 and 2 of the Annex into a single
section. Except for the reference to
later sections, the first sentence is identical to Article 1, section 1 of the
Annex, the second sentence is identical to Article 1, section 2, and the third
is identical to Article 2.
Mr.
Plantard's commentary that is pertinent to this section is as follows:
"The Uniform Law is
intended to be introduced into the legal system of each
"The
scope of the Uniform Law is thus defined in the first sentence. As was mentioned above, the idea behind it
was to establish a new type of will, the form of which would be the same in all
countries. The Law obviously does not
affect the subsistence of all the other forms of will known under each national
law . . .
"Some
of the provisions relating to form laid down by the Uniform Law are considered
essential. Violation of these provisions
is sanctioned by the invalidity of the will as an international will. These are:
that the will must be made in writing, the presence of two witnesses and
of the authorized person, signature by the testator and by the persons involved
(witnesses and authorized person) and the prohibition of joint wills. The other formalities, such as the position
of the signature and date, the delivery and form of the certificate, are laid
down for reasons of convenience and uniformity but do not affect the validity of
the international will.
"Lastly,
even when the international will is declared invalid because one of the
essential provisions contained in Articles 2 to 5 has not been observed, it is
not necessarily deprived of all effect.
Paragraph 2 of Article 1 specifies that it may still be valid as a will
of another kind, if it conforms with the requirements of the applicable
national law. Thus, for example, a will
written, dated and signed by the testator but handed over to an authorized
person in the absence of witnesses or without the signature of the witnesses
and the authorized person could quite easily be considered a valid holograph
will. Similarly, an international will
produced in the presence of a person who is not duly authorized might be valid
as a will witnessed in accordance with Common law rules.
"However,
in these circumstances, one could no longer speak of an international will and
the validity of the document would have to be assessed on the basis of the
rules of internal law or of private international law.
"A
joint will cannot be drawn up in the form of an international will. This is the meaning of Article 2 of the
Uniform Law which does not give an opinion as to whether this prohibition on
joint wills, which exists in many legal systems, is connected with its form or
its substance.
"A
will made in this international form by several people together in the same
document would, therefore, be invalid as an international will but could
possibly be valid as another kind of will, in accordance with Article 1,
paragraph 2 of the Uniform Law.
"The terminology used in Article 2 is in
harmony with that used in Article 4 of The Hague Convention on the Conflicts of
Laws Relating to the Form of Testamentary Dispositions."
Section 2‑1003.
International Will; Requirements.
(a) The will shall be made in writing.
It need not be written by the testator himself. It may be written in any language, by hand or
by any other means.
(b) The testator shall declare in the presence of two witnesses and of
a person authorized to act in connection with international wills that the
document is his will and that he knows the contents thereof. The testator need not inform the witnesses,
or the authorized person, of the contents of the will.
(c) In the presence of the witnesses, and of the authorized person, the
testator shall sign the will or, if he has previously signed it, shall
acknowledge his signature.
(d) When the testator is unable to sign, the absence of his signature
does not affect the validity of the international will if the testator
indicates the reason for his inability to sign and the authorized person makes
note thereof on the will. In these
cases, it is permissible for any other person present, including the authorized
person or one of the witnesses, at the direction of the testator to sign the
testator's name for him, if the authorized person makes note of this also on
the will, but it is not required that any person sign the testator's name for
him.
(e) The witnesses and the authorized person shall there and then attest
the will by signing in the presence of the testator.
COMMENT
The
five subsections of this section correspond in content to Articles 3 through 5
of the Annex to the 1973 Convention.
Article 1, section 1 makes it clear that compliance with all
requirements listed in Articles 3 through 5 is necessary in order to achieve an
international will. As re‑organized
for enactment in the
Mr.
Plantard's comments on the requirements are as follows:
"Paragraph
1 of Article 3 lays down an essential condition for a will's validity as an
international will: it must be made in
writing.
"The
Uniform Law does not explain what is meant by 'writing'. This is a word of everyday language which, in
the opinion of the Law's authors, does not call for any definition but which
covers any form of expression made by signs on a durable substance.
"Paragraphs
2 and 3 show the very liberal approach of the draft.
"Under
paragraph 2, the will does not necessarily have to be written by the testator
himself. This provision marks a moving
away from the holograph will toward the other types of will: the public will or the mystic will and
especially the Common law will. The
latter, which is often very long, is only in exceptional cases written in the
hand of the testator, who is virtually obliged to use a lawyer, in order to use
the technical formulae necessary to give effect to his wishes. This is all the more so as wills frequently
involve inter vivos family arrangements, and fiscal considerations play a very
important part in this matter.
"This
provision also allows for the will of illiterate persons, or persons who, for
some other reason, cannot write themselves, for example paralysed or blind
persons.
"According
to paragraph 3 a will may be written in any language. This provision is in contrast with the rules
accepted in various countries as regards public wills. It will be noted that the Uniform Law does
not even require the will to be written in a language known by the
testator. The latter is, therefore, quite
free to choose according to whichever suits him best: it is to be expected that he will usually
choose his own language but, if he thinks it is better, he will sometimes also
choose the language of the place where the will is drawn up or that of the
place where the will is mainly to be carried out. The important point is that he have full
knowledge of the contents of his will, as is guaranteed by Articles 4 and 10.
"Lastly,
a will may be written by hand or by any other method. This provision is the corollary of paragraph
2. What is mainly had in mind is a
typewriter, especially in the case of a will drawn up by a lawyer advising the
testator.
"The
liberal nature of the principles set out in Article 3 calls for certain
guarantees on the other hand. These are
provided by the presence of three persons, already referred to in the context
of Articles III and V of the Convention, that is to say, the authorised person
and the two witnesses. It is evident
that these three persons must all be simultaneously present with the testator
during the carrying out of the formalities laid down in Articles 4 and 5.
"Paragraph
1 of Article 4 requires, first of all, that the testator declare, in the
presence of these persons, that the document produced by him is his will and
that he knows the contents thereof. The
word 'declares' covers any unequivocal expression of intention, by way of words
as well as by gestures or signs, as, for example, in the case of a testator who
is dumb. This declaration must be made
on pain of the international will being invalid. This is justified by the fact that the will
produced by the testator might have been materially drawn up by a person other
than the testator and even, in theory, in a language which is not his own.
"Paragraph
2 of the article specifies that this declaration is sufficient: the testator does not need to 'inform' the
witnesses or the authorized person 'of the contents of the will'. This rule makes the international will differ
from the public will and brings it closer to the other types of will: the holograph will and especially the mystic
will and the Common law will.
"The
testator can, of course, always ask for the will to be read, a precaution which
can be particularly useful if the testator is unable to read himself. The paragraph under consideration does not in
any way prohibit this; it only aims at
ensuring respect for secrecy, if the testator should so wish. The international will can therefore be a
secret will without being a closed will.
"The
declaration made by the testator under Article 4 is not sufficient: under Article 5, paragraph 1, he must also
sign his will. However, the authors of
the Uniform Law presumed that, in certain cases, the testator might already
have signed the document forming his will before producing it. To require a second signature would be
evidence of an exaggerated formalism and a will containing two signatures by
the testator would be rather strange.
That is why the same paragraph provides that, when he has already signed
the will, the testator can merely acknowledge it. This acknowledgement is completely informal
and is normally done by a simple declaration in the presence of the authorized
person and witnesses.
"The
Uniform Law does not explain what is meant by 'signature'. This is once more a word drawn from everyday
language, the meaning of which is usually the same in the various legal
systems. The presence of the authorized
person, who will necessarily be a practicing lawyer will certainly guarantee
that there is a genuine signature correctly affixed.
"Paragraph
2 was designed to give persons incapable of signing the possibility of making
an international will. All they have to
do is indicate their incapacity and the reason therefore to the authorized
person. The authorized person must then
note this declaration on the will which will then be valid, even though it has
not been signed by the testator.
Indication of the reason for incapacity is an additional guarantee as it
can be checked. The certificate drawn up
by the authorized person in the form prescribed in Article 10 again reproduces
this declaration.
"The
authors of the Uniform Law were also conscious of the fact that in some legal
systems‑for example, English law‑persons who are incapable of
signing can name someone to sign in their place. Although this procedure is completely unknown
to other systems in which a signature is exclusively personal, it was accepted
that the testator can ask another person to sign in his name, if this is
permitted under the law from which the authorized person derives his
authority. This amounts to nothing more
than giving satisfaction to the practice of certain legal systems, as the
authorized person must, in any case, indicate on the will that the testator
declared that he could not sign, and give the reason therefore. This indication is sufficient to make the
will valid. There will, therefore simply
be a signature affixed by a third person instead of that of the testator. Although there is nothing stipulating this in
the Uniform Law, one can expect the authorized person to explain the source of
this signature on the document, all the more so as the signature of this
substitute for the testator must also appear on the other pages of the will, by
virtue of Article 6.
"This
method over which there were some differences of opinion at the Diplomatic
Conference, should not however interfere in any way with the legal systems
which do not admit a signature in the name of someone else. Besides, its use is limited to the legal systems
which admit it already and it is now implicitly accepted by the others when
they recognize the validity of a foreign document drawn up according to this
method. However, this situation can be
expected to arise but rarely, as an international will made by a person who is
incapable of signing it will certainly be a rare event.
"Lastly,
Article 5 requires that the witnesses and authorized person also sign the will
there and then in the presence of the testator.
By using the words 'attest the will by signing', when only the word
'sign' had been used when referring to the testator, the authors of the Uniform
Law intended to make a distinction between the person acknowledging the
contents of a document and those who have only to affix their signature in order
to certify their participation and presence.
"In conclusion, the international will
will normally contain four signatures:
that of the testator, that of the authorized person and those of the two
witnesses. The signature of the testator
might be missing: in this case, the will
must contain a note made by the authorized person indicating that the testator
was incapable of signing, adding his reason.
All these signatures and notes must be made on pain of invalidity. Finally, if the signature of the testator is
missing, the will could contain the signature of a person designated by the
testator to sign in his name, in addition to the above‑mentioned note
made by the authorized person."
Section 2‑1004.
International Will; Other Points of Form.
(a) The signatures shall be placed at the end of the will. If the will consists of several sheets, each
sheet will be signed by the testator or, if he is unable to sign, by the person
signing on his behalf or, if there is no such person, by the authorized person. In addition, each sheet shall be numbered.
(b) The date of the will shall be the date of its signature by the
authorized person. That date shall be
noted at the end of the will by the authorized person.
(c) The authorized person shall ask the testator whether he wishes to
make a declaration concerning the safekeeping of his will. If so and at the express request of the
testator the place where he intends to have his will kept shall be mentioned in
the certificate provided for in Section 5.
(d) A will executed in compliance with Section 3 shall not be invalid
merely because it does not comply with this section.
COMMENT
Mr.
Plantard's commentary about Articles 6, 7 and 8 of the Annex [supra] relate to subsections (a), (b)
and (c) respectively of this section.
Subsections (a) and (b) are identical to Articles 6 and 7; subsection
(c) is the same as Article 8 of the Annex except that the prefatory language
"In the absence of any mandatory rule pertaining to the safekeeping of the
will . . . " has been deleted because it is inappropriate for inclusion in
a local statute designed for enactment by a state that has had no tradition or
familiarity with mandatory rules regarding the safekeeping of the wills. Subsection (d) embodies the sense of Article
1, section 1 of the Annex which states that compliance with Articles 2 to 5 is
necessary and so indicates that compliance with the remaining articles
prescribing formal steps is not necessary.
Mr.
Plantard's commentary is as follows:
"The
provisions of Article 6 and those of the following articles are not imposed on
pain of invalidity. They are
nevertheless compulsory legal provisions which can involve sanctions, for
example, the professional, civil and even criminal liability of the authorized
person, according to the provisions of the law from which he derives his
authority.
"The
first paragraph, to guarantee a uniform presentation for international wills,
simply indicates that signatures shall be placed at the end of international
wills, that is, at the end of the text.
"Paragraph
2 provides for the frequent case in which the will consists of several
sheets. Each sheet has to be signed by
the testator, to guarantee its authenticity and to avoid substitutions. The use of the word 'signed' seems to imply
that the signature must be in the same form as that at the end of the
will. However, in the legal systems
which merely require that the individual sheets be paraphed, usually by means
of initials, this would certainly have the same value as signature, as a
signature itself could simply consist of initials.
"The
need for a signature on each sheet, for the purpose of authentifying each such
sheet, led to the introduction of a special system for the case when the
testator is incapable of signing. In
this case it will generally be the authorized person who will sign each sheet
in his place, unless, in accordance with Article 5, paragraph 2, the testator
has designated another person to sign in his name. In this case, it will of course be this
person who will sign each sheet.
"Lastly,
it is prescribed that the sheets shall be numbered. Although no further details are given on this
subject, it will in practice be up to the authorized person to check if they
have already been numbered and, if not, to number them or ask the testator to
do so.
"The
aim of this provision is obviously to guarantee the orderliness of the document
and to avoid losses, subtractions or substitutions.
"The
date is an essential element of the will and its importance is quite clear in the
case of successive wills. Paragraph 1 of
Article 7 indicates that the date of the will in the case of an international
will is the date on which it was signed by the authorized person, this being
the last of the formalities prescribed by the Uniform Law on pain of invalidity
(Article 5, paragraph 3). It is
therefore, from the moment of this signature that the international will is
valid.
"Paragraph
2 stipulates that the date shall be noted at the end of the will by the
authorized person. Although this is
compulsory for the authorized person, this formality is not sanctioned by the
invalidity of the will which, as is the case in many legal systems such as
English, German and Austrian law, remains fully valid even if it is not dated
or is wrongly dated. The date will then
have to be proved by some other means.
It can happen that the will has two dates, that of its drawing up and
the date on which it was signed by the authorized person as a result of which
it became an international will.
Evidently only this last date is to be taken into consideration.
"During
the preparatory work it had been intended to organize the safekeeping of the
international will and to entrust its care to the authorized person. This plan caused serious difficulties both
for the countries which do not have the notary as he is known in Civil law
systems and for the countries in which wills must be deposited with a public
authority, as is the case, for example, in the Federal Republic of Germany,
where wills must be deposited with a Court.
"The
authors of the Uniform Law therefore abandoned the idea of introducing a
unified system for the safekeeping of international wills. However, where a legal system already has
rules on this subject, these rules of course also apply to the international
will as well as to other types of will.
Finally, the Washington Conference adopted, at the same time as the
Convention, a resolution recommending States, in particular, to organize a
system facilitating the safekeeping of international wills (see the commentary
on this resolution, at the end of this Report).
It should lastly be underlined that States desiring to give testators an
additional guarantee as regards the international will will organize its safekeeping
by providing, for example, that it shall be deposited with the authorized
person or with a public officer.
Complementary legislation of this kind could be admitted within the
framework of paragraph 3 of Article 1 of the Convention, as was mentioned in
our commentary on that article.
"These
considerations explain why Article 8 starts by stipulating that it only applies
'in the absence of any mandatory rule pertaining to the safekeeping of the
will'. If there happens to be such a
rule in the national law from which the authorized person derives his authority
this rule shall govern the safekeeping of the will. If there is no such rule, Article 8 requires
the authorized person to ask the testator whether he wishes to make a
declaration in this regard. In this way,
the authors of the Uniform Law sought to reconcile the advantage of exact
information so as to facilitate the discovery of the will after the death of
the testator, on the one hand, and respect for the secrecy which the testator
may want as regards the place where his will is kept, on the other hand. The testator is therefore quite free to make
or not to make a declaration in this regard, but his attention is nevertheless
drawn to the possibility left open to him, and particularly to the opportunity
he has, if he expressly asks for it, to have the details he thinks appropriate
in this regard mentioned on the certificate provided for in Article 9. It will thus be easier to find the will again
at the proper time, by means of the certificate made out in three copies, one
of which remains in the hands of the authorized person."
Section 2‑1005.
International Will; Certificate.
The authorized person shall attach to the
will a certificate to be signed by him establishing that the requirements of
this Part for valid execution of an international will have been complied
with. The authorized person shall keep a
copy of the certificate and deliver another to the testator. The certificate
shall be substantially in the following form:
CERTIFICATE
(Convention of October 26,
1973)
1. I,
____________________ (name, address and capacity), a person authorized to act
in connection with international wills
2. Certify
that on __________ (date) at __________ (place)
3. (testator)
___________ (name, address, date and place of birth) in my presence and that of
the witnesses
4. (a) ____________________ (name, address, date and
place of birth)
(b) ____________________
(name, address, date and place of birth)has declared that the attached document
is his will and that he knows the contents thereof.
5. I
furthermore certify that:
6. (a) in my presence and in that of the witnesses
(1) the
testator has signed the will or has acknowledged his signature previously
affixed.
* following a
declaration of the testator stating that he
(2) was
unable to sign his will for the following reason ____________________, I have
mentioned this declaration on the will
* and the signature has been
affixed by ____________________ (name and address)
7. (b) the witnesses and I have signed the will;
8. *(c) each page of the will has been signed by ____________________ and
numbered;
9. (d) I
have satisfied myself as to the identity of the testator and of the witnesses
as designated above;
10. (e) the
witnesses met the conditions requisite to act as such according to the law
under which I am acting;
11. *(f) the testator has requested me to include the following statement
concerning the safekeeping of his will:
12. PLACE
OF EXECUTION
13. DATE
14. SIGNATURE
and, if necessary, SEAL
* to be completed if appropriate
COMMENT
This
section embodies the content of Articles 9, 10 and 11 of the Annex with only
minor, clarifying changes. Those
familiar with the pre‑proved will authorized by Uniform Probate Code § 2‑504
should be comfortable with sections 5 and 6 of this act. Indeed, inclusion of these provisions in the
Annex was the result of a concession by those familiar with civil law
approaches to problems of execution and proof of wills, to the English speaking
countries where will ceremonies are divided between those occurring as testator
acts, and those occurring later when the will is probated. Further, since English and Canadian practices
reduce post‑mortem probate procedures down to little more than the
presentation of the will to an appropriate registry and so, approach civil law
customs, the concession was largely to accommodate American states where post‑mortem
probate procedures are very involved.
Thus, the primary purpose of the certificate, which provides conclusive
proof of the formal validity of the will, is to put wills executed before a
civil law notary and wills executed in the American tradition on a par; with
the certificate, both are good without question insofar as formal requirements
are concerned.
It
should be noted that Article III of the Convention binds countries becoming
parties to recognize the capacity of an authorized person to act in relation to
an international will, as conferred by the law of another country that is a
party. This means that an international
will coming into one of our states that has enacted the uniform law will be
entirely good under local law, and that the certificate from abroad will
provide conclusive proof of its validity.
May
an international will be contested? The
answer is clearly affirmative as to contests based on lack of capacity, fraud,
undue influence, revocation or ineffectiveness based on the contents of the
will or substantive restraints on testamentary power. Contests based on failure to follow mandatory
requirements of execution are not precluded because the next section provides
that the certificate is conclusive only "in the absence of evidence to the
contrary". However, the Convention
becomes relevant when one asks whether a probate Court may require additional
proof of the genuineness of signatures by testators and witnesses. It provides:
Article VI 1. The signature of the testator, of the
authorized person, and of the witnesses to an international will, whether on
the will or on the certificate, shall be exempt from any legalization or like
formality.
2.
Nonetheless, the competent authorities of any Contracting Party may, if
necessary, satisfy themselves as to the authenticity of the signature of the
authorized person.
Presumably,
the prohibition against legalization would not preclude additional proof of
genuineness if evidence tending to show forgery is introduced, but without
contrary proof, the certificate proves the will.
The
authorized person is directed to attach the certificate to the will, and to
keep a copy. The sense of
"keep" intended by the draftsman is "continuously keep," or
"preserve."
If
the will with attached certificate is to be retained by the authorized person
or otherwise placed for safekeeping out of the possession of the testator, good
practice would involve an unexecuted copy of the will that could be given to
the testator for disposition or retention as he saw fit. It would seem that good practice in these
cases also would involve attachment of the testator's copy of the certificate
to testator's copy of the will. The statute
is silent on this point, however.
Mr.
Plantard's commentary on the articles of the Annex that are pertinent to
section 5, are as follows:
"This
provision specifies that the authorized person must attach to the international
will a certificate drawn up in accordance with the form set out in Article 10,
establishing that the Uniform Law's provisions have been complied with. The term 'joint au testament' means that the
certificate must be added to the will, that is, fixed thereto. The English text which uses the work 'attach'
is perfectly clear on this point.
Furthermore, it results from Article 11 that the certificate must be
made out in three copies. This document,
the contents of which are detailed in Article 10, is proof that the formalities
required for the validity of the international will have been complied
with. It also reveals the identity of
the persons who participated in drawing up the document and may, in addition,
contain a declaration by the testator as to the place where he intends his will
to be kept. It should be stressed that
the certificate is drawn up under the entire responsibility of the authorized
person who is the only person to sign it.
"Article
10 sets out the form for the certificate.
The authorized person must abide by it, in accordance with the
provisions of Article 10 itself, laying down this or a substantially similar
form. This last phrase could not be
taken as authorizing him to depart from this form: it only serves to allow for small changes of
detail which might be useful in the interests of improving its
comprehensibility or presentation, for example, the omission of the particulars
marked with an asterisk indicating that they are to be completed where
appropriate when in fact they do not need to be completed and thus become
useless.
"Including
the form of a certificate in one of the articles of a Uniform Law is
unusual. Normally these appear in the
annexes to Conventions. However, in this
way, the authors of the Uniform Law underlined the importance of the
certificate and its contents. Moreover,
the Uniform Law already forms the Annex to the Convention itself.
"The
14 particulars indicated on the certificate are numbered. These numbers must be reproduced on each
certificate, so as to facilitate its reading, especially when the reader speaks
a foreign language, as they will help him to find the relevant details more
easily: the name of the authorized
person and the testator, addresses, etc.
"The
certificate contains all the elements necessary for the identification of the
authorized person, testator and witnesses.
It expressly mentions all the formalities which have to be carried out
in accordance with the provisions of the Uniform Law. Furthermore, the certificate contains all the
information required for the will's registration according to the system
introduced by the Council of Europe Convention on the Establishment of a Scheme
of Registration of Wills, signed at
"The authorized person must keep a copy
of the certificate and deliver one to the testator. Seeing that another copy has to be attached
to the will in accordance with Article 9, it may be deduced that the authorized
person must make out altogether three copies of the certificate. These cannot be simple copies but have to be
three signed originals. This provision
is useful for a number of reasons. The
fact that the testator keeps a copy of the certificate is a useful reminder for
him, especially when his will is being kept by the authorized person or
deposited with someone designated by national law. Moreover, discovery of the certificate among
the testators' papers will inform his heirs of the existence of a will and will
enable them to find it more easily. The
fact that the authorized person keeps a copy of the certificate enables him to
inform the heirs as well, if necessary.
Lastly, the fact that there are several copies of the certificate is a
guarantee against changes being made to one of them and even, to a certain extent,
against certain changes to the will itself, for example as regards its
date."
Section 2‑1006.
International Will; Effect of Certificate.
In the absence of evidence to the contrary,
the certificate of the authorized person shall be conclusive of the formal
validity of the instrument as a will under this Part. The absence or
irregularity of a certificate shall not affect the formal validity of a will
under this Part.
COMMENT
This
section, which corresponds to Articles 11 and 12 of the Annex, must be read
with the definition of "authorized person" in section 1, and Articles
III and IV of the 1973 Convention which will become binding on all states if
and when the
Article III. The capacity of the
authorized person to act in connection with an international will, if conferred
in accordance with the law of a Contracting Party, shall be recognized in the
territory of the other Contracting Parties.
Article IV. The effectiveness of the
certificate provided for in Article 10 of the Annex shall be recognized in the
territories of all Contracting Parties.
In
effect, the state enacting this law will be recognizing certificates by
authorized persons designated, not only by this state, but by the
In
this connection, it should be noted that under Article II of the Convention,
each contracting country may designate its diplomatic or consular
representatives abroad as authorized persons insofar as the local law does not
prohibit it. Since the Uniform Act will
be the law locally, and since it does not prohibit persons designated by
foreign states that are parties to the Convention from acting locally in
respect to international wills, there should be a considerable amount of
latitude in selecting authorized persons to assist with wills and a correlative
reduction in the chances of local non‑recognition of an authorized person
from abroad. Also, it should be noted
that the Uniform Act does not restrict the persons which it constitutes as
authorized persons in relation to the places where they can so function. This supports the view that local law as
embodied in this statute should not be construed as restrictive in relation to
local activities concerning international wills of foreign diplomatic and
consular representatives who are resident here.
The
certificate requires the authorized person to state that the witnesses had the
requisite capacity. If the authorized
person derives his authority from the law of a state other than that where he
is acting, it would be advisable to have the certificate identify the
applicable law.
The
Uniform Act is silent in regard to methods of meeting local probate
requirements contemplating deposit of the original will with the Court. Section
3‑409 of the Uniform Probate Code, or its counterpart in a state that has
not adopted the uniform law on the point, becomes pertinent. The last sentence of UPC 3‑409
provides:
A will from a place which does not provide for
probate of a will after death, may be proved for probate in this state by a
duly authenticated certificate of its legal custodian that the copy introduced
is a true copy and that the will has become effective under the law of the
other place.
One
final matter warrants mention. Implicit
in local proof of an instrument by means of authentication provided by a
foreign official, is the problem of proving the authority of the official. The traditional, exceedingly formalistic,
method of accomplishing this has been through what has been known as
"legalization", a process that involves a number of
certificates. The capacity of the
official who authenticates the signature of the party to the document, if
derived from his status as a county official, is proved by the certificate of a
high county official. In turn, the
county official's status is proved by the certificate of the area's secretary
of state, whose status is established by another and so on until, ultimately,
the Department of State certifies to the identity of the highest local
government official in a format that will be persuasive to the receiving
country's foreign relations representative.
Article
VI of the 1973 Convention forbids legalization of the signature of testators
and witnesses. It provides:
1. The signature of the testator, of the authorized
person, and of the witnesses to an international will, whether on the will or
on the certificate, shall be exempt from any legalization or like formality.
2. Nonetheless, the competent authorities of any
Contracting Party may, if necessary, satisfy themselves as to the authenticity
of the signature of the authorized person.
Thus,
it would appear that if the United States, as contracting party, satisfies
itself that the signature of a foreign authorized person is authentic, and so
indicates to those interested in local probate of the document, the local
Court, though presumably able to receive and to act upon evidence to the
contrary, cannot reject an international will for lack of proof. This is not to say, of course, that the
authenticity of the signature of the foreign authorized person must be shown
through the aid of the State Department; plainly, the point may be implied from
the face of the document unless and until challenged.
Mr.
Plantard's commentary on this portion of the uniform law is as follows:
"Article
12 states that the certificate is conclusive of the formal validity of the
international will. It is therefore a
kind of proof supplied in advance.
"This
provision is only really understandable in those legal systems, like the
"However,
the certificate is not always irrefutable as proof, as is indicated by the
words 'in the absence of evidence to the contrary'. If it is challenged, then the ensuing
litigation will be solved in accordance with the legal procedure applicable in
the
"The
principle set out in Article 13 is already implied by Article 1, as only the
provisions of Articles 2 to 5 are prescribed on pain of invalidity. Besides, it is perfectly logical that the
absence of or irregularities in a certificate should not affect the formal
validity of the will, as the certificate is a document serving essentially for
purposes of proof drawn up by the authorized person, without the testator
taking any part either in drawing it up or in checking it. This provision is in perfect harmony with
Article 12 which by the terms 'in the absence of evidence to the contrary'
means that one can challenge what is stated in the certificate.
"In
consideration of the fact that the authorized person will be a practicing
lawyer officially designated by each
"However,
the international will subsists, even if, by some quirk, the certificate which
is a means of proof but not necessarily the only one, should be missing, be
incomplete or contain particulars which are manifestly erroneous. In these undoubtedly very rare circumstances,
proof that the formalities prescribed on pain of invalidity have been carried
out will have to be produced in accordance with the legal procedures applicable
in each State which has adopted the Uniform Law."
Section 2‑1007. International Will; Revocation.
The international will shall be subject to
the ordinary rules of revocation of wills.
COMMENT
Mr.
Plantard's commentary on this portion of the uniform law is as follows:
"The authors of the Uniform Law did not
intend to deal with the subject of the revocation of wills. There is indeed no reason why the
international will should be submitted to a regime different from that of other
kinds of wills. Article 14 therefore
merely gives expression to this idea.
Whether or not there has been revocation‑for example, by a
subsequent will‑is to be assessed in accordance with the law of each
State which has adopted the Uniform Law, by virtue of Article 14. Besides, this is a question mainly concerning
rules of substance which would thus overstep the scope of the Uniform
Law."
Section 2‑1008.
Source and Construction.
Sections 2‑1001 through 2‑1007
derive from Annex to Convention of
COMMENT
Mr.
Plantard's commentary on this portion of the uniform law is as follows:
"This Article contains a provision which is to
be found in a similar form in several conventions or draft Uniform Laws. It seeks to avoid practising lawyers
interpreting the Uniform Law solely in terms of the principles of their
respective internal law, as this would prejudice the international unification
being sought after. It requests judges
to take the international character of the Uniform Law into consideration and
to work towards elaborating a sort of common caselaw, taking account of the
foreign legal systems which provided the foundation for the Uniform Law and the
decisions handed down on the same text by the Courts of other countries. The effort toward unification must not be
limited to just bringing about the Law's adoption, but should be carried on
into the process of putting it into operation."
Section 2‑1009. Persons Authorized to Act in Relation to
International Will; Eligibility; Recognition by Authorizing Agency.
Individuals who have been admitted to
practice law before the courts of this state and who are in good standing as
active law practitioners in this state, are hereby declared to be authorized
persons in relation to international wills.
COMMENT
The
subject of who should be designated to be authorized persons under the Uniform
Law is discussed under the heading "Description of the Proposal" in
the Prefatory Note.
The first draft of the Uniform Law presented
to the National Conference at its 1975 meeting in Quebec City included
provision for a special new licensing procedure through which others than
attorneys might become qualified. The
ensuing discussion resulted in rejection of this approach in favor of the
simpler approach of section 9. Among
other difficulties with the special licensee approach, representatives of the
State Department expressed concern about the attendant burden on the
Section 2‑1010. International Will Information Registration.
The [Secretary of State] shall establish a
registry system by which authorized persons may register in a central
information center, information regarding the execution of international wills,
keeping that information in strictest confidence until the death of the maker
and then making it available to any person desiring information about any will
who presents a death certificate or other satisfactory evidence of the
testator's death to the center.
Information that may be received, preserved in confidence until death,
and reported as indicated is limited to the name, social‑security or any
other individual‑identifying number established by law, address, and date
and place of birth of the testator, and the intended place of deposit or
safekeeping of the instrument pending the death of the maker. The [Secretary of State], at the request of
the authorized person, may cause the information it receives about execution of
any international will to be transmitted to the registry system of another
jurisdiction as identified by the testator, if that other system adheres to
rules protecting the confidentiality of the information similar to those
established in this state.]
COMMENT
The
relevance of this optional, bracketed section to the other sections
constituting the uniform law concerning international wills is explained in the
Prefatory Note. Also, Mr. Plantard's
observations regarding the Resolution attached to the 1973 Convention are
pertinent. He writes:
"The
Resolution adopted by the Washington Conference and annexed to its Final Act
encourages States which adopt the Uniform Law to make additional provisions for
the registering and safekeeping of the international will. The authors of the Uniform Law considered
that it was not possible to lay down uniform rules on this subject on account
of the differences in tradition and outlook, but several times, both during the
preparatory work and during the final diplomatic phase, they underlined the
importance of States making such provisions.
"The
Resolution recommends organizing a system enabling . . . 'the safekeeping,
search and discovery of an international will as well as the accompanying
certificate' . . .
"Indeed
lawyers know that many wills are never carried out because the very existence
of the will itself remains unknown or because the will is never found or is
never produced. It would be quite
possible to organize a register or index which would enable one to know after
the death of a person whether he had drawn up a will. Some countries have already done something in
this field, for example,
"The
Washington Conference also underlined that there is already an International
Convention on this subject, namely the Council of Europe Convention on the
Establishment of a Scheme of Registration of Wills, concluded at
"In
this Convention the Contracting States simply undertake to create an internal
system for registering wills. The
Convention stipulates the categories of will which should be registered, in
terms which include the international will.
Apart from national bodies in charge of registration, the Convention
also provides for the designation by each
"As
for the organization of the safekeeping of international wills, the resolution
merely underlies the importance of this, without making any specific
suggestions in this regard. This problem
has already been discussed in connection with Article 8 of the Uniform Law.
"The
Council of Europe Convention on the Establishment of a Scheme of Registration
of Wills of
PART 11
UNIFORM DISCLAIMER OF PROPERTY INTERESTS
ACT (1999)
GENERAL COMMENT
Part 11 incorporates into the Code the Uniform
Disclaimer of Property Interests Act (UDIPA or Act). The UDPIA replaces the Code’s former
disclaimer provision (Section 2-801). It also replaces three Uniform Acts
promulgated in 1978 (Uniform Disclaimer of Property Interests Act, Uniform
Disclaimer of Transfers by Will, Intestacy or Appointment Act, and Uniform
Disclaimer of Transfers under Nontestatmentary Instruments Act). The new Act is
the most comprehensive disclaimer statute ever written. It is designed to allow
every sort of disclaimer, including those that are useful for tax planning
purposes. It does not, however, include a specific time limit on the making of
any disclaimer. Because a disclaimer is a refusal to accept, the only bar to a
disclaimer should be acceptance of the offer. In addition, in almost all
jurisdictions disclaimers can be used for more than tax planning. A proper
disclaimer will often keep the disclaimed property from the disclaimant’s
creditors. In short, the new Act is an enabling statute which prescribes all
the rules for refusing a proffered interest in or power over property and the
effect of that refusal on the power or interest while leaving the effect of the
refusal itself to other law. Section
2-1113(e) explicitly states that a disclaimer may be barred or limited by law
other than the Act.
The decision not to include a specific time limit–
to “decouple” the disclaimer statute from the time requirement applicable to a
“qualified disclaimer” under IRC §2518–is also designed to reduce confusion.
The older Uniform Acts and almost all the current state statutes (many of which
are based on those Acts) were drafted in the wake of the passage of IRC §2518
in 1976. That provision replaced the “reasonable time” requirement of prior law
with a requirement that a disclaimer must be made within nine months of the
creation of the interest disclaimed if the disclaimer is to be a “qualified
disclaimer” which is not regarded as transfer by the disclaimant. The statutes
that were written in response to this new provision of tax law reflected the
nine month time limit. Under most of these statutes (including the older Uniform
Acts and former Section 2-801) a disclaimer must be made within nine months of
the creation of a present interest (for example, as disclaimer of an outright
gift under a will must be made within nine months of the decedent’s death),
which corresponds to the requirement of IRC §2518. A future interest, however,
may be disclaimed within nine months of the time the interest vests in
possession or enjoyment (for example, a remainder whether or not contingent on
surviving the holder of the life income interest must be disclaimed within nine
months of the death of the life income beneficiary). The time limit for future
interests does not correspond to IRC §2518 which generally requires that a
qualified disclaimer of a future interest be made within nine months of the
interest’s creation, no matter how contingent it may then be. The nine-month
time limit of the existing statutes really is a trap. While it superficially
conforms to IRC §2518, its application to the disclaimer of future interests
does not. The removal of all mention of time limits will clearly signal the
practitioner that the requirements for a tax qualified disclaimer are set by
different law.
The elimination of the time limit is not the only
change from current statutes. The Act abandons the concept of “relates back” as
a proxy for when a disclaimer becomes effective. Instead, by stating
specifically when a disclaimer becomes effective and explicitly stating in
Section 2-1105(f) that a disclaimer “is not a transfer, assignment, or
release,” the Act makes clear the results of refusing property or powers
through a disclaimer. Second, UDPIA creates rules for several types of
disclaimers that have not been explicitly addressed in previous statutes. The
Act provides detailed rules for the disclaimer of interests in jointly held
property (Section 2-1107). Such disclaimers have important uses especially in
tax planning, but their status under current law is not clear. Furthermore,
although current statutes mention the disclaimer of jointly held property, they
provide no details. Recent developments in the law of qualified disclaimers of
jointly held property make fuller treatment of such disclaimers necessary.
Section 2-1108 addresses the disclaimer by trustees of property that would
otherwise become part of the trust. The disclaimer of powers of appointment and
other powers not held in a fiduciary capacity is treated in Section 2-1109 and
disclaimers by appointees, objects, and takers in default of exercise of a
power of appointment is the subject of Section 2-1110. Finally, Section 2-1111
provides rules for the disclaimer of powers held in a fiduciary capacity.
Section 2-1101.
[RESERVED.]
COMMENT
This Section is marked
“Reserved” in order to preserve corresponding numbeirng between the free-standing
form of the Uniform Disclaimers of Property Interests Act (1999) and it s
version as codified in the Uniform Probate Code. The result is that Section 2 of the
free-standing act becomes Section 2-1102 of the UPC, and so on.
Section 2-1102.
Definitions.
In
this Part:
1) “Disclaimant” means the person to whom a
disclaimed interest or power would have passed had the disclaimer not been
made.
(2) “Disclaimed interest” means the interest that
would have passed to the disclaimant had the disclaimer not been made.
(3) “Disclaimer” means the refusal to accept an
interest in or power over property.
(4) “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.
(5) “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.
(6) “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 legal or commercial entity.
(7) “State” means a State of the
(8) “Trust” means:
(A) an express trust, charitable or noncharitable, with additions
thereto, whenever and however created; and
(B) a trust created pursuant to a statute, judgment, or decree which
requires the trust to be administered in the manner of an express trust.
COMMENT
The definition of “disclaimant” (paragraph (1))
limits the term to the person who would have received the disclaimed property
or power if the disclaimer had not been made. The disclaimant is not
necessarily the person making the disclaimer, who may be a guardian, custodian,
or other fiduciary acting for the disclaimant or the personal representative of
the disclaimant’s estate.
The term “disclaimed interest” (paragraph (2))
refers to the subject matter of a disclaimer of an interest in property and
provides a compact term the use of which simplifies the drafting of Section 2-1106.
The definition of “disclaimer” (paragraph (3))
expands previous definitions. Prior Uniform Acts provided for a disclaimer of
“the right of succession to any property or interest therein” and former Section
2-801 referred to “an interest in or with respect to property or an interest
therein.” These previously authorized types of disclaimers are continued by the
present language referring to “an interest in ... property.” The language referring to “power over
property” broadens the permissible scope of disclaimers to include any power
over property that gives the power-holder a right to control property, whether
it be cast in the form of a power of appointment or a fiduciary’s management
power over property or discretionary power of distribution over income or
corpus.
Under the Act, a “fiduciary” (defined in paragrpah
(4)) is given the power to disclaim except where specifically prohibited by
state law or by the document creating the fiduciary relationship. See Section 2-1104(b).
The term “jointly held property” (paragraph (5)) includes not only a traditional
joint tenancy but also other property that is “held,” but may not be “owned,”
by two or more persons with a right of survivorship. One form of such property
is a joint bank account between parties who are not married to each other
which, under the laws of many States, is owned by the parties in proportion to
their deposits. (See Section 6-211(b).) This “holding” concept, as opposed to
“owning,” may also be true with joint brokerage accounts under the law of some
States. See Treas. Regs. §25.2518-2(c)(4).
Ther terms “person” (paragraph (6)), “State” (paragraph (7)), and “trust”
(paragraph (8)) are also defined in Section 1-201 of this Code, but the more
modern version of these definitions is included here for ease of reference. For purposes of this Part, the definitions in
this Section control.
The term “trust” (paragraph (8)) means an express trust, whether private
or charitable, including a trust created by statute, court judgment or decree
which is to be administered in the manner of an express trust. Excluded from the Act’s coverage are
resulting and constructive trusts, which are not express trusts but remedial
devices imposed by law. The Act is
directed primarily at express trust which arise in an estate planning or other
donative context, but the definition of “trust” is not so limited. A trust created pursuant to a divorce action
would be included, even though such a trust is not donative but is created
pursuant to a bargained for exchange.
The extent to which even more commercially-oriented trusts are subject
to the Act will vary depending on the type of trust and the laws, other than
this Act, under which the trust is created.
Commercial trusts come in various forms, including created pursuant to a
state business trust act and trusts created to administer specified funds, such
as to pay a pension or to manage pooled investments. See
John H. Langbein, The Secret Life of the Trust: The Trust as an Instrument of
Commerce, 107 Yale L.J. 165 (1997).
Section 2-1103.
Scope.
This Part applies to
disclaimers of any interest in or power over property, whenever created.
Section 2-1104.
Part Supplemented By Other Law.
(a) Unless displaced by a provision of this Part,
the principles of law and equity supplement this Part.
(b) This Part 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 Part.
Section 2-1105.
Power To Disclaim; General Requirements; When Irrevocable.
(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.
(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.
(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 2-1112.
In this subsection:
(1) “record” means information that isinscribed on a tangible medium or
that is stored in an electronic or other medium and is retrievable in
perceivable form;
(2) “signed” means, with present intent to authenticate or adopt a
record, to;
(A) execute or adopt a tangible symbol; or
(B) attach to or logically associate with the record an electronic
sound, symbol, or process.
(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.
(e) A disclaimer becomes irrevocable when it is
delivered or filed pursuant to Section 2-1112 or when it becomes effective as
provided in Sections 2-1106 through 2-1111, whichever occurs later.
(f) A disclaimer made under this Part is not a
transfer, assignment, or release.
COMMENT
Subsections (a) and (b) give both
persons (as defined in Section
2-1102(6)) and fiduciaries (as defined in Section 2-1102(4)) and other
persons a broad power to disclaim both interests in and powers over property.
In both instances, the ability to disclaim interests is comprehensive; it does
not matter whether the disclaimed interest is vested, either in interest or in possession. For
example, Father’s will creates a testamentary trust which is to pay income to
his descendants and after the running of the traditional perpetuities period is
to terminate and be distributed to his descendants then living by
representation. If at any time there are no descendants, the trust is to
terminate and be distributed to collateral relatives. At the time of Father’s
death he has many descendants and the possibility of his line dying out and the
collateral relatives taking under the trust is remote in the extreme.
Nevertheless, under the Act the collateral relatives may disclaim their contingent
remainders. In order to make a qualified disclaimer for tax purposes, however,
they must disclaim them within 9 months of Father’s death.) Every sort of power
may also be disclaimed.
Subsection (a) continues the provisions of current
law by making ineffective any attempt to limit the right to disclaim which the
creator of an interest or non-fiduciary power seeks to impose on a person. This
provision follows from the principle behind all disclaimers – no one can be
forced to accept property – and extends that principle to powers over property.
This Act also gives fiduciaries broad powers to
disclaim both interests and powers. A
fiduciary who may also be a beneficiary of the fiduciary arrangement may
disclaim in either capacity. For example, a trustee who is also one of several
beneficiaries of a trust may have the power to invade trust principal for the
beneficiaries. The trustee may disclaim the power as trustee under Section
2-1111 or may disclaim as a holder of a power of appointment under Section 2-1109.
Subsection (b) also gives fiduciaries the right to disclaim in spite of
spendthrift or similar restrictions given, but subjects that right to a
restriction applicable only to fiduciaries.
As a policy matter, the creator of a trust or other arrangement creating
a fiduciary relationship should be able to prevent a fiduciary accepting office
under the arrangement from altering the parameters of the relationship. This
reasoning also applies to fiduciary relationships created by statute such as
those governing conservatorships and guardianships. Subsection (b) therefore
does not override express restrictions on disclaimers contained in the
instrument creating the fiduciary relationship or in other statutes of the
State.
Subsection (c) sets forth the formal requirements
for a disclaimer. The definitions of “record” and “signed” in this subsection
are derived from the Uniform Electronic Transactions Act §102. The definitions
recognize that a disclaimer may be prepared in forms other than typewritten
pages with a signature in pen. Because of the novelty of a disclaimer executed
in electronic form and the ease with which the term “record” can be confused
with recording of documents, the Act does not use the term “record” in
isolation but refers to “writing or other record.” The delivery requirement is
set forth in Section 2-1112.
Subsection (d) specifically allows a partial
disclaimer of an interest in property or of a power over property, and gives
the disclaimant wide latitude in describing the portion disclaimed. For
example, a residuary beneficiary of an estate may disclaim a fraction or
percentage of the residue or may disclaim specific property included in the
residue (all the shares of X corporation or a specific number of shares). A
devisee or donee may disclaim specific acreage or an undivided fraction or
carve out a life estate or remainder from a larger interest in real or personal
property. (It must be noted, however, that a disclaimer by a devisee or donee
which seeks to “carve out” a remainder or life estate is not a “qualified
disclaimer” for tax purposes, Treas. Reg. §25.2518-3(b).)
Subsection (e) makes the disclaimer irrevocable on
the later to occur of (i) delivery or filing or (ii) its becoming effective
under the section governing the disclaimer of the particular power or interest.
A disclaimer must be “irrevocable” in order to be a qualified disclaimer for
tax purposes. Since a disclaimer under this Act becomes effective at the time
significant for tax purposes, a disclaimer under this Act will always meet the
irrevocability requirement for tax qualification. The interaction of the Act
and the requirements for a tax qualified disclaimer can be illustrated by
analyzing a disclaimer of an interest in a revocable lifetime trust.
Example 1. G creates a revocable lifetime trust which
will terminate on G’s death and distribute the trust property to G’s surviving
descendants by representation. G’s son, S, determines that he would prefer his
share of G’s estate to pass to his descendants and executes a disclaimer of his
interest in the revocable trust. The disclaimer is then delivered to G (see Section 2-1112(e)(3)). The disclaimer is not irrevocable at that
time, however, because it will not become effective until G’s death when the
trust becomes irrevocable (see
Section 2-1106(b)(1)). Because the disclaimer will not become irrevocable until
it becomes effective at G’s death, S may recall the disclaimer before G’s death
and, if he does so, the disclaimer will have no effect.
Subsection (f) restates the
long standing rule that a disclaimer is a true refusal to accept and not an act
by which the disclaimant transfers, assigns, or releases the disclaimed
interest. This subsection states the effect and meaning of the traditional
“relation back” doctrine of prior Acts. It also makes it clear that the
disclaimed interest passes without direction by the disclaimant, a requirement
of tax qualification.
Section 2-1106.
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 Section 7
or 8, 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.
COMMENT
Subsection (a) defines two terms that are used only in Section
2-1106. The first, “future interest,” is
used in Section 2-1106(b)(4) in connection with the acceleration rule.
The second defined term,
“time of distribution,” is used in determining to whom the disclaimed interest
passes (see below). Possession or
enjoyment is a term of art and means that time at which it is certain to whom
the property belongs. It does not mean
that the person actually has the property in hand. For example, the time of distribution of
present interests created by will and all interests arising under the law of
intestate succession is the death of the decedent. At that moment the heir or devisee is
entitled to his or her devise or share, and it is irrelevant that time will
pass before the will is admitted to probate and that actual receipt of the gift
may not occur until the administration of the estate is complete. The time of distribution of present interests
created by non-testamentary instruments generally depends on when the
instrument becomes irrevocable. Because
the recipient of a present interest is entitled to the property as soon as the
gift is made, the time of distribution occurs when the creator of the interest
can no longer take it back. The time of
distribution of a future interest is the time when it comes into possession and
the owner of the future interest becomes the owner of a present interest. For example, if B is the owner of the
remainder interest in a trust which is to pay income to A for life, the time of
distribution of B’s remainder is A’s death.
At that time the trust terminated and B’s ownership of the remainder
becomes outright ownership of the trust property.
Section 2-1106(b)(1) makes a
disclaimer of an interest in property effective as of the time the instrument
creating the interest becomes irrevocable or at the decedent’s death if the
interest is created by intestate succession.
A will and a revocable trust are irrevocable at the testator’s or
settlor’s death. Inter vivos trusts may
also be irrevocable at their creation or may become irrevocable before the
settlor’s death. A beneficiary designation
is also irrevocable at death, unless it is made irrevocable at an earlier time.
This provision continues the provision of Uniform Acts on this subject, but
with different wording. Previous Acts
have stated that the disclaimer “relates back” to some time before the
disclaimed interest was created. The
relation back doctrine gives effect to the special nature of the disclaimer as
a refusal to accept. Because the
disclaimer “relates back,” the disclaimant is regarded as never having had an
interest in the disclaimed property. A
disclaimer by a devisee against whom there is an outstanding judgment will
prevent the creditor from reaching the property the debtor would otherwise
inherit. This Act continues the effect
of the relation back doctrine, not by using the specific words, but by directly
stating what the relation back doctrine has been interpreted to mean. Sections 2-1102(3) and 2-1105(f) taken
together define a disclaimer as a refusal to accept which is not a transfer or
release, and subsection (b)(1) of this section makes the disclaimer effective
as of the time the creator cannot revoke the interest. Nothing in the statute, however, prevents the
legislatures or the courts from limiting the effect of the disclaimer as
refusal doctrine in specific situations or generally. See the Comments
to Section 2-1113 below.
Section 2-1106(b)(2) allows
the creator of the instrument to control the disposition of the disclaimed
interest by express provision in the instrument. The provision may apply to a particular
interest. “I give to my cousin A the sum of ten thousand dollars ($10,000) and
should he disclaim any part of this gift, I give the part disclaimed to my
cousin B.” The provision may also apply
to all disclaimed interests. A residuary
clause beginning “I give my residuary estate, including all disclaimed
interests to.... “ is such a provision.
Sections 2-1106(b)(3)(B),
(C), and (D) apply if Section 2-1106(b)(2) does not and if the disclaimant is
an individual. Because “disclaimant” is
defined as the person to whom the disclaimed interest would have passed had the
disclaimer not been made (Section 2-1102(1)), these paragraphs would apply to
disclaimers by fiduciaries on behalf of individuals. The general rule is that the disclaimed
interest passes as if the disclaimant had died immediately before the time of
distribution defined in Section 2-1106(a)(2).
The application of this general rule to present interests given to named
individuals is illustrated by the following examples:
Example 1(a). T’s will devised “ten thousand dollars
($10,000) to my brother, B.” B disclaims
the entire devise. B is deemed to have
predeceased T, and, therefore B’s gift has lapsed. If the State’s antilapse statute applies, it
will direct the passing of the disclaimed interest. Under Section 2-603(b)(1), for example, B’s
descendants who survive T by 120 hours will take the devise by representation.
Example 1(b). T’s will devised “ten thousand dollars
($10,000) to my friend, F.” F disclaims the entire devise. F is deemed to predecease T and the gift has
lapsed. Few antilapse statutes apply to
devises to non-family members. Under
Section 2-603(b), which saves from lapse only gifts made to certain relatives,
the devise would lapse and pass through the residuary clause of the will.
Example 1(c). T’s
will devised “ten thousand dollars ($10,000) to my brother, B, but if B does
not survive me, to my children.” If B
disclaims the devise, he will be deemed to have predeceased T and the
alternative gift to T’s children will dispose of the devise.
Present interests are also
given to the surviving members of a class or group of persons. Perhaps the most common example of this gift
is a devise of the testator’s residuary estate “to my descendants who survive
me by representation.” Under the system
of distribution among multi-generational classes used in Section 2-709,
division of the property to be distributed begins in the eldest generation in
which there are living people. The
following example illustrates a problem that can arise.
Example 2(a). T’s will devised “the residue of my estate to
my descendants who survive me by representation.” T is survived by son S and daughter D. Son has two living children and D has
one. S disclaims his interest. The disclaimed interest is one-half of the
residuary estate, the interest S would have received had he not
disclaimed. Section 2-1106(b)(3)(B)
provides that the disclaimed interest passes as if S had predeceased T. If Section 2-1106(b)(3) stopped there, S’s
children would take one-half of the disclaimed interest and D would take the
other half under Section 2-709. S’s
disclaimer should not have that effect, however, but should pass what he would
have taken to his children. Section 2-1106(b)(3)(C) solves the problem. It provides that the entire disclaimed
interest passes only to S’s descendants because they would share in the
interest had S truly predeceased T.
The provision also solves a
problem that exists when the disclaimant is the only representative of an older
generation.
Example 2(b).
Assume the same facts as Example 2(a), but D has predeceased
T. T is survived, therefore, by S, S’s
two children, and D’s child. S
disclaims. Again, the disclaimed
interest is one-half of the residuary estate and it passes as if S had
predeceased T. Had S actually
predeceased T, the three grandchildren of S would have shared equally in T’s
residuary estate because they are all in the same generation. Were the three grandchildren to share equally
in the disclaimed interest, S’s two children would each receive one-third of
the one-half while D’s child would receive one-third of the one-half in
addition to the one-half of the residuary estate received as the representative
of his or her late parent. Section
2-1106(b)(3)(C) again applies to insure that S’s children receive one-half of
the residue, exactly the interest S would have received but for the disclaimer.
The disclaimer of future
interests created by will leads to a different problem. The effective date of the disclaimer of the
future interest, the testator’s death, is earlier in time than the distribution
date. This in turn leads to a possible
anomaly illustrated by the following example.
Example 3.
Father’s will creates a testamentary trust for Mother who is to receive
all the income for life. At her death,
the trust is to be distributed to Father and Mother’s surviving descendants by
representation. Mother is survived by
son S and daughter D. Son has two living
children and D has one. Son decides that
he would prefer his share of the trust to pass to his children and
disclaims. The disclaimer must be made
within nine months of Father’s death if it is to be a qualified disclaimer for
tax purposes. Under prior Acts and
former Section 2-801, the interest would have passed as if Son had predeceased
Father. A problem could arise if, at
Mother’s death, one or more of S’s children living at that time were born after
Father’s death. It would be possible to
argue that had S predeceased Father the afterborn children would not exist and
that D and S’s two children living at the time of Father’s death are entitled
to all of the trust property.
The problem illustrated in Example
3 is solved by Section 2-1106(b)(3)(B).
The disclaimed interest would have taken effect in possession or
enjoyment, that is, Son would be entitled to receive one-half of the trust
property, at Mother’s death. Under
paragraph (3)(B) Son is deemed to have died immediately before Mother’s death
even though under Section 2-1106(b)(1) the disclaimer is effective as of
Father’s death. There is no doubt,
therefore, that S’s children living at the distribution date, whenever born,
are entitled to the share of the trust property S would have received and, as Examples
2(a) and 2(b) show, they will take exactly what S would have
received but for the disclaimer. Had S
actually died before Mother, he would have received nothing at Mother’s death
whether or not the disclaimer had been made.
There is nothing to pass to S’s children and they take as representatives
of S under the representational scheme in effect.
Future interests may or may
not be conditioned on survivorship. The
following examples illustrate disclaimers of future interests not expressly
conditioned on survival.
Example 4(a). G’s
revocable trust directs the trustee to pay “ten thousand dollars ($10,000) to
the grantor’s brother, B” at the termination of the trust on G’s death. B disclaims the entire gift immediately after
G’s death. B is deemed to have
predeceased G because it is at G’s death that the interest given B will come
into possession and enjoyment. Had B not
disclaimed he would have received $10,000 at that time. The recipient of the disclaimed interest will
be determined by the law that applies to gifts of future interests to persons
who die before the interest comes into possession and enjoyment. Traditional analysis would regard the gift to
B as a vested interest subject to divestment by G’s power to revoke the trust. So long as G has not revoked the gift, the
interest would pass through B’s estate to B’s successors in interest. Yet If B’s successors in interest are
selected by B’s will, the disclaimer cannot be a qualified disclaimer for tax
purposes. This problem does not arise in
a jurisdiction with Section 2-707(b), because the interest passes not through
B’s estate but rather to B’s descendants who survive G by 120 hours by
representation. Because the antilapse
mechanism of Section 2-707 is not limited to gifts to relatives, a disclaimer
by a friend rather than a brother would have the same result. For jurisdictions without Section 2-707,
however, Section 2-1106(b)(3)(D) provides an equivalent solution: a disclaimed
interest that would otherwise pass through B’s estate instead passes to B’s
descendants who survive G by representation.
Example 4(b). G’s
revocable trust directed that on his death the trust property is to be
distributed to his three children, A, B, and C.
A disclaims immediately after G’s death and is deemed to predecease the
distribution date, which is G’s death.
The traditional analysis applies exactly as it does in Example 4(a). The only condition on A’s gift would be G’s
not revoking the trust. A is not
explicitly required to survive G. (See First
National Bank of Bar Harbor v. Anthony, 557 A.2d 957 (Me. 1989).) The interest would pass to A’s successors in
interest. If those successors are
selected by A’s will, the disclaimer cannot be a qualified disclaimer for tax purposes. Section 2-707(b) provides that A’s interest
passes by representation to A’s descendants who survive G by 120 hours. For jurisdictions without Section 2-707,
Section 2-1106(b)(3)(D) reaches the same result.
Example 4(c). G
conveys land “to A for life, remainder to B.”
B disclaims immediately after the conveyance. Traditional analysis regards B’s remainder as
vested; it is not contingent on surviving A.
This classification is unaffected by whether or not the jurisdiction has
adopted Section 2-707, because that section only applies to future interests in
trust; it does not apply to future interests not in trust, such as the one in
this example created directly in land.
To the extent that B’s remainder is transmissible through B’s estate,
B’s disclaimer cannot be a qualified disclaimer for tax purposes. Section 2-1106(b)(3)(D) resolves the
problem: a disclaimed interest that
would otherwise pass through B’s estate instead passes as if it were controlled
by Sections 2-707 and 2-711. Because Section
2-707 only applies to future interests in trust, jurisdictions enacting Section
2-1106 should enact Section 2-1106(b)(3)(D) whether or not they have enacted
Section 2-707.
Section 2-1106(b)(3)(A)
provides a rule for the passing of property interests disclaimed by persons
other than individuals. Because Section
2-1108 applies to disclaimers by trustees of property that would otherwise pass
to the trust, Section 2-1106(b)(3)(A) principally applies to disclaimers by
corporations, partnerships, and the other entities listed in the definition of
“person” in Section 2-1102(6). A charity,
for example, might wish to disclaim property the acceptance of which would be
incompatible with its purposes.
Section 2-1106(b)(4)
continues the provision of prior Uniform Acts and former Section 2-801 on this
subject providing for the acceleration of future interests on the making of the
disclaimer, except that future interests in the disclaimant do not
accelerate. The workings of Section
2-1106(b)(4) are illustrated by the following examples.
Example 5(a).
Father’s will creates a testamentary trust to pay income to his son S
for his life, and on his death to pay the remainder to S’s descendants then
living, by representation. If S
disclaims his life income interest in the trust, he will be deemed to have died
immediately before Father’s death. The
disclaimed interest, S’s income interest, came into possession and enjoyment at
Father's death as would any present interest created by will (see Examples
1(a), (b), and (c)), and, therefore, the time of distribution
is Father’s death. If at the income
beneficiary of a testamentary trust does not survive the testator, the income
interest is not created and the next interest in the trust takes effect. Since the next interest in Father’s trust is
the remainder in S’s descendants, the trust property will pass to S’s
descendants who survive Father by representation. It is immaterial under the statute that the
actual situation at the S’s death might be different with different descendants
entitled to the remainder.
Example 5(b).
Mother’s will creates a testamentary trust to pay the income to her
daughter D until she reaches age 35 at which time the trust is to terminate and
the trust property distributed in equal shares to D and her three siblings. D
disclaims her income interest. The
remainder interests in her three siblings accelerate and they each receive
one-fourth of the trust property. D’s
remainder interest does not accelerate, however, and she must wait until she is
35 to receive her fourth of the trust property.
2006 Technical Amendment. By technical
amendment, subsection (b)(3)(D) was added to resolve the problem of future
interests transmissible through the disclaimant’s estate. The Comment was correspondingly amended. For the prior version, see 8 U.L.A. 65-69
(Supp. 2005).
Legislative Note. Because
Section 2-707 only applies to future interests in trust, and does not apply to
legal future interests, states that have enacted Section 2-1106 should enact
the 2006 technical amendments whether or not they have enacted Section 2-707.
Section 2-1107.
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.
COMMENT
The various forms of ownership in which “joint
property,” as defined in Section 2-1102(5), can be held include common law
joint tenancies and any statutory variation that preserves the right of
survivorship. The common law was unsettled whether a surviving joint tenant had
any right to renounce his interest in jointly-owned property and if so to what
extent. See Casner, Estate Planning,
5th ed. §10.7. Specifically, if A and B owned real estate or securities as
joint tenants with right of survivorship and A died, the problem was whether B
might disclaim what was given to him originally upon creation of the estate,
or, if not, whether he could nevertheless reject the incremental portion
derived through the right of survivorship.
There was also a question of whether a joint bank account should be
treated differently from jointly-owned securities or real estate for the
purpose of disclaimer.
This common law of disclaimers of jointly held
property must be set against the rapid developments in the law of tax qualified
disclaimers of jointly held property. Since the previous Uniform Acts were
drafted, the law regarding tax qualified disclaimers of joint property
interests has been clarified. Courts
have repeatedly held that a surviving joint tenant may disclaim that portion of
the jointly held property to which the survivor succeeds by operation of law on
the death of the other joint tenant so long as the joint tenancy was severable
during the life of the joint tenants (Kennedy
v. Commissioner, 804 F.2d 1332 (7th Cir. 1986), McDonald v. Commissioner, 853 F.2d 1494 (9th Cir. 1988), Dancy v. Commissioner, 872 F.2d 84 (4th
Cir. 1989).) On
The amended final Regulations, §25.2518-2(c)(4)(i)
allow a surviving joint tenant or tenant by the entireties to disclaim that
portion of the tenancy to which he or she succeeds upon the death of the first
joint tenant (½ where there are two joint tenants) whether or not the tenancy
could have been unilaterally severed under local law and regardless of the
proportion of consideration furnished by the disclaimant. The Regulations also
create a special rule for joint tenancies between spouses created after
The amended final Regulations, §25.2518-2(c)(4)(iii)
also recognize the unique features of joint bank accounts, and allow the
disclaimer by a survivor of that part of the account contributed by the
decedent, so long as the decedent could have regained that portion during life
by unilateral action, bar the disclaimer of that part of the account
attributable to the survivor’s contributions, and explicitly extend the rule
governing joint bank accounts to brokerage and other investment accounts, such
as mutual fund accounts, held in joint name.
These developments in the tax law of disclaimers are
reflected in subsection (a). The
subsection allows a surviving holder of jointly held property to disclaim the
greater of the accretive share, the part of the jointly held property which
augments the survivor’s interest in the property, and all of the property that
it not attributable to the disclaimant’s contribution to the jointly held property.
In the usual joint tenancy or tenancy by the entireties between husband and
wife, the survivor will always be able to disclaim one-half the property. If
the disclaimer conforms to the requirements of IRC §2518, it will be a
qualified disclaimer. In addition the surviving spouse can disclaim all of the
property attributable to the decedent’s contribution, a provision which will
allow the non-citizen spouse to take advantage of the contribution rule of the
final Regulations. The contribution rule
of subsection (a)(2) will also allow surviving holders of joint property
arrangements other than joint tenancies to make a tax qualified disclaimer
under the rules applicable to those joint arrangements. For example, if A contributes 60% and B contributes
40% to a joint bank account and they allow the interest on the funds to
accumulate, on B's death A can disclaim 40% of the account; on A's death B can
disclaim 60% of the account. (Note that under subsection (a)(1) A can disclaim
up to 50% of the account on B's death because there are two joint account
holders, but the disclaimer would not be fully tax qualified. As previously
noted, a tax qualified disclaimer is limited to 40% of the account.) If the account belonged to
the parties during their joint lives in proportion to their contributions, the
disclaimers in this example can be tax qualified disclaimers if all the
requirements of IRC §2518 are met.
Subsection (b) provides that the disclaimer is
effective as of the death of the joint holder which triggers the survivorship
feature of the joint property arrangement.
The disclaimant, therefore, has no interest in and has not transferred
the disclaimed interest.
Subsection (c) provides that the disclaimed interest
passes as if the disclaimant had predeceased the holder to whose death the
disclaimer relates. Where there are two joint holders, a disclaimer by the
survivor results in the disclaimed property passing as part of the deceased
joint holder’s estate because under this subsection, the deceased joint holder
is the survivor as to the portion disclaimed. If a married couple owns the
family home in joint tenancy, therefore, a disclaimer by the survivor under
subsection (a)(1) results in one-half the home passing through the decedent’s
estate. The surviving spouse and whoever receives the interest through the
decedent’s estate are tenants in common in the house. In the proper
circumstances, the disclaimed one-half could help to use up the decedent’s
unified credit. Without the disclaimer,
the interest would automatically qualify for the marital deduction, perhaps
wasting part of the decedent’s applicable exclusion amount.
In
a multiple holder joint property arrangement, the disclaimed interest will
belong to the other joint holder or holders.
Example 1. A, B, and C make
equal contributions to the purchase of Blackacre, to which they take title as
joint tenants with right of survivorship. On partition each would receive 1/3
of Blackacre and any of them could convert his or her interest to a 1/3 tenancy
in common by unilateral severance (which, of course, would have to be
accomplished in accordance with state law). On A’s death, B and C may each, if
they wish, disclaim up to 1/3 of the property under section (a)(1). Should one
of them disclaim the full 1/3, the disclaimant will be deemed to predecease A.
Assume
that B so disclaims. With respect to the 1/3 undivided interest that now no
longer belongs to A the only surviving joint holder is C. C therefore owns that 1/3 as tenant in common
with the joint tenancy. Should C
predecease B, the 1/3 tenancy in common interest will pass through C’s estate
and B will be the sole owner of an undivided 2/3 interest in Blackacre as the
survivor of the joint tenancy. Should B
predecease C, C will be the sole owner of Blackacre in fee simple absolute.
Alternatively,
assume that both B and C make valid disclaimers after A’s death. They are both
deemed to predeceased A, A is the sole survivor of the joint tenancy and
Blackacre passes through A’s estate.
Finally,
assume that A provided all the consideration for the purchase of
Blackacre. On A’s death, B and C can
each disclaim the entire property under subsection (a)(2). If they both do so, Blackacre will pass
through A’s estate. If only one of B or C disclaims the entire property, the
one who does not will be the sole owner of Blackacre as the only surviving
joint tenant. Such a disclaimer would
not be completely tax qualified, however. The Regulations limit a tax qualified
disclaimer to no more than 1/3 of the property. If, however, B or C were the
first to die, A could still disclaim the 1/3 interest that no longer belongs to
the decedent under subsection (a)(1), the disclaimer would be a qualified
disclaimer for tax purposes under the Regulations, and the result is that the other
surviving joint tenant owns 1/3 of Blackacre as tenant in common with the joint
tenancy.
2004 Amendment. This comment was amended in 2004 to correct an error in
the joint bank account example and to provide a more complete explanation for
the result in Example 1.
Section 2-1108.
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.
COMMENT
This section deals with disclaimer of a right to receive property into a trust, and thus applies only to trustees. (A disclaimer of a right to receive property by a fiduciary acting on behalf of an individual, such as a personal representative, conservator, guardian, or agent is governed by the section of the statute applicable to the type of interest being disclaimed.) The instrument under which the right to receive the property was created may govern the disposition of the property in the event of a disclaimer by providing for a disposition when the trust does not exist. When the instrument does not make such a provision, the doctrine of resulting trust will carry the property back to the donor. The effect of the actions of co-trustees will depend on the state law governing the action of multiple trustees. Every disclaimer by a trustee must be compatible with the trustee’s fiduciary obligations.
Section 2-1109.
Disclaimer Of Power Of Appointment Or Other Power Not Held In Fiduciary
Capacity.
If
a holder disclaims a power of appointment or other power not held in a
fiduciary capacity, the following rules apply:
(1) If the holder has not exercised the power, the disclaimer takes
effect as of the time the instrument creating the power becomes irrevocable.
(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.
(3) The instrument creating the power is construed as if the power expired
when the disclaimer became effective.
COMMENT
Section 2-1105(a) authorizes a person to disclaim an
interest in or power over property. Section 2-1109 provides rules for
disclaimers of powers which are not held in a fiduciary capacity. The most
common non-fiduciary power is a power of appointment. Section 2-1105(a) also authorizes the partial
disclaimer of a power as well as of an interest. For example, the disclaimer
could be of a portion of the power to appoint one's self, while retaining the
right to appoint to others. The effect of a disclaimer of a power under Section
2-1109 depends on whether or not the holder has exercised the power and on what
sort of power is held. If a holder disclaims a power before exercising it, the
power expires and can never be exercised. If the power has been exercised, the
power is construed as having expired immediately after its last exercise by the
holder. The disclaimer affects only the holder of the power and will not affect
other aspects of the power.
Example 1. T creates a testamentary trust to pay the income to A for life, remainder as A shall appoint by will among her descendants living at A’s death and four named charities. If A does not exercise her power, the remainder passes to her descendants living at her death by representation. A disclaims the power. The power can no longer be exercised and on A’s death the remainder will pass to the takers in default.
Section 2-1110.
Disclaimer By Appointee, Object, Or Taker In 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.
COMMENT
This section governs disclaimers by those who may or
do receive an interest in property through the exercise of a power of
appointment. At the time of the creation of a power of appointment, the creator
of the power, besides giving the power to the holder of the power, can also
limit the objects of the power (the permissible appointees of the property
subject to the power) and also name those who are to take if the power is not
exercised, persons referred to as takers in default.
This section provides rules for disclaimers by all
of these persons:
subsection (a) is concerned with a disclaimer by a
person who actually receives an interest in property through the exercise of a
power of appointment, and subsection (b) recognizes a disclaimer by a taker in
default or permissible appointee before the power is exercised. These two
situations are quite different. An appointee is in the same position as any
devisee or beneficiary of a trust. He or she may receive a present or future
interest depending on how the holder of the power exercises it. Subsection (a)
therefore, makes the disclaimer effective as of the time the instrument
exercising the power–giving the interest to the disclaimant–becomes
irrevocable. If the holder of the power created an interest in the appointee,
the effect of the disclaimer is governed by Section 2-1106. If the holder
created another power in the appointee, the effect of the disclaimer is
governed by Section 2-1109.
Example 1. Mother’s will creates a testamentary trust
for daughter D. The trustees are to pay all income to D for her life and have
discretion to invade principal for D’s maintenance. On D’s death she may
appoint the trust property by will among her then living descendants. In
default of appointment the property is to be distributed by representation to
D’s descendants who survive her. D is the donee, her descendants are the permissible
appointees and the takers in default. D exercises her power by appointing the
trust property in three equal shares to her children A, B, and C. The three
children are the appointees. A disclaims.
Under subsection (a) A’s disclaimer is effective as of D’s death (the
time at which the will exercising the power became irrevocable). Because A
disclaimed an interest in property, the effect of the disclaimer is governed by
Section 2-1106(b). If D’s will makes no provisions for the disposition of the
interest should it be disclaimed or of disclaimed interests in general (Section
2-1106(b)(2)), the interest passes as if A predeceased the time of distribution
which is D’s death. An appointment to a person who is dead at the time of the
appointment is ineffective except as provided by an antilapse statute. See Restatement, Second, Property
(Donative Transfers) §18.5. The Restatement, Second, Property (Donative
Transfers), §18.6 suggests that any requirement of the antilapse statute that
the deceased devisee be related in some way to the testator be applied as if
the appointive property were owned either by the donor or the holder of the
power. (See also Restatement, Third, Property (Wills and Other Donative
Transfers) §5.5, Comment l.) That is
the position taken by Section 2-603. Since antilapse statutes usually apply to
devises to children and grandchildren, the disclaimed interest would pass to
A’s descendants by representation.
A taker in default or a permissible object of
appointment is traditionally regarded as having a type of future interest. See Restatement, Second, Property
(Donative Transfers) §11.2, Comments c
and d. The future interest will come
into possession and enjoyment when the question of whether or not the power is
to be exercised is resolved. For testamentary powers that time is the death of
the holder.
Subsection (b) provides that a disclaimer by an
object or taker in default takes effect as of the time the instrument creating
the power becomes effective. Because the disclaimant is disclaiming an interest
in property, albeit a future interest, the effect of the disclaimer is governed
by Section 2-1106. The effect of these rules is illustrated by the following
examples.
Example 2(a). The facts are the same as Example 1, except A disclaims before
D’s death and D’s will does not exercise the power. Under subsection (b) A’s disclaimer is
effective as of Mother’s death which is the time when the instrument creating
the power, Mother’s will, became irrevocable. Because A disclaimed an interest
in property, the effect of the disclaimer is governed by Section 2-1106(b). If
Mother’s will makes no provision for the disposition of the interest should it
be disclaimed or of disclaimed interests in general (Section 2-1106(b)(2)), the
interest passes and under Section 2-1106(b)(3) as if the disclaimant had died
immediately before the time of distribution.
Thus, A is deemed to have died immediately before D’s death which is the
time of distribution. If A actually survives D, the disclaimed interest is
one-third of the trust property; it will pass as if A predeceased D, and the
result is the same as in Example 1.
If A does predecease D he would have received nothing and there is no
disclaimed interest. The disclaimer has no effect on the passing of the trust
property.
Example 2(b). The facts are the same as
in Example 2(a) except D does
exercise her power of appointment to give one-third of the trust property to
each of her three children, A, B, and C. A’s disclaimer means the disclaimed
interest will pass as if he predeceased D and the result is the same as in Example 1.
In
addition, if all the objects and takers in default disclaim before the power is
exercised the power of appointment is destroyed. See Restatement, Second,
Property (Donative Transfers) §12.1, Comment g.
Section 2-1111.
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.
COMMENT
This section governs disclaimers by fiduciaries of
powers held in their fiduciary capacity. Examples include a right to remove and
replace a trustee or a trustee’s power to make distributions of income or
principal. Such disclaimers have not been specifically dealt with in prior
Uniform Acts although they could prove useful in several situations. A trustee
who is also a beneficiary may want to disclaim a power to invade principal for
himself for tax purposes. A trustee of a trust for the benefit for a surviving
spouse who also has the power to invade principal for the decedent’s descendants
may wish to disclaim the power in order to qualify the trust for the marital
deduction. (The use of a disclaimer in just that situation was approved in Cleaveland v. U.S., 62 A.F.T.R.2d
88-5992, 88-1 USTC ¶13,766 (C. D. Ill. 1988).)
The section refers to fiduciary in the singular. It
is possible, of course, for a trust to have two or more co-trustees and an
estate to have two or more co-personal representatives. This Act leaves the effect
of actions of multiple fiduciaries to the general rules in effect in each State
relating to multiple fiduciaries. For example, if the general rule is that a
majority of trustees can make binding decisions, a disclaimer by two of three
co-trustees of a power is effective. A dissenting co-trustee could follow
whatever procedure state law prescribes for disassociating him or herself from
the action of the majority. A sole trustee burdened with a power to invade
principal for a group of beneficiaries including him or herself who wishes to
disclaim the power but yet preserve the possibility of another trustee
exercising the power would seek the appointment of a disinterested co-trustee
to exercise the power and then disclaim the power for him or herself. The
subsection thus makes the disclaimer effective only as to the disclaiming
fiduciary unless the disclaimer states otherwise. If the disclaimer does
attempt to bind other fiduciaries, be they co- fiduciaries or successor
fiduciaries, the effect of the disclaimer will depend on local law.
As with any action by a fiduciary, a disclaimer of fiduciary powers must be compatible with the fiduciary’s duties.
Section 2-1112.
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 nonprobate 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 personal representative of
the decedent's estate; or
(2) if no personal representative 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 trustee then serving, or if no
trustee is then serving, to the personal representative of the decedent's
estate; or
(2) if no personal representative is 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 made before the time the designation becomes
irrevocable, a disclaimer must be delivered to the person making the
beneficiary designation.
(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.
(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 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.
COMMENT
The rules set forth in this
section are designed so that anyone who has the duty to distribute the
disclaimed interest will be notified of the disclaimer. For example, a
disclaimer of an interest in an decedent’s estate must be delivered to the
personal representative of the estate. A disclaimer is required to be filed in
Court only when there is no one person or entity to whom delivery can be made.
Section 2-1113.
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 [Part.]
(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 Part had
the disclaimer not been barred.
COMMENT
The 1978 Act required that an effective disclaimer
be made within nine months of the event giving rise to the right to disclaim
(e.g., nine months from the death of the decedent or donee of a power or the
vesting of a future interest). The nine month period corresponded in some
situations with the Internal Revenue Code provisions governing qualified tax
disclaimers. Under the common law an effective disclaimer had to be made only
within a “reasonable” time.
This Act specifically rejects a time requirement for
making a disclaimer. Recognizing that
disclaimers are used for purposes other than tax planning, a disclaimer can be
made effectively under the Act so long as the disclaimant is not barred from
disclaiming the property or interest or has not waived the right to disclaim.
Persons seeking to make tax qualified disclaimers will continue to have to
conform to the requirements of the Internal Revenue Code.
The events resulting in a bar to the right to
disclaim set forth in this section are similar to those found in the 1978 Acts
and former Section 2-801. Subsection (a) provides that a written waiver of the
right to disclaim is effective to bar a disclaimer. Such a waiver might be
sought, for example, by a creditor who wishes to make sure that property
acquired in the future will be available to satisfy the debt.
Whether particular actions by the disclaimant amount
to accepting the interest sought to be disclaimed within the meaning of
subsection (b)(1) will necessarily be determined by the courts based upon the
particular facts. (See Leipham v. Adams, 77 Wash. App. 827, 894
P.2d 576 (1995); Matter of Will of Hall,
318 S.C. 188, 456 S.E.2d 439 (Ct. App. 1995); Jordan v. Trower, 208 Ga. App. 552, 431 S.E.2d 160 (1993); Matter of Gates, 189 A.D.2d 427, 595
N.Y.S.2d 194 (3d Dept. 1993); “What Constitutes or Establishes Beneficiary’s
Acceptance or Renunciation of Devise or Bequest,” 93 ALR2d 8).
The addition in this Act of the word “voluntary” to
the list of actions barring a disclaimer which also appears in the earlier Acts
reflects the numerous cases holding that only actions by the disclaimant taken
after the right to disclaim has arisen will act as a bar. (See Troy v. Hart, 116 Md.
App. 468, 697 A.2d 113 (1997), Estate of
Opatz, 554 N.W.2d 813 (N.D. 1996), Frances
Slocum Bank v. Martin, 666 N.E.2d 411 (Ind. App. 1996), Brown v. Momar, Inc., 201 Ga. App. 542,
411 S.E.2d 718 (1991), Tompkins State
Bank v. Niles, 127 Ill.2d 209, 130 Ill. Dec. 207, 537 N.E.2d 274 (1989).)
An existing lien, therefore, will not prevent a disclaimer, although the
disclaimant’s actions before the right to disclaim arises may work an estoppel.
See Hale v. Bardouh, 975 S.W.2d 419 (Tex. Ct. App. 1998). With regard
to joint property, the event giving rise to the right to disclaim is the death
of a joint holder, not the creation of the joint interest and any benefit
received during the deceased joint tenant’s life is ignored.
The reference to judicial sale in subsection (b)(3)
continues a provision from the earlier Acts and ensures that title gained from
a judicial sale by a personal representative will not be clouded by a possible
disclaimer.
Subsection (c) rephrases the rules of Section 2-1111
governing the effect of disclaimers of powers.
Subsection (d) is applicable to powers which can be
disclaimed under Section 2-1109. It bars
the disclaimer of a general power of appointment once it has been exercised. A
general power of appointment allows the holder to take the property subject to
the power for him or herself, whether outright or by using it to pay his or her
creditors (for estate and gift tax purposes, a general power is one that allows
the holder to appoint to himself, his estate, his creditors, or the creditors
of his estate). The power is presently exercisable if the holder need not wait
to some time or for some event to occur before exercising the power. If the
holder has exercised such a power, it can no longer be disclaimed.
Subsection (e), unlike the 1978 Act, specifies that
“other law” may bar the right to disclaim. Some States, including
Subsection (f) provides a rule stating what happens if an attempt is made to disclaim a power or property interest whose disclaimer is barred by this section. A disclaimer of a power is ineffective, but the attempted disclaimer of the property interest, although invalid as a disclaimer, will operate as a transfer of the disclaimed property interest to the person or persons who would have taken the interest had the disclaimer not been barred. This provision removes the ambiguity that would otherwise be caused by an ineffective refusal to accept property. Whoever has control of the property will know to whom to deliver it and the person attempting the disclaimer will bear any transfer tax consequences.
Section 2-1114.
Tax Qualified Disclaimer.
Notwithstanding any other
provision of this Part, 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 Part.
COMMENT
This section coordinates the
Act with the requirements of a qualified disclaimer for transfer tax purposes
under IRC §2518. Any disclaimer which is qualified for estate and gift tax
purposes is a valid disclaimer under this Act even if its does not otherwise
meet the Act’s more specific requirements.
Section 2-1115.
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. 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.
COMMENT
This section permits the recordation of a disclaimer of an interest in property ownership of or title to which is the subject of a recording system. This section expands on the corresponding provision of previous Uniform Acts which only referred to permissive recording of a disclaimer of an interest in real property. While local practice may vary, disclaimants should realize that in order to establish the chain of title to real property, and to ward off creditors and bona fide purchasers, the disclaimer may have to be recorded. This section does not change the law of the state governing notice.
Section 2-1116.
Application To Existing Relationships.
Except as otherwise provided
in Section 2-1113, an interest in or power over property existing on the
effective date of this Part as to which the time for delivering or filing a
disclaimer under law superseded by this Part has not expired may be disclaimed
after the effective date of this Part.
COMMENT
This section deals with the
application of the Act to existing interests and powers. It insures that
disclaimers barred by the running of a time period under prior law will not be
revived by the Act. For example, assume prior law, like the prior Acts and former Section 2-801,
allows the disclaimer of present interests within nine months of their creation
and the disclaimer of future interests nine months after they are indefeasibly
vested. Under T’s will, X receives an outright devise of a sum of money and
also has a contingent remainder in a trust created under the will. The Act is
effective in the jurisdiction governing the administration of T’s estate ten
months after T’s death. X cannot disclaim the general devise, irrespective of
the application of Section 2-1113, because the nine months allowed under prior
law have run. The contingent remainder, however, may be disclaimed so long as
it is not barred under Section 2-1113 without regard to the nine month period
of prior law.
Section 2-1117.
Relation to Electronic Signatures in Global and National Commerce
Act.
This Part modifies, limits,
and supersedes the federal Electronic Signatures in Global and National
Commerce Act (15 U.S.C. Section 7001, et seq.) but does not modify, limit, or
supersede Section 101(c) of that act (15 U.S.C. Section 7001(c)) or authorize
electronic delivery of any of the notices described in Section 103(b) of the
act (15 U.S.C. Section 7003(b)).
COMMENT
This section adopts standard
language approved by the Uniform Law Conference that is intended to preempt
application of the federal Electronic Signatures in Global and National
Commerce Act of 2000 (E-Sign). Section 102(a)(2)(B) of that Act provides that
the federal law can be preempted by a later statute of the State that
specifically refers to the federal law.
Not subject to preemption by the state’s are E-Sign’s consumer consent
provisions (Section 101(c)) and its notice provisions (Section 103(b)), neither
of which have substantive impact on the Disclaimers Act. The effect of this
Section is to reaffirm state authority over the formal requirements for the
making of a disclaimer. For these
requirements, see Section 2-1105, and, specifically, Section 2-1105(c), which
allow a disclaimer to be made by means of a signed record.
ARTICLE III
PROBATE OF WILLS AND ADMINISTRATION
PART 1
GENERAL PROVISIONS
Section
3-101.
Devolution of Estate at Death; Restrictions.
3-101A. [Devolution
of Estate at Death; Restrictions.]
3‑102. Necessity
of Order of Probate For Will.
3‑103. Necessity
of Appointment For Administration.
3‑104. Claims
Against Decedent; Necessity of Administration.
3‑105. Proceedings Affecting Devolution and
Administration; Jurisdiction of Subject Matter.
3‑106. Proceedings Within the Exclusive
Jurisdiction of Court; Service; Jurisdiction Over Persons.
3‑107. Scope of Proceedings; Proceedings
Independent; Exception.
3‑108. Probate, Testacy and Appointment
Proceedings; Ultimate Time Limit.
3-109.
Statutes of Limitation on Decedent's Cause of Action.
PART 2
VENUE FOR PROBATE AND ADMINISTRATION;
PRIORITY TO ADMINISTER; DEMAND FOR NOTICE
Section
3-201. Venue for First and Subsequent Estate
Proceedings; Location of Property.
3-202. Appointment or Testacy Proceedings;
Conflicting Claim of Domicile in Another State.
3-203. Priority Among Persons Seeking Appointment
as Personal Representative.
3-204.
Demand for Notice of Order or Filing Concerning Decedent's Estate.
PART 3
INFORMAL PROBATE AND APPOINTMENT PROCEEDINGS;
SUCCESSION WITHOUT ADMINISTRATION
Section
3‑301. Informal Probate or Appointment Proceedings;
Application; Contents.
3‑302. Informal Probate; Duty of Registrar; Effect
of Informal Probate.
3‑303. Informal Probate; Proof and Findings Required.
3‑304. Informal Probate; Unavailable in Certain Cases.
3‑305. Informal Probate; Registrar Not Satisfied.
3‑306. Informal Probate; Notice Requirements.
3‑307. Informal Appointment Proceedings; Delay in
Order; Duty of Registrar; Effect of Appointment.
3‑308. Informal Appointment Proceedings; Proof and
Findings Required.
3‑309. Informal
Appointment Proceedings; Registrar Not Satisfied.
3‑310. Informal
Appointment Proceedings; Notice Requirements.
3-311.
Informal Appointment Unavailable in Certain Cases.
SUCCESSION WITHOUT ADMINISTRATION
3‑312. Universal Succession; In General.
3‑313. Universal Succession; Application; Contents.
3‑314. Universal Succession; Proof and Findings
Required.
3-315.
Universal Succession; Duty of Registrar; Effect of Statement of
Universal Succession.
3‑316. Universal Succession; Universal Successors'
Powers.
3‑317. Universal Succession; Universal Successors'
Liability to Creditors, Other Heirs, Devisees and Persons Entitled to
Decedent's Property; Liability of Other Persons Entitled to Property.
3‑318. Universal Succession; Universal Successors'
Submission to Jurisdiction; When Heirs or Devisees May Not Seek Administration.
3‑319. Universal Succession; Duty of Universal
Successors; Information to Heirs and Devisees.
3‑320. Universal Succession; Universal Successors'
Liability For Restitution to Estate.
3‑321. Universal Succession; Liability of Universal
Successors for Claims, Expenses, Intestate Shares and Devises.
3-322.
Universal Succession; Remedies of Creditors, Other Heirs, Devisees or
Persons Entitled to Decedent's Property.
PART 4
FORMAL TESTACY AND APPOINTMENT PROCEEDINGS
Section
3‑401. Formal Testacy Proceedings; Nature; When
Commenced.
3‑402. Formal Testacy or Appointment Proceedings;
Petition; Contents.
3‑403. Formal Testacy Proceedings; Notice of
Hearing on Petition.
3‑404. Formal Testacy Proceedings; Written
Objections to Probate.
3‑405. Formal Testacy Proceedings; Uncontested
Cases; Hearings and Proof.
3‑406. Formal Testacy Proceedings; Contested Cases.
3‑407. Formal Testacy Proceedings; Burdens in
Contested Cases.
3‑408. Formal Testacy Proceedings; Will
Construction; Effect of Final Order in Another Jurisdiction.
3‑409. Formal Testacy Proceedings; Order; Foreign
Will.
3‑410. Formal Testacy Proceedings; Probate of More
Than One Instrument.
3‑411. Formal Testacy Proceedings; Partial
Intestacy.
3‑412. Formal Testacy Proceedings; Effect of Order;
Vacation.
3‑413. Formal Testacy Proceedings; Vacation of
Order For Other Cause.
3-414.
Formal Proceedings Concerning Appointment of Personal Representative.
PART 5
SUPERVISED ADMINISTRATION
Section
3‑501. Supervised
Administration; Nature of Proceeding.
3‑502. Supervised
Administration; Petition; Order.
3‑503. Supervised
Administration; Effect on Other Proceedings.
3‑504. Supervised
Administration; Powers of Personal Representative.
3-505.
Supervised Administration; Interim Orders; Distribution and Closing
Orders.
PART 6
PERSONAL REPRESENTATIVE; APPOINTMENT,
CONTROL AND TERMINATION OF AUTHORITY
Section
3‑601. Qualification.
3‑602. Acceptance
of Appointment; Consent to Jurisdiction.
3‑603. Bond
Not Required Without Court Order, Exceptions.
3‑604. Bond
Amount; Security; Procedure; Reduction.
3‑605. Demand
For Bond by Interested Person.
3‑606. Terms
and Conditions of Bonds.
3‑607. Order
Restraining Personal Representative.
3‑608. Termination
of Appointment; General.
3‑609. Termination
of Appointment; Death or Disability.
3‑610. Termination
of Appointment; Voluntary.
3‑611. Termination
of Appointment by Removal; Cause; Procedure.
3‑612. Termination
of Appointment; Change of Testacy Status.
3‑613. Successor
Personal Representative.
3‑614. Special
Administrator; Appointment.
3‑615. Special
Administrator; Who May Be Appointed.
3‑616. Special
Administrator; Appointed Informally; Powers and Duties.
3‑617. Special
Administrator; Formal Proceedings; Power and Duties.
3-618.
Termination of Appointment; Special Administrator.
PART 7
DUTIES AND POWERS OF PERSONAL REPRESENTATIVES
Section
3‑701. Time of Accrual of Duties and Powers.
3‑702. Priority Among Different Letters.
3‑703. General Duties; Relation and Liability to Persons
Interested in Estate; Standing to Sue.
3‑704. Personal Representative to Proceed Without
Court Order; Exception.
3‑705. Duty of Personal Representative; Information
to Heirs and Devisees.
3‑706. Duty of Personal Representative; Inventory
and Appraisement.
3‑707. Employment of Appraisers.
3‑708. Duty of Personal Representative;
Supplementary Inventory.
3‑709. Duty of Personal Representative; Possession
of Estate.
3‑710. Power to Avoid Transfers.
3‑711. Powers of Personal Representatives; In
General.
3‑712. Improper Exercise of Power; Breach of
Fiduciary Duty.
3‑713.
3‑714. Persons Dealing with Personal
Representative; Protection.
3‑715. Transactions Authorized for Personal
Representatives; Exceptions.
3‑716. Powers and Duties of Successor Personal
Representative.
3‑717. Co‑representatives; When Joint Action
Required.
3‑718. Powers of Surviving Personal Representative.
3‑719. Compensation of Personal Representative.
3‑720. Expenses in Estate Litigation.
3-721.
Proceedings for Review of Employment of Agents and Compensation of
Personal Representatives and Employees of Estate.
PART 8
CREDITORS' CLAIMS
Section
3‑801. Notice
to Creditors.
3‑802. Statutes
of Limitations.
3‑803. Limitations
on Presentation of Claims.
3‑804. Manner
of Presentation of Claims.
3‑805. Classification
of Claims.
3‑806. Allowance
of Claims.
3‑807. Payment
of Claims.
3‑808. Individual
Liability of Personal Representative.
3‑809. Secured
Claims.
3‑810. Claims
Not Due and Contingent or Unliquidated Claims.
3‑811. Counterclaims.
3‑812. Execution
and Levies Prohibited.
3‑813. Compromise
of Claims.
3‑814. Encumbered
Assets.
3‑815. Administration in More Than
3-816.
Final Distribution to Domiciliary Representative.
PART 9
SPECIAL PROVISIONS RELATING TO DISTRIBUTION
Section
3‑901. Successors' Rights if No Administration.
3-902.
Distribution; Order in Which Assets Appropriated; Abatement.
3-902A. [Distribution; Order in Which Aassets
Appropriated; Abatement.]
3‑903. Right of Retainer.
3‑904. Interest on General Pecuniary Devise.
3‑905. Penalty Clause for Contest.
3‑906. Distribution in Kind; Valuation; Method.
3‑907. Distribution in Kind; Evidence.
3‑908. Distribution; Right or Title of Distributee.
3‑909. Improper Distribution; Liability of
Distributee.
3-910.
Purchasers from Distributees Protected.
3-911.
Partition for Purpose of Distribution.
3‑912. Private Agreements Among Successors to
Decedent Binding on Personal Representative.
3‑913. Distributions to Trustee.
3‑914. Disposition of Unclaimed Assets.
3‑915. Distribution to Person Under Disability.
3-916.
Apportionment of Estate Taxes.
PART 10
CLOSING ESTATES
Section
3‑1001. Formal Proceedings Terminating
Administration; Testate or Intestate; Order of General Protection.
3‑1002. Formal Proceedings Terminating Testate
Administration; Order Construing Will Without Adjudicating Testacy.
3‑1003. Closing Estates; By Sworn Statement of
Personal Representative.
3‑1004. Liability of Distributees to Claimants.
3‑1005. Limitations on Proceedings Against Personal
Representative.
3‑1006. Limitations on Actions and Proceedings
Against Distributees.
3‑1007. Certificate Discharging Liens Securing
Fiduciary Performance.
3-1008.
Subsequent Administration.
PART
11
COMPROMISE OF CONTROVERSIES
Section
3‑1101. Effect of Approval of Agreements Involving
Trusts, Inalienable Interests, or Interests of Third Persons.
3-1102.
Procedure for Securing Court Approval of Compromise.
PART 12
COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT AND
SUMMARY ADMINISTRATION PROCEDURE FOR SMALL ESTATES
Section
3‑1201. Collection
of Personal Property by Affidavit.
3-1202.
Effect of Affidavit.
3-1203.
Small Estates; Summary Administration Procedure.
3-1204.
Small Estates; Closing by Sworn Statement of Personal Representative.
______________
The following free-standing Acts are
associated with Article III:
Uniform Succession Without Administration Act
Article III, Sections 3-312 through 3-322
have also been adopted as the Uniform Succession Without Administration
Act.
Revised Uniform Estate Tax Apportionment Act
Article III, Section 3-916 has also been
adopted as the Revised Uniform Estate Tax Apportionment Act.
GENERAL
COMMENT
The
provisions of this Article describe the Flexible System of Administration of
Decedents' Estates. Designed to be applicable to both intestate and testate
estates and to provide persons interested in decedents' estates with as little
or as much by way of procedural and adjudicative safeguards as may be suitable
under varying circumstances, this system is the heart of the Uniform Probate
Code.
The
organization and detail of the system here described may be expressed in
varying ways and some states may see fit to reframe parts of this Article to
better accommodate local institutions. Variations in language from state to
state can be tolerated without loss of the essential purposes of procedural
uniformity and flexibility, if the following essential characteristics
are carefully protected in the redrafting process:
(1) Post‑mortem
probate of a will must occur to make a will effective and appointment of a
personal representative by a public official after the decedent's death is
required in order to create the duties and powers attending the office of
personal representative. Neither are
compelled, however, but are left to be obtained by persons having an interest
in the consequence of probate or appointment. Estates descend at death to
successors identified by any probated will, or to heirs if no will is probated,
subject to rights which may be implemented through administration.
(2) Two
methods of securing probate of wills which include a non‑adjudicative
determination (informal probate) on the one hand, and a judicial determination
after notice to all interested persons (formal probate) on the other, are
provided.
(3) Two
methods of securing appointment of a personal representative which include
appointment without notice and without final adjudication of matters relevant
to priority for appointment (informal appointment), on the one hand, and appointment
by judicial order after notice to interested persons (formal appointment) on
the other, are provided.
(4) A five day
waiting period from death preventing informal probate or informal appointment
of any but a special administrator is required.
(5) Probate of
a will by informal or formal proceedings or an adjudication of intestacy may
occur without any attendant requirement of appointment of a personal
representative.
(6) One
judicial, in rem, proceeding encompassing formal probate of any wills (or a
determination after notice that the decedent left no will), appointment of a
personal representative and complete settlement of an estate under continuing
supervision of the Court (supervised administration) is provided for testators
and persons interested in a decedent's estate, whether testate or intestate,
who desire to use it.
(7) Unless
supervised administration is sought and ordered, persons interested in estates
(including personal representatives, whether appointed informally or after
notice) may use an "in and out" relationship to the Court so that any
question or assumption relating to the estate, including the status of an
estate as testate or intestate, matters relating to one or more claims,
disputed titles, accounts of personal representatives, and distribution, may be
resolved or established by adjudication after notice without necessarily
subjecting the estate to the necessity of judicial orders in regard to other or
further questions or assumptions.
(8) The status
of a decedent in regard to whether he left a valid will or died intestate must
be resolved by adjudication after notice in proceedings commenced within three
years after his death. If not so
resolved, any will probated informally becomes final, and if there is no such
probate, the status of the decedent as intestate is finally determined, by a
statute of limitations which bars probate and appointment unless requested
within three years after death.
(9) Personal
representatives appointed informally or after notice, and whether supervised or
not, have statutory powers enabling them to collect, protect, sell, distribute
and otherwise handle all steps in administration without further order of the
Court, except that supervised personal representatives may be subjected to
special restrictions on power as endorsed on their letters.
(10) Purchasers
from personal representatives and from distributees of personal representatives
are protected so that adjudications regarding the testacy status of a decedent
or any other question going to the propriety of a sale are not required in
order to protect purchasers.
(11) Provisions
protecting a personal representative who distributes without adjudication are
included to make nonadjudicated settlements feasible.
(12) Statutes
of limitation bar creditors of the decedent who fail to present claims within
four months after legal advertising of the administration and unsecured claims
not previously barred by non‑claim statutes are barred after three years
from the decedent's death.
Overall,
the system accepts the premise that the Court's role in regard to probate and
administration, and its relationship to personal representatives who derive
their power from public appointment, is wholly passive until some interested
person invokes its power to secure resolution of a matter. The state, through the Court, should provide
remedies which are suitable and efficient to protect any and all rights
regarding succession, but should refrain from intruding into family affairs
unless relief is requested, and limit its relief to that sought.
PART 1
GENERAL PROVISIONS
Section 3‑101. Devolution of Estate at Death;
Restrictions.
The power of a person to leave property by
will, and the rights of creditors, devisees, and heirs to his property are
subject to the restrictions and limitations contained in this Code to
facilitate the prompt settlement of estates. Upon the death of a person, his
real and personal property devolves to the persons to whom it is devised by his
last will or to those indicated as substitutes for them in cases involving
lapse, renunciation, or other circumstances affecting the devolution of testate
estate, or in the absence of testamentary disposition, to his heirs, or to
those indicated as substitutes for them in cases involving renunciation or
other circumstances affecting devolution of intestate estates, subject to
homestead allowance, exempt property and family allowance, to rights of
creditors, elective share of the surviving spouse, and to administration.
ALTERNATIVE SECTION FOR
COMMUNITY PROPERTY STATES
[Section
3-101A. Devolution of Estate at Death;
Restrictions.
The power of a person to leave property by
will, and the rights of creditors, devisees, and heirs to his property are
subject to the restrictions and limitations contained in this Code to
facilitate the prompt settlement of estates. Upon the death of a person, his
separate property devolves to the persons to whom it is devised by his last
will or to those indicated as substitutes for them in cases involving lapse,
renunciation, or other circumstances affecting the devolution of testate
estate, or in the absence of testamentary disposition, to his heirs, or to
those indicated as substitutes for them in cases involving renunciation or
other circumstances affecting devolution of intestate estates, and upon the
death of a husband or wife, the decedent’s share of their community property
devolves to the persons to whom it is devised by his last will, or in the
absence of testamentary disposition, to his heirs, but all of their community
property which is under the management and control of the decedent is subject
to his debts and administration, and that portion of their community property
which is not under the management and control of the decedent but which is
necessary to carry out the provisions of his will is subject to administration;
but the devolution of all the above described property is subject to rights to
homestead allowance, exempt property and family allowances, to renunciation, to
rights of creditors, [elective share of surviving spouse] and to
administration.]
COMMENT
In its present form, this section will not
fit existing concepts concerning community property in all states recognizing
community ownership. States differ in
respect to how much testamentary power a decedent has over the community. Also, some changes of language may be
necessary to reflect differing views concerning what estate is subject to
“separate” and “community” debts. The
reference to certain family rights is not intended to suggest that such rights
relate to the survivor’s interest in any community property. Rather, the assumption is that such rights
relate only to property passing from the decedent at his death; e.g., his half
of community property and his separate property.
Section 3‑102.
Necessity of Order of Probate For Will.
Except as provided in Section 3‑1201,
to be effective to prove the transfer of any property or to nominate an
executor, a will must be declared to be valid by an order of informal probate
by the Registrar, or an adjudication
of probate by the Court.
COMMENT
The
basic idea of this section follows Section 85 of the Model Probate Code. The
exception referring to Section 3‑1201 relates to affidavit procedures
which are authorized for collection of estates worth less than $5,000.
Section
3‑107 and various sections in Parts 3 and 4 of this Article make it clear
that a will may be probated without appointment of a personal representative,
including any nominated by the will.
The
requirement of probate stated here and the limitations on probate provided in 3‑108
mean that questions as to testacy may be eliminated simply by the running of
time. Under these sections, an informally probated will cannot be questioned
after the later of three years from the decedent's death or one year from the
probate whether or not an executor was appointed, or, if an executor was
appointed, without regard to whether the estate has been distributed. If the decedent is believed to have died
without a will, the running of three years from death bars probate of a late‑discovered
will and so makes the assumption of intestacy conclusive.
The
exceptions to the section (other than the exception relevant to small estates)
are not intended to accommodate cases of late‑discovered wills. Rather, they are designed to make the probate
requirement inapplicable where circumstances led survivors of a decedent to
believe that there was no point to probating a will of which they may have had
knowledge. If any will was probated within three years of death, or if letters
of administration were issued in this period, the exceptions to the section are
inapplicable. If there has been no proceeding in probate, persons seeking to
establish title by an unprobated will must show, with reference to the estate they claim, either that it has been
possessed by those to whom it was devised or that it has been unknown to the
decedent's heirs or devisees and not possessed by any.
It
is to be noted, also, that devisees who are able to claim under one of the
exceptions to this section may not obtain probate of the will or administration
of the estate to assist them in their efforts to obtain the estate in question.
The exceptions are to a rule which bars admission of a will into evidence,
rather than to the section barring late probate and late appointment of
personal representatives. Still, the exceptions should serve to prevent two
"hard" cases which can be imagined readily. In one, a surviving
spouse fails to seek probate of a will, giving her the entire estate of the decedent
because she is informed or believes that all of her husband's property was held
by them jointly, with right of survivorship. Later, it is discovered that she
was mistaken as to the nature of her husband's title. The other case involves a
devisee who sees no point to securing probate of a will in his favor because he
is unaware of any estate. Subsequently, valuable rights of the decedent are
discovered.
In 1993, a technical amendment removed a two‑pronged
exception formerly occupying about 8 lines of text in the official text. The
removed language permitted unprobated wills to be admitted in evidence in two
limited categories of cases in which failure to probate a will within three
years of the testator's death were deemed to be justified. The 1993 technical
amendment to 3‑108 so limits the three year time bar on probate and
appointment proceedings as to make the 3‑102 exception unnecessary.
Section 3‑103.
Necessity of Appointment For Administration.
Except as otherwise provided in Article IV,
to acquire the powers and undertake the duties and liabilities of a personal
representative of a decedent, a person must be appointed by order of the Court
or Registrar, qualify and be issued
letters. Administration of an estate is commenced by the issuance of letters.
COMMENT
This
section makes it clear that appointment by a public official is required before
one can acquire the status of personal representative. "Qualification" is dealt with in
Section 3‑601. "Letters" are the subject of Section 1‑305.
Section 3‑701 is also related, since it deals with the time of accrual of
duties and powers of personal representatives.
See 3‑108 for the time
limit on requests for appointment of personal representatives.
In
Article IV, Sections 4‑204 and 4‑205 permit a personal
representative from another state to obtain the powers of one appointed locally
by filing evidence of his authority with a local Court.
Section 3‑104.
Claims Against Decedent; Necessity of Administration.
No proceeding to enforce a claim against the
estate of a decedent or his successors may be revived or commenced before the
appointment of a personal representative. After the appointment and until
distribution, all proceedings and actions to enforce a claim against the estate
are governed by the procedure prescribed by this Article. After distribution a
creditor whose claim has not been barred may recover from the distributees as
provided in Section 3‑1004 or from a former personal representative
individually liable as provided in Section 3‑1005. This section has no
application to a proceeding by a secured creditor of the decedent to enforce
his right to his security except as to any deficiency judgment which might be
sought therein.
COMMENT
This
and sections of Part 8, Article III, are designed to force creditors of
decedents to assert their claims against duly appointed personal
representatives. Creditors of a decedent are interested persons who may seek
the appointment of a personal representative (Section 3‑301). If no
appointment is granted to another within 45 days after the decedent's death, a
creditor may be eligible to be appointed if other persons with priority decline
to serve or are ineligible (Section 3‑203). But, if a personal
representative has been appointed and has closed the estate under circumstances
which leave a creditor's claim unbarred, the creditor is permitted to enforce
his claims against distributees, as well as against the personal representative
if any duty owed to creditors under 3‑807 or 3‑1003 has been
breached. The methods for closing
estates are outlined in Sections 3‑1001 through 3‑1003. Termination of appointment under Sections 3‑608
et seq. may occur though the estate is not
closed and so may be irrelevant to the question of whether creditors may
pursue distributees.
Section 3‑105.
Proceedings Affecting Devolution and Administration; Jurisdiction of Subject
Matter.
Persons interested in decedents' estates may apply
to the Registrar for determination in the informal proceedings provided in this
Article, and may petition the Court for orders in formal proceedings within the
Court's jurisdiction including but not limited to those described in this
Article. The Court has exclusive jurisdiction of formal proceedings to
determine how decedents' estates, subject to the laws of this state, are to be
administered, expended and distributed. The Court has concurrent jurisdiction
of any other action or proceeding concerning a succession or to which an
estate, through a personal representative, may be a party, including actions to
determine title to property alleged to belong to the estate, and of any action
or proceeding in which property distributed by a personal representative or its
value is sought to be subjected to rights of creditors or successors of the
decedent.
COMMENT
This
and other sections of Article III contemplate a non‑judicial officer who
will act on informal application and a judge who will hear and decide formal
petitions. See Section 1‑307
which permits the judge to perform or delegate the functions of the Registrar. However, the primary purpose of Article III
is to describe functions to be performed by various public officials, rather
than to prescribe how these responsibilities should be assigned within a given
state or county. Hence, any of
several alternatives to the organizational scheme assumed for purposes of this
draft would be acceptable.
If
separate Courts or offices are not feasible, it may be preferable to
concentrate authority for allocating responsibility respecting formal and
informal proceedings in the judge. To do so helps fix responsibility for the
total operation of the office. This is the assumption of this draft.
It
will be up to each adopting state to select the organizational arrangement
which best meets its needs.
If
the office with jurisdiction to hear and decide formal petitions is the county
or district court of general jurisdiction, there will be little basis for
objection to the broad statement of concurrent jurisdiction of this section.
However, if a more specialized "estates" court is used, there may be
pressure to prevent it from hearing negligence and other actions involving jury
trials, even though it may be given unlimited power to decide other cases to
which a personal representative is a party.
A system for certifying matters involving jury trials to the general
trial court could be provided, although the alternative of permitting the
estates court to empanel juries where necessary might not be unworkable. In any event, the jurisdiction of the
"estates" or "probate" Court in regard to negligence
litigation would only be concurrent with that of the general trial court. The important point is that the estates
court, whatever it is called, should have unlimited power to hear and finally
dispose of all matters relevant to determination of the extent of the
decedent's estate and of the claims against it.
The jury trial question is peripheral.
See the comment to the next section regarding
adjustments which might be made in the Code by a state with a single court of
general jurisdiction for each county or district.
Section 3‑106.
Proceedings Within the Exclusive Jurisdiction of Court; Service; Jurisdiction
Over Persons.
In proceedings within the exclusive
jurisdiction of the Court where notice is required by this Code or by rule, and
in proceedings to construe probated wills or determine heirs which concern
estates that have not been and cannot now be open for administration,
interested persons may be bound by the orders of the Court in respect to
property in or subject to the laws of this state, by notice in conformity with
Section 1‑401. An order is binding as to all who are given notice of the
proceeding though less than all interested persons are notified.
COMMENT
The
language in this and the preceding section which divides matters coming before
the probate Court between those within the Court's "exclusive"
jurisdiction and those within its "concurrent" jurisdiction would be
inappropriate if probate matters were assigned to a branch of a single Court of
general jurisdiction. The Code could be adjusted to an assumption of a single
Court in various ways. Any adjusted version should contain a provision
permitting the Court to hear and settle certain kinds of matters after notice
as provided in 1‑401. It might be suitable to combine the second sentence
of 3‑105 and 3‑106 into a single section as follows:
"The Court may hear and determine formal
proceedings involving administration and distribution of decedents' estates
after notice to interested persons in conformity with Section 1‑401.
Persons notified are bound though less than all interested persons may have
been given notice."
An
adjusted version also might provide:
"Subject to general rules concerning the proper
location of civil litigation and jurisdiction of persons, the Court (meaning
the probate division) may hear and determine any other controversy concerning a
succession or to which an estate through a personal representative, may be a
party."
The
propriety of this sort of statement would depend upon whether questions of
docketing and assignment, including the division of matters between coordinate
branches of the Court, should be dealt with by legislation.
The
Joint Editorial Board, in 1975, recommended the addition after
"rule", of the language "and in proceedings to construe probated
wills or determine heirs which concern estates that have not been and cannot
now be opened for administration."
This addition, coupled with the exceptions to the limitations provisions
in Section 3‑108 that permit proceedings to construe wills and to
determine heirs of intestates to be commenced more than three years after
death, clarifies the purpose of the draftsmen to offer a probate proceeding to
aid the determination of rights of inheritance of estates that were not opened
for administration within the time permitted by Section 3‑108.
Section 3‑107.
Scope of Proceedings; Proceedings Independent; Exception.
Unless supervised administration as described in Part 5 is involved, (1) each proceeding before the Court or Registrar is independent of any other proceeding involving the same estate; (2) petitions for formal orders of the Court may combine various requests for relief in a single proceeding if the orders sought may be finally granted without delay. Except as required for proceedings which are particularly described by other sections of this Article, no petition is defective because it fails to embrace all matters which might then be the subject of a final order (3) proceedings for probate of wills or adjudications of no will may be combined with proceedings for appointment of personal representatives; and(4) a proceeding for appointment of a personal representative is concluded by an order making or declining the appointment.
COMMENT
This section and others in Article III
describe a system of administration of decedents' estates which gives
interested persons control of whether matters relating to estates will become
occasions for judicial orders. Sections 3‑501 through 3‑505
describe supervised administration, a judicial proceeding which is continuous
throughout administration. It corresponds with the theory of administration of
decedents' estates which prevails in many states. See, section 62, Model Probate Code. If supervised administration
is not requested, persons interested in an estate may use combinations of the
formal proceedings (order by judge after notice to persons concerned with the
relief sought), informal proceedings (request for the limited response that
nonjudicial personnel of the probate Court are authorized to make in response
to verified application) and filings provided in the remaining Parts of Article
III to secure authority and protection needed to administer the estate. Nothing
except self‑interest will compel resort to the judge. When resort to the
judge is necessary or desirable to resolve a dispute or to gain protection, the
scope of the proceeding if not otherwise prescribed by the Code is framed by
the petition. The securing of necessary jurisdiction over interested persons in
a formal proceeding is facilitated by Sections 3‑106 and 3‑602.
Section 3‑201 locates venue for all proceedings at the place where the
first proceeding occurred.
Section 3‑108.
Probate, Testacy and Appointment Proceedings; Ultimate Time Limit.
(a) No informal probate or appointment proceeding or formal testacy or
appointment proceeding, other than a proceeding to probate a will previously
probated at the testator's domicile and appointment proceedings relating to an
estate in which there has been a prior appointment, may be commenced more than
three years after the decedent's death, except:
(1) if a
previous proceeding was dismissed because of doubt about the fact of the
decedent's death, appropriate probate, appointment, or testacy proceedings may
be maintained at any time thereafter upon a finding that the decedent's death
occurred before the initiation of the previous proceeding and the applicant or
petitioner has not delayed unduly in initiating the subsequent proceeding;
(2) appropriate
probate, appointment, or testacy proceedings may be maintained in relation to
the estate of an absent, disappeared or missing person for whose estate a
conservator has been appointed, at any time within three years after the
conservator becomes able to establish the death of the protected person;
(3) a
proceeding to contest an informally probated will and to secure appointment of
the person with legal priority for appointment in the event the contest is
successful, may be commenced within the later of twelve months fromthe informal
probate or three years from the decedent's death;
(4) an
informal appointment or a formal testacy or appointment proceeding may be
commenced thereafter if no proceedings concerning the succession or estate
administration has occurred within the three year period after the decedent's
death, but the personal representative has no right to possess estate assets as
provided in Section 3‑709 beyond that necessary to confirm title thereto
in the successors to the estate and claims other than expenses of administration
may not be presented against the estate; and
(5) a formal
testacy proceeding may be commenced at any time after three years from the
decedent's death for the purpose of establishing an instrument to direct or
control the ownership of property passing or distributable after the decedent's
death from one other than the decedent when the property is to be appointed by
the terms of the decedent's will or is to pass or be distributed as a part of
the decedent's estate or its transfer is otherwise to be controlled by the
terms of the decedent's will.
(b) These limitations do not apply to proceedings to construe probated
wills or determine heirs of an intestate.
(c) In cases under subsection (a)(1) or (2), the date on which a
testacy or appointment proceeding is properly commenced shall be deemed to be
the date of the decedent's death for purposes of other limitations provisions
of this Code which relate to the date of death.
COMMENT
As
originally approved and read with 3‑102's requirement that wills be probated
before being admissible in evidence, this section created a three‑year‑from‑death
time period within which proceedings concerning a succession (other than a
determination of heirs, or will interpretation or construction) must be
commenced. Unless certain limited exceptions were met, an estate became
conclusively intestate if no formal or informal estate proceeding was commenced
within the three year period, and no administration could be opened in order to
generate a deed of distribution for purposes of proving a succession.
Several
of the original UPC states rejected the three year bar against late‑offered
wills and the correlated notion that formal proceedings to determine heirs in
previously unadministered estates were necessary to generate title muniments
locating inherited land in lawful successors. Critics preferred continued
availability of UPC's procedures for appointing p.r.'s whose distributive
instruments gave protection to purchasers. The 1987 technical amendment to 3‑108
reduced, but failed to eliminate, instances in which original probate and
appointment proceedings were barred by the 3 year limitation period.
Section 3‑109. Statutes of Limitation on
Decedent's Cause of Action.
No statute of limitation running on a cause
of action belonging to a decedent which had not been barred as of the date of
his death, shall apply to bar a cause of action surviving the decedent's death
sooner than four months after death. A cause of action which, but for this
section, would have been barred less than four months after death, is barred
after four months unless tolled.
PART 2
VENUE FOR PROBATE AND ADMINISTRATION; PRIORITY TO ADMINISTER;
DEMAND FOR NOTICE
Section 3‑201.
Venue for First and Subsequent Estate Proceedings; Location of Property.
(a) Venue for the first informal or formal testacy or appointment proceedings after a decedent's death is:
(1) in the
[county]where the decedent had his domicile at the time of his death; or
(2) if the
decedent was not domiciled in this state, in any [county] where property of the
decedent was located at the time of his death.
(b) Venue for all subsequent proceedings within the exclusive
jurisdiction of the Court is in the place where the initial proceeding
occurred, unless the initial proceeding has been transferred as provided in
Section 1‑303 or (c) of this section.
(c) If the first proceeding was informal, on application of an
interested person and after notice to the proponent in the first proceeding,
the Court, upon finding that venue is elsewhere, may transfer the proceeding
and the file to the other court.
(d) For the purpose of aiding determinations concerning location of
assets which may be relevant in cases involving non‑domiciliaries, a
debt, other than one evidenced by investment or commercial paper or other
instrument in favor of a non‑domiciliary is located where the debtor
resides or, if the debtor is a person other than an individual, at the place
where it has its principal office.
Commercial paper, investment paper and other instruments are located
where the instrument is. An interest in
property held in trust is located where the trustee may be sued.
COMMENT
Sections
1‑303 and 3‑201 cover the subject of venue for estate proceedings.
Sections 3‑202, 3‑301, 3‑303 and 3‑309 also may be
relevant.
Provisions
for transfer of venue appear in Section 1‑303.
The
interplay of these several sections may be illustrated best by examples.
(1) A formal probate or appointment proceeding is
initiated in A County. Interested
persons who believe that venue is in B County rather than A County must raise
their question about venue in A County, because 1‑303 gives the Court in
which the proceeding is first commenced authority to resolve disputes over
venue. If the Court in A County erroneously determines that it has venue, the
remedy is by appeal.
(2) An informal probate or appointment application
is filed and granted without notice in A County. If interested persons wish to
challenge the Registrar's determination of venue, they may not simply file a
formal proceeding in the County of their choice and thus force the proponent in
the prior proceeding to debate the question of venue in their County. 3‑201(b) locates the venue of any
subsequent proceeding where the first proceeding occurred. The function of (b)
is obvious when one thinks of subsequent proceedings as those which relate to
claims, or accounts, or to efforts to control a personal representative. It is
less obvious when it seems to locate the forum for squabbles over venue at the
place accepting the first informal application.
Still, the applicant seeking an informal order must be careful about the
statements he makes in his application because he may be charged with perjury
under Section 1‑310 if he is deliberately inaccurate. Moreover, the
Registrar must be satisfied that the
allegations in the application support a finding of venue. Section 3‑201(c)
provides a remedy for one who is upset about the venue‑locating impact of
a prior order in an informal proceeding and who does not wish to engage in full
litigation about venue in the forum chosen by the other interested person
unless he is forced to do so. Using it, he may succeed in getting the A County
Court to transfer the proceedings to the County of his choice. He would be well
advised to initiate formal proceedings if he gets the chance, for if he relies
on informal proceedings, he, too, may be "bumped" if the judge in B
County agrees with some movant that venue was not in B County.
(3) If the decedent's domicile was not in the
state, venue is proper under 3‑201 and 1‑303 in any county where he
had assets.
One
contemplating starting administration because of the presence of local assets
should have several other sections of the Code in mind. First, by use of the
recognition provisions in Article IV, it may be possible to avoid
administration in any state other than that in which the decedent was
domiciled. Second, Section 3‑203 may apply to give priority for local
appointment to the representative appointed at domicile. Third, under Section 3‑309,
informal appointment proceedings in this state will be dismissed if it is known
that a personal representative has been previously appointed at domicile.
Section 3‑202.
Appointment or Testacy Proceedings; Conflicting Claim of Domicile in Another
State.
If conflicting claims as to the domicile of a
decedent are made in a formal testacy or appointment proceeding commenced in
this state, and in a testacy or appointment proceeding after notice pending at
the same time in another state, the Court of this state must stay, dismiss, or
permit suitable amendment in, the proceeding here unless it is determined that
the local proceeding was commenced before the proceeding elsewhere. The
determination of domicile in the proceeding first commenced must be accepted as
determinative in the proceeding in this state.
COMMENT
This section is designed to reduce the
possibility that conflicting findings of domicile in two or more states may
result in inconsistent administration and distribution of parts of the same
estate. Section 3-408 dealing with the
effect of adjudications in other states concerning testacy supports the same
general purpose to use domiciliary law to unify succession of property located
in different states.
Whether testate or intestate, succession
should follow the presumed wishes of the decedent whenever possible. Unless a decedent leaves a separate will for
the portion of his estate located in each different state, it is highly
unlikely that he would want different portions of his estate subject to different
rules simply because courts reach conflicting conclusions concerning his
domicile. It is pointless to debate
whether he would prefer one or the other of the conflicting rules, when the
paramount inference is that the decedent would prefer that his estate be
unified under either rule rather than wasted in litigation.
The section adds very little to existing
law. If a previous estate proceeding in
State A has determined that a decedent was a domiciliary of A, persons who were
personally before the court in A would be precluded by the principles of res judicata or collateral estoppel (and
full faith and credit) from relitigating the issue of domicile in a later
proceeding in State B. Probably, it
would not matter in this setting that domicile was a jurisdictional fact. Stoll
v. Gottlieb, 59 S.Ct. 134, 305
Where a court learns that parties before it
are also parties to previously initiated litigation involving a common
question, traditional judicial reluctance to deciding unnecessary questions, as
well as considerations of comity, are likely to lead it to delay the local
proceedings to await the result in the other court. A somewhat more troublesome question is
involved when one of the parties before the local court manifests a
determination not to appear personally in the prior initiated proceedings so
that he can preserve his ability to litigate contested points in a more
friendly, or convenient, forum. But, the
need to preserve all possible advantages available to a particular litigant
should be subordinated to the decedent’s probable wish that his estate not be
wasted in unnecessary litigation. Thus,
the section requires that the local claimant either initiate litigation in the
forum of his choice before litigation is started somewhere else, or accept the
necessity of contesting unwanted views concerning the decedent’s domicile
offered in litigation pending elsewhere.
It is to be noted, in this connection, that
the local suitor always will have a chance to contest the question of domicile
in the other state. His locally
initiated proceedings may proceed to a valid judgment accepting his theory of
the case unless parties who would oppose him appear and defend on the theory
that the domicile question is currently being litigated elsewhere. If the litigation in the other state has
proceeded to judgment, Section 3-408 rather than the instant section will
govern. If this section applies, it will
mean that the foreign proceedings are still pending, so that the local person’s
contention concerning domicile can be made therein even though until the
defense of litigation elsewhere is offered in the local proceedings, he may not
have been notified of the foreign proceeding.
Section 3‑203.
Priority Among Persons Seeking Appointment as Personal Representative.
(a)
Whether the proceedings are formal or informal, persons who are not
disqualified have priority for appointment in the following order:
(1) the person
with priority as determined by a probated will including a person nominated by
a power conferred in a will;
(2) the
surviving spouse of the decedent who is a devisee of the decedent;
(3) other
devisees of the decedent;
(4) the
surviving spouse of the decedent;
(5) other
heirs of the decedent;
(6) 45 days
after the death of the decedent, any creditor.
(b) An objection to an appointment can be made only in formal
proceedings. In case of objection the
priorities stated in (a) apply except that (1) if the estate appears to be more
than adequate to meet exemptions and costs of administration but inadequate to
discharge anticipated unsecured claims, the Court, on petition of creditors,
may appoint any qualified person; (2) in case of objection to appointment of a
person other than one whose priority is determined by will by an heir or
devisee appearing to have a substantial interest in the estate, the Court may
appoint a person who is acceptable to heirs and devisees whose interests in the
estate appear to be worth in total more than half of the probable distributable
value, or, in default of this accord any suitable person.
(c) A person entitled to letters under (2) through (5) of (a) above,
and a person aged [18] and over who would be entitled to letters but for his
age, may nominate a qualified person to act as personal representative. Any person aged [18] and over may renounce
his right to nominate or to an appointment by appropriate writing filed with
the Court. When two or more persons
share a priority, those of them who do not renounce must concur in nominating
another to act for them, or in applying for appointment.
(d) Conservators of the estates of protected persons, or if there is no
conservator, any guardian except a guardian ad litem of a minor or
incapacitated person, may exercise the same right to nominate, to object to
another's appointment, or to participate in determining the preference of a
majority in interest of the heirs and devisees that the protected person or
ward would have if qualified for appointment.
(e) Appointment of one who does not have priority, including priority
resulting from renunciation or nomination determined pursuant to this section,
may be made only in formal proceedings.
Before appointing one without priority, the Court must determine that
those having priority, although given notice of the proceedings, have failed to
request appointment or to nominate another for appointment, and that
administration is necessary.
(f) No person is qualified to serve as a personal representative who
is:
(1) under the
age of [21];
(2) a person
whom the Court finds unsuitable in formal proceedings.
(g) A personal representative appointed by a court of the decedent's
domicile has priority over all other persons except where the decedent's will
nominates different persons to be personal representative in this state and in
the state of domicile. The domiciliary
personal representative may nominate another, who shall have the same priority
as the domiciliary personal representative.
(h) This section governs priority for appointment of a successor
personal representative but does not apply to the selection of a special
administrator.
COMMENT
The
priorities applicable to informal proceedings are applicable to formal
proceedings. However, if the proceedings are formal, a person with a
substantial interest may object to the selection of one having priority other
than because of will provisions. The provision for majority approval which is
triggered by such a protest can be handled in a formal proceeding since all
interested persons will be before the Court, and a judge capable of handling
discretionary matters, will be involved.
In
considering this section as it relates to a devise to a trustee for various
beneficiaries, it is to be noted that "interested persons" is defined
by 1‑201(20) to include fiduciaries. Also, 1‑403(2) and 3‑912
show a purpose to make trustees serve as representatives of all beneficiaries.
The provision in (d) is consistent.
If
a state’s statutes recognize a public administrator or public trustee as the
appropriate agency to seek administration of estates in which the state may
have an interest, it would be appropriate to indicate in this section the
circumstances under which such an officer may seek administration. If no
officer is recognized locally, the state could claim as heir by virtue of 2‑105.
Subsection
(g) was inserted in connection with the decision to abandon the effort to
describe ancillary administration in Article IV. Other provisions in Article III which are
relevant to administration of assets in a state or other than that of the decedent's
domicile are 1‑301 (territorial effect), 3‑201 (venue), 3‑308
(informal appointment for non‑resident decedent delayed 30 days), 3‑309
(no informal appointment here if a representative has been appointed at
domicile), 3‑815 (duty of personal representative where administration is
in more than one state) and 4‑201 to 4‑205 (local recognition of
foreign personal representatives).
The
meaning of "spouse" is determined by Section 2‑802.
Section 3‑204.
Demand for Notice of Order or Filing Concerning Decedent's Estate.
Any person desiring notice of any order or
filing pertaining to a decedent's estate in which he has a financial or
property interest, may file a demand for notice with the Court at any time
after the death of the decedent stating the name of the decedent, the nature of
his interest in the estate, and the demandant's address or that of his
attorney. The clerk shall mail a copy of
the demand to the personal representative if one has been appointed. After filing of a demand, no order or filing
to which the demand relates shall be made or accepted without notice as
prescribed in Section 1‑401 to the demandant or his attorney. The validity of an order which is issued or
filing which is accepted without compliance with this requirement shall not be
affected by the error, but the petitioner receiving the order or the person
making the filing may be liable for any damage caused by the absence of
notice. The requirement of notice
arising from a demand under this provision may be waived in writing by the
demandant and shall cease upon the termination of his interest in the estate.
COMMENT
The
notice required as the result of demand under this section is regulated as far
as time and manner requirements are concerned by Section 1‑401.
This
section would apply to any order which might be made in a supervised
administration proceeding.
PART 3
INFORMAL PROBATE AND APPOINTMENT PROCEEDINGS;
SUCCESSION WITHOUT ADMINISTRATION
Section 3‑301. Informal Probate or Appointment Proceedings; Application; Contents.
(a) Applications for informal probate or informal appointment shall be directed to the Registrar, and verified by the applicant to be accurate and complete to the best of his knowledge and belief as to the following information:
(1) Every
application for informal probate of a will or for informal appointment of a
personal representative, other than a special or successor representative,
shall contain the following:
(i) a
statement of the interest of the applicant;
(ii) the name,
and date of death of the decedent, his age, and the county and state or of his
domicile at the time of death, and the names and addresses of the spouse,
children, heirs and devisees and the ages of any who are minors so far as known
or ascertainable with reasonable diligence by the applicant;
(iii)if the decedent was not domiciled in the state at the time of his death, a statement
showing venue;
(iv) a
statement identifying and indicating the address of any personal representative
of the decedent appointed in this state or elsewhere whose appointment has not
been terminated;
(v) a
statement indicating whether the applicant has received a demand for notice, or
is aware of any demand for notice of any probate or appointment proceeding
concerning the decedent that may have been filed in this state or elsewhere;
and
(vi) that the
time limit for informal probate or appointment as provided in this Article has
not expired either because 3 years or less have passed since the decedent's
death, or, if more than 3 years from death have passed, circumstances as
described by Section 3‑108 authorizing tardy probate or appointment have
occurred.
(2) An
application for informal probate of a will shall state the following in
addition to the statements required by (1):
(i) that the
original of the decedent's last will is in the possession of the court, or
accompanies the application, or that an authenticated copy of a will probated
in another jurisdiction accompanies the application;
(ii) that the
applicant, to the best of his knowledge, believes the will to have been validly
executed;
(iii)that after the exercise of reasonable
diligence, the applicant is unaware of any instrument revoking the will, and
that the applicant believes that the instrument which is the subject of the
application is the decedent's last will.
(3) An
application for informal appointment of a personal representative to administer
an estate under a will shall describe the will by date of execution and state
the time and place of probate or the pending application or petition for
probate. The application for appointment shall adopt the statements in the
application or petition for probate and state the name, address and priority
for appointment of the person whose appointment is sought.
(4) An
application for informal appointment of an administrator in intestacy shall
state in addition to the statements required by (1):
(i) that after
the exercise of reasonable diligence, the applicant is unaware of any unrevoked
testamentary instrument relating to property having a situs in this state under Section 1‑301, or, a statement
why any such instrument of which he may be aware is not being probated;
(ii) the
priority of the person whose appointment is sought and the names of any other
persons having a prior or equal right to the appointment under Section 3‑203.
(5) An application
for appointment of a personal representative to succeed a personal
representative appointed under a different testacy status shall refer to the
order in the most recent testacy proceeding, state the name and address of the
person whose appointment is sought and of the person whose appointment will be
terminated if the application is granted, and describe the priority of the
applicant.
(6) An
application for appointment of a personal representative to succeed a personal
representative who has tendered a resignation as provided in 3‑610(c), or
whose appointment has been terminated by death or removal, shall adopt the
statements in the application or petition which led to the appointment of the
person being succeeded except as specifically changed or corrected, state the
name and address of the person who seeks appointment as successor, and describe
the priority of the applicant.
(b) By verifying an application for informal probate, or informal
appointment, the applicant submits personally to the jurisdiction of the court
in any proceeding for relief from fraud relating to the application, or for
perjury, that may be instituted against him.
COMMENT
Forcing
one who seeks informal probate or informal appointment to make oath before a
public official concerning the details required of applications should deter
persons who might otherwise misuse the no‑notice feature of informal
proceedings. The application is available as a part of the public record. If deliberately false representation is made,
remedies for fraud will be available to injured persons without specified time
limit (see Article I). The section is
believed to provide important safeguards that may extend well beyond those
presently available under supervised administration for persons damaged by deliberate
wrongdoing.
Section
1‑310 deals with verification.
In
1975, the Joint Editorial Board recommended the addition of subsection (b) to
reflect an improvement accomplished in the first enactment in
Section 3‑302.
Informal Probate; Duty of Registrar; Effect of Informal Probate.
Upon receipt of an application requesting informal probate of a will, the Registrar, upon making the findings required by Section 3‑303 shall issue a written statement of informal probate if at least 120 hours have elapsed since the decedent's death. Informal probate is conclusive as to all persons until superseded by an order in a formal testacy proceeding. No defect in the application or procedure relating thereto which leads to informal probate of a will renders the probate void.
COMMENT
Model Probate Code Sections 68 and 70
contemplate probate by judicial order as the only method of validating a will.
This "umbrella" section and the sections it refers to describe an
alternative procedure called "informal probate". It is a statement of
probate by the Registrar. A succeeding section describes cases in which
informal probate is to be denied. "Informal probate" is subjected to
safeguards which seem appropriate to a transaction which has the effect of
making a will operative and which may
be the only official reaction concerning its validity. "Informal
probate", it is hoped, will serve to keep the simple will which generates
no controversy from becoming involved in truly
judicial proceedings. The procedure is very much like "probate in common
form" as it is known in
Section 3‑303. Informal Probate; Proof and
Findings Required.
(a) In an informal proceeding for original probate of a will, the Registrar shall determine whether:
(1) the
application is complete;
(2) the
applicant has made oath or affirmation that the statements contained in the
application are true to the best of his knowledge and belief;
(3) the
applicant appears from the application to be an interested person as defined in
Section 1‑201(23);
(4) on the
basis of the statements in the application, venue is proper;
(5) an
original, duly executed and apparently unrevoked will is in the Registrar's
possession;
(6) any notice
required by Section 3‑204 has been given and that the application is not
within Section 3‑304; and
(7) it appears
from the application that the time limit for original probate has not expired.
(b) The application shall be denied if it indicates that a personal
representative has been appointed in another [county] of this state or except
as provided in subsection (d) below, if it appears that this or another will of
the decedent has been the subject of a previous probate order.
(c) A will which appears to have the required signatures and which contains an attestation clause showing that requirements of execution under Section 2‑502, 2‑503 or 2‑506 have been met shall be probated without further proof. In other cases, the Registrar may assume execution if the will appears to have been properly executed, or he may accept a sworn statement or affidavit of any person having knowledge of the circumstances of execution, whether or not the person was a witness to the will.
(d) Informal probate of a will which has been previously probated
elsewhere may be granted at any time upon written application by any interested
person, together with deposit of an authenticated copy of the will and of the
statement probating it from the office or court where it was first probated.
(e) A will from a place which does not provide for probate of a will
after death and which is not eligible for probate under subsection (a) above,
may be probated in this state upon receipt by the Registrar of a duly
authenticated copy of the will and a duly authenticated certificate of its
legal custodian that the copy filed is a true copy and that the will has become
operative under the law of the other place.
COMMENT
The
purpose of this section is to permit informal probate of a will which, from a
simple attestation clause, appears to have been executed properly. It is not
necessary that the will be notarized as is the case with "pre‑proved"
wills in some states. If a will is "pre‑proved" as provided in
Article II, it will, of course, "appear" to be well executed and
include the recital necessary for easy probate here. If the instrument does not
contain a proper recital by attesting witnesses, it may be probated informally
on the strength of an affidavit by a person who can say what occurred at the
time of execution.
Except
where probate or its equivalent has occurred previously in another state,
informal probate is available only where an original will exists and is
available to be filed. Lost or destroyed wills must be established in formal
proceedings. See Section 3‑402.
Under Section 3‑401, pendency of formal testacy proceedings blocks
informal probate or appointment proceedings.
Section 3‑304. Informal Probate; Unavailable in
Certain Cases.
Applications for informal probate which
relate to one or more of a known series of testamentary instruments (other than
a will and one or more codicils thereto), the latest of which does not
expressly revoke the earlier, shall be declined.
COMMENT
The
Registrar handles the informal proceeding, but is required to decline
applications in certain cases where circumstances suggest that formal probate
would provide desirable safeguards.
Section 3‑305. Informal Probate; Registrar Not
Satisfied.
If the Registrar is not satisfied that a will is entitled to be probated in informal proceedings because of failure to meet the requirements of Sections 3‑303 and 3‑304 or any other reason, he may decline the application. A declination of informal probate is not an adjudication and does not preclude formal probate proceedings.
COMMENT
The
purpose of this section is to recognize that the Registrar should have some
authority to deny probate to an instrument even though all stated statutory
requirements may be said to have been met.
Denial of an application for informal probate cannot be appealed. Rather, the proponent may initiate a formal
proceeding so that the matter may be brought before the judge in the normal way
for contested matters.
Section 3‑306. Informal Probate; Notice
Requirements.
[*]
The moving party must give notice as described by Section 1‑401 of his
application for informal probate to any person demanding it pursuant to Section
3‑204, and to any personal representative of the decedent whose
appointment has not been terminated. No
other notice of informal probate is required.
[(b) If an informal probate is granted, within 30 days thereafter the
applicant shall give written information of the probate to the heirs and
devisees. The information shall include the name and address of the applicant,
the name and location of the Court granting the informal probate, and the date
of the probate. The information shall be delivered or sent by ordinary mail to
each of the heirs and devisees whose address is reasonably available to the
applicant. No duty to give information is incurred if a personal representative
is appointed who is required to give the written information required by
Section 3‑705. An applicant's failure to give information as required by
this section is abreach of his duty to the heirs and devisees but does not
affect the validity of the probate.]
* This paragraph becomes (a) if optional subsection (b) is accepted.
COMMENT
This provision assumes that
there will be a single office within each county or other area of jurisdiction
of the probate Court which can be checked for demands for notice relating to
estates in that area. If there are or
may be several Registrars within a given area, provision would need to be made
so that information concerning demands for notice might be obtained from the
chief Registrar's place of business.
In
1975, the Joint Editorial Board recommended the addition, as a bracketed,
optional provision, of subsection (b). The recommendation was derived from a
provision added to the Code in
Section 3‑307.
Informal Appointment Proceedings; Delay in Order; Duty of Registrar; Effect of
Appointment.
(a) Upon receipt of an application for informal appointment of a
personal representative other than a special administrator as provided in
Section 3‑614, if at least 120 hours have elapsed since the decedent's
death, the Registrar, after making the findings required by Section 3‑308,
shall appoint the applicant subject to qualification and acceptance; provided,
that if the decedent was a non‑resident, the Registrar shall delay the
order of appointment until 30 days have elapsed since death unless the personal
representative appointed at the decedent's domicile is the applicant, or unless
the decedent's will directs that his estate be subject to the laws of this
state.
(b) The status of personal representative and the powers and duties
pertaining to the office are fully established by informal appointment. An
appointment, and the office of personal representative created thereby, is
subject to termination as provided in Sections 3‑608 through 3‑612,
but is not subject to retroactive vacation.
COMMENT
Section
3‑307 describes the duty of a personal representative and the protection
available to one who acts under letters issued in informal proceedings. The
provision requiring a delay of 30 days from death before appointment of a
personal representative for a non‑resident decedent is new. It is
designed to permit the first appointment to be at the decedent's domicile. See Section 3‑203.
Section 3‑308.
Informal Appointment Proceedings; Proof and Findings Required.
(a) In informal appointment proceedings, the Registrar must determine whether:
(1) the
application for informal appointment of a personal representative is complete;
(2) the
applicant has made oath or affirmation that the statements contained in the
application are true to the best of his knowledge and belief;
(3) the
applicant appears from the application to be an interested person as defined in
Section 1‑201(23);
(4) on the
basis of the statements in the application, venue is proper;
(5) any will
to which the requested appointment relates has been formally or informally
probated; but this requirement does not
apply to the appointment of a special administrator;
(6) any notice
required by Section 3‑204 has been given;
(7) from the
statements in the application, the person whose appointment is sought has
priority entitling him to the appointment.
(b) Unless Section 3‑612 controls, the application must be denied
if it indicates that a personal representative who has not filed a written
statement of resignation as provided in Section 3‑610(c) has been
appointed in this or another [county] of this state, that (unless the
applicant is the domiciliary personal representative or his nominee) the
decedent was not domiciled in this state and that a personal representative
whose appointment has not been terminated has been appointed by a Court in the
state of domicile, or that other requirements of this section have not been
met.
COMMENT
Sections
3‑614 and 3‑615 make it clear that a special administrator may be
appointed to conserve the estate during any period of delay in probate of a
will. Even though the will has not been approved, Section 3‑614 gives
priority for appointment as special administrator to the person nominated by the
will which has been offered for probate. Section 3‑203 governs priorities
for appointment. Under it, one or more of the same class may receive priority
through agreement of the others.
The last sentence of the section is designed
to prevent informal appointment of a personal representative in this state when
a personal representative has been previously appointed at the decedent's
domicile. Sections 4‑204 and 4‑205
may make local appointment unnecessary. Appointment in formal proceedings is
possible, however.
Section 3‑309.
Informal Appointment Proceedings; Registrar Not Satisfied.
If the Registrar is not satisfied that a requested informal appointment of a personal representative should be made because of failure to meet the requirements of Sections 3‑307 and 3‑308, or for any other reason, he may decline the application. A declination of informal appointment is not an adjudication and does not preclude appointment in formal proceedings.
COMMENT
Authority
to decline an application for appointment is conferred on the Registrar. Appointment of a personal representative
confers broad powers over the assets of a decedent's estate. The process of declining a requested appointment
for unclassified reasons should be one which a Registrar can use quickly and
informally.
Section 3‑310. Informal Appointment Proceedings;
Notice Requirements.
The moving party must give notice as described by Section 1‑401 of his intention to seek an appointment informally: (1) to any person demanding it pursuant to Section 3‑204; and (2) to any person having a prior or equal right to appointment not waived in writing and filed with the Court. No other notice of an informal appointment proceeding is required.
Section 3‑311. Informal Appointment Unavailable
in Certain Cases.
If an application for
informal appointment indicates the existence of a possible unrevoked
testamentary instrument which may relate to property subject to the laws of
this state,
and which is not
filed for probate in this court, the Registrar shall decline the application.
_________________________________
SUCCESSION WITHOUT ADMINISTRATION
PREFATORY NOTE
This
amendment to the Uniform Probate Code is an alternative to other methods of
administering a decedent's estate. The Uniform Probate Code otherwise provides
procedures for informal administration, formal administration and supervised
administration. This amendment adds another alternative to the system of
flexible administration provided by the Uniform Probate Code and permits the
heirs of an intestate or residuary devisees of a testator to accept the estate
assets without administration by assuming responsibility for discharging those
obligations that normally would be discharged by the personal representative.
The
concept of succession without administration is drawn from the civil law and is
a variation of the method which is followed largely on the Continent in
This
proposed amendment contains cross‑references to the procedures in the
Uniform Probate Code and particularly implements the policies and concepts
reflected in Sections 1‑102, 3‑101 and 3‑109. These sections of the Uniform Probate Code
provide in part:
SECTION 1‑102. [Purposes; Rule of Construction.]
(a) This Code
shall be liberally construed and applied to promote its underlying purposes and
policies.
(b) The
underlying purposes and policies of this Code are:
(1) to simplify and clarify the law concerning the
affairs of decedents, missing persons, protected persons, minors and
incapacitated persons;
(2) to discover and make effective the intent of a
decedent in the distribution of his property;
(3) to promote a speedy and efficient system for
liquidating the estate of the decedent and making distribution to his
successors;
************************
SECTION 3‑101.
[Devolution of Estate at Death; Restrictions.]
The
power of a person to leave property by will, and the rights of creditors,
devisees, and heirs to his property are subject to the restrictions and
limitations contained in this Code to facilitate the prompt settlement of
estates. Upon the death of a person, his real and personal property devolves to
the persons to whom it is devised by his last will or to those indicated as
substitutes for them in cases involving lapse, renunciation, or other
circumstances affecting the devolution of testate estate, or in the absence of
testamentary disposition, to his heirs, or to those indicated as substitutes
for them in cases involving renunciation or other circumstances affecting
devolution of intestate estates, subject to homestead allowance, exempt
property and family allowance, to rights of creditors, elective share of the
surviving spouse, and to administration.
SECTION 3‑901.
[Successors' Rights if No Administration.]
In the absence of administration,
the heirs and devisees are entitled to the estate in accordance with the terms
of a probated will or the laws of intestate succession. Devisees may establish
title by the probated will to devised property. Persons entitled to property by
homestead allowance, exemption or intestacy may establish title thereto by
proof of the decedent's ownership, his death, and their relationship to the
decedent. Successors take subject to all
charges incident to administration, including the claims of creditors and allowances
of surviving spouse and dependent children, and subject to the rights of others
resulting from abatement, retainer, advancement, and ademption.
Section 3‑312.
Universal Succession; In General.
The heirs of an intestate or the residuary
devisees under a will, excluding minors and incapacitated, protected, or
unascertained persons, may become universal successors to the decedent's estate
by assuming personal liability for (1) taxes, (2) debts of the decedent, (3)
claims against the decedent or the estate, and (4) distributions due other
heirs, devisees, and persons entitled to property of the decedent as provided
in Sections 3‑313 through 3‑322.
COMMENT
This
section states the general policy of the Act to permit heirs or residuary
legatees to take possession, control and title to a decedent's estate by
assuming a personal obligation to pay taxes, debts, claims and distributions
due to others entitled to share in the decedent's property by qualifying under
the statute. Although the surviving spouse most often will be an heir or
residuary devisee, he or she may also be a person otherwise entitled to
property of the decedent as when a forced share is claimed.
This
Act does not contemplate that assignees of heirs or residuary devisees will
have standing to apply for universal succession since this involves undertaking
responsibility for obligations of the decedent.
Of course, after the statement of universal succession has been issued,
persons may assign their beneficial interests as any other asset.
The
Act excludes incapacitated and unascertained persons as universal successors
because of the need for successors to deal with the property for various
purposes. The procedure permits
competent heirs and residuary devisees to proceed even where there are some
others incompetent or unascertained. If any unascertained or incompetent heir
or devisee wishes, they may require bonding or if unprotected they may force
the estate into administration. Subsequent sections permit the conservator,
guardian ad litem or other fiduciary of unascertained or incompetent heirs or
devisees to object. The universal successors' obligations may be enforced by
appropriate remedy. In
In
restricting universal succession to competent heirs and residuary legatees, the
act makes them responsible to incompetent heirs and legatees. This restriction is deemed appropriate to
avoid the problems in dealing with the estate assets vested in an incompetent.
This is a variation from the
This
Act contemplates that known competent successors may proceed under it. Although all competent heirs are required to
join in the informal process, the possibility of an unknown heir is not treated
as jurisdictional. An unknown heir who appeared would be able to establish his
or her rights as in administration unless barred by adjudication, estoppel or
lapse of time.
Section 3‑313. Universal Succession;
Application; Contents.
(a) An application to become universal successors by the heirs of an
intestate or the residuary devisees under a will must be directed to the
Registrar, signed by each applicant,
and verified to be accurate and complete to the best of the applicant's
knowledge and belief as follows:
(1) An
application by heirs of an intestate must contain the statements required by
Section 3‑301(a)(1) and (4)(i) and state that the applicants constitute
all the heirs other than minors and incapacitated, protected, or unascertained
persons.
(2) An
application by residuary devisees under a will must be combined with a petition
for informal probate if the will has not been admitted to probate in this State
and must contain the statements required by Section 3‑301(a)(1) and (2).
If the will has been probated in this state, an application by residuary
devisees must contain the statements required by Section 3‑301(a)(2)(iii).
An application by residuary devisees must state that the applicants constitute
the residuary devisees of the decedent other than any minors and incapacitated,
protected, or unascertained persons. If the estate is partially intestate, all
of the heirs other than minors and incapacitated, protected, or unascertained
persons must join as applicants.
(b) The application must state whether letters of administration are
outstanding, whether a petition for appointment of a personal representative of
the decedent is pending in any court of this state, and that the applicants
waive their right to seek appointment of a personal representative.
(c) The application may describe in general terms the assets of the
estate and must state that the applicants accept responsibility for the estate and
assume personal liability for (1) taxes, (2) debts of the decedent, (3) claims
against the decedent or the estate and (4) distributions due other heirs,
devisees, and persons entitled to property of the decedent as provided in
Sections 3‑316 through 3‑322.
COMMENT
This
section spells out in detail the form and requirements for application to the
Registrar to become universal successors.
The section requires the applicants to inform the Registrar whether the
appointment of a personal representative has occurred or is pending in order to
assure any administration is terminated before the application can be
granted. The section requires applicants
to waive their right to seek the appointment of a personal representative. The
appointment of an executor would preclude or postpone universal succession by
application for appointment unless the executor's appointment is avoided
because of lack of interest in the estate. See
Sections 3‑611, 3‑912.
The
statements in the application are verified by signing and filing and deemed to
be under oath as provided in Section 1‑310. Like other informal proceedings under the
U.P.C., false statements constitute fraud (U.P.C. 1‑106).
Even
though the presence of residuary devisees would seem to preclude partial
intestacy (U.P.C. 2‑605, 2‑606), the last sentence of 3‑313(a)
regarding partial intestacy warns all parties that if there is a partial
intestacy, the heirs must join. It avoids problems of determining whether the
residuary takers are in all instances true residuary legatees, e.g., if a
testator provides: "Lastly, I give 1/2 and only 1/2 of the rest of my
estate to A." (cf. U.P.C. 2‑603).
Section
3‑313(c) provides that a general description of the assets may be
included appropriate to the assets in the estate and adequate to inform the
parties and the Registrar of the nature of the estate involved.
In
the event an heir or residuary devisee were to disclaim prior to acceptance of
the succession, those who would take in place of the disclaimant would be the
successors who could apply to become universal successors. The disclaimant
could not become a universal successor as to the disclaimed interest and would
not be subject to liability as a universal successor.
Trustees
of testamentary trusts have standing as devisees. If the trustee is a pecuniary
devisee or a specific devisee other than a residuary devisee, he would
administer the trust upon receipt of the assets from the universal successors
and as a devisee could enforce distribution from the universal successors.
The trustee who is a
residuary legatee has standing to qualify as a universal successor by
acceptance of the decedent's assets, then to discharge the obligations of the
universal successor, and finally to administer the residue under the trust
without appointment of a personal representative. The will would be probated in
any event. The residuary trustee could choose to insist on appointment of a
personal representative and not seek universal succession. Neither alternative
could alter the provisions of the residuary trust.
Section 3‑314.
Universal Succession; Proof and Findings Required.
(a) The [Registrar] shall grant the application if:
(1) the
application is complete in accordance with Section 3‑313;
(2) all
necessary persons have joined and have verified that the statements contained
therein are true, to the best knowledge and belief of each;
(3) venue is
proper;
(4) any notice
required by Section 3‑204 has been given or waived;
(5) the time
limit for original probate or appointment proceedings has not expired and the
applicants claim under a will;
(6) the
application requests informal probate of a will, the application and findings
conform with Sections 3‑301(a)(2) and 3‑303(a)(c)(d) and (e) so the
will is admitted to probate; and
(7) none of
the applicants is a minor or an incapacitated or protected person.
(b) The [Registrar] shall deny the application if letters of administration are outstanding.
(c) Except as provided in Section 3‑322, the [Registrar] shall deny the application if any creditor, heir, or devisee who is qualified by Section 3‑605 to demand bond files an objection.
COMMENT
This
section outlines the substantive requirements for universal succession and is
the guideline to the Registrar for approval of the application. As in U.P.C. 3‑303,
review of the filed documents is all that is required, with the Registrar
expected to determine whether to approve on the basis of information available
to the Registrar. There is very little discretion in the Registrar except that
if something appears lacking in the application, the Registrar would be able to
request additional information. The analogy to U.P.C. 3‑303 is rather
direct and the authority of the Registrar is somewhat more limited because
there is no parallel section to U.P.C. 3‑305 as there is in probate. (See
also U.P.C. 3‑309.)
Section
3‑314(a)(5) requires that the application for universal succession under
a will be made before the time limit for original probate has expired. Against the background of U.P.C. 3‑108
which limits administration proceedings after three years except for proof of
heirship or will construction, the heirs could take possession of property and
prove their title without the universal succession provisions.
The
review of the application by the Registrar essentially is a clerical matter to
determine if the application exhibits the appropriate circumstance for
succession without administration. Hence, if there are letters of
administration outstanding, the application must be denied under Section 3‑314(b).
Even though a disinterested executor under a will should not be able to
preclude those interested in the estate from settling the estate without
administration, coordination of the Registrar's action with the process of the
probate Court is imperative to protect the parties and the public.
Consequently, any outstanding letters must be terminated before succession
without administration is approved. Under the Uniform Probate Code, those with
property interests in the estate are viewed as "interested persons"
(U.P.C. 1‑201(2)) and may initiate either informal (U.P.C. 3‑105)
or formal proceedings (U.P.C. 3‑401); also the agreement of those
interested in the estate is binding on the personal representative (U.P.C. 3‑912,
3‑1101). These provisions appear adequate to preclude the personal
representative who has no other interest in the estate from frustrating those
interested from utilizing succession without administration.
There
is need for coordination with other process within the probate Court when a
petition for letters is pending (i.e., not withdrawn) as when letters were
outstanding. The appropriateness of the appointment of the personal
representative, i.e., whether administration was necessary, could be determined
on an objection to the appointment under U.P.C. Sections 3‑414(b); cf., 3‑608 to 3‑612. If the
appointment of a personal representative is denied, then the application for
universal succession without administration could be approved in appropriate
cases.
Section
3‑314 does not require prior notice unless requested under U.P.C. 3‑204.
Information to other heirs and devisees is provided after approval of the
application. See Section 3‑319.
If, after universal succession is approved, a
creditor or devisee were not paid or secured, in addition to suing the
successor directly, the creditor or devisee could move for appointment of a
personal representative to administer the estate properly. This pressure on the
universal successors to perform seems desirable. In view of the availability of
informal administration and other flexible alternatives under the U.P.C., if
any person properly moves for appointment of a personal representative,
succession without administration should be foreclosed or terminated.
Section 3‑315.
Universal Succession; Duty of Registrar; Effect of Statement of Universal
Succession.
Upon receipt of an application under Section 3‑313, if at least 120 hours have elapsed since the decedent's death, the Registrar, upon granting the application, shall issue a written statement of universal succession describing the estate as set forth in the application and stating that the applicants (i) are the universal successors to the assets of the estate as provided in Section 3‑312, (ii) have assumed liability for the obligations of the decedent, and (iii)have acquired the powers and liabilities of universal successors. The statement of universal succession is evidence of the universal successors' title to the assets of the estate. Upon its issuance, the powers and liabilities of universal successors provided in Sections 3‑316 through 3‑322 attach and are assumed by the applicants.
COMMENT
This section provides for a written statement issued by the Registrar evidencing the right and power of the universal successors to deal with the property of the decedent and serves as an instrument of distribution to them. Although the application for universal succession may be filed anytime after death, within the time limit for original probate, the Registrar may not act before 120 hours have elapsed since the testator's death. This period parallels provisions for other informal proceedings under the U.P.C., e.g., §§ 2‑601, 3‑302, 3‑307.
Section 3‑316.
Universal Succession; Universal Successors' Powers.
Upon the [Registrar's] issuance of a statement of universal succession:
(1) Universal
successors have full power of ownership to deal with the assets of the estate
subject to the limitations and liabilities in this [Act]. The universal successors shall proceed
expeditiously to settle and distribute the estate without adjudication but if
necessary may invoke the jurisdiction of the court to resolve questions
concerning the estate.
(2) Universal
successors have the same powers as distributees from a personal representative
under Sections 3‑908 and 3‑909 and third persons with whom they
deal are protected as provided in Section 3‑910.
(3) For
purposes of collecting assets in another state whose law does not provide for
universal succession, universal successors have the same standing and power as
personal representatives or distributees in this State.
COMMENT
This
section is the substantive provision (1) declaring the successors to be
distributees and (2) to have the powers of owners so far as dealing with the
estate assets subject to the obligations to others.
Details
concerning the status of distributees under U.P.C. 3‑908 and the power to
deal with property are provided in U.P.C. 3‑910.
Although one state cannot control the law of another, the universal successor should be recognized in other states as having the standing of either a foreign personal representative or a distributee of the claim to local assets. Paragraph (3) attempts to remove any limitation of this state in such a case.
Section 3‑317.
Universal Succession; Universal Successors' Liability to Creditors, Other
Heirs, Devisees and Persons Entitled to Decedent's Property; Liability of Other
Persons Entitled to Property.
(a) In the proportions and subject to limits expressed in Section 3‑321,
universal successors assume all liabilities of the decedent that were not
discharged by reason of death and liability for all taxes, claims against the
decedent or the estate, and charges properly incurred after death for the
preservation of the estate, to the extent those items, if duly presented, would
be valid claims against the decedent's estate.
(b) In the proportions and subject to the limits expressed in Section 3‑321,
universal successors are personally liable to other heirs, devisees, and
persons entitled to property of the decedent for the assets or amounts that
would be due those heirs, were the estate administered, but no allowance having
priority over devisees may be claimed for attorney's fees or charges for
preservation of the estate in excess of reasonable amounts properly incurred.
(c) Universal successors are entitled to their interests in the estate
as heirs or devisees subject to priority and abatement pursuant to Section 3‑902
and to agreement pursuant to Section 3‑912.
(d) Other heirs, devisees, and persons to whom assets have been distributed
have the same powers and liabilities as distributees under Sections 3‑908,
3‑909, and 3‑910.
(e) Absent breach of fiduciary obligations or express undertaking, a
fiduciary's liability is limited to the assets received by the fiduciary.
COMMENT
The
purpose of succession without administration is not to alter the relative
property interests of the parties but only to facilitate the family's
expeditious settlement of the estate. Consistent with this, the liability
arising from the assumption of obligations is stated explicitly here to assist
in understanding the coupling of power and liability. Subsection (b) includes an abatement
reference that recognizes the possible adjustment that may be necessary by
reason of excess claims under U.P.C. 3‑902.
In succession
without administration, there being no personal representative's notice to
creditors, the short non‑claim period under U.P.C. Section 3‑803(a)(1)
does not apply and creditors are subject to the statutes of limitations and the
limitation of three years on decedent's creditors when no notice is published
under U.P.C. Section 3‑803(a)(2).
The general statutes of limitation are suspended for four months
following the decedent's death but resume thereafter under U.P.C. Section 3‑802.
The assumption of liability by the universal successors upon the issuance of
the Statement of Universal Succession is deemed to be by operation of law and
does not operate to extend or renew any statute of limitations that had begun
to run against the decedent. The result is that creditors are barred by the
general statutes of limitation or 3 years whichever is the shorter.
The
obligation of the universal successors to other heirs, devisees and
distributees is based on the promise to perform in return for the direct distribution
of property and any limitation or laches begins to run on issuance of the
statement of universal succession unless otherwise extended by action or
assurance of the universal successor.
It
should be noted that this statute does not deal with the consequences or
obligations that arise under either federal or state tax laws. The universal
successors will be subject to obligations for the return and payment of both
income and estate taxes in many situations depending upon the tax law and the
circumstances of the decedent and the estate. These tax consequences should be
determined before electing to utilize succession without administration.
Section 3‑318.
Universal Succession; Universal Successors' Submission to Jurisdiction; When
Heirs or Devisees May Not Seek Administration.
(a) Upon issuance of the statement of universal succession, the
universal successors become subject to the personal jurisdiction of the Courts
of this state in any proceeding that may be instituted relating to the estate
or to any liability assumed by them.
(b) Any heir or devisee who voluntarily joins in an application under
Section 3‑313 may not subsequently seek appointment of a personal
representative.
COMMENT
This
section imposes jurisdiction over the universal successors and bars them from
seeking appointment as personal representative.
Section 3‑319.
Universal Succession; Duty of Universal Successors; Information to Heirs and
Devisees.
Not later than thirty days after issuance of
the statement of universal succession, each universal successor shall inform
the heirs and devisees who did not join in the application of the succession
without administration. The information must be delivered or be sent by
ordinary mail to each of the heirs and devisees whose address is reasonably
available to the universal successors. The information must include the names
and addresses of the universal successors, indicate that it is being sent to
persons who have or may have some interest in the estate, and describe the
court where the application and statement of universal succession has been
filed. The failure of a universal successor to give this information is a
breach of duty to the persons concerned but does not affect the validity of the
approval of succession without administration or the powers or liabilities of
the universal successors. A universal successor may inform other persons of the
succession without administration by delivery or by ordinary first class mail.
COMMENT
The
problem of residuary legatees or some of the heirs moving for universal
succession without the knowledge of others interested in the estate is similar
to that of informal administration. By this provision those devisees and heirs
who do not participate in the application are informed of the application and
its approval and may move to protect any interest that they perceive. The provision parallels U.P.C. Section 3‑705.
Section 3‑320.
Universal Succession; Universal Successors' Liability For Restitution to
Estate.
If a personal representative is subsequently
appointed, universal successors are personally liable for restitution of any
property of the estate to which they are not entitled as heirs or devisees of
the decedent and their liability is the same as a distributee under Section 3‑909,
subject to the provisions of Sections 3‑317 and 3‑321 and the
limitations of Section 3‑1006.
COMMENT
The
liability of universal successors for restitution in the event a personal
representative is appointed is spelled out in this section and keyed to the
parallel sections in the U.P.C.
Section 3‑321.
Universal Succession; Liability of Universal Successors for Claims, Expenses,
Intestate Shares and Devises.
The liability of universal successors is
subject to any defenses that would have been available to the decedent. Other
than liability arising from fraud, conversion, or other wrongful conduct of a
universal successor, the personal liability of each universal successor to any
creditor, claimant, other heir, devisee, or person entitled to decedent's
property may not exceed the proportion of the claim that the universal
successor's share bears to the share of all heirs and residuary devisees.
COMMENT
This
is the primary provision for the successor's liability to creditors and others.
The theory is that the universal successors as a group are liable in full to
the creditors but that none have a greater liability than in proportion to the
share of the estate received. Under the
U.P.C., since informal administration is available with limited liability for
the personal representative, the analogy to the Louisiana system would be to
accept full responsibility for debts and claims if succession without
administration is desired but to choose informal administration if protection
of the inventory is desired.
This
definition of liability assumes, first, that the devisees and heirs are subject
to the usual priorities for creditors and devisees and abatement for them in §§
3‑316, 3‑317. Second, it is assumed that if a creditor or a
subsequently appointed personal representative were to proceed against the
successors, having jurisdiction by submission, § 3‑318, the liability
would be on a theory of contribution by the successors with the burden on each
universal successor to prove his or her own share of the estate and liability
against that share.
Third,
it is also assumed that, a creditor who is unprotected or unsecured under § 3‑322,
can object to universal succession under § 3‑314(c) and if the creditor
does not object, payments by the successors, like those by the decedent when
alive, will be recognized as good without any theory of preferring creditors.
Thus, until a creditor takes action to require administration, that creditor
should be bound by the successors' non‑fraudulent prior payment to other
creditors. If a creditor suspects insolvency, he can put the estate into
administration and after the appointment of a personal representative would
have the usual priority as to remaining assets. This would be subject to the
theory of fraud, i.e., a knowing and conscious design on the part of the
successors to ignore the priority of the decedent's creditors to the harm of a
creditor. This would constitute fraud that would defeat the limits on
successor's liability otherwise available under the statute.
Section 3‑322.
Universal Succession; Remedies of Creditors, Other Heirs, Devisees or Persons
Entitled to Decedent's Property.
In addition to remedies otherwise provided by
law, any creditor, heir, devisee, or person entitled to decedent's property
qualified under Section 3‑605, may demand bond of universal successors.
If the demand for bond precedes the granting of an application for universal
succession, it must be treated as an objection under Section 3‑314(c)
unless it is withdrawn, the claim satisfied, or the applicants post bond in an
amount sufficient to protect the demandant. If the demand for bond follows the
granting of an application for universal succession, the universal successors,
within 10 days after notice of the demand, upon satisfying the claim or posting
bond sufficient to protect the demandant, may disqualify the demandant from
seeking administration of the estate.
COMMENT
This section provides
necessary protection to creditors and other heirs, devisees or persons entitled
to distribution. Any person to whom a universal successor is obligated could
pursue any available remedy, e.g., a proceeding to collect a debt or to secure
specific performance. By this section,
any creditor or other heir, devisee or person entitled to distribution may also
demand protection and, if it is not forthcoming, put the estate into
administration. This seems adequate to coerce performance from universal
successors while assuring creditors their historical preference and other
beneficiaries of the estate their rights.
PART 4
FORMAL TESTACY AND APPOINTMENT PROCEEDINGS
Section 3‑401.
Formal Testacy Proceedings; Nature; When Commenced.
A formal testacy proceeding
is litigation to determine whether a decedent left a valid will. A formal
testacy proceeding may be commenced by an interested person filing a petition
as described in Section 3‑402(a) in which he requests that the Court,
after notice and hearing, enter an order probating a will, or a petition to set
aside an informal probate of a will or to prevent informal probate of a will
which is the subject of a pending application, or a petition in accordance with
Section 3‑402(b) for an order that the decedent died intestate.
A petition may seek formal
probate of a will without regard to whether the same or a conflicting will has
been informally probated. A formal testacy proceeding may, but need not,
involve a request for appointment of a personal representative.
During the pendency of a
formal testacy proceeding, the Registrar
shall not act upon any application for informal probate of any will of the
decedent or any application for informal appointment of a personal
representative of the decedent.
Unless a petition in a
formal testacy proceeding also requests confirmation of the previous informal
appointment, a previously appointed personal representative, after receipt of
notice of the commencement of a formal probate proceeding, must refrain from
exercising his power to make any further distribution of the estate during the
pendency of the formal proceeding. A petitioner who seeks the appointment of a
different personal representative in a formal proceeding also may request an
order restraining the acting personal representative from exercising any of the
powers of his office and requesting the appointment of a special administrator.
In the absence of a request, or if the request is denied, the commencement of a
formal proceeding has no effect on the powers and duties of a previously
appointed personal representative other than those relating to distribution.
COMMENT
The
word "testacy" is used to refer to the general status of a decedent
in regard to wills. Thus, it embraces the possibility that he left no will, any
question of which of several instruments is his valid will, and the possibility
that he died intestate as to a part of his estate, and testate as to the
balance. See Section 1‑201(44).
The
formal proceedings described by this section may be: (i) an original proceeding to secure
"solemn form" probate of a will; (ii) a proceeding to secure
"solemn form" probate to corroborate a previous informal probate;
(iii) a proceeding to block a pending application for informal probate, or to
prevent an informal application from occurring thereafter; (iv) a proceeding to
contradict a previous order of informal probate; (v) a proceeding to secure a
declaratory judgment of intestacy and a determination of heirs in a case where
no will has been offered. If a pending
informal application for probate is blocked by a formal proceeding, the applicant
may withdraw his application and avoid the obligation of going forward with
prima facie proof of due execution. See Section
3‑407. The petitioner in the
formal proceedings may be content to let matters stop there, or he can frame
his petition, or amend, so that he may secure an adjudication of intestacy
which would prevent further activity concerning the will.
If
a personal representative has been appointed prior to the commencement of a
formal testacy proceeding, the petitioner must request confirmation of the
appointment to indicate that he does not want the testacy proceeding to have
any effect on the duties of the personal representative, or refrain from
seeking confirmation, in which case, the proceeding suspends the distributive
power of the previously appointed representative. If nothing else is requested
or decided in respect to the personal representative, his distributive powers
are restored at the completion of the proceeding, with Section 3‑703
directing him to abide by the will. "Distribute" and
"distribution" do not include payment of claims. See Section 1‑201(10), 3‑807 and
3‑902.
Section 3‑402.
Formal Testacy or Appointment Proceedings; Petition; Contents.
(a) Petitions for formal probate of a will, or for adjudication of
intestacy with or without request for appointment of a personal representative,
must be directed to the Court, request a judicial order after notice and
hearing and contain further statements as indicated in this section. A petition
for formal probate of a will (1) requests an order as to the testacy of the
decedent in relation to a particular instrument which may or may not have been
informally probated and determining the heirs, (2) contains the statements
required for informal applications as stated in the six subparagraphs under
Section 3‑301(a)(1), the statements required by subparagraphs (ii) and
(iii) of Section 3‑301(a)(2), and (3) states whether the original of the
last will of the decedent is in the possession of the Court or accompanies the
petition.
If the original will is
neither in the possession of the Court nor accompanies the petition and no
authenticated copy of a will probated in another jurisdiction accompanies the
petition, the petition also must state the contents of the will, and indicate
that it is lost, destroyed, or otherwise unavailable.
(b) A petition for adjudication of intestacy and appointment of an
administrator in intestacy must request a judicial finding and order that the
decedent left no will and determining the heirs, contain the statements
required by (1) and (4) of Section 3‑301(a) and indicate whether
supervised administration is sought. A petition may request an order
determining intestacy and heirs without requesting the appointment of an
administrator, in which case, the statements required by subparagraph (ii) of
Section 3‑301(a)(4) above may be omitted.
COMMENT
If
a petitioner seeks an adjudication that a decedent died intestate, he is
required also to obtain a finding of heirship. A formal proceeding which is to
be effective on all interested persons must follow reasonable notice to such
persons. It seems desirable to force the proceedings through a formal
determination of heirship because the finding will bolster the order, as well
as preclude later questions that might arise at the time of distribution.
Unless
an order of supervised administration is sought, there will be little occasion
for a formal order concerning appointment of a personal representative which
does not also adjudicate the testacy status of the decedent. If a formal order
of appointment is sought because of disagreement over who should serve, Section
3‑414 describes the appropriate procedure.
The words "otherwise
unavailable" in the last paragraph of subsection (a) are not intended to
be read restrictively.
Section
1‑310 expresses the verification requirement which applies to all
documents filed with the Courts.
Section 3‑403.
Formal Testacy Proceedings; Notice of Hearing on Petition.
(a) Upon commencement of a formal testacy proceeding, the Court shall
fix a time and place of hearing. Notice shall be given in the manner prescribed
by Section 1‑401 by the petitioner to the persons herein enumerated and
to any additional person who has filed a demand for notice under Section 3‑204
of this Code.
Notice shall be given to the
following persons: the surviving spouse, children, and other heirs of the
decedent, the devisees and executors named in any will that is being, or has
been, probated, or offered for informal or formal probate in the [county], or
that is known by the petitioner to have been probated, or offered for informal
or formal probate elsewhere, and any personal representative of the decedent
whose appointment has not been terminated. Notice may be given to other
persons. In addition, the petitioner shall give notice by publication to all unknown
persons and to all known persons whose addresses are unknown who have any
interest in the matters being litigated.
(b) If it appears by the petition or otherwise that the fact of the
death of the alleged decedent may be in doubt, or on the written demand of any
interested person, a copy of the notice of the hearing on said petition shall
be sent by registered mail to the alleged decedent at his last known address.
The Court shall direct the petitioner to report the results of, or make and
report back concerning, a reasonably diligent search for the alleged decedent
in any manner that may seem advisable including any or all of the following
methods:
(1) by
inserting in one or more suitable periodicals a notice requesting information
from any person having knowledge of the whereabouts of the alleged decedent;
(2) by
notifying law enforcement officials and public welfare agencies in appropriate
locations of the disappearance of the alleged decedent;
(3) by
engaging the services of an investigator.
The costs of any search so
directed shall be paid by the petitioner if there is no administration or by
the estate of the decedent in case there is administration.
COMMENT
Provisions
governing the time and manner of notice required by this section and other sections
in the Code are contained in 1‑401.
The
provisions concerning search for the alleged decedent are derived from Model
Probate Code, Section 71.
Testacy
proceedings involve adjudications that no will exists. Unknown wills as well as
any which are brought to the attention of the Court are affected. Persons with
potential interests under unknown wills have the notice afforded by death and
by publication. Notice requirements extend also to persons named in a will that
is known to the petitioners to exist, irrespective of whether it has been
probated or offered for formal or informal probate, if their position may be
affected adversely by granting of the petition. But, a rigid statutory
requirement relating to such persons might cause undue difficulty. Hence, the statute merely provides that the
petitioner may notify other persons.
It
would not be inconsistent with this section for the Court to adopt rules
designed to make petitioners exercise reasonable diligence in searching for as
yet undiscovered wills.
Section
3‑106 provides that an order is valid as to those given notice, though
less than all interested persons were given notice. Section 3‑1001(b) provides a means of
extending a testacy order to previously unnotified persons in connection with a
formal closing.
Section 3‑404.
Formal Testacy Proceedings; Written Objections to Probate.
Any party to a formal proceeding who opposes
the probate of a will for any reason shall state in his pleadings his
objections to probate of the will.
COMMENT
Model Probate Code section 72 requires a
contestant to file written objections to any will he would oppose. The
provision prevents potential confusion as to who must file what pleading that
can arise from the notion that the probate of a will is in rem. The petition
for probate of a revoking will is sufficient warning to proponents of the
revoked will.
Section 3‑405.
Formal Testacy Proceedings; Uncontested Cases; Hearings and Proof.
If a petition in a testacy proceeding is
unopposed, the Court may order probate or intestacy on the strength of the
pleadings if satisfied that the conditions of Section 3‑409 have been
met, or conduct a hearing in open court and require proof of the matters
necessary to support the order sought. If evidence concerning execution of the
will is necessary, the affidavit or testimony of one of any attesting witnesses
to the instrument is sufficient. If the affidavit or testimony of an attesting
witness is not available, execution of the will may be proved by other evidence
or affidavit.
COMMENT
For
various reasons, attorneys handling estates may want interested persons to be
gathered for a hearing before the Court on the formal allowance of the will.
The Court is not required to conduct a hearing, however.
If no hearing is required, uncontested formal
probates can be completed on the strength of the pleadings. There is no good
reason for summoning attestors when no interested person wants to force the
production of evidence on a formal probate. Moreover, there seems to be no
valid distinction between litigation to establish a will, and other civil
litigation, in respect to whether the Court may enter judgment on the
pleadings.
Section 3‑406.
Formal Testacy Proceedings; Contested Cases.
In a contested case in which the proper execution of a will is at
issue, the following rules apply:
(1) If the will is
self-proved pursuant to Section 2-504, the will satisfies the requirements for
execution without the testimony of any attesting witness, upon filing the will
and the acknowledgment and affidavits annexed or attached to it, unless there
is evidence of fraud or forgery affecting the acknowledgment or affidavit.
(2) If the will is notarized
pursuant to Section 2-502(a)(3)(B), but not self-proved, there is a rebuttable
presumption that the will satisfies the requirements for execution upon filing
the will.
(3) If the will is witnessed pursuant to Section
2-502(a)(3)(A), but not notarized or self-proved, the testimony of at least one
of the attesting witnesses is required to establish proper execution if the
witness is within this state, competent, and able to testify. Proper execution
may be established by other evidence, including an affidavit of an attesting
witness. An attestation clause that is signed by the attesting witnesses raises
a rebuttable presumption that the events recited in the clause occurred.
COMMENT
2008 Revisions. This section, which applies
in a contested case in which the proper execution of a will is at issue, was
substantially revised and clarified in 2008.
Self-Proved
Wills: Paragraph
(1) provides that a will that is self-proved pursuant to Section 2-504
satisfies the requirements for execution without the testimony of any attesting
witness, upon filing the will and the acknowledgment and affidavits annexed or
attached to it, unless there is evidence of fraud or forgery affecting the
acknowledgment or affidavit. Paragraph (1) does not preclude evidence of undue
influence, lack of testamentary capacity, revocation, or any relevant evidence
that the testator was unaware of the contents of the document.
Notarized
Wills: Paragraph
(2) provides that if the will is notarized pursuant to Section 2-502(a)(3)(B),
but not self-proved, there is a rebuttable presumption that the will satisfies
the requirements for execution upon filing the will.
Witnessed
Wills: Paragraph
(3) provides that if the will is witnessed pursuant to Section 2-502(a)(3)(A),
but not notarized or self-proved, the testimony of at least one of the
attesting witnesses is required to establish proper execution if the witness is
within this state, competent, and able to testify. Proper execution may be
established by other evidence, including an affidavit of an attesting witness.
An attestation clause that is signed by the attesting witnesses raises a
rebuttable presumption that the events recited in the clause occurred. For
further explanation of the effect of an attestation clause, see Restatement
(Third) of Property: Wills and Other Donative Transfers § 3.1 cmt. q (1999).
Historical Note. This Comment was revised in
2008.
Section 3‑407. Formal Testacy Proceedings;
Burdens in Contested Cases.
In contested cases, petitioners who seek to
establish intestacy have the burden of establishing prima facie proof of death,
venue, and heirship. Proponents of a will have the burden of establishing prima
facie proof of due execution in all cases, and, if they are also petitioners,
prima facie proof of death and venue. Contestants of a will have the burden of
establishing lack of testamentary intent or capacity, undue influence, fraud,
duress, mistake or revocation. Parties have the ultimate burden of persuasion
as to matters with respect to which they have the initial burden of proof. If a
will is opposed by the petition for probate of a later will revoking the
former, it shall be determined first whether the later will is entitled to
probate, and if a will is opposed by a petition for a declaration of intestacy,
it shall be determined first whether the will is entitled to probate.
COMMENT
This section is designed to clarify the law
by stating what is believed to be a fairly standard approach to questions
concerning burdens of going forward with evidence in will contest cases.
Section 3‑408.
Formal Testacy Proceedings; Will Construction; Effect of Final Order in Another
Jurisdiction.
A final order of a court of another state
determining testacy, the validity or construction of a will, made in a
proceeding involving notice to and an opportunity for contest by all interested
persons must be accepted as determinative by the courts of this state if it
includes, or is based upon, a finding that the decedent was domiciled at his
death in the state where the order
was made.
COMMENT
This
section is designed to extend the effect of final orders of another
jurisdiction of the
Informal
proceedings by which a will is probated or a personal representative is
appointed are not proceedings which must be respected by a local Court under
either Section 3‑202 or this section.
Nothing
in this section bears on questions of what assets are included in a decedent's
estate.
This
section adds nothing to existing law as applied to cases where the parties
before the local Court were also personally before the foreign Court, or where
the property involved was subject to the power of the foreign Court. It extends present law so that, for some
purposes, the law of another state may become binding in regard to due
execution or revocation of wills controlling local land, and to questions
concerning the meaning of ambiguous words in wills involving local land. But,
choice of law rules frequently produce a similar result. See § 240 Restatement of the Law, Second: Conflict of Laws, p. 73, Proposed Official
Draft III, 1969.
This
section may be easier to justify than familiar choice of law rules, for its
application is limited to instances where the protesting party has had notice
of, and an opportunity to participate in, previous litigation resolving the
question he now seeks to raise.
Section 3‑409.
Formal Testacy Proceedings; Order; Foreign Will.
After the time required for any notice has expired,
upon proof of notice, and after any hearing that may be necessary, if the Court
finds that the testator is dead, venue is proper and that the proceeding was
commenced within the limitation prescribed by Section 3‑108, it shall
determine the decedent's domicile at death, his heirs and his state of testacy.
Any will found to be valid and unrevoked shall be formally probated.
Termination of any previous informal appointment of a personal representative,
which may be appropriate in view of the relief requested and findings, is
governed by Section 3‑612. The
petition shall be dismissed or appropriate amendment allowed if the court is
not satisfied that the alleged decedent is dead. A will from a place which does
not provide for probate of a will after death, may be proved for probate in
this state by a duly authenticated certificate of its legal custodian that the
copy introduced is a true copy and that the will has become effective under the
law of the other place.
COMMENT
Model Probate Code section 80(a), slightly
changed. If the Court is not satisfied
that the alleged decedent is dead, it may permit amendment of the proceeding so
that it would become a proceeding to protect the estate of a missing and
therefore "disabled" person. See Article V of this Code.
Section 3‑410.
Formal Testacy Proceedings; Probate of More Than One Instrument.
If two or more instruments are offered for
probate before a final order is entered in a formal testacy proceeding, more
than one instrument may be probated if neither expressly revokes the other or
contains provisions which work a total revocation by implication. If more than
one instrument is probated, the order shall indicate what provisions control in
respect to the nomination of an executor, if any. The order may, but need not,
indicate how any provisions of a particular instrument are affected by the
other instrument. After a final order in a testacy proceeding has been entered,
no petition for probate of any other instrument of the decedent may be
entertained, except incident to a petition to vacate or modify a previous
probate order and subject to the time limits of Section 3‑412.
COMMENT
Except
as otherwise provided in Section 3‑412, an order in a formal testacy
proceeding serves to end the time within which it is possible to probate after‑discovered
wills, or to give effect to late‑discovered facts concerning heirship.
Determination of heirs is not barred by the three year limitation but a
judicial determination of heirs is conclusive unless the order may be vacated.
This section authorizes a Court to engage in
some construction of wills incident to determining whether a will is entitled
to probate. It seems desirable to leave the extent of this power to the sound
discretion of the Court. If wills are not construed in connection with a
judicial probate, they may be subject to construction at any time. See Section 3‑108.
Section 3‑411. Formal Testacy Proceedings;
Partial Intestacy.
If it becomes evident in the course of a
formal testacy proceeding that, though one or more instruments are entitled to
be probated, the decedent's estate is or may be partially intestate, the Court
shall enter an order to that effect.
Section 3‑412. Formal Testacy Proceedings;
Effect of Order; Vacation.
Subject to appeal and subject
to vacation as provided in this section and in Section 3‑413, a formal
testacy order under Sections 3‑409 to 3‑411, including an order
that the decedent left no valid will and determining heirs, is final as to all
persons with respect to all issues concerning the decedent's estate that the
Court considered or might have considered incident to its rendition relevant to
the question of whether the decedent left a valid will, and to the
determination of heirs, except that:
(1) The Court
shall entertain a petition for modification or vacation of its order and
probate of another will of the decedent if it is shown that the proponents of
the later‑offered will:
(i) were
unaware of its existence at the time of the earlier proceeding: or
(ii) were
unaware of the earlier proceeding and were given no notice thereof, except by
publication.
(2) If
intestacy of all or part of the estate has been ordered, the determination of
heirs of the decedent may be reconsidered if it is shown that one or more
persons were omitted from the determination and it is also shown that the
persons were unaware of their relationship to the decedent, were unaware of his
death or were given no notice of any proceeding concerning his estate, except
by publication.
(3) A petition
for vacation under paragraph (1) or (2) must be filed prior to the earlier of
the following time limits:
(i) if a
personal representative has been appointed for the estate, the time of entry of
any order approving final distribution of the estate, or, if the estate is
closed by statement, six months after the filing of the closing statement;
(ii) whether or
not a personal representative has been appointed for the estate of the decedent,
the time prescribed by Section 3‑108 when it is no longer possible to
initiate an original proceeding to probate a will of the decedent; or
(iii)twelve months after the entry of the order sought
to be vacated.
(4) The order
originally rendered in the testacy proceeding may be modified or vacated, if
appropriate under the circumstances, by the order of probate of the later‑offered
will or the order redetermining heirs.
(5) The
finding of the fact of death is conclusive as to the alleged decedent only if
notice of the hearing on the petition in the formal testacy proceeding was sent
by registered or certified mail addressed to the alleged decedent at his last
known address and the court finds that a search under Section 3‑403(b)
was made.
If the alleged decedent is
not dead, even if notice was sent and search was made, he may recover estate
assets in the hands of the personal representative. In addition to any remedies
available to the alleged decedent by reason of any fraud or intentional
wrongdoing, the alleged decedent may recover any estate or its proceeds from
distributees that is in their hands, or the value of distributions received by
them, to the extent that any recovery from distributees is equitable in view of
all of the circumstances.
COMMENT
The
provisions barring proof of late‑discovered wills is derived in part from
section 81 of Model Probate Code. The same section is the source of the
provisions of (5) above. The provisions permitting vacation of an order
determining heirs on certain conditions reflect the effort to offer parallel
possibilities for adjudications in testate and intestate estates. See Section 3‑401. An objective is
to make it possible to handle an intestate estate exactly as a testate estate
may be handled. If this is achieved, some of the pressure on persons to make
wills may be relieved.
If
an alleged decedent turns out to have been alive, heirs and distributees are
liable to restore the "estate or its proceeds". If neither can be
identified through the normal process of tracing assets, their liability
depends upon the circumstances. The liability of distributees to claimants
whose claims have not been barred, or to persons shown to be entitled to
distribution when a formal proceeding changes a previous assumption informally
established which guided an earlier distribution, is different. See
Sections 3‑909 and 3‑1004.
1993 technical amendments clarified the
conditions intended in (1) and (2).
Section 3‑413.
Formal Testacy Proceedings; Vacation of Order For Other Cause.
For good cause shown, an order in a formal
testacy proceeding may be modified or vacated within the time allowed for
appeal.
COMMENT
See
Sections 1‑304 and 1‑308.
Section 3‑414.
Formal Proceedings Concerning Appointment of Personal Representative.
(a) A formal proceeding for adjudication regarding the priority or qualification
of one who is an applicant for appointment as personal representative, or of
one who previously has been appointed personal representative in informal
proceedings, if an issue concerning the testacy of the decedent is or may be
involved, is governed by Section 3‑402, as well as by this section. In
other cases, the petition shall contain or adopt the statements required by
Section 3‑301(1) and describe the question relating to priority or
qualification of the personal representative which is to be resolved. If the proceeding
precedes any appointment of a personal representative, it shall stay any
pending informal appointment proceedings as well as any commenced thereafter.
If the proceeding is commenced after appointment, the previously appointed
personal representative, after receipt of notice thereof, shall refrain from
exercising any power of administration except as necessary to preserve the
estate or unless the Court orders otherwise.
(b) After notice to interested persons, including all persons
interested in the administration of the estate as successors under the
applicable assumption concerning testacy, any previously appointed personal
representative and any person aving or claiming priority for appointment as
personal representative, the Court shall determine who is entitled to appointment
under Section 3‑203, make a proper appointment and, if appropriate,
terminate any prior appointment found to have been improper as provided in
cases of removal under Section 3‑611.
COMMENT
A
petition raising a controversy concerning the priority or qualifications of a
personal representative may be combined with a petition in a formal testacy
proceeding. However, it is not necessary to petition formally for the
appointment of a personal representative as a part of a formal testacy
proceeding. A personal representative may be appointed on informal application
either before or after formal proceedings which establish whether the decedent
died testate or intestate or no appointment may be desired. See Sections 3‑107, 3‑301(a)(3),
(4) and 3‑307. Furthermore,
procedures for securing the appointment of a new personal representative after
a previous assumption as to testacy has been changed are provided by Section 3‑612.
These may be informal, or related to pending formal proceedings concerning
testacy. A formal order relating to appointment may be desired when there is a
dispute concerning priority or qualification to serve but no dispute concerning
testacy. It is important to distinguish formal proceedings concerning
appointment from "supervised administration". The former includes any
proceeding after notice involving a request for an appointment. The latter
originates in a "formal proceeding" and may be requested in addition
to a ruling concerning testacy or priority or qualifications of a personal
representative, but is descriptive of a special proceeding with a different
scope and purpose than those concerned merely with establishing the bases for
an administration. In other words, a personal
representative appointed in a "formal" proceeding may or may not be
"supervised".
Another
point should be noted. The Court may not immediately issue letters even though
a formal proceeding seeking appointment is involved and results in an order
authorizing appointment. Rather, Section 3‑601 et seq. control the
subject of qualification. Section 1‑305 deals with letters.
PART 5
SUPERVISED ADMINISTRATION
Section 3‑501.
Supervised Administration; Nature of Proceeding.
Supervised administration is a single in rem
proceeding to secure complete administration and settlement of a decedent's
estate under the continuing authority of the Court which extends until entry of
an order approving distribution of the estate and discharging the personal
representative or other order terminating the proceeding. A supervised personal
representative is responsible to the Court, as well as to the interested
parties, and is subject to directions concerning the estate made by the Court
on its own motion or on the motion of any interested party. Except as otherwise
provided in this Part, or as otherwise ordered by the Court, a supervised
personal representative has the same duties and powers as a personal
representative who is not supervised.
COMMENT
This
and the following sections of this Part describe an optional procedure for
settling an estate in one continuous proceeding in the Court. The proceeding is characterized as "in
rem" to align it with the concepts described by the Model Probate Code. See
Section 62, M.P.C. In cases where
supervised administration is not requested or ordered, no compulsion other than
self‑interest exists to compel use of a formal testacy proceeding to
secure an adjudication of a will or no will, because informal probate or
appointment of an administrator in intestacy may be used. Similarly, unless administration is
supervised, there is no compulsion other than self‑interest to use a
formal closing proceeding. Thus, even though an estate administration may be
begun by use of a formal testacy
proceeding which may involve an order concerning who is to be appointed
personal representative, the proceeding is over when the order concerning
testacy and appointment is entered. See Section 3‑107. Supervised administration, therefore, is
appropriate when an interested person desires assurance that the essential
steps regarding opening and closing of an estate will be adjudicated. See the Comment following the next
section.
Section 3‑502. Supervised Administration;
Petition; Order.
A petition for supervised
administration may be filed by any interested person or by a personal
representative at any time or the prayer for supervised administration may be
joined with a petition in a testacy or appointment proceeding. If the testacy
of the decedent and the priority and qualification of any personal
representative have not been adjudicated previously, the petition for
supervised administration shall include the matters required of a petition in a
formal testacy proceeding and the notice requirements and procedures applicable
to a formal testacy proceeding apply. If not previously adjudicated, the Court
shall adjudicate the testacy of the decedent and questions relating to the
priority and qualifications of the personal representative in any case
involving a request for supervised administration, even though the request for
supervised administration may be denied. After notice to interested persons,
the Court shall order supervised administration of a decedent's estate:
(1) if the
decedent's will directs supervised administration, it shall be ordered unless
the Court finds that circumstances bearing on the need for supervised
administration have changed since the execution of the will and that there is
no necessity for supervised administration;
(2) if the
decedent's will directs unsupervised administration, supervised administration
shall be ordered only upon a finding that it is necessary for protection of
persons interested in the estate; or
(3) in other
cases if the Court finds that supervised administration is necessary under the
circumstances.
COMMENT
The
expressed wishes of a testator regarding supervised administration should bear
upon, but not control, the question of whether supervised administration will
be ordered. This section is designed to achieve a fair balance between the
wishes of the decedent, and the interests of successors in regard to supervised
administration.
Since
supervised administration normally will result in an adjudicated distribution
of the estate, the issue of will or no will must be adjudicated. This section
achieves this by forcing a petition for supervised administration to include
matters necessary to put the issue of testacy before the Court. It is possible,
however, that supervised administration will be requested because
administrative complexities warranting it develop after the issue of will or no
will has been resolved in a previously concluded formal testacy proceeding.
It should be noted that supervised
administration, though it compels a judicial settlement of an estate, is not
the only route to obtaining judicial review and settlement at the close of an
administration. The procedures described in Sections 3‑1101 and 3‑1102
are available for use by or against personal representatives who are not
supervised. Also efficient remedies for breach of duty by a personal
representative who is not supervised are available under Part 6 of this
Article. Finally, each personal representative consents to jurisdiction of the
Court as invoked by mailed notice of any proceeding relating to the estate
which may be initiated by an interested person. Also, persons interested in the
estate may be subjected to orders of the Court following mailed notices made in
proceedings initiated by the personal representative. In combination, these
possibilities mean that supervised administration will be valuable principally
to persons who see some advantage in a single judicial proceeding which will
produce adjudications on all major points involved in an estate settlement.
Section 3‑503. Supervised Administration; Effect
on Other Proceedings.
(a) The pendency of a proceeding for supervised administration of a
decedent's estate stays action on any informal application then pending or
thereafter filed.
(b) If a will has been previously probated in informal proceedings, the
effect of the filing of a petition for supervised administration is as provided
for formal testacy proceedings by Section 3‑401.
(c) After he has received notice of the filing of a petition for
supervised administration, a personal representative who has been appointed
previously shall not exercise his power to distribute any estate. The filing of
the petition does not affect his other powers and duties unless the Court
restricts the exercise of any of them pending full hearing on the petition.
COMMENT
The
duties and powers of personal representative are described in Part 7 of this
Article. The ability of a personal representative to create a good title in a
purchaser of estate assets is not hampered by the fact that the personal
representative may breach a duty created by statute, Court order or other
circumstances in making the sale. See
Section 3‑715. However, formal
proceedings against a personal representative may involve requests for
qualification of the power normally possessed by personal representatives which,
if granted, would subject the personal representative to the penalties for
contempt of Court if he disregarded the restriction. See Section 3‑607. If a proceeding also involved a demand
that particular real estate be kept in the estate pending determination of a
petitioner's claim thereto, notice of the pendency of the proceeding could be
recorded as is usual under the jurisdiction's system for the lis pendens
concept.
The word "restricts" in the last
sentence is intended to negate the idea that a judicial order specially
qualifying the powers and duties of a personal representative is a restraining
order in the usual sense. The section means simply that some supervised
personal representatives may receive the same powers and duties as ordinary
personal representatives, except that they must obtain a Court order before
paying claimants or distributing, while others may receive a more restricted
set of powers. Section 3‑607
governs petitions which seek to limit the power of a personal representative.
Section 3‑504.
Supervised Administration; Powers of Personal
Representative.
Unless restricted by the Court, a supervised
personal representative has, without interim orders approving exercise of a
power, all powers of personal representatives under this Code, but he shall not
exercise his power to make any distribution of the estate without prior order
of the Court. Any other restriction on
the power of a personal representative which may be ordered by the Court must
be endorsed on his letters of appointment and, unless so endorsed, is
ineffective as to persons dealing in good faith with the personal
representative.
COMMENT
This section provides authority to issue
letters showing restrictions of power of supervised administrators. In general,
persons dealing with personal representatives are not bound to inquire
concerning the authority of a personal representative, and are not affected by
provisions in a will or judicial order unless they know of it. But, it is
expected that persons dealing with personal representatives will want to see
the personal representative's letters, and this section has the practical
effect of requiring them to do so. No provision is made for noting restrictions
in letters except in the case of supervised representatives. See Section 3‑715.
Section 3‑505.
Supervised Administration; Interim Orders; Distribution and Closing Orders.
Unless otherwise ordered by the Court,
supervised administration is terminated by order in accordance with time
restrictions, notices and contents of orders prescribed for proceedings under
Section 3‑1001. Interim orders
approving or directing partial distributions or granting other relief may be
issued by the Court at any time during the pendency of a supervised
administration on the application of the personal representative or any
interested person.
COMMENT
Since
supervised administration is a single proceeding, the notice requirement
contained in 3‑106 relates to the notice of institution of the
proceedings which is described with particularity by Section 3‑502. The
above section makes it clear that an additional notice is required for a
closing order. It was discussed whether provision for notice of interim orders
should be included. It was decided to leave the point to be covered by Court
order or rule. There was a suggestion for a rule as follows: "Unless otherwise required by order,
notice of interim orders in supervised administration need be given only to
interested persons who request notice of all orders entered in the
proceeding." 1‑402 permits any person to waive notice by a writing
filed in the proceeding.
A demand for notice under Section 3‑204
would entitle any interested person to notice of any interim order which might
be made in the course of supervised administration.
PART 6
PERSONAL REPRESENTATIVE; APPOINTMENT,
CONTROL AND TERMINATION OF AUTHORITY
Section 3‑601.
Qualification.
Prior to receiving letters, a personal
representative shall qualify by filing with the appointing Court any required
bond and a statement of acceptance of the duties of the office.
COMMENT
This
and related sections of this Part describe details and conditions of
appointment which apply to all personal representatives without regard to
whether the appointment proceeding involved is formal or informal, or whether
the personal representative is supervised. Section 1‑305 authorizes
issuance of copies of letters and prescribes their content. The section should
be read with Section 3‑504 which directs endorsement on letters of any
restrictions of power of a supervised administrator.
Section 3‑602.
Acceptance of Appointment; Consent to Jurisdiction.
By accepting appointment, a personal
representative submits personally to the jurisdiction of the Court in any
proceeding relating to the estate that may be instituted by any interested
person. Notice of any proceeding shall be delivered to the personal
representative, or mailed to him by ordinary first class mail at his address as
listed in the application or petition for appointment or as thereafter reported
to the Court and to his address as then known to the petitioner.
COMMENT
Except
for personal representatives appointed pursuant to Section 3‑502,
appointees are not deemed to be "officers" of the appointing Court or
to be parties in one continuous judicial proceeding that extends until final
settlement. See Section 3‑107.
Yet, it is desirable to continue present patterns which prevent a personal
representative who might make himself unavailable to service within the state
from affecting the power of the appointing Court to enter valid orders
affecting him. See Michigan Trust Co. v.
Ferry, 33 S.Ct. 550, 228
Section 3‑603.
Bond Not Required Without Court Order, Exceptions.
No bond is required of a personal
representative appointed in informal proceedings, except (1) upon the
appointment of a special administrator; (2) when an executor or other personal
representative is appointed to administer an estate under a will containing an
express requirement of bond or (3) when bond is required under Section 3‑605.
Bond may be required by court order at the time of appointment of a personal
representative appointed in any formal proceeding except that bond is not
required of a personal representative appointed in formal proceedings if the
will relieves the personal representative of bond, unless bond has been
requested by an interested party and the Court is satisfied that it is
desirable. Bond required by any will may
be dispensed with in formal proceedings upon determination by the Court that it
is not necessary. No bond is required of any personal representative who,
pursuant to statute, has deposited cash or collateral with an agency of this
state to secure performance of his duties.
COMMENT
This
section must be read with the next three sections. The purpose of these
provisions is to move away from the idea that bond always should be required of
a probate fiduciary, or required unless a will excuses it. Also, it is designed to keep the Registrar
acting pursuant to applications in informal proceedings, from passing judgment
in each case on the need for bond. The point is that the Court and Registrar
are not responsible for seeing that personal representatives perform as they
are supposed to perform. Rather, performance is coerced by the remedies
available to interested persons. Interested persons are protected by their
ability to demand prior notice of informal proceedings (Section 3‑204),
to contest a requested appointment by use of a formal testacy proceeding or by
use of a formal proceeding seeking the appointment of another person. Section 3‑105
gives general authority to the Court in a formal proceeding to make appropriate
orders as desirable incident to estate administration. This should be
sufficient to make it clear that an informal application may be blocked by a
formal petition which disputes the matters stated in the petition. Furthermore,
an interested person has the remedies provided in Sections 3‑605 and 3‑607.
Finally, interested persons have assurance under this Code that their rights in
respect to the values of a decedent's estate cannot be terminated without a
judicial order after notice or before the passage of three years from the
decedent's death.
It is believed that the total package of
protection thus afforded may represent more real protection than a blanket
requirement of bond. Surely, it permits a reduction in the procedures which
must occur in uncomplicated estates where interested persons are perfectly
willing to trust each other and the fiduciary.
Section 3‑604.
Bond Amount; Security; Procedure; Reduction.
If bond is required and the provisions of the
will or order do not specify the amount, unless stated in his application or
petition, the person qualifying shall file a statement under oath with the
Registrar indicating his best
estimate of the value of the personal estate of the decedent and of the income
expected from the personal and real estate during the next year, and he shall
execute and file a bond with the Registrar, or give other suitable security, in
an amount not less than the estimate. The Registrar shall determine that the
bond is duly executed by a corporate surety, or one or more individual sureties
whose performance is secured by pledge of personal property, mortgage on real
property or other adequate security. The Registrar may permit the amount of the
bond to be reduced by the value of assets of the estate deposited with a
domestic financial institution (as defined in Section 6‑101) in a manner
that prevents their unauthorized disposition. On petition of the personal
representative or another interested person the Court may excuse a requirement
of bond, increase or reduce the amount of the bond, release sureties, or permit
the substitution of another bond with the same or different sureties.
COMMENT
This
section permits estimates of value needed to fix the amount of required bond to
be filed when it becomes necessary. A consequence of this procedure is that
estimates of value of estates no longer need appear in the petitions and
applications which will attend every administered estate. Hence, a measure of privacy that is not
possible under most existing procedures may be achieved. A co‑signature
arrangement might constitute adequate security within the meaning of this
section.
Section 3‑605.
Demand For Bond by Interested Person.
Any person apparently having an interest in the estate worth in excess of [$1000], or any creditor having a claim in excess of [$1000], may make a written demand that a personal representative give bond. The demand must be filed with the Registrar and a copy mailed to the personal representative, if appointment and qualification have occurred. Thereupon, bond is required, but the requirement ceases if the person demanding bond ceases to be interested in the estate, or if bond is excused as provided in Section 3‑603 or 3‑604. After he has received notice and until the filing of the bond or cessation of the requirement of bond, the personal representative shall refrain from exercising any powers of his office except as necessary to preserve the estate. Failure of the personal representative to meet a requirement of bond by giving suitable bond within 30 days after receipt of notice is cause for his removal and appointment of a successor personal representative.
COMMENT
The demand for bond described in this section may be made in a petition or application for appointment of a personal representative, or may be made after a personal representative has been appointed. The mechanism for compelling bond is designed to function without unnecessary judicial involvement. If demand for bond is made in a formal proceeding, the judge can determine the amount of bond to be required with due consideration for all circumstances. If demand is not made in formal proceedings, methods for computing the amount of bond are provided by statute so that the demand can be complied with without resort to judicial proceedings. The information which a personal representative is required by Section 3‑705 to give each beneficiary includes a statement concerning whether bond has been required.
Section 3‑606.
Terms and Conditions of Bonds.
(a) The following requirements and provisions apply to any bond
required by this Part:
(1) Bonds
shall name the [state] as obligee for the benefit of the persons interested in
the estate and shall be conditioned upon the faithful discharge by the
fiduciary of all duties according to law.
(2) Unless
otherwise provided by the terms of the approved bond, sureties are jointly and
severally liable with the personal representative and with each other. The
address of sureties shall be stated in the bond.
(3) By
executing an approved bond of a personal representative, the surety consents to
the jurisdiction of the probate court which issued letters to the primary
obligor in any proceedings pertaining to the fiduciary duties of the personal
representative and naming the surety as a party. Notice of any proceeding shall
be delivered to the surety or mailed to him by registered or certified mail at
his address as listed with the Court where the bond is filed and to his address
as then known to the petitioner.
(4) On
petition of a successor personal representative, any other personal
representative of the same decedent, or any interested person, a proceeding in
the Court may be initiated against a surety for breach of the obligation of the
bond of the personal representative.
(5) The bond
of the personal representative is not void after the first recovery but may be
proceeded against from time to time until the whole penalty is exhausted.
(b) No action or proceeding may be commenced against the surety on any
matter as to which an action or proceeding against the primary obligor is
barred by adjudication or limitation.
COMMENT
Paragraph
(2) is based, in part, on Section 109 of the Model Probate Code. Paragraph (3)
is derived from Section 118 of the Model Probate Code.
Section 3‑607.
Order Restraining Personal Representative.
(a) On petition of any person who appears to have an interest in the
estate, the Court by temporary order may restrain a personal representative
from performing specified acts of administration, disbursement, or
distribution, or exercise of any powers or discharge of any duties of his
office, or make any other order to secure proper performance of his duty, if it
appears to the Court that the personal representative otherwise may take some
action which would jeopardize unreasonably the interest of the applicant or of
some other interested person. Persons with whom the personal representative may
transact business may be made parties.
(b) The matter shall be set for hearing within 10 days unless the
parties otherwise agree. Notice as the Court directs shall be given to the
personal representative and his attorney of record, if any, and to any other
parties named defendant in the petition.
COMMENT
Cf.
Section 3‑401 which provides for a restraining order against a previously
appointed personal representative incident to a formal testacy proceeding. The
above section describes a remedy which is available for any cause against a
previously appointed personal representative, whether appointed formally or
informally.
This remedy, in combination with the safeguards
relating to the process for appointment of a personal representative, permit
"control" of a personal representative that is believed to be equal,
if not superior to that presently available with respect to
"supervised" personal representatives appointed by inferior Courts.
The request for a restraining order may mark the beginning of a new proceeding
but the personal representative, by the consent provided in Section 3‑602,
is practically in the position of one who, on motion, may be cited to appear
before a judge.
Section 3‑608.
Termination of Appointment; General.
Termination of appointment of a personal
representative occurs as indicated in Sections 3‑609 to 3‑612,
inclusive. Termination ends the right and power pertaining to the office of
personal representative as conferred by this Code or any will, except that a
personal representative, at any time prior to distribution or until restrained
or enjoined by court order, may perform acts necessary to protect the estate
and may deliver the assets to a successor representative. Termination does not
discharge a personal representative from liability for transactions or
omissions occurring before termination, or relieve him of the duty to preserve
assets subject to his control, to account therefor and to deliver the assets.
Termination does not affect the jurisdiction of the Court over the personal
representative, but terminates his authority to represent the estate in any
pending or future proceeding.
COMMENT
"Termination",
as defined by this and succeeding provisions, provides definiteness respecting
when the powers of a personal representative (who may or may not be discharged
by Court Order) terminate.
It
is to be noted that this section does not relate to jurisdiction over the
estate in proceedings which may have been commenced against the personal
representative prior to termination. In such cases, a substitution of successor
or special representative should occur if the plaintiff desires to maintain his
action against the estate.
It
is important to note that "termination" is not "discharge".
However, an order of the Court entered under 3‑1001 or 3‑1002 both
terminates the appointment of, and discharges, a personal representative.
Section 3‑609.
Termination of Appointment; Death or Disability.
The death of a personal representative or the
appointment of a conservator for the estate of a personal representative,
terminates his appointment. Until appointment and qualification of a successor
or special representative to replace the deceased or protected representative,
the representative of the estate of the deceased or protected personal
representative, if any, has the duty to protect the estate possessed and being
administered by his decedent or ward at the time his appointment terminates,
has the power to perform acts necessary for protection and shall account for
and deliver the estate assets to a successor or special personal representative
upon his appointment and qualification.
COMMENT
See Section
3‑718, which establishes the rule that a surviving co‑executor may
exercise all powers incident to the office unless the will provides otherwise.
Read together, this section and Section 3‑718 mean that the representative
of a deceased co‑representative would not have any duty or authority in
relation to the office held by his decedent.
Section 3‑610.
Termination of Appointment; Voluntary.
(a) An appointment of a personal representative terminates as provided
in Section 3‑1003, one year after the filing of a closing statement.
(b) An order closing an estate as provided in Section 3‑1001 or 3‑1002
terminates an appointment of a personal representative.
(c) A personal representative may resign his position by filing a
written statement of resignation with the Registrar after he has given at least
15 days written notice to the persons known to be interested in the estate. If
no one applies or petitions for appointment of a successor representative
within the time indicated in the notice, the filed statement of resignation is
ineffective as a termination of appointment and in any event is effective only
upon the appointment and qualification of a successor representative and
delivery of the assets to him.
COMMENT
Subparagraph (c) above provides a procedure for resignation by a personal representative which may occur without judicial assistance.
Section 3‑611.
Termination of Appointment by Removal; Cause; Procedure.
(a) A person interested in the estate may petition for removal of a
personal representative for cause at any time. Upon filing of the petition, the
Court shall fix a time and place for hearing. Notice shall be given by the
petitioner to the personal representative, and to other persons as the Court
may order. Except as otherwise ordered as provided in Section 3‑607,
afterreceipt of notice of removal proceedings, the personal representative
shall not act except to account, to correct maladministration or preserve the
estate. If removal is ordered, the Court also shall direct by order the
disposition of the assets remaining in the name of, or under the control of,
the personal representative being removed.
(b) Cause for removal exists when removal would be in the best
interests of the estate, or if it is shown that a personal representative or
the person seeking his appointment intentionally misrepresented material facts
in the proceedings leading to his appointment, or that the personal
representative has disregarded an order of the Court, has become incapable of
discharging the duties of his office, or has mismanaged the estate or failed to
perform any duty pertaining to the office. Unless the decedent's will directs
otherwise, a personal representative appointed at the decedent's domicile,
incident to securing appointment of himself or his nominee as ancillary
personal representative, may obtain removal of another who was appointed
personal representative in this state to administer local assets.
COMMENT
Thought
was given to qualifying (a) above so that no formal removal proceedings could
be commenced until after a set period from entry of any previous order
reflecting judicial consideration of the qualifications of the personal
representative. It was decided, however,
that the matter should be left to the judgment of interested persons and the
Court.
Section 3‑612.
Termination of Appointment; Change of Testacy Status.
Except as otherwise ordered in formal
proceedings, the probate of a will subsequent to the appointment of a personal
representative in intestacy or under a will which is superseded by formal
probate of another will, or the vacation of an informal probate of a will
subsequent to the appointment of the personal representative thereunder, does
not terminate the appointment of the personal representative although his
powers may be reduced as provided in Section 3‑401. Termination occurs
upon appointment in informal or formal appointment proceedings of a person
entitled to appointment under the later assumption concerning testacy. If no
request for new appointment is made within 30 days after expiration of time for
appeal from the order in formal testacy proceedings, or from the informal
probate, changing the assumption concerning testacy, the previously appointed
personal representative upon request may be appointed personal representative
under the subsequently probated will, or as in intestacy as the case may be.
COMMENT
This section and Section 3‑401 describe
the relationship between formal or informal proceedings which change a previous
assumption concerning the testacy of the decedent, and a previously appointed
personal representative. The basic assumption of both sections is that an
appointment, with attendant powers of management, is separable from the basis
of appointment; i.e., intestate or testate?; what will is the last will? Hence,
a previously appointed personal representative continues to serve in spite of
formal or informal proceedings that may give another a prior right to serve as
personal representative. But, if the testacy status is changed in formal
proceedings, the petitioner also may request appointment of the person who
would be entitled to serve if his assumption concerning the decedent's will
prevails. Provision is made for a situation where all interested persons are
content to allow a previously appointed personal representative to continue to
serve even though another has a prior right because of a change relating to the
decedent's will. It is not necessary for the continuing representative to seek
reappointment under the new assumption for Section 3‑703 is broad enough
to require him to administer the estate as intestate, or under a later probated
will, if either status is established after he was appointed. Under Section 3‑403,
notice of a formal testacy proceeding is required to be given to any previously
appointed personal representative. Hence, the testacy status cannot be changed
without notice to a previously appointed personal representative.
Section 3‑613.
Successor Personal Representative.
Parts 3 and 4 of this Article govern
proceedings for appointment of a personal representative to succeed one whose
appointment has been terminated. After appointment and qualification, a
successor personal representative may be substituted in all actions and
proceedings to which the former personal representative was a party, and no
notice, process or claim which was given or served upon the former personal
representative need be given to or served upon the successor in order to
preserve any position or right the person giving the notice or filing the claim
may thereby have obtained or preserved with reference to the former personal
representative. Except as otherwise ordered by the Court, the successor
personal representative has the powers and duties in respect to the continued
administration which the former personal representative would have had if his
appointment had not been terminated.
Section 3‑614.
Special Administrator; Appointment.
A special administrator may
be appointed:
(1) informally by the Registrar on the application of any interested
person when necessary to protect the estate of a decedent prior to the
appointment of a general personal representative or if a prior appointment has
been terminated as provided in Section 3‑609;
(2) in a formal proceeding by order of the Court on the petition of any
interested person and finding, after notice and hearing, that appointment is
necessary to preserve the estate or to secure its proper administration
including its administration in circumstances where a general personal
representative cannot or should not act. If it appears to the Court that an
emergency exists, appointment may be ordered without notice.
COMMENT
The appointment of a special administrator
other than one appointed pending original appointment of a general personal
representative must be handled by the Court. Appointment of a special
administrator would enable the estate to participate in a transaction which the
general personal representative could not, or should not, handle because of
conflict of interest. If a need arises because of temporary absence or
anticipated incapacity for delegation of the authority of a personal
representative, the problem may be handled without judicial intervention by use
of the delegation powers granted to personal representatives by Section 3‑715(21).
Section 3‑615.
Special Administrator; Who May Be Appointed.
(a) If a special administrator is to be appointed pending the probate
of a will which is the subject of a pending application or petition for
probate, the person named executor in the will shall be appointed if available,
and qualified.
(b) In other cases, any proper person may be appointed special
administrator.
COMMENT
In
some areas of the country, particularly where wills cannot be probated without
full notice and hearing, appointment of special administrators pending probate
is sought almost routinely. The provisions of this Code concerning informal
probate should reduce the number of cases in which a fiduciary will need to be
appointed pending probate of a will.
Nonetheless,
there will be instances where contests begin before probate and where it may be
necessary to appoint a special administrator. The objective of this section is
to reduce the likelihood that contestants will be encouraged to file contests
as early as possible simply to gain some advantage via having a person who is
sympathetic to their cause appointed special administrator. Most will contests
are not successful. Hence, it seems
reasonable to prefer the named executor as special administrator where he is
otherwise qualified.
Section 3‑616.
Special Administrator; Appointed Informally; Powers and Duties.
A special administrator appointed by the Registrar in informal proceedings pursuant to Section 3‑614(1) has the duty to collect and manage the assets of the estate, to preserve them, to account therefor and to deliver them to the general personal representative upon his qualification. The special administrator has the power of a personal representative under the Code necessary to perform his duties.
Section 3‑617.
Special Administrator; Formal Proceedings; Power and Duties.
A special administrator appointed by order of
the Court in any formal proceeding has the power of a general personal
representative except as limited in the appointment and duties as prescribed in
the order. The appointment may be for a specified time, to perform particular
acts or on other terms as the Court may direct.
Section 3‑618.
Termination of Appointment; Special Administrator.
The appointment of a special administrator
terminates in accordance with the provisions of the order of appointment or on
the appointment of a general personal representative. In other cases, the
appointment of a special administrator is subject to termination as provided in
Sections 3‑608 through 3‑611.
PART 7
DUTIES AND POWERS OF PERSONAL
REPRESENTATIVES
Section 3‑701.
Time of Accrual of Duties and Powers.
The duties and powers of a personal
representative commence upon his appointment. The powers of a personal
representative relate back in time to give acts by the person appointed which
are beneficial to the estate occurring prior to appointment the same effect as
those occurring thereafter. Prior to appointment, a person named executor in a
will may carry out written instructions of the decedent relating to his body,
funeral and burial arrangements. A personal representative may ratify and
accept acts on behalf of the estate done by others where the acts would have
been proper for a personal representative.
COMMENT
This section codifies the doctrine that the
authority of a personal representative relates back to death from the moment it
arises. It also makes it clear that authority of a personal representative
stems from his appointment. The sentence concerning ratification is designed to
eliminate technical questions that might arise concerning the validity of acts
done by others prior to appointment. Section 3‑715(21) relates to
delegation of authority after appointment. The third sentence accepts an idea
found in the Illinois Probate Act, § 79 [S.H.A. ch. 3, § 79].
Section 3‑702.
Priority Among Different Letters.
A person to whom general letters are issued
first has exclusive authority under the letters until his appointment is
terminated or modified. If, through error, general letters are afterwards
issued to another, the first appointed representative may recover any property
of the estate in the hands of the representative subsequently appointed, but
the acts of the latter done in good faith before notice of the first letters
are not void for want of validity of appointment.
COMMENT
The
qualification relating to "modification" of an appointment is
intended to refer to the change that may occur in respect to the exclusive
authority of one with letters upon later appointment of a co‑representative
or of a special administrator. The sentence concerning erroneous dual
appointment is derived from recent
Erroneous
appointment of a second personal representative is possible if formal
proceedings after notice are employed. It might be desirable for a state to
promulgate a system whereby a notation of letters issued by each Divisional
probate office would be relayed to a central record keeping office which, in
turn could indicate to any other office whether letters for a particular
decedent, perhaps identified by social security number, had been issued
previously. The problem can arise even though notice to known interested
persons and by publication is involved.
Section 3‑703.
General Duties; Relation and Liability to Persons Interested in Estate;
Standing to Sue.
(a)
A personal representative is a fiduciary who shall observe the
standards of care applicable to trustees as described by Section 7‑302. A
personal representative is under a duty to settle and distribute the estate of
the decedent in accordance with the terms of any probated and effective will
and this Code, and as expeditiously and efficiently as is consistent with the
best interests of the estate. He shall
use the authority conferred upon him by this Code, the terms of the will, if
any, and any order in proceedings to which he is party for the best interests
of successors to the estate.
(b) A personal representative may not be surcharged for acts of
administration or distribution if the conduct in question was authorized at the
time. Subject to other obligations of administration, an informally probated
will is authority to administer and distribute the estate according to its terms.
An order of appointment of a personal representative, whether issued in
informal or formal proceedings is authority to distribute apparently intestate
assets to the heirs of the decedent if, at the time of distribution, the
personal representative is not aware of a pending testacy proceeding, a
proceeding to vacate an order entered in an earlier testacy proceeding, a
formal proceeding questioning his appointment or fitness to continue, or a
supervised administration proceeding. This section does not affect the duty of
the personal representative to administer and distribute the estate in
accordance with the rights of claimants whose claims have been allowed, the
surviving spouse, any minor and dependent children and any pretermitted child
of the decedent as described elsewhere in this Code.
(c) Except as to proceedings which do not survive the death of the
decedent, a personal representative of a decedent domiciled in this state at
his death has the same standing to sue and be sued in the Courts of this state
and the courts of any other jurisdiction as his decedent had immediately prior
to death.
COMMENT
This
and the next section are especially important sections for they state the basic
theory underlying the duties and powers of personal representatives. Whether or not a personal representative is
supervised, this section applies to describe the relationship he bears to
interested parties. If a supervised
representative is appointed, or if supervision of a previously appointed
personal representative is ordered, an additional obligation to the Court is
created. See Section 3‑501.
The
fundamental responsibility is that of a trustee. Unlike many trustees, a personal
representative's authority is derived from appointment by the public agency
known as the Court. But, the Code also
makes it clear that the personal representative, in spite of the source of his
authority, is to proceed with the administration, settlement and distribution
of the estate by use of statutory powers and in accordance with statutory
directions. See Sections 3‑107 and 3‑704. Subsection (b) is particularly important, for
it ties the question of personal liability for administrative or distributive
acts to the question of whether the act was "authorized at the time".
Thus, a personal representative may rely upon and be protected by a will which
has been probated without adjudication or an order appointing him to administer
which is issued in no‑notice proceedings even though proceedings
occurring later may change the assumption as to whether the decedent died
testate or intestate. See Section 3‑302
concerning the status of a will probated without notice and Section 3‑102
concerning the ineffectiveness of an unprobated will. However, it does not follow from the fact that the
personal representative distributed under authority that the distributees may
not be liable to restore the property or values received if the assumption
concerning testacy is later changed. See Sections 3‑909 and 3‑1004.
Thus, a distribution may be "authorized at the time" within the
meaning of this section, but be "improper" under the latter section.
Paragraph (c) is designed to reduce or eliminate differences in the amenability to suit of personal representatives appointed under this Code and under traditional assumptions. Also, the subsection states that so far as the law of the appointing forum is concerned, personal representatives are subject to suit in other jurisdictions. It, together with various provisions of Article IV, are designed to eliminate many of the present reasons for ancillary administrations.
1997 Technical Amendment. By technical amendment effective July 31,
1997, the final sentence of Section 3-703(b) was modified to clarify the
originally intended meaning that a personal representative of a decedent’s
estate does not owe fiduciary duties to a person whose claim has not yet been
allowed. This added language is not
intended to affect any duty to give notice to prospective claimants under
Section 3-801 or Tulsa Professional
Collection Services v. Pope, 485 U.S. 478 (1988).
Section 3‑704.
Personal Representative to Proceed Without Court Order; Exception.
A personal representative shall proceed
expeditiously with the settlement and distribution of a decedent's estate and,
except as otherwise specified or ordered in regard to a supervised personal
representative, do so without adjudication, order, or direction of the Court,
but he may invoke the jurisdiction of the Court, in proceedings authorized by
this Code, to resolve questions concerning the estate or its administration.
COMMENT
This
section is intended to confer authority on the personal representative to
initiate a proceeding at any time when it is necessary to resolve a question
relating to administration. Section 3‑105 grants broad subject matter
jurisdiction to the probate Court which covers a proceeding initiated for any
purpose other than those covered by more explicit provisions dealing with
testacy proceedings, proceedings for supervised administration, proceedings
concerning disputed claims and proceedings to close estates.
Section 3‑705.
Duty of Personal Representative; Information to Heirs and Devisees.
Not later than 30 days after his appointment
every personal representative, except any special administrator, shall give information
of his appointment to the heirs and devisees, including, if there has been no
formal testacy proceeding and if the personal representative was appointed on
the assumption that the decedent died intestate, the devisees in any will
mentioned in the application for appointment of a personal representative. The
information shall be delivered or sent by ordinary mail to each of the heirs
and devisees whose address is reasonably available to the personal
representative. The duty does not extend to require information to persons who
have been adjudicated in a prior formal testacy proceeding to have no interest
in the estate. The information shall include the name and address of the
personal representative, indicate that it is being sent to persons who have or
may have some interest in the estate being administered, indicate whether bond
has been filed, and describe the Court where papers relating to the estate are
on file. The information shall state that the estate is being administered by
the personal representative under the [State] Probate Code without supervision by the Court but that recipients
are entitled to information regarding the administration from the personal
representative and can petition the Court in any matter relating to the estate,
including distribution of assets and expenses of administration. The personal representative's failure to give
this information is a breach of his duty to the persons concerned but does not
affect the validity of his appointment, his powers or other duties. A personal
representative may inform other persons of his appointment by delivery or
ordinary first class mail.
COMMENT
This
section requires the personal representative to inform persons who appear to
have an interest in the estate as it is being administered, of his appointment.
Also, it requires the personal representative to give notice to persons who
appear to be disinherited by the assumption concerning testacy under which the
personal representative was appointed. The communication involved is not to be
confused with the notice requirements relating to litigation. The duty applies
even though there may have been a prior testacy proceeding after notice, except
that persons who have been adjudicated to be without interest in the estate are
excluded. The rights, if any, of persons in regard to estates cannot be cut off
completely except by the running of the three year statute of limitations
provided in Section 3‑108, or by a formal judicial proceeding which will
include full notice to all interested persons. The interests of some persons
may be shifted from rights to specific property of the decedent to the proceeds
from sale thereof, or to rights to values received by distributees. However, such a shift of protected interest
from one thing to another, or to funds or obligations, is not new in relation
to trust beneficiaries. A personal
representative may initiate formal proceedings to determine whether persons,
other than those appearing to have interests, may be interested in the estate,
under Section 3‑401 or, in connection with a formal closing, as provided
by Section 3‑1001.
No
information or notice is required by this section if no personal representative
is appointed.
In
any circumstance in which a fiduciary accounting is to be prepared, preparation
of an accounting in conformity with the Uniform Principles and Model Account
Formats promulgated by the National Fiduciary Accounting Project shall be
considered as an appropriate manner of presenting a fiduciary account. See ALI‑ABA Monograph, Whitman,
Brown and Kramer, Fiduciary Accounting Guide (2nd edition 1990).
Section 3‑706.
Duty of Personal Representative; Inventory and Appraisement.
Within 3 months after his appointment, a
personal representative, who is not a special administrator or a successor to
another representative who has previously discharged this duty, shall prepare
and file or mail an inventory of property owned by the decedent at the time of
his death, listing it with reasonable detail, and indicating as to each listed
item, its fair market value as of the date of the decedent's death, and the
type and amount of any encumbrance that may exist with reference to any item.
The personal representative shall send a copy
of the inventory to interested persons who request it. He may also file the original of the
inventory with the Court.
COMMENT
This
and the following sections eliminate the practice now required by many probate
statutes under which the judge is involved in the selection of appraisers. If
the personal representative breaches his duty concerning the inventory, he may
be removed. Section 3‑611. Or, an interested person seeking to surcharge
a personal representative for losses incurred as a result of his administration
might be able to take advantage of any breach of duty concerning inventory. The
section provides two ways in which a personal representative may handle an
inventory. If the personal representative elects to send copies to all
interested persons who request it, information concerning the assets of the
estate need not become a part of the records of the Court. The alternative
procedure is to file the inventory with the Court. This procedure would be indicated in estates
with large numbers of interested persons, where the burden of sending copies to
all would be substantial. The Court's
role in respect to the second alternative is simply to receive and file the
inventory with the file relating to the estate. See 3‑204, which permits any interested person to demand
notice of any document relating to an estate which may be filed with the Court.
In
1975, the Joint Editorial Board recommended elimination of the word
"or" that separated the language dealing with the duty to send a copy
of the inventory to interested persons requesting it, from the final part of
the paragraph dealing with filing of the original. The purpose of the change
was to prevent a literal interpretation of the original text that would have
permitted a personal representative who filed the original inventory with the
Court to avoid compliance with requests for copies from interested persons.
Section 3‑707.
Employment of Appraisers.
The personal representative may employ a
qualified and disinterested appraiser to assist him in ascertaining the fair
market value as of the date of the decedent's death of any asset the value of
which may be subject to reasonable doubt. Different persons may be employed to
appraise different kinds of assets included in the estate. The names and
addresses of any appraiser shall be indicated on the inventory with the item or
items he appraised.
Section 3‑708.
Duty of Personal Representative; Supplementary Inventory.
If any property not included in the original
inventory comes to the knowledge of a personal representative or if the
personal representative learns that the value or description indicated in the
original inventory for any item is erroneous or misleading, he shall make a
supplementary inventory or appraisement showing the market value as of the date
of the decedent's death of the new item or the revised market value or
descriptions, and the appraisers or other data relied upon, if any, and file it
with the Court if the original inventory was filed, or furnish copies thereof
or information thereof to persons interested in the new information.
Section 3‑709.
Duty of Personal Representative; Possession of Estate.
Except as otherwise provided by a decedent's
will, every personal representative has a right to, and shall take possession
or control of, the decedent's property, except that any real property or tangible
personal property may be left with or surrendered to the person presumptively
entitled thereto unless or until, in the judgment of the personal
representative, possession of the property by him will be necessary for
purposes of administration. The request by a personal representative for
delivery of any property possessed by an heir or devisee is conclusive
evidence, in any action against the heir or devisee for possession thereof,
that the possession of the property by the personal representative is necessary
for purposes of administration. The personal representative shall pay taxes on,
and take all steps reasonably necessary for the management, protection and
preservation of, the estate in his possession. He may maintain an action to
recover possession of property or to determine the title thereto.
COMMENT
Section
3‑101 provides for the devolution of title on death. Section 3‑711
defines the status of the personal representative with reference to
"title" and "power" in a way that should make it unnecessary
to discuss the "title" to decedent's assets which his personal
representative acquires. This section deals with the personal representative's
duty and right to possess assets. It proceeds from the assumption that it is
desirable whenever possible to avoid disruption of possession of the decedent's
assets by his devisees or heirs. But, if the personal representative decides
that possession of an asset is necessary or desirable for purposes of
administration, his judgment is made conclusive in any action for possession
that he may need to institute against an heir or devisee. It may be possible for an heir or devisee to
question the judgment of the personal representative in later action for
surcharge for breach of fiduciary duty, but this possibility should not
interfere with the personal representative's administrative authority as it
relates to possession of the estate.
This
Code follows the Model Probate Code in regard to partnership interests. In the
introduction to the Model Probate Code, the following appears at p. 22:
"No provisions for the administration of
partnership estates when a partner dies have been included. Several states have
statutes providing that unless the surviving partner files a bond with the
probate Court, the personal representative of the deceased partner may
administer the partnership estate upon giving an additional bond. Kan. Gen. Stat. (Supp.1943) §§ 59‑1001
to 59‑1005; Mo. Rev. Stat. Ann.
(1942) §§ 81 to 93 [V.A.M.S. §§ 473.220 to 473.230]. In these states the administration
of partnership estates upon the death of a partner is brought more or less
completely under the jurisdiction of the probate Court. While the provisions
afford security to parties in interest, they have caused complications in the
settlement of partnership estates and have produced much litigation. Woener, Administration (3rd ed., 1923) §§ 128 to
130; annotation, 121 A.L.R. 860. These
statutes have been held to be inconsistent with section 37 of the Uniform
Partnership Act providing for winding up by the surviving partner.
Section 3‑710.
Power to Avoid Transfers.
The property liable for the payment of
unsecured debts of a decedent includes all property transferred by him by any
means which is in law void or voidable as against his creditors, and subject to
prior liens, the right to recover this property, so far as necessary for the
payment of unsecured debts of the decedent, is exclusively in the personal
representative.
COMMENT
Model
Probate Code section 125, with additions. See,
also, Section 6‑201, which saves creditors' rights in regard to non‑testamentary
transfers effective at death.
Section 3‑711.
Powers of Personal Representatives; In General.
Until termination of his appointment a
personal representative has the same power over the title to property of the
estate that an absolute owner would have, in trust however, for the benefit of
the creditors and others interested in the estate. This power may be exercised without notice,
hearing, or order of court.
COMMENT
The personal representative is given the broadest possible "power over title". He receives a "power", rather than title, because the power concept eases the succession of assets which are not possessed by the personal representative. Thus, if the power is unexercised prior to its termination, its lapse clears the title of devisees and heirs. Purchasers from devisees or heirs who are "distributees" may be protected also by Section 3‑910. The power over title of an absolute owner is conceived to embrace all possible transactions which might result in a conveyance or encumbrance of assets, or in a change of rights of possession. The relationship of the personal representative to the estate is that of a trustee. Hence, personal creditors or successors of a personal representative cannot avail themselves of his title to any greater extent than is true generally of creditors and successors of trustees. Interested persons who are apprehensive of possible misuse of power by a personal representative may secure themselves by use of the devices implicit in the several sections of Parts 1 and 3 of this Article. See especially Sections 3‑501, 3‑605, 3‑607 and 3‑611.
Section 3‑712.
Improper Exercise of Power; Breach of Fiduciary Duty.
If the exercise of power concerning the
estate is improper, the personal representative is liable to interested persons
for damage or loss resulting from breach of his fiduciary duty to the same
extent as a trustee of an express trust. The rights of purchasers and others
dealing with a personal representative shall be determined as provided in
Sections 3‑713 and 3‑714.
COMMENT
An
interested person has two principal remedies to forestall a personal
representative from committing a breach of fiduciary duty.
(1) Under Section 3‑607 he may apply to the
Court for an order restraining the personal representative from performing any
specified act or from exercising any power in the course of
administration.
(2) Under Section 3‑611 he may petition the
Court for an order removing the personal representative.
Evidence
of a proceeding, or order, restraining a personal representative from selling,
leasing, encumbering or otherwise affecting title to real property subject to
administration, if properly recorded under the laws of this state, would be
effective to prevent a purchaser from acquiring a marketable title under the
usual rules relating to recordation of real property titles.
In addition Sections 1‑302 and 3‑105 authorize joinder of third persons who may be involved in contemplated transactions with a personal representative in proceedings to restrain a personal representative under Section 3‑607.
Section 3‑713.
Any sale or encumbrance to the personal
representative, his spouse, agent or attorney, or any corporation or trust in
which he has a substantial beneficial interest, or any transaction which is
affected by a substantial conflict of interest on the part of the personal
representative, is voidable by any person interested in the estate except one
who has consented after fair disclosure, unless (1) the will or a contract
entered into by the decedent expressly
authorized the transaction; or (2) the transaction is approved by the Court
after notice to interested persons.
COMMENT
If a personal representative
violates the duty against self‑dealing described by this section, a
voidable title to assets sold results. Other breaches of duty relating to sales
of assets will not cloud titles except as to purchasers with actual knowledge
of the breach. See Section 3‑714.
The principles of bona fide purchase would protect a purchaser for value
without notice of defect in the seller's title arising from conflict of
interest.
Section 3‑714.
Persons Dealing with Personal Representative; Protection.
A person who in good faith either assists a
personal representative or deals with him for value is protected as if the
personal representative properly exercised his power. The fact that a person
knowingly deals with a personal representative does not alone require the
person to inquire into the existence of a power or the propriety of its exercise.
Except for restrictions on powers of supervised personal representatives which
are endorsed on letters as provided in Section 3‑504, no provision in any
will or order of Court purporting to limit the power of a personal
representative is effective except as to persons with actual knowledge thereof.
A person is not bound to see to the proper application of estate assets paid or
delivered to a personal representative. The protection here expressed extends
to instances in which some procedural irregularity or jurisdictional defect
occurred in proceedings leading to the issuance of letters, including a case in
which the alleged decedent is found to be alive. The protection here expressed
is not by substitution for that provided by comparable provisions of the laws
relating to commercial transactions and laws simplifying transfers of
securities by fiduciaries.
COMMENT
This
section qualifies the effect of a provision in a will which purports to
prohibit sale of property by a personal representative. The provisions of a
will may prescribe the duties of a personal representative and subject him to
surcharge or other remedies of interested persons if he disregards them. See Section 3‑703. But, the will's
prohibition is not relevant to the rights of a purchaser unless he had actual
knowledge of its terms. Interested persons who want to prevent a personal
representative from having the power described here must use the procedures
described in Sections 3‑501 to 3‑505. Each state will need to identify the relation
between this section and other statutory provisions creating liens on estate
assets for inheritance and other taxes. The section cannot control whether a
purchaser takes free of the lien of unpaid federal estate taxes. Hence,
purchasers from personal representatives appointed pursuant to this Code will
have to satisfy themselves concerning whether estate taxes are paid, and if not
paid, whether the tax lien follows the property they are acquiring. See Section 6234, Internal Revenue Code
[26 U.S.C.A. § 6324].
The
impact of formal recording systems beyond the usual probate procedure depends
upon the particular statute. In states in which the recording system provides
for recording wills as muniments of title, statutory adaptation should be made
to provide that recording of wills should be postponed until the validity has
been established by probate or limitation. Statutory limitation to this effect
should be added to statutes which do not so provide to avoid conflict with
power of the personal representative during administration. The purpose of the
Code is to make the deed or instrument of distribution the usual muniment of
title. See Section 3‑907, 3‑908,
3‑910. However, this is not available when no administration has occurred
and in that event reliance upon general recording statutes must be had.
If a state continues to permit wills to be recorded
as muniments of title, the above section would need to be qualified to give
effect to the notice from recording.
Section 3‑715.
Transactions Authorized for Personal Representatives; Exceptions.
Except as restricted or
otherwise provided by the will or by an order in a formal proceeding and
subject to the priorities stated in Section 3‑902, a personal
representative, acting reasonably for the benefit of the interested persons,
may properly:
(1) retain assets owned by the decedent pending distribution or
liquidation including those in which the representative is personally
interested or which are otherwise improper for trust investment;
(2) receive assets from fiduciaries, or other sources;
(3) perform, compromise or refuse performance of the decedent's
contracts that continue as obligations of the estate, as he may determine under
the circumstances. In performing
enforceable contracts by the decedent to convey or lease land, the personal
representative, among other possible courses of action, may:
(i) execute
and deliver a deed of conveyance for cash payment of all sums remaining due or
the purchaser's note for the sum remaining due secured by a mortgage or deed of
trust on the land; or
(ii) deliver a
deed in escrow with directions that the proceeds, when paid in accordance with
the escrow agreement, be paid to the successors of the decedent, as designated
in the escrow agreement;
(4) satisfy written charitable pledges of the decedent irrespective of
whether the pledges constituted binding obligations of the decedent or were
properly presented as claims, if in the judgment of the personal representative
the decedent would have wanted the pledges completed under the circumstances;
(5) if funds are not needed to meet debts and expenses currently
payable and are not immediately distributable, deposit or invest liquid assets
of the estate, including moneys received from the sale of other assets, in
federally insured interest‑bearing accounts, readily marketable secured
loan arrangements or other prudent investments which would be reasonable for
use by trustees generally;
(6) acquire or dispose of an asset, including land in this or another
state, for cash or on credit, at public or private sale; and manage, develop, improve, exchange,
partition, change the character of, or abandon an estate asset;
(7) make ordinary or extraordinary repairs or alterations in buildings
or other structures, demolish any improvements, raze existing or erect new
party walls or buildings;
(8) subdivide, develop or dedicate land to public use; make or obtain the vacation of plats and
adjust boundaries; or adjust differences in valuation on exchange or partition
by giving or receiving considerations; or dedicate easements to public use without
consideration;
(9) enter for any purpose into a lease as lessor or lessee, with or
without option to purchase or renew, for a term within or extending beyond the
period of administration;
(10) enter into a lease or arrangement for exploration and removal of
minerals or other natural resources or enter into a pooling or unitization
agreement;
(11) abandon property when, in the opinion of the personal
representative, it is valueless, or is so encumbered, or is in condition that
it is of no benefit to the estate;
(12) vote stocks or other securities in person or by general or limited
proxy;
(13) pay calls, assessments, and other sums chargeable or accruing
against or on account of securities, unless barred by the provisions relating
to claims;
(14) hold a security in the name of a nominee or in other form without
disclosure of the interest of the estate but the personal representative is
liable for any act of the nominee in connection with the security so held;
(15) insure the assets of the estate against damage, loss and liability
and himself against liability as to third persons;
(16) borrow money with or without security to be repaid from the estate
assets or otherwise; and advance money for the protection of the estate;
(17) effect a fair and reasonable compromise with any debtor or obligor,
or extend, renew or in any manner modify the terms of any obligation owing to
the estate. If the personal
representative holds a mortgage, pledge or other lien upon property of
another person, he may, in lieu of foreclosure, accept a conveyance or transfer
of encumbered assets from the owner thereof in satisfaction of the indebtedness
secured by lien;
(18) pay taxes, assessments, compensation of the personal representative,
and other expenses incident to the administration of the estate;
(19) sell or exercise stock subscription or conversion rights; consent,
directly or through a committee or other agent, to the reorganization,
consolidation, merger, dissolution, or liquidation of a corporation or other
business enterprise;
(20) allocate items of income or expense to either estate income or
principal, as permitted or provided by law;
(21) employ persons, including attorneys, auditors, investment advisors,
or agents, even if they are associated with the personal representative, to
advise or assist the personal representative in the performance of his
administrative duties; act without independent investigation upon their
recommendations; and instead of acting personally, employ one or more agents to
perform any act of administration, whether or not discretionary;
(22) prosecute or defend claims, or proceedings in any jurisdiction for
the protection of the estate and of the personal representative in the
performance of his duties;
(23) sell, mortgage, or lease any real or personal property of the estate
or any interest therein for cash, credit, or for part cash and part credit, and
with or without security for unpaid balances;
(24) continue any unincorporated business or venture in which the
decedent was engaged at the time of his death (i) in the same business form for
a period of not more than 4 months from the date of appointment of a general
personal representative if continuation is a reasonable means of preserving the
value of the business including good will, (ii) in the same business form for
any additional period of time that may be approved by order of the Court in a
formal proceeding to which the persons interested in the estate are
parties; or (iii) throughout the period
of administration if the business is incorporated by the personal
representative and if none of the probable distributees of the business who are
competent adults object to its incorporation and retention in the estate;
(25) incorporate any business or venture in which the decedent was
engaged at the time of his death;
(26) provide for exoneration of the personal representative from personal
liability in any contract entered into on behalf of the estate;
(27) satisfy and settle claims and distribute the estate as provided in
this Code.
COMMENT
This
section accepts the assumption of the Uniform Trustee's Powers Act that it is
desirable to equip fiduciaries with the authority required for the prudent
handling of assets and extends it to personal representatives. The section
requires that a personal representative act reasonably and for the benefit of
the interested person. Subject to this and to the other qualifications
described by the preliminary statement, the enumerated transactions are made
authorized transactions for personal representatives. Sub‑paragraphs (27) and (18) support
the other provisions of the Code, particularly Section 3‑704, which
contemplates that personal representatives will proceed with all of the
business of administration without Court orders.
In
part, sub‑paragraph (4) involves a substantive question of whether
noncontractual charitable pledges of a decedent can be honored by his personal
representative. It is believed, however, that it is not desirable from a
practical standpoint to make much turn on whether a charitable pledge is, or is
not, contractual. Pledges are rarely made the subject of claims. The effect of
subparagraph (4) is to permit the personal representative to discharge pledges
where he believes the decedent would have wanted him to do so without exposing
himself to surcharge. The holder of a contractual pledge may, of course, pursue
the remedies of a creditor. If a pledge provides that the obligation ceases on
the death of the pledgor, no personal representative would be safe in assuming
that the decedent would want the pledge completed under the circumstances.
Subsection
(3) is not intended to affect the right to performance or to damages of any
person who contracted with the decedent. To do so would constitute an unreasonable
interference with private rights. The intention of the subsection is simply to
give a personal representative who is obligated to carry out a decedent's
contracts the same alternatives in regard to the contractual duties which the
decedent had prior to his death.
Section 3‑716.
Powers and Duties of Successor Personal Representative.
A successor personal representative has the
same power and duty as the original personal representative to complete the
administration and distribution of the estate, as expeditiously as possible,
but he shall not exercise any power expressly made personal to the executor
named in the will.
Section 3‑717. Co‑representatives; When
Joint Action Required.
If two or more persons are appointed co‑representatives
and unless the will provides otherwise, the concurrence of all is required on
all acts connected with the administration and distribution of the estate. This restriction does not apply when any co‑representative
receives and receipts for property due the estate, when the concurrence of all
cannot readily be obtained in the time reasonably available for emergency
action necessary to preserve the estate, or when a co‑representative has
been delegated to act for the others. Persons dealing with a co‑representative
if actually unaware that another has been appointed to serve with him or if
advised by the personal representative with whom they deal that he has
authority to act alone for any of the reasons mentioned herein, are as fully
protected as if the person with whom they dealt had been the sole personal
representative.
COMMENT
With
certain qualifications, this section is designed to compel co‑representatives
to agree on all matters relating to administration when circumstances permit.
Delegation by one to another representative is a form of concurrence in acts
that may result from the delegation. A co‑representative who abdicates
his responsibility to co‑administer the estate by a blanket delegation
breaches his duty to interested persons as described by Section 3‑703.
Section 3‑715 (21) authorizes some limited delegations, which are
reasonable and for the benefit of interested persons.
Section 3‑718.
Powers of Surviving Personal Representative.
Unless the terms of the will otherwise
provide, every power exercisable by personal co‑representatives may be
exercised by the one or more remaining after the appointment of one or more is
terminated, and if one of 2 or more nominated as co‑executors is not
appointed, those appointed may exercise all the powers incident to the office.
COMMENT
Source,
Model Probate Code section 102. This
section applies where one of two or more co‑representatives dies, becomes
disabled or is removed. In regard to co‑executors, it is based on the
assumption that the decedent would not consider the powers of his fiduciaries
to be personal, or to be suspended if one or more could not function. In regard
to co‑administrators in intestacy, it is based on the idea that the
reason for appointing more than one ceases on the death or disability of either
of them.
Section 3‑719. Compensation of Personal Representative.
A personal representative is entitled to
reasonable compensation for his services. If a will provides for compensation
of the personal representative and there is no contract with the decedent
regarding compensation, he may renounce the provision before qualifying and be
entitled to reasonable compensation. A personal representative also may
renounce his right to all or any part of the compensation. A written
renunciation of fee may be filed with the Court.
COMMENT
This
section has no bearing on the question of whether a personal representative who
also serves as attorney for the estate may receive compensation in both
capacities. If a will provision concerning a fee is framed as a condition on
the nomination as personal representative, it could not be renounced.
Section 3‑720.
Expenses in Estate Litigation.
If any personal representative or person
nominated as personal representative defends or prosecutes any proceeding in good
faith, whether successful or not he is entitled to receive from the estate his
necessary expenses and disbursements including reasonable attorneys' fees
incurred.
COMMENT
Litigation
prosecuted by a personal representative for the primary purpose of enhancing
his prospects for compensation would not be in good faith.
A
personal representative is a fiduciary for successors of the estate (Section 3‑703).
Though the will naming him may not yet be probated, the priority for
appointment conferred by Section 3‑203 on one named executor in a
probated will means that the person named has an interest, as a fiduciary, in
seeking the probate of the will. Hence, he is an interested person within the
meaning of Sections 3‑301 and 3‑401. Section 3‑912 gives the
successors of an estate control over the executor, provided all are competent
adults. So, if all persons possibly interested in the probate of a will,
including trustees of any trusts created thereby, concur in directing the named
executor to refrain from efforts to probate the instrument, he would lose
standing to proceed. All of these observations apply with equal force to the
case where the named executor of one instrument seeks to contest the probate of
another instrument. Thus, the Code changes the idea followed in some
jurisdictions that an executor lacks standing to contest other wills which, if
valid, would supersede the will naming him, and standing to oppose other
contests that may be mounted against the instrument nominating him.
Section 3‑721.
Proceedings for Review of Employment of Agents and Compensation of Personal
Representatives and Employees of Estate.
After notice to all interested persons or on
petition of an interested person or on appropriate motion if administration is
supervised, the propriety of employment of any person by a personal
representative including any attorney, auditor, investment advisor or other
specialized agent or assistant, the reasonableness of the compensation of any
person so employed, or the reasonableness of the compensation determined by the
personal representative for his own services, may be reviewed by the Court. Any
person who has received excessive compensation from an estate for services
rendered may be ordered to make appropriate refunds.
COMMENT
In
view of the broad jurisdiction conferred on the probate Court by Section 3‑105,
description of the special proceeding authorized by this section might be
unnecessary. But, the Code's theory that
personal representatives may fix their own fees and those of estate attorneys marks an important departure from
much existing practice under which fees are determined by the Court in the
first instance. Hence, it seemed wise to emphasize that any interested person
can get judicial review of fees if he desires it. Also, if excessive fees have
been paid, this section provides a quick and efficient remedy.
PART 8
CREDITORS' CLAIMS
GENERAL
COMMENT
The
need for uniformity of law regarding creditors' claims against estates is
especially strong. Commercial and consumer credit depends upon efficient
collection procedures. The cost of credit is pushed up by the cost of credit
life insurance which becomes a practical necessity for lenders unwilling to
bear the expense of understanding or using the cumbersome and provincial collection
procedures found in 50 codes of probate.
The sections which follow facilitate collection of
claims against decedents in several ways. First, a simple written statement
mailed to the personal representative is a sufficient "claim."
Allowance of claims is handled by the personal representative and is assumed if
a claimant is not advised of disallowance. Also, a personal representative may
pay any just claims without presentation and at any time, if he is willing to
assume risks which will be minimal in many cases. The period of uncertainty
regarding possible claims is only four months from first publication. This
should expedite settlement and distribution of estates.
Section 3‑801.
Notice to Creditors.
(a) Unless notice has already been given under this section, a personal
representative upon appointment [may] [shall] publish a notice to creditors
once a week for three successive weeks in a newspaper of general circulation in
the [county] announcing the appointment and the personal representative's
address and notifying creditors of the estate to present their claims within
four months after the date of the first publication of the notice or be forever
barred.
(b) A personal representative may give written notice by mail or other
delivery to a creditor, notifying the creditor to present his [or her] claim
within four months after the published notice, if given as provided in
subsection (a), or within 60 days after the mailing or other delivery of the
notice, whichever is later, or be forever barred. Written notice must be the
notice described in subsection (a) above or a similar notice.
(c) The personal representative is not liable to a creditor or to a
successor of the decedent for giving or failing to give notice under this
section.
COMMENT
Section
3‑1203, relating to small estates, contains an important qualification on
the duty created by this section.
In
1989, the Joint Editorial Board recommended replacement of the word
"shall" with "[may] [shall]" in (a) to signal its approval
of a choice between mandatory publication and optional publication of notice to
creditors to be made by the legislature in an enacting state. Publication of
notice to creditors is quite expensive in some populous areas of the country
and, if
Additional
discussion of the impact of Pope on
the Code appears in the Comment to Section 3‑803, infra.
If a state elects to make
publication of notice to creditors a duty for personal representatives, failure
to advertise for claims would involve a breach of duty on the part of the
personal representative. If, as a result of such breach, a claim is later
asserted against a distributee under Section 3‑1004, the personal
representative may be liable to the distributee for costs related to discharge
of the claim and the recovery of contribution from other distributees. The
protection afforded personal representatives under Section 3‑1003 would
not be available, for that section applies only if the personal representative
truthfully recites that the time limit for presentation of claims has expired.
Putting
aside Pope case concerns regarding
state action under this code, it might be appropriate, by legislation, to
channel publications through the personnel of the probate Court. See Section
1‑401. If notices are controlled by a centralized authority, some
assurance could be gained against publication in newspapers of small
circulation. Also, the form of notices could be made uniform and certain
efficiencies could be achieved. For example, it would be compatible with this
section for the Court to publish a single notice each day or each week listing
the names of personal representatives appointed since the last publication,
with addresses and dates of non‑claim.
Section 3‑802.
Statutes of Limitations.
(a) Unless an estate is insolvent, the personal representative, with
the consent of all successors whose interests would be affected, may waive any
defense of limitations available to the estate. If the defense is not waived,
no claim barred by a statute of limitations at the time of the decedent's death
may be allowed or paid.
(b) The running of a statute of limitations measured from an event
other than death or the giving of notice to creditors is suspended for four
months after the decedent's death, but resumes thereafter as to claims not
barred by other sections.
(c) For purposes of a statute of limitations, the presentation of a
claim pursuant to Section 3‑804 is equivalent to commencement of a
proceeding on the claim.
COMMENT
This
section means that four months is added to the normal period of limitations by
reason of a debtor's death before a debt is barred. It implies also that after
the expiration of four months from death, the normal statute of limitations may
run and bar a claim even though the non‑claim provisions of Section 3‑803
have not been triggered. Hence, the non‑claim and limitation provisions
of Section 3‑803 are not mutually exclusive.
It
should be noted that under Sections 3‑803 and 3‑804 it is possible
for a claim to be barred by the process of claim, disallowance and failure by
the creditor to commence a proceeding to enforce his claim prior to the end of
the four month suspension period. Thus, the regular statute of limitations
applicable during the debtor's lifetime, the non‑claim provisions of
Sections 3‑803 and 3‑804, and the three‑year limitation of
Section 3‑803 all have potential application to a claim. The first of the
three to accomplish a bar controls.
In 1975, the Joint Editorial
Board recommended a change that makes it clear that only those successors who
would be affected thereby, must agree to a waiver of a defense of limitations
available to an estate. As the original text stood, the section appeared to
require the consent of "all successors," even though this would
include some who, under the rules of abatement, could not possibly be affected
by allowance and payment of the claim in question.
In
1989, in connection with other amendments recommended in sequel to Tulsa Professional Collection Services v.
Pope, 108 S.Ct. 1340, 485 U.S. 478 (1988), the Joint Editorial Board
recommended the splitting out, into Subsections (b) and (c), of the last two
sentences of what formerly was a four‑sentence section. The first two
sentences now appear as Subsection (a).
The rearrangement aids understanding that the section deals with three
separable ideas. No other change in
language is involved, and the timing of the changes to coincide with Pope case amendments is purely
coincidental.
Section 3‑803.
Limitations on Presentation of Claims.
(a) All claims against a decedent's estate which arose before the death
of the decedent, including claims of the State and any political subdivision
thereof, whether due or to become due, absolute or contingent, liquidated or
unliquidated, founded on, if not barred earlier by another statute, contract,
tort, or other legal basis of limitations or non‑claim statute, are
barred against the estate, the personal representative, the heirs and devisees
and non-probate transferees of the decedent, unless presented within the
earlier of the following:
(1) one year
after the decedent's death; or
(2) the time
provided by Section 3‑801(b) for creditors who are given actual notice,
and within the time provided in Section 3‑801(a) for all creditors barred
by publication.
(b) A claim described in subsection (a) which is barred by the non‑claim
statute of the decedent's domicile before the giving of notice to creditors in
this State is barred in this State.
(c) All claims against a decedent's estate which arise at or after the
death of the decedent, including claims of the state and any subdivision
thereof, whether due or to become due, absolute or contingent, liquidated or
unliquidated, founded on contract, tort, or other legal basis, are barred
against the estate, the personal representative, and the heirs and devisees of
the decedent, unless presented as follows:
(1) a claim
based on a contract with the personal representative, within four months after
performance by the personal representative is due; or
(2) any other
claim, within the later of four months after it arises, or the time specified
in subsection (a)(1).
(d) Nothing in this section affects or prevents:
(1) any
proceeding to enforce any mortgage, pledge, or other lien upon property of the
estate;
(2) to the
limits of the insurance protection only, any proceeding to establish liability
of the decedent or the personal representative for which he is protected by
liability insurance; or
(3) collection
of compensation for services rendered and reimbursement for expenses advanced
by the personal representative or by the attorney or accountant for the
personal representative of the estate.
COMMENT
There
was some disagreement among the Reporters over whether a short period of
limitations, or of non‑claim, should be provided for claims arising at or
after death. Sub‑paragraph (b) was finally inserted because most felt it
was desirable to accelerate the time when unadjudicated distributions would be
final. The time limits stated would not, of course, affect any personal
liability in contract, tort, or by statute, of the personal representative. Under Section 3‑808 a personal
representative is not liable on transactions entered into on behalf of the
estate unless he agrees to be personally liable or unless he breaches a duty by
making the contract. Creditors of the estate and not of the personal
representative thus face a special limitation that runs four months after
performance is due from the personal representative. Tort claims normally will
involve casualty insurance of the decedent or of the personal representative,
and so will fall within the exception of subparagraph (d). If a personal representative is personally at
fault in respect to a tort claim arising after the decedent's death, his
personal liability would not be affected by the running of the special short
period provided here.
In
1989, the Joint Editorial Board recommended amendments to Subsection (a). The
change in (1) shortens the ultimate limitations period on claims against a
decedent from 3 years after death to 1 year after death. Corresponding amendments were recommended for
Sections 3‑1003(a)(1) and 3‑1006.
The new one‑year from death limitation (which applies without
regard to whether or when an estate is opened for administration) is designed
to prevent concerns stemming from the possible applicability to this Code of Tulsa Professional Collection Services v.
Pope, 108 S. Ct. 1340, 485 U.S. 478 (1988) from unduly prolonging estate
settlements and closings.
Subsection
(a)(2), by reference to 3‑801(a) and 3‑801(b), adds an additional
method of barring a prospective claimant of whom the personal representative is
aware. The new bar is available when it is appropriate, under all of the
circumstances, to send a mailed warning to one or more known claimants who have
not presented claims that the recipient's claim will be barred if not presented
within 60 days from the notice. This optional, mailed notice, described in
accompanying new text in Section 3‑801(b), is designed to enhance the
ability of personal representatives to protect distributees against pass‑through
liability (under Section 3‑1004) to possibly unbarred claimants. Personal representatives acting in the best
interests of successors to the estate (see Section 3‑703(a) and the
definition of "successors" in Section 1‑201(42)) may determine
that successors are willing to assume risks (i) that Pope, supra, will be held to apply to this Code in spite of absence
of any significant contact between an agency of the state and the acts of a
personal representative operating independently of Court supervision; and (ii)
that a possibly unbarred claim is valid and will be pursued by its owner
against estate distributees in time to avoid bar via the earliest to run of its
own limitation period (which, under Section 3‑802(b), resumes running
four months after death), or the one‑year from death limitation now
provided by § 3‑803(a)(1). If publication of notice as provided in
Section 3‑801 has occurred and if Pope
either is inapplicable to this Code or is applicable but the late‑arising
claim in question is judged to have been unknown to the personal representative
and unlikely to have been discovered by reasonable effort, an earlier, four
months from first publication bar will apply.
The
Joint Editorial Board recognized that the new bar running one year after death
may be used by some sets of successors to avoid payment of claims against their
decedents of which they are aware. Successors who are willing to delay receipt
and enjoyment of inheritances may consider waiting out the non‑claim
period running from death simply to avoid any public record of an administration
that might alert known and unknown creditors to pursue their claims. The
scenario was deemed to be unlikely, however, for unpaid creditors of a decedent
are interested persons (Section 1‑201(20)) who are qualified to force the
opening of an estate for purposes of presenting and enforcing claims. Further, successors who delay opening an
administration will suffer from lack of proof of title to estate assets and
attendant inability to enjoy their inheritances. Finally, the odds that holders
of important claims against the decedent will need help in learning of the
death and proper place of administration is rather small. Any benefit to such
claimants of additional procedures designed to compel administrations and to
locate and warn claimants of an impending non‑claim bar, is quite likely
to be heavily outweighed by the costs such procedures would impose on all
estates, the vast majority of which are routinely applied to quick payment of
the decedents' bills and distributed without any creditor controversy.
Note
that the new bar described by Section 3‑801(b) and Section 3‑803(a)(2)
is the earlier of one year from death or the period described by reference to §
3‑801(b) and § 3‑801(a) in § 3‑803(a)(2). If publication of
notice is made under § 3‑801(a), and the personal representative
thereafter gives actual notice to a known creditor, when is the creditor
barred? If the actual notice is given less than 60 days prior to the expiration
of the four months from first publication period, the claim will not be barred
four months after first publication because the actual notice given by § 3‑801(b)
advises the creditor that it has no less than 60 days to present the claim. It
is as if the personal representative gave the claimant a written waiver of any
benefit the estate may have had by reason of the four month bar following
published notice. (c.f., the ability of a personal representative, under § 3‑802
to change claims from allowed to disallowed, and vice versa, and the 60 day
period given by § 3‑806(a) within which a claimant may contest a
disallowance). The period ending with the running of 60 days from actual notice
replaces the four month from publication period as the "time for original
presentation" referred to in Section 3‑806(a).
Note,
too, that if there is no publication of notice as provided in Section 3‑801(a),
the giving of actual notice to known creditors establishes separate, 60 days
from time of notice, non‑claim periods for those so notified. The failure
to publish also means that no general non‑claim period, other than the
one year period running from death, will be working for the estate. If an
actual notice to a creditor is given before notice by publication is given, a
question arises as to whether the 60 day period from actual notice, or the
longer, four‑month from publication applies. Subsections 3‑801(a)
and (b), which are pulled into Section 3‑803(a)(2) by reference, make no
distinction between actual notices given before publication and those given
after publication. Hence, it would seem that the later time bar would control
in either case. This reading also fits more satisfactorily with Section 3‑806(a)
and other code language referring in various contexts to "the time limit
prescribed in § 3‑803."
The
proviso, formerly appended to 3‑803(a)(1), regarding the effect in this
state of the prior running of a non‑claim statute of the decedent's
domicile, has been restated as 3‑803(b), and former subsections (b) and
(c) have been redesignated as (c) and (d). The relocation of the proviso was made
to improve the style of the section. No change of meaning is intended.
The
second paragraph of the original comment has been deleted because of
inconsistency with amended § 3‑803(a).
The
1989 changes recommended by the Joint Editorial Board relating to former § 3‑803(b)
now designated as 3‑803(c) are unrelated to the Pope case problem. The original text failed to describe a
satisfactory non‑claim period for claims arising at or after the
decedent's death other than claims based on contract. The four months
"after [any other claim] arises" period worked unjustly as to tort
claims stemming from accidents causing the decedent's death by snuffing out
claims too quickly, sometimes before an estate had been opened. The language added by the 1989 amendment assures
such claimants against any bar working prior to the later of one year after
death or four months from the time the claim arises.
The other change affecting what is now § 3‑803(d)
is the addition of a third class of items which are not barred by any time bar
running from death, publication of notice to creditors, or any actual notice
given to an estate creditor. The addition resembles a modification to the Code
as enacted in
1997 Technical
Amendment. By technical amendment effective
Section 3‑804.
Manner of Presentation of Claims.
Claims against a decedent's estate may be
presented as follows:
(1) The
claimant may deliver or mail to the personal representative a written statement
of the claim indicating its basis, the name and address of the claimant, and
the amount claimed, or may file a written statement of the claim, in the form
prescribed by rule, with the clerk of the Court. The claim is deemed presented
on the first to occur of receipt of the written statement of claim by the
personal representative, or the filing of the claim with the Court. If a claim
is not yet due, the date when it will become due shall be stated. If the claim
is contingent or unliquidated, the nature of the uncertainty shall be stated.
If the claim is secured, the security shall be described. Failure to describe
correctly the security, the nature of any uncertainty, and the due date of a
claim not yet due does not invalidate the presentation made.
(2) The
claimant may commence a proceeding against the personal representative in any
Court where the personal representative may be subjected to jurisdiction, to
obtain payment of his claim against the estate, but the commencement of the
proceeding must occur within the time limited for presenting the claim. No
presentation of claim is required in regard to matters claimed in proceedings
against the decedent which were pending at the time of his death.
(3) If a claim
is presented under subsection (1), no proceeding thereon may be commenced more
than 60 days after the personal representative has mailed a notice of disallowance;
but, in the case of a claim which is not presently due or which is contingent
or unliquidated, the personal representative may consent to an extension of the
60‑day period, or to avoid injustice the Court, on petition, may order an
extension of the 60‑day period, but in no event shall the extension run
beyond the applicable statute of limitations.
COMMENT
The
filing of a claim with the probate Court under (2) of this section does not
serve to initiate a proceeding concerning the claim. Rather, it serves merely
to protect the claimant who may anticipate some need for evidence to show that
his claim is not barred. The probate Court acts simply as a depository of the
statement of claim, as is true of its responsibility for an inventory filed with
it under Section 3‑706.
In
reading this section it is important to remember that a regular statute of
limitation may run to bar a claim before the non‑claim provisions run. See Section 3‑802.
Section 3‑805.
Classification of Claims.
(a) If the applicable assets of the estate are insufficient to pay all
claims in full, the personal representative shall make payment in the following
order:
(1) costs and
expenses of administration;
(2) reasonable
funeral expenses;
(3) debts and
taxes with preference under federal law;
(4) reasonable
and necessary medical and hospital expenses of the last illness of the
decedent, including compensation of persons attending him;
(5) debts and
taxes with preference under other laws of this state;
(6) all other
claims.
(b) No preference shall be given in the payment of any claim over any
other claim of the same class, and a claim due and payable shall not be
entitled to a preference over claims not due.
COMMENT
In
1975, the Joint Editorial Board recommended the separation of funeral expenses
from the items now accorded fourth priority. Under federal law, funeral
expenses, but not debts incurred by the decedent can be given priority over
claims of the
Section 3‑806.
Allowance of Claims.
(a) As to claims presented in the manner described in Section 3‑804
within the time limit prescribed in 3‑803, the personal representative
may mail a notice to any claimant stating that the claim has been disallowed.
If, after allowing or disallowing a claim, the personal representative changes
his decision concerning the claim, he shall notify the claimant. The personal
representative may not change a disallowance of a claim after the time for the
claimant to file a petition for allowance or to commence a proceeding on the
claim has run and the claim has been barred. Every claim which is disallowed in
whole or in part by the personal representative is barred so far as not allowed
unless the claimant files a petition for allowance in the Court or commences a
proceeding against the personal representative not later than 60 days after the
mailing of the notice of disallowance or partial allowance if the notice warns
the claimant of the impending bar. Failure of the personal representative to
mail notice to a claimant of action on his claim for 60 days after the time for
original presentation of the claim has expired has the effect of a notice of
allowance.
(b) After allowing or disallowing a claim the personal representative
may change the allowance or disallowance as hereafter provided. The personal
representative may prior to payment change the allowance to a disallowance in
whole or in part, but not after allowance by a court order or judgment or an
order directing payment of the claim. He shall notify the claimant of the
change to disallowance, and the disallowed claim is then subject to bar as
provided in subsection (a). The personal representative may change a
disallowance to an allowance, in whole or in part, until it is barred under
subsection (a); after it is barred, it may be allowed and paid only if the
estate is solvent and all successors whose interests would be affected consent.
(c) Upon the petition of the personal representative or of a claimant
in a proceeding for the purpose, the Court may allow in whole or in part any claim
or claims presented to the personal representative or filed with the Clerk of
Court in due time and not barred by
subsection (a) of this section. Notice in this proceeding shall be given to the
claimant, the personal representative and those other persons interested in the
estate as the Court may direct by order entered at the time the proceeding is
commenced.
(d) A judgment in a proceeding in another court against a personal
representative to enforce a claim against a decedent's estate is an allowance
of the claim.
(e) Unless otherwise provided in any judgment in another court entered
against the personal representative, allowed claims bear interest at the legal
rate for the period commencing 60 days after the time for original presentation
of the claim has expired unless based on a contract making a provision for
interest, in which case they bear interest in accordance with that provision.
Section 3‑807.
Payment of Claims.
(a) Upon the expiration of the earlier of the time limitations provided
in Section 3‑803 for the presentation of claims, the personal
representative shall proceed to pay the claims allowed against the estate in
the order of priority prescribed, after making provision for homestead, family
and support allowances, for claims already presented that have not yet been
allowed or whose allowance has been appealed, and for unbarred claims that may
yet be presented, including costs and expenses of administration. By petition
to the Court in a proceeding for the purpose, or by appropriate motion if the
administration is supervised, a claimant whose claim has been allowed but not
paid may secure an order directing the personal representative to pay the claim
to the extent funds of the estate are available to pay it.
(b) The personal representative at any time may pay any just claim that
has not been barred, with or without formal presentation, but is personally
liable to any other claimant whose claim is allowed and who is injured by its
payment if:
(1) payment
was made before the expiration of the time limit stated in subsection (a) and
the personal representative failed to require the payee to give adequate
security for the refund of any of the payment necessary to pay other claimants;
or
(2) payment
was made, due to negligence or willful fault of the personal representative, in
such manner as to deprive the injured claimant of priority.
COMMENT
As
recommended for amendment in 1989 by the Joint Editorial Board, the section
directs the personal representative to pay allowed claims at the earlier of one
year from death or the expiration of 4 months from first publication. This interpretation reflects that
distribution need not be delayed further on account of creditors' claims once a
time bar running from death or publication has run, for known creditors who
have failed to present claims by such time may have received an actual notice
leading to a bar 60 days thereafter and in any event can and should be the
occasion for withholding or the making of other provision by the personal
representative to cover the possibility of later presentation and allowance of
such claims. Distribution would also be appropriate whenever competent and
solvent distributees expressly agree to indemnify the estate for any claims
remaining unbarred and undischarged after the distribution.
Section 3‑808.
Individual Liability of Personal Representative.
(a) Unless otherwise provided in the contract, a personal
representative is not individually liable on a contract properly entered into
in his fiduciary capacity in the course of administration of the estate unless
he fails to reveal his representative capacity and identify the estate in the
contract.
(b) A personal representative is individually liable for obligations
arising from ownership or control of the estate or for torts committed in the
course of administration of the estate only if he is personally at fault.
(c) Claims based on contracts entered into by a personal representative
in his fiduciary capacity, on obligations arising from ownership or control of
the estate or on torts committed in the course of estate administration may be
asserted against the estate by proceeding against the personal representative
in his fiduciary capacity, whether or not the personal representative is
individually liable therefor.
(d) Issues of liability as between the estate and the personal
representative individually may be determined in a proceeding for accounting,
surcharge or indemnification or other appropriate proceeding.
COMMENT
In the absence of statute an executor, administrator
or a trustee is personally liable on contracts entered into in his fiduciary
capacity unless he expressly excludes personal liability in the contract. He is
commonly personally liable for obligations stemming from ownership or
possession of the property (e.g., taxes) and for torts committed by servants
employed in the management of the property. The claimant ordinarily can reach
the estate only after exhausting his remedies against the fiduciary as an
individual and then only to the extent that the fiduciary is entitled to
indemnity from the property. This and the following sections are designed to
make the estate a quasi‑corporation for purposes of such liabilities. The
personal representative would be personally liable only if an agent for a
corporation would be under the same circumstances, and the claimant has a
direct remedy against the quasi‑corporate property.
Section 3‑809.
Secured Claims.
Payment of a secured claim
is upon the basis of the amount allowed if the creditor surrenders his security;
otherwise payment is upon the basis of one of the following:
(1) if the
creditor exhausts his security before receiving payment, [unless precluded by
other law] upon the amount of the claim allowed less the fair value of the
security; or
(2) if the creditor
does not have the right to exhaust his security or has not done so, upon the
amount of the claim allowed less the value of the security determined by
converting it into money according to the terms of the agreement pursuant to
which the security was delivered to the creditor, or by the creditor and
personal representative by agreement, arbitration, compromise or litigation.
Section 3‑810.
Claims Not Due and Contingent or Unliquidated Claims.
(a) If a claim which will become due at a future time or a contingent
or unliquidated claim becomes due or certain before the distribution of the
estate, and if the claim has been allowed or established by a proceeding, it is
paid in the same manner as presently due and absolute claims of the same class.
(b) In other cases the personal representative or, on petition of the
personal representative or the claimant in a special proceeding for the
purpose, the Court may provide for payment as follows:
(1) if the
claimant consents, he may be paid the present or agreed value of the claim,
taking any uncertainty into account;
(2) arrangement
for future payment, or possible payment, on the happening of the contingency or
on liquidation may be made by creating a trust, giving a mortgage, obtaining a
bond or security from a distributee, or otherwise.
Section 3‑811.
Counterclaims.
In allowing a claim the personal
representative may deduct any counterclaim which the estate has against the
claimant. In determining a claim against an estate a Court shall reduce the
amount allowed by the amount of any counterclaims and, if the counterclaims
exceed the claim, render a judgment against the claimant in the amount of the
excess. A counterclaim, liquidated or unliquidated, may arise from a
transaction other than that upon which the claim is based. A counterclaim may
give rise to relief exceeding in amount or different in kind from that sought
in the claim.
Section 3‑812.
Execution and Levies Prohibited.
No execution may issue upon nor may any levy
be made against any property of the estate under any judgment against a
decedent or a personal representative, but this section shall not be construed
to prevent the enforcement of mortgages, pledges or liens upon real or personal
property in an appropriate proceeding.
Section 3‑813.
Compromise of Claims.
When a claim against the estate has been
presented in any manner, the personal representative may, if it appears for the
best interest of the estate, compromise the claim, whether due or not due,
absolute or contingent, liquidated or unliquidated.
Section 3‑814.
Encumbered Assets.
If any assets of the estate are encumbered by
mortgage, pledge, lien, or other security interest, the personal representative
may pay the encumbrance or any part thereof, renew or extend any obligation
secured by the encumbrance or convey or transfer the assets to the creditor in
satisfaction of his lien, in whole or in part, whether or not the holder of the
encumbrance has presented a claim, if it appears to be for the best interest of
the estate. Payment of an encumbrance
does not increase the share of the distributee entitled to the encumbered
assets unless the distributee is entitled to exoneration.
COMMENT
Section
2‑609 establishes a rule of construction against exoneration. Thus, unless the will indicates to the
contrary, a specific devisee of mortgaged property takes subject to the lien
without right to have other assets applied to discharge the secured obligation.
In
1975, the Joint Editorial Board recommended substitution of the word
"presented", in the first sentence, for the word "filed" in
the original text. The change aligns
this section with Section 3‑804, which describes several methods,
including mailing or delivery to the personal representative, as methods of
protecting a claim against non‑claim provisions of the Code.
Section 3‑815.
Administration in More Than
(a) All assets of estates being administered in this state are subject
to all claims, allowances and charges existing or established against the
personal representative wherever appointed.
(b) If the estate either in this state or as a whole is insufficient to
cover all family exemptions and allowances determined by the law of the
decedent's domicile, prior charges and claims, after satisfaction of the
exemptions, allowances and charges, each claimant whose claim has been allowed
either in this state or elsewhere in administrations of which the personal
representative is aware, is entitled to receive payment of an equal proportion
of his claim. If a preference or security in regard to a claim is allowed in
another jurisdiction but not in this state, the creditor so benefited is to
receive dividends from local assets only upon the balance of his claim after
deducting the amount of the benefit.
(c) In case the family exemptions and allowances, prior charges and
claims of the entire estate exceed the total value of the portions of the
estate being administered separately and this state is not the state of the
decedent's last domicile, the claims allowed in this state shall be paid their
proportion if local assets are adequate for the purpose, and the balance of
local assets shall be transferred to the domiciliary personal representative.
If local assets are not sufficient to pay all claims allowed in this state the
amount to which they are entitled, local assets shall be marshalled so that
each claim allowed in this state is paid its proportion as far as possible,
after taking into account all dividends on claims allowed in this state from assets
in other jurisdictions.
COMMENT
Under
Section 3‑803(a)(1), if a local (property only) administration is
commenced and proceeds to advertisement for claims before non‑claim
statutes have run at domicile, claimants may prove claims in the local administration
at any time before the local non‑claim period expires. Section 3‑815
has the effect of subjecting all assets of the decedent, wherever they may be
located and administered, to claims properly presented in any local
administration. It is necessary, however, that the personal representative of
any portion of the estate be aware of other administrations in order for him to
become responsible for claims and charges established against other
administrations.
Section 3‑816.
Final Distribution to Domiciliary Representative.
The estate of a non‑resident decedent
being administered by a personal representative appointed in this state shall,
if there is a personal representative of the decedent's domicile willing to
receive it, be distributed to the domiciliary personal representative for the
benefit of the successors of the decedent unless (1) by virtue of the
decedent's will, if any, and applicable choice of law rules, the successors are
identified pursuant to the local law of this state without reference to the
local law of the decedent's domicile; (2) the personal representative of this
state, after reasonable inquiry, is unaware of the existence or identity of a
domiciliary personal representative; or (3) the Court orders otherwise in a
proceeding for a closing order under Section 3‑1001 or incident to the
closing of a supervised administration.
In other cases, distribution of the estate of a decedent shall be made
in accordance with the other Parts of this Article.
PART 9
SPECIAL PROVISIONS RELATING TO DISTRIBUTION
Section 3‑901.
Successors' Rights if No Administration.
In the absence of administration, the heirs
and devisees are entitled to the estate in accordance with the terms of a
probated will or the laws of intestate succession. Devisees may establish title
by the probated will to devised property. Persons entitled to property by
homestead allowance, exemption or intestacy may establish title thereto by
proof of the decedent's ownership, his death, and their relationship to the
decedent. Successors take subject to all charges incident to administration,
including the claims of creditors and allowances of surviving spouse and
dependent children, and subject to the rights of others resulting from
abatement, retainer, advancement, and ademption.
COMMENT
Title
to a decedent's property passes to his heirs and devisees at the time of his
death. See Section 3‑101. This
section adds little to Section 3‑101 except to indicate how successors
may establish record title in the absence of administration.
Section 3‑902.
Distribution; Order in Which Assets Appropriated; Abatement.
(a) Except as provided in subsection (b) and except as provided in
connection with the share of the surviving spouse who elects to take an
elective share, shares of distributees abate, without any preference or
priority as between real and personal property, in the following order:
(1) property
not disposed of by the will;
(2) residuary
devises;
(3) general
devises;
(4) specific
devises.
For purposes of abatement, a
general devise charged on any specific property or fund is a specific devise to
the extent of the value of the property on which it is charged, and upon the
failure or insufficiency of the property on which it is charged, a general
devise to the extent of the failure or insufficiency. Abatement within each classification is in
proportion to the amounts of property each of the beneficiaries would have
received if full distribution of the property had been made in accordance with the
terms of the will.
(b) If the will expresses an order of abatement, or if the testamentary
plan or the express or implied purpose of the devise would be defeated by the
order of abatement stated in subsection (a), the shares of the distributees
abate as may be found necessary to give effect to the intention of the
testator.
(c) If the subject of a preferred devise is sold or used incident to
administration, abatement shall be achieved by appropriate adjustments in, or
contribution from, other interests in the remaining assets.
COMMENT
A testator may determine the
order in which the assets of his estate are applied to the payment of his
debts. If he does not, then the provisions of this section express rules which
may be regarded as approximating what testators generally want. The statutory order
of abatement is designed to aid in resolving doubts concerning the intention of
a particular testator, rather than to defeat his purpose. Hence, subsection (b)
directs that consideration be given to the purpose of a testator. This may be
revealed in many ways. Thus, it is commonly held that, even in the absence of
statute, general legacies to a wife, or to persons with respect to which the
testator is in loco parentis, are to be preferred to other legacies in the same
class because this accords with the probable purpose of the legacies.
[3-902A. Distribution; Order in Which Assets
Appropriated; Abatement.
(addendum for adoption in community property states)
[(a) and (b) as above.]
(c) If
an estate of a decedent consists partly of separate property and partly of
community property, the debts and expenses of administration shall be
apportioned and charged against the different kinds of property in proportion
to the relative value thereof.
[(d) same as (c) in common law state.]]
COMMENT
(c) is suggested for inclusion in Section
3-902 in a community property state. Its inclusion causes (c) as drafted for
common law states to be redesignated (d). As is the case with other insertions
suggested in the Code for community property states, the specific language of
this draft is to be taken as illustrative of coverage that is desirable.
Section 3‑903.
Right of Retainer.
The amount of a non‑contingent
indebtedness of a successor to the estate if due, or its present value if not
due, shall be offset against the successor's interest; but the successor has
the benefit of any defense which would be available to him in a direct
proceeding for recovery of the debt.
Section 3‑904.
Interest on General Pecuniary Devise.
General pecuniary devises bear interest at
the legal rate beginning one year after the first appointment of a personal
representative until payment, unless a contrary intent is indicated by the
will.
COMMENT
Unlike
the common law, this section provides that a general pecuniary devisee's right
to interest begins one year from the time when administration was commenced,
rather than one year from death. The
rule provided here is similar to the common law rule in that the right to
interest for delayed payment does not depend on whether the estate in fact
realized income during the period of delay.
The section is consistent with Section 5(b) of the Revised Uniform
Principal and Income Act which allocates realized net income of an estate
between various categories of successors.
Section 3‑905.
Penalty Clause for Contest.
A provision in a will purporting to penalize
any interested person for contesting the will or instituting other proceedings
relating to the estate is unenforceable if probable cause exists for
instituting proceedings.
Section 3‑906.
Distribution in Kind; Valuation; Method.
(a) Unless a contrary intention is indicated by the will, the
distributable assets of a decedent's estate shall be distributed in kind to the
extent possible through application of the following provisions:
(1) A specific
devisee is entitled to distribution of the thing devised to him, and a spouse
or child who has selected particular assets of an estate as provided in Section
2‑403 shall receive the items selected.
(2) Any
homestead or family allowance or devise of a stated sum of money may be
satisfied in kind provided
(i) the person
entitled to the payment has not demanded payment in cash;
(ii) the
property distributed in kind is valued at fair market value as of the date of
its distribution, and
(iii)no residuary devisee has requested that the
asset in question remain a part of the residue of the estate.
(3) For the
purpose of valuation under paragraph (2) securities regularly traded on
recognized exchanges, if distributed in kind, are valued at the price for the
last sale of like securities traded on the business day prior to distribution,
or if there was no sale on that day, at the median between amounts bid and
offered at the close of that day. Assets consisting of sums owed the decedent
or the estate by solvent debtors as to which there is no known dispute or
defense are valued at the sum due with accrued interest or discounted to the
date of distribution. For assets which do not have readily ascertainable
values, a valuation as of a date not more than 30 days prior to the date of
distribution, if otherwise reasonable, controls. For purposes of facilitating
distribution, the personal representative may ascertain the value of the assets
as of the time of the proposed distribution in any reasonable way, including
the employment of qualified appraisers, even if the assets may have been
previously appraised.
(4) The
residuary estate shall be distributed in any equitable manner.
(b) After the probable charges against the estate are known, the
personal representative may mail or deliver a proposal for distribution to all
persons who have a right to object to the proposed distribution. The right of
any distributee to object to the proposed distribution on the basis of the kind
or value of asset he is to receive, if not waived earlier in writing,
terminates if he fails to object in writing received by the personal
representative within 30 days after mailing or delivery of the proposal.
COMMENT
This
section establishes a preference for distribution in kind. It directs a
personal representative to make distribution in kind whenever feasible and to
convert assets to cash only where there is a special reason for doing so. It
provides a reasonable means for determining value of assets distributed in
kind. It is implicit in Sections 3‑101,
3‑901 and this section that each residuary beneficiary's basic right is
to his proportionate share of each asset constituting the residue.
Section 3‑907.
Distribution in Kind; Evidence.
If distribution in kind is made, the personal
representative shall execute an instrument or deed of distribution assigning,
transferring or releasing the assets to the distributee as evidence of the
distributee's title to the property.
COMMENT
This
and sections following should be read with Section 3‑709 which permits
the personal representative to leave certain assets of a decedent's estate in
the possession of the person presumptively entitled thereto. The "release" contemplated by this
section would be used as evidence that the personal representative had
determined that he would not need to disturb the possession of an heir or
devisee for purposes of administration.
Under
Section 3‑711, a personal representative's relationship to assets of the
estate is described as the "same power over the title to property of the
estate as an absolute owner would have."
A personal representative may, however, acquire a full title to estate
assets, as in the case where particular items are conveyed to the personal
representative by sellers, transfer agents or others. The language of Section 3‑907 is
designed to cover instances where the instrument of distribution operates as a
transfer, as well as those in which its operation is more like a release.
Section 3‑908. Distribution; Right or Title of Distributee.
Proof that a distributee has received an
instrument or deed of distribution of assets in kind, or payment in
distribution, from a personal representative, is conclusive evidence that the
distributee has succeeded to the interest of the estate in the distributed
assets, as against all persons interested in the estate, except that the
personal representative may recover the assets or their value if the
distribution was improper.
COMMENT
The
purpose of this section is to channel controversies which may arise among
successors of a decedent because of improper distributions through the personal
representative who made the distribution, or a successor personal
representative. Section 3‑108 does not bar appointment proceedings
initiated to secure appointment of a personal representative to correct an
erroneous distribution made by a prior representative. But see Section 3‑1006.
Section 3‑909.
Improper Distribution; Liability of Distributee.
Unless the distribution or payment no longer
can be questioned because of adjudication, estoppel, or limitation, a
distributee of property improperly distributed or paid, or a claimant who was
improperly paid, is liable to return the property improperly received and its
income since distribution if he has the property. If he does not have the
property, then he is liable to return the value as of the date of disposition
of the property improperly received and its income and gain received by him.
COMMENT
The
term "improperly" as used in this section must be read in light of Section
3‑703 and the manifest purpose of this and other sections of the Code to
shift questions concerning the propriety of various distributions from the
fiduciary to the distributees in order to prevent every administration from
becoming an adjudicated matter. Thus, a distribution may be "authorized at
the time" as contemplated by Section 3‑703, and still be
"improper" under this section. Section 3‑703 is designed to
permit a personal representative to distribute without risk in some cases, even
though there has been no adjudication. When an unadjudicated distribution has
occurred, the rights of persons to show that the basis for the distribution
(e.g., an informally probated will, or informally issued letters of
administration) is incorrect, or that the basis was improperly applied
(erroneous interpretation, for example) is preserved against distributees by
this section.
The
definition of "distributee" to include the trustee and beneficiary of
a testamentary trust in 1‑201(10) is important in allocating liabilities
that may arise under Sections 3‑909 and 3‑910 on improper
distribution by the personal representative under an informally probated will.
The provisions of 3‑909 and
3‑910 are based on the theory that
liability follows the property and the fiduciary is absolved from liability by
reliance upon the informally probated will.
Section 3‑910.
Purchasers from Distributees Protected.
If property distributed in kind or a security
interest therein is acquired for value by a purchaser from or lender to a distributee
who has received an instrument or deed of distribution from the personal
representative, or is so acquired by a purchaser from or lender to a transferee
from such distributee, the purchaser or lender takes title free of rights of
any interested person in the estate and incurs no personal liability to the
estate, or to any interested person, whether or not the distribution was proper
or supported by court order or the authority of the personal representative was
terminated before execution of the instrument or deed. This section protects a
purchaser from or lender to a distributee who, as personal representative, has
executed a deed of distribution to himself, as well as a purchaser from or
lender to any other distributee or his transferee. To be protected under this
provision, a purchaser or lender need not inquire whether a personal
representative acted properly in making the distribution in kind, even if the
personal representative and the distributee are the same person, or whether the
authority of the personal representative had terminated before the
distribution. Any recorded instrument
described in this section on which a state documentary fee is noted pursuant to
[insert appropriate reference] shall be prima facie evidence that such transfer
was made for value.
COMMENT
The
words "instrument or deed of distribution" are explained in Section 3‑907.
The effect of this section may be to make an instrument or deed of distribution
a very desirable link in a chain of title involving succession of land. Cf. Section 3‑901.
In
1975, the Joint Editorial Board recommended additions that strengthen the
protection extended by this section to bona fide purchasers from distributees.
The additional language was derived from recommendations evolved with respect
to the
Section 3‑911.
Partition for Purpose of Distribution.
When two or more heirs or devisees are entitled to distribution of undivided interests in any real or personal property of the estate, the personal representative or one or more of the heirs or devisees may petition the Court prior to the formal or informal closing of the estate, to make partition. After notice to the interested heirs or devisees, the Court shall partition the property in the same manner as provided by the law for civil actions of partition. The Court may direct the personal representative to sell any property which cannot be partitioned without prejudice to the owners and which cannot conveniently be allotted to any one party.
COMMENT
Ordinarily heirs or devisees desiring
partition of a decedent's property will resolve the issue by agreement without
resort to the Courts. (See Section 3‑912.)
If Court determination is necessary, the Court with jurisdiction to administer
the estate has jurisdiction to partition the property.
Section 3‑912.
Private Agreements Among Successors to Decedent Binding on Personal
Representative.
Subject to the rights of creditors and taxing
authorities, competent successors may agree among themselves to alter the
interests, shares, or amounts to which they are entitled under the will of the
decedent, or under the laws of intestacy, in any way that they provide in a
written contract executed by all who are affected by its provisions. The
personal representative shall abide by the terms of the agreement subject to
his obligation to administer the estate for the benefit of creditors, to pay
all taxes and costs of administration, and to carry out the responsibilities of
his office for the benefit of any successors of the decedent who are not
parties. Personal representatives of decedents' estates are not required to see
to the performance of trusts if the trustee thereof is another person who is
willing to accept the trust.
Accordingly, trustees of a testamentary trust are successors for the
purposes of this section. Nothing herein relieves trustees of any duties owed
to beneficiaries of trusts.
COMMENT
It
may be asserted that this section is only a restatement of the obvious and
should be omitted. Its purpose, however, is to make it clear that the
successors to an estate have residual control over the way it is to be
distributed. Hence, they may compel a personal representative to administer and
distribute as they may agree and direct. Successors should compare the
consequences and possible advantages of careful use of the power to renounce as
described by Article II, Part 11 with the effect of agreement under this
section. The most obvious difference is that an agreement among successors
under this section would involve transfers by some participants to the extent
it changed the pattern of distribution from that otherwise applicable.
Differing
from a pattern that is familiar in many states, this Code does not subject
testamentary trusts and trustees to special statutory provisions, or
supervisory jurisdiction. A testamentary trustee is treated as a devisee with
special duties which are of no particular concern to the personal
representative. Article VII contains optional procedures extending the
safeguards available to personal representatives to trustees of both inter
vivos and testamentary trusts.
Section 3‑913.
Distributions to Trustee.
(a) Before distributing to a trustee, the personal representative may
require that the trust be registered if the state in which it is to be
administered provides for registration and that the trustee inform the
beneficiaries as provided in Section 7‑303.
(b) If the trust instrument does not excuse the trustee from giving
bond, the personal representative may petition the appropriate Court to require
that the trustee post bond if he apprehends that distribution might jeopardize
the interests of persons who are not able to protect themselves, and he may
withhold distribution until the Court has acted.
(c) No inference of negligence on the part of the personal
representative shall be drawn from his failure to exercise the authority
conferred by subsections (a) and (b).
COMMENT
This
section is concerned with the fiduciary responsibility of the executor to
beneficiaries of trusts to which he may deliver. Normally, the trustee
represents beneficiaries in matters involving third persons, including prior fiduciaries.
Yet, the executor may apprehend that delivery to the trustee may involve risks
for the safety of the fund and for him. For example, he may be anxious to see
that there is no equivocation about the devisee's willingness to accept the
trust, and no problem of preserving evidence of the acceptance. He may have doubts about the integrity of the
trustee, or about his ability to function satisfactorily. The testator's
selection of the trustee may have been based on facts which are still current,
or which are of doubtful relevance at the time of distribution. If the risks
relate to the question of the trustee's intention to handle the fund without
profit for himself, a conflict of interest problem is involved. If the risk
relates to the ability of the trustee to manage prudently, a more troublesome
question is posed for the executor. Is he, as executor, not bound to act in the
best interests of the beneficiaries?
In
many instances involving doubts of this sort, the executor probably will want
the protection of a Court Order. Sections 3‑1001 and 3‑1002 provide
ample authority for an appropriate proceeding in the Court which issued the
executor's letters.
In
other cases, however, the executor may believe that he may be adequately
protected if the acceptance of the trust by the devisee is unequivocal, or if
the trustee is bonded. The purpose of this section is to make it clear that it
is proper for the executor to require the trustee to register the trust and to
notify beneficiaries before receiving distribution. Also, the section
complements Section 7‑304 by providing that the personal representative
may petition an appropriate Court to require that the trustee be bonded.
Status of testamentary
trustees under the Uniform Probate Code. Under the
Uniform Probate Code, the testamentary trustee by construction would be
considered a devisee, distributee, and successor to whom title passes at time
of the testator's death even though the will must be probated to prove the
transfer. The informally probated will is conclusive until set aside and the
personal representative may distribute to the trustee under the informally
probated will or settlement agreement and the title of the trustee as
distributee represented by the instrument or deed of distribution is conclusive
until set aside on showing that it is improper. Should the informally probated
will be set aside or the distribution to the trustee be shown to be improper,
the trustee as distributee would be liable for value received but purchasers
for value from the trustee as distributee under an instrument of distribution
would be protected. Section 1‑201's definition of "distributee"
limits the distributee liability of the trustee and substitutes that of the
trust beneficiaries to the extent of distributions by the trustee.
As
a distributee as defined by 1‑201, the testamentary trustee or
beneficiary of a testamentary trust is liable to claimants like other
distributees, would have the right of contribution from other distributees of
the decedent's estate and would be protected by the same time limitations as
other distributees (3‑1006).
Incident
to his standing as a distributee of the decedent's estate, the testamentary
trustee would be an interested party who could petition for an order of
complete settlement by the personal representative or for an order terminating
testate administration. He also could appropriately receive the personal
representative's account and distribution under a closing statement. As distributee he could represent his
beneficiaries in compromise settlements in the decedent's estate which would be
binding upon him and his beneficiaries. See Section 3‑912.
The general fiduciary responsibilities of the
testamentary trustee are not altered by the Uniform Probate Code and the
trustee continues to have the duty to collect and reduce to possession within a
reasonable time the assets of the trust estate including the enforcement of any
claims on behalf of the trust against prior fiduciaries, including the personal
representative, and third parties.
Section 3‑914.
Disposition of Unclaimed Assets.
(a) If an heir, devisee or claimant cannot be found, the personal
representative shall distribute the share of the missing person to his
conservator, if any, otherwise to the [state treasurer], to become a part of the [state escheat fund].
(b) The money received by [state
treasurer] shall be paid to the person entitled on proof of his right thereto
or, if the [state treasurer] refuses or fails to pay, the person may petition
the Court which appointed the personal representative, whereupon the Court upon
notice to the [state treasurer] may
determine the person entitled to the money and order the [treasurer] to pay it
to him. No interest is allowed thereon and the heir, devisee or claimant shall
pay all costs and expenses incident to the proceeding. If no petition is made
to the [court] within 8 years after payment to the [state treasurer], the right
of recovery is barred.
COMMENT
The
foregoing section is bracketed to indicate that the National Conference does
not urge the specific content as set forth above over recent comprehensive
legislation on the subject which may have been enacted in an adopting state.
This
section applies when it is believed that a claimant, heir or distributee exists
but he cannot be located. See 2‑105.
Section 3‑915.
Distribution to Person Under Disability.
(a) A personal representative may discharge his obligation to
distribute to any person under legal disability by distributing in a manner
expressly provided in the will.
(b) Unless contrary to an express provision in the will, the personal
representative may discharge his obligation to distribute to a minor or person
under other disability as authorized by Section 5‑104 or any other
statute. If the personal representative knows that a conservator has been
appointed or that a proceeding for appointment of a conservator is pending, the
personal representative is authorized to distribute only to the conservator.
(c) If the heir or devisee is under disability other than minority, the
personal representative is authorized to distribute to:
(1) an
attorney in fact who has authority under a power of attorney to receive
property for that person; or
(2) the
spouse, parent or other close relative with whom the person under disability
resides if the distribution is of amounts not exceeding [$10,000] a year, or
property not exceeding [$10,000] in value, unless the court authorizes a larger
amount or greater value.
Persons receiving money or
property for the disabled person are obligated to apply the money or property
to the support of that person, but may not pay themselves except by way of
reimbursement for out-of-pocket expenses for goods and services necessary for
the support of the disabled person. Excess sums must be preserved for future
support of the disabled person. The personal representative is not responsible
for the proper application of money or property distributed pursuant to this
subsection.
COMMENT
Section
5‑104 is especially important as a possible source of authority for a
valid discharge for payment or distribution made on behalf of a minor.
Section 3‑916.
[RESERVED]
PART 9A
APPORTIONMENT OF ESTATE TAXES
General Comment
Part 9A incorporates into the
Uniform Probate Code the Uniform Estate Tax Apportionment Act as revised in
2003 (UETAA or new UETAA). The new UETAA
replaces the Code’s former estate tax apportionment provision (Section 3-916),
which incorporated into the Code the former UETAA.
The Internal Revenue Code
(IRC) places the primary responsibility for paying federal estate taxes on the
decedent’s executor and empowers, but does not direct, the executor to collect
from recipients of certain nonprobate transfers included in the taxable estate
a prorated portion of the estate tax attributable to those types of
property. In the absence of specific
contrary directions of the decedent, the IRC generally provides as to other
transfers that taxes are to be borne by the persons who would bear that cost if
the taxes were paid by the executor prior to distributing the estate. The determination of who should bear the
ultimate burden of the estate taxes is left to state law.
If a state does not have a
statutory apportionment law, the burden of the estate taxes generally will fall
on residuary beneficiaries of the probate estate. This means that recipients of many types of
nonprobate assets (such as beneficiaries of revocable trusts and surviving
joint tenants) may be exonerated from paying a portion of the tax. Also, it generates a risk that residual gifts
to the spouse or a charity may result in a smaller deduction and a larger
tax. A number of states have adopted
legislation apportioning the burden of estate taxes among the beneficiaries.
The new UETAA replaces the
former UETAA, which was promulgated in 1958 and revised in 1964 and 1982.
The new UETAA continues to
advance the principle of the former UETAA that the decedent’s expressed
intentions govern apportionment of an estate tax. Statutory apportionment applies only to the
extent there is no clear and effective decedent’s tax burden direction to the
contrary. Under the statutory scheme,
marital and charitable beneficiaries generally are insulated from bearing any
of the estate tax, and a decedent’s direction that estate tax be paid from a
gift to be shared by a spouse or charity with another is construed to locate
the tax burden only on the taxable portion of the gift. The new UETAA provides relief for
persons forced to pay estate tax on values passing to others whose
interests, though contributing to the tax, are unreachable by the
fiduciary. The new UETAA also addresses
the allocation of the burden incurred because of several federal transfer tax
provisions that did not exist when the former UETAA was adopted.
Section 3-9A-101. Short
Title.
This Part may be cited as the
Uniform Estate Tax Apportionment Act.
Section 3-9A-102. Definitions.
In
this Part:
(1) “Apportionable estate” means the value of the
gross estate as finally determined for purposes of the estate tax to be apportioned
reduced by:
(A) any claim or expense allowable as a deduction for purposes of the
tax;
(B) the value of any interest in property that, for purposes of the
tax, qualifies for a marital or charitable deduction or otherwise is deductible
or is exempt; and
(C) any amount added to the decedent’s gross estate because of a gift
tax on transfers made before death.
(2) "Estate tax" means a federal, state,
or foreign tax imposed because of the death of an individual and interest and
penalties associated with the tax. The term does not include an inheritance
tax, income tax, or generation-skipping transfer tax other than a
generation-skipping transfer tax incurred on a direct skip taking effect at
death.
(3) "Gross estate" means, with respect
to an estate tax, all interests in property subject to the tax.
(4) "Person" means an individual,
corporation, business trust, estate, trust, partnership, limited liability
company, association, joint venture, public corporation, government,
governmental subdivision, agency, or instrumentality, or any other legal or
commercial entity.
(5) “Ratable” means apportioned or allocated pro
rata according to the relative values of interests to which the term is to be
applied. “Ratably” has a corresponding meaning.
(6) “Time-limited interest” means an interest in
property which terminates on a lapse of time or on the occurrence or
nonoccurrence of an event or which is subject to the exercise of discretion
that could transfer a beneficial interest to another person. The term does not
include a cotenancy unless the cotenancy itself is a time-limited interest.
(7) "Value" means, with respect to an
interest in property, fair market value as finally determined for purposes of
the estate tax that is to be apportioned, reduced by any outstanding debt
secured by the interest without reduction for taxes paid or required to be paid
or for any special valuation adjustment.
COMMENT
The starting point for
calculating the apportionable estate is the value of the gross estate. Since
the properties included and deductions allowed for determining different taxes
can differ, the apportionable estate figure may not be the same for different
taxes.
Property not included in the
apportionable estate for an estate tax typically will not bear any of that tax.
However, the donee recipients of such property will bear part of an estate tax
to the extent that the available assets of the apportionable estate are
insufficient to pay the tax. See Sections 3-9A-106(c) and 3-9A-109(b). Since
deductible transfers will not generate any estate tax, it is appropriate to
insulate those transfers from the allocation of that tax to the extent that
properties of the apportionable estate are sufficient.
A gift tax paid by the
decedent on a gift that was made by the decedent or the decedent’s spouse
within three years of the decedent’s death is added back to the decedent’s
gross estate for federal estate tax purposes by Internal Revenue Code §2035(b).
A State or foreign estate tax may have a similar provision or effect. Subparagraph
(1)(C) excludes any such gift tax from the apportionable estate.
The value of the
apportionable estate is reduced by claims and expenditures that are allowable
estate tax deductions whether or not allowed. For example, administrative
expenses that could have been claimed as estate tax deductions, but instead are
taken as income tax deductions, will reduce the apportionable estate. When a
decedent’s estate includes property in more than one State, the apportionable
estate for each State’s estate tax will be reduced by the expenses and claims
that are deductible for purposes of that tax. Where an expenditure cannot be
identified as pertaining to property in the gross estate of only one State tax,
the expenditure is to be apportioned ratably among the taxes of the States in
which the relevant properties are located, in accordance with the values of
those properties.
A spouse’s elective share
under Article II, Part 2, or a spouse’s share under Section 2-301, is excluded
from the apportionable estate to the extent that the spouse’s share qualifies
for an estate tax deduction. Other statutory claims against a decedent’s estate
that do not qualify for an estate tax deduction (for example, the claim of an
omitted child under Section 2-302) do not reduce the apportionable estate.
The term “estate tax” is
defined in the UETAA to include all estate taxes and certain
generation-skipping taxes arising because of an individual’s death. The term
estate tax does not include any inheritance taxes, income taxes, gift taxes, or
generation-skipping taxes incurred because of a taxable termination, a taxable
distribution, or an inter vivos direct skip. A generation-skipping tax that is
incurred because of a direct skip that takes place because of the decedent’s
death is included in the term “estate tax.”
Currently, no
Some States impose an
inheritance tax on recipients of property from a decedent. The UETAA does not
apportion those taxes.
The UETAA does not provide
for the apportionment of the income tax payable on the receipt of Income in
Respect of a Decedent (IRD). If a decedent held an installment obligation the
payment on which is accelerated by the decedent’s death, the income tax
incurred thereby is not apportioned by the UETAA.
If a donor pays a gift tax
during the donor’s life, the amount paid will not be part of the donor’s assets
when the donor dies; and so the gift tax will not be subject to apportionment
among the persons interested in the donor’s gross estate. This consequence is
consistent with the typical donor’s wish that the gifts made during life pass
to the donee free of any transfer tax. If all or part of a gift tax was not
paid at the time of the donor’s death and is subsequently paid by the donor’s
personal representative, the burden of the gift tax should lie with the same
persons who would have borne it if the donor had paid it during life,
typically, the residuary beneficiaries.
A gift tax liability is not apportioned by the UETAA, but is treated the
same as any other debt of the estate. A
gift tax deficiency that becomes due after the decedent’s death also is treated
as a debt of the decedent’s estate.
The kinds of death benefits
included in a gross estate depend upon the particular estate tax to be
apportioned and may not be the same for each tax. For example, some State death
taxes will have an exemption for a homestead; some will exclude life insurance
proceeds and pensions. In determining the gross estate for such taxes, the
property excluded from the tax will also be excluded from the gross estate for
that tax. Property that is deductible under an estate tax, such as property
that qualifies for a marital or charitable deduction, is nevertheless “subject
to” that tax and included in the gross estate. Once the value of the gross
estate for an estate tax is determined, the reductions described in Paragraph
(1) are applied to ascertain the apportionable estate.
A “time-limited interest”
includes a term of years, a life interest, a life income interest, an annuity
interest, an interest that is subject to a power of transfer, a unitrust
interest, and similar interests, whether present or future, and whether held
alone or in cotenancy. The fact that an interest that otherwise is not a
time-limited interest is held in cotenancy does not make it a time-limited interest.
If a debt is secured by more
than one interest in property, the value of each such interest is the fair
market value of that interest less a ratable portion of the debt that it
secures.
If the beneficiary of an
interest in property is required by the terms of the transfer to make a payment
to a third party or to pay a liability of the transferor, that obligation
constitutes an encumbrance on the property, but does not necessarily reduce the
value of the apportionable estate. If the obligation is to make a transfer or
payment to a third party, other than an obligation to satisfy a debt of the
decedent based on money or money worth’s consideration, the right of the third
person constitutes an interest in the apportionable estate and so is subject to
apportionment.
A decedent’s direction by
will or other dispositive instrument that property controlled by that
instrument is to be used to pay a debt secured by an interest in property is an
additional bequest to the person who is to receive the interest securing the
debt.
Taxes imposed on the transfer
or receipt of property, regardless of whether a lien on the property or payable
by the recipient of the property, do not reduce the value of the property for
purposes of apportioning estate taxes by the UETAA.
The date on which gross
estate property is to be valued for federal estate tax purposes (and for some
other estate tax purposes) is either the date of the decedent’s death or an
alternate valuation date elected by the decedent’s personal representative
pursuant to the estate tax law. An estate tax value that is determined on the
alternate valuation date is not, as such, a “special valuation
adjustment.” A “special valuation
adjustment” refers to a reduction of the valuation of an item included in the gross
estate pursuant to a provision of the estate tax law. See the Comment to
Section 3-9A-107.
If a person has a right by
contract or by the decedent’s will or other dispositive instrument to purchase
gross estate property at a price below its estate tax value, the estate tax
value of the property is the amount included in the value of the decedent’s
gross estate. The difference or discount between the purchase price and the
estate tax value of the property can be viewed as an interest which the decedent
passed to that person. If the right to purchase is exercised, the amount of the
discount is the value of that person’s interest in the apportionable estate.
The value of a person’s
interest in the apportionable estate can depend upon the value of the apportionable
estate. So, the value of a residuary interest in a decedent’s estate will
reflect the amount of allowable deductions which, under the UETAA, reduce the
apportionable estate, but will not be reduced by expenditures that are not
allowable deductions for that estate tax. The formula for allocating estate
taxes in Section 3-9A-104(1) utilizes a fraction of which the numerator is the
value of a person’s interest in the apportionable estate rather than the value
of the person’s interest in the net estate or in the taxable estate. Since the
denominator of the fraction is the value of the apportionable estate, the sum
of the numerators of all persons having an interest in the apportionable estate
will equal the denominator, and so 100% of the estate taxes will be
apportioned. Consider the following example.
Ex. D died leaving a gross estate with a value of
$10,150,000 and made no provision for apportionment of taxes. D’s will made
pecuniary devises totaling $1,000,000, and gave the residue to A and B equally.
There are no claims against the estate and no marital or charitable deductions
are allowable. The funeral expenses are $10,000, and the estate incurred
administrative expenses of $240,000 of which, while all were allowed as
administrative expenses by the State probate court, $100,000 was disallowed by
the Service for a federal estate tax deduction on the ground that $100,000 of
the expenses was not necessary for the administration of the estate. See Rev.
Rul. 77-461 and TAM 7912006. The
personal representative elected to deduct the remaining $140,000 of
administrative expenses as a federal estate tax deduction. For federal estate
tax purposes, the apportionable estate is equal to the difference between the
gross estate ($10,150,000) and the allowable deductions of $150,000 ($140,000
deductible administrative expenses and $10,000 deductible funeral expenses);
and so the apportionable estate is $10,000,000. The value of the two residuary
beneficiaries’ interests in the apportionable estate is equal to the difference
between the entire apportionable estate of $10,000,000 and the $1,000,000 that
was devised to the pecuniary beneficiaries. While the residuary beneficiaries
will not receive any part of the $100,000 of administrative expenses for which
no federal estate tax deduction is allowable, that expense does not reduce the
gross estate in determining the apportionable estate, and so does not affect
the value of their residuary interests for the purpose of apportioning the
federal estate tax. So, for purposes of apportioning the federal estate taxes,
each residuary beneficiary has an interest in the apportionable estate valued
at $4,500,000, which constitutes 45% of the apportionable estate of
$10,000,000. Forty-five percent of the federal estate taxes is apportioned each
to A and B, and 10% of the federal estate taxes is apportioned to the pecuniary
beneficiaries.
Section 3-9A-103. Apportionment
By Will Or Other Dispositive Instrument
(a) Except as otherwise provided in subsection
(c), the following rules apply:
(1) To the extent that a provision of a decedent’s will expressly and
unambiguously directs the apportionment of an estate tax, the tax must be
apportioned accordingly.
(2) Any portion of an estate tax not apportioned pursuant to paragraph
(1) must be apportioned in accordance with any provision of a revocable trust
of which the decedent was the settlor which expressly and unambiguously directs
the apportionment of an estate tax. If conflicting apportionment provisions
appear in two or more revocable trust instruments, the provision in the most
recently dated instrument prevails. For purposes of this paragraph:
(A) a trust is revocable if it was revocable immediately after the
trust instrument was executed, even if the trust subsequently becomes irrevocable;
and
(B) the date of an amendment to a revocable trust instrument is the
date of the amended instrument only if the amendment contains an apportionment
provision.
(3) If any portion of an estate tax is not apportioned pursuant to
paragraph (1) or (2), and a provision in
any other dispositive instrument expressly and unambiguously directs that any
interest in the property disposed of by the instrument is or is not to be
applied to the payment of the estate tax attributable to the interest disposed
of by the instrument, the provision controls the apportionment of the tax to
that interest.
(b) Subject to subsection (c), and unless the
decedent expressly and unambiguously directs the contrary, the following rules
apply:
(1) If an apportionment provision directs that a person receiving an
interest in property under an instrument is to be exonerated from the
responsibility to pay an estate tax that would otherwise be apportioned to the
interest,
(A) the tax attributable to the exonerated interest must be apportioned
among the other persons receiving interests passing under the instrument, or
(B) if the values of the other interests are less than the tax
attributable to the exonerated interest, the deficiency must be apportioned
ratably among the other persons receiving interests in the apportionable estate
that are not exonerated from apportionment of the tax.
(2) If an apportionment provision directs that an estate tax is to be
apportioned to an interest in property a portion of which qualifies for a marital
or charitable deduction, the estate tax must first be apportioned ratably among
the holders of the portion that does not qualify for a marital or charitable
deduction and then apportioned ratably among the holders of the deductible
portion to the extent that the value of the nondeductible portion is
insufficient.
(3) Except as otherwise provided in paragraph (4), if an apportionment
provision directs that an estate tax be apportioned to property in which one or
more time-limited interests exist, other than interests in specified property
under Section 3-9A-107, the tax must be apportioned to the principal of that
property, regardless of the deductibility of some of the interests in that
property.
(4) If an apportionment provision directs that an estate tax is to be
apportioned to the holders of interests in property in which one or more
time-limited interests exist and a charity has an interest that otherwise
qualifies for an estate tax charitable deduction, the tax must first be
apportioned, to the extent feasible, to interests in property that have not
been distributed to the persons entitled to receive the interests.
(c) A provision that apportions an estate tax is
ineffective to the extent that it increases the tax apportioned to a person
having an interest in the gross estate over which the decedent had no power to
transfer immediately before the decedent executed the instrument in which the
apportionment direction was made. For purposes of this subsection, a
testamentary power of appointment is a power to transfer the property that is
subject to the power.
COMMENT
A decedent’s direction will
not control the apportionment of taxes unless it explicitly refers to the
payment of an estate tax and is specific and unambiguous as to the direction it
makes for that payment. For example, a testamentary direction that “all debts
and expenses of and claims against me or my estate are to be paid out of the
residuary of my probate estate” is not an express direction for the payment of
estate taxes and will not control apportionment. While an estate tax is a claim
against the estate, a will’s direction for payment of claims that does not
explicitly mention estate taxes is likely to be a boiler plate that was written
with no intention of controlling tax apportionment. To protect against an
inadvertent inclusion of estate tax payment in a general provision of that
nature, the UETAA requires that the direction explicitly mention estate taxes.
On the other hand, a
direction in a will that “all taxes arising as a result of my death, whether
attributable to assets passing under this will or otherwise, be paid out of the
residue of my probate estate” satisfies the UETAA’s requirement for an explicit
mention of estate taxes and is specific and unambiguous as to what properties
are to bear the payment of those taxes.
Whether other directions of a
decedent that explicitly mention estate taxes comply with the UETAA’s
requirement that they be specific and unambiguous is a matter for judicial
construction. For example, there is a split among judicial decisions as to
whether a direction such as “all estate taxes be paid out of the residue of my
estate” is ambiguous because it is unclear whether it is intended to apply to
taxes attributable to nonprobate assets. To the extent that it is determined
that a decedent failed to apportion an estate tax, then the UETAA will apply to
apportion that amount of the tax.
If an amendment is made to a
revocable trust instrument, and if the amendment itself contains an express and
unambiguous provision apportioning an estate tax, the date of the amendment is
the date of the revocable trust instrument. However, if an amendment to a
revocable trust instrument does not contain an express and unambiguous
provision apportioning an estate tax, the date of the revocable trust
instrument is the date on which it was executed or the date of the most recent
amendment containing an express and unambiguous provision apportioning an
estate tax. An express and unambiguous provision apportioning an estate tax includes
a provision directing that payment of an estate tax be made from specified
property.
The statutory apportionment
rules of the UETAA are default rules applicable to the extent that the decedent
does not make a valid provision as to how estate taxes are to be apportioned.
The decedent has the power to determine which recipients of decedent’s property
will bear the estate taxes and in what proportion. If provisions conflict, it
is necessary to determine which prevails. A possible choice would permit the directions
in each of decedent’s instruments determine the extent to which property
controlled by that instrument bears a share of estate taxes, but having the
provisions for an allocation scheme scattered among a number of documents would
make decedent’s personal representative search multiple instruments to
ascertain the decedent’s directions. Instead, the UETAA provides an order of
priority for a decedent’s provisions for estate tax allocations. To the extent
that a decedent makes an express and unambiguous provision by will, that
provision will trump any competing provision in another instrument. To the
extent that the will does not expressly and unambiguously provide for the
allocation of some estate taxes, an express and unambiguous provision in a revocable
trust instrument will control. If the decedent executed more than one revocable
trust instrument, the express provisions in the instrument that was executed
most recently will control. In determining which revocable trust instrument was
executed most recently, the date of any amendment containing an express and
unambiguous apportionment provision will be taken into account. In the event
that the allocation of estate taxes is not fully provided for by the decedent’s
will or revocable trust instrument, an express and unambiguous provision in
other instruments executed by the decedent controls to the extent that the
provision applies to the property disposed of in that instrument. An example of a provision in an instrument
disposing of property, other than a will or revocable trust instrument, is a
provision in a designation of a beneficiary of life insurance proceeds either
that the proceeds will or will not be used to pay a portion of estate taxes. A
designation of that form will be honored if there is no conflicting valid
provision in a will or revocable trust instrument.
A provision in decedent’s
will, revocable trust, or other instrument will not be honored to the extent
that it would contravene subsection (c).
The exclusivity of the
provisions of this section apply only to apportionment rules; they do not
prevent a dispositive instrument from making additional gifts; nor do they
prevent a governing instrument of an entity from rearranging the internal
division of the assets of that entity.
Ex.(1). On D’s death, her
will apportioned $100,000 of estate taxes to the holders of interests in the D
Family Trust, an irrevocable trust created by D during her life. The D Family
Trust is divided into two separate shares: the William Share, and the Franklin Share,
each of which is for a different child of D. The William Share is for the
benefit of William, and the Franklin Share is for the benefit of
Ex. (2). The same facts as
those stated in Ex. (1) except that D’s will apportioned the $100,000 of estate
taxes to the Franklin Share of the D Family Trust. The trust provision placing the burden of the
tax on the William Share cannot qualify as an apportionment direction since it
is in conflict with the will provision allocating all of the trust’s share of
the estate tax to the Franklin Share. But the settlor has the power to direct
trust assets to whomever the settlor pleases. The direction in the trust
instrument that assets of the William Share are to be used to pay any taxes
apportioned to the Franklin Share is a gift to
The federal estate tax laws
enable a decedent’s personal representative to collect a portion of the
decedent’s federal estate tax from the recipients of certain nonprobate
property that is included in the decedent’s gross estate. See e.g., §§2206 to
2207B of the Internal Revenue Code. There is a conflict among the courts as to
whether those federal provisions preempt a State law apportionment provision.
Choosing the position that there is no federal preemption, the UETAA apportions
taxes without regard to the federal provisions. The federal provisions are not
apportionment statutes; rather, they simply empower the personal representative
to collect a portion of the estate tax that is attributable to the property
included in the decedent’s gross estate and do not direct use of the collected
amounts by the personal representative. The rights granted to the personal
representative by federal law for the collection of assets from nonprobate
beneficiaries do not conflict either with the apportionment of taxes by State
law or with other rights of collection granted by State law. Since there is no
conflict, the UETAA does not include a direction as to whether federal or State
law takes priority.
The UETAA does not permit
anyone other than the decedent to override the allocation provisions of the
UETAA. For example, if X created a QTIP trust for Y, the value of the trust
assets will be included in Y’s gross estate for federal estate tax purposes on
Y’s death. See §2044 of the Internal Revenue Code of 1986. If X’s QTIP trust
provided that the trust is not to bear any of the estate taxes imposed at Y’s
death, the direction would be ineffective under the UETAA because only Y can
direct apportionment of taxes on Y’s estate. In this regard, it is noteworthy
that the right granted to a decedent’s estate by §2207A of the Internal Revenue
Code to collect a share of the federal estate tax from a QTIP included in the
decedent’s gross estate can be waived only by direction of the decedent in a
will or revocable trust instrument. Y is in the best position to determine the
optimum allocation of Y’s estate taxes among the various assets that comprise
Y’s gross estate. If Y fails to make an allocation, the default provisions of
the UETAA are more likely to reflect Y’s intentions than would a direction of a
third person.
If an instrument transferring
property that may be included in the taxable estate of someone other than the
transferor directs payment from the transferred property of any part of the
estate taxes of the other person, the direction affects the size of the gift,
and so is a dispositive rather than an apportionment provision, and is not
subject to the UETAA.
If a decedent makes a valid
direction that a person receiving property under a particular disposition is
exonerated from payment of an estate tax, the tax that would have been borne by
that person will, instead, be borne by other persons receiving interests under
the instrument directing the exoneration. Thus, if several assets are disposed
of by a governing instrument, which exonerates one or more of those assets from
bearing an estate tax, the exoneration will not reduce the amount of estate tax
to be allocated to all of the assets disposed of by that instrument, including
the exonerated assets. For example, if decedent’s will directs that all federal
estate taxes attributable to decedent’s probate estate be paid from the
residuary of his estate, the exoneration of the pre-residuary devises will not
affect the total amount of federal estate tax apportioned to the beneficiaries
of the probate estate, all of which tax will be borne by the residuary
beneficiaries if the residuary is sufficient. If the value of the other
interests is insufficient to pay the estate taxes, the difference will be
payable by other persons receiving interests in the apportionable estate that
are not exonerated from apportionment of the tax.
If a decedent directs that
estate taxes be paid from properties, some of which qualify for a marital or
charitable deduction, the provision making that direction may designate the
extent to which the charitable or marital interests will or will not bear a
portion of the tax. If the decedent makes no provision as to whether the
marital or charitable interests bear a portion of the tax, the UETAA provides a
default rule that exempts the marital or charitable interests from payment of
the tax to the extent that it is feasible to do so. An example of when this
circumstance arises is when the decedent’s will makes a residuary devise, a
portion of which qualifies for a marital or charitable deduction and a portion
of which does not. If the decedent provides that estate taxes are to be paid
from the residuary, unless directed otherwise, the default provision of the
UETAA will require the payment to be made first from the nondeductible interests
in the residuary. The default rule does not apply to an allocation of tax to a
holder of an interest in property in
which there is a time-limited interest; the tax allocated to any interest in
that property is to be paid from the principal of the property unless the
decedent expressly directed otherwise or unless Section 3-9A-107 applies to the
property.
If a decedent created a trust
during life the value of which is included in the decedent’s gross estate at
death, if immediately after decedent’s death, there were one or more
time-limited interests in the trust that did not qualify for an estate tax
deduction, and if one or more charities held a remainder interest in the trust
that otherwise qualified for an estate tax charitable deduction, the charitable
deduction for the remainder interests may be lost if the estate taxes generated
by the nondeductible time-limited interests are to be paid from assets in the
trust. See Rev. Rul. 82-128, Rev. Proc. 90-30 (§§ 4 and 5), and Rev. Proc.
90-31 (§§ 5 and 6). It is possible that if the payment of an estate tax is made
from funds that, while directed to be added to the trust’s assets, had not been
distributed to the trust before payment of the estate tax, the payment will not
disqualify the charitable deduction. There are numerous instances in which
estate taxes are required to be paid from a charitable remainder trust that was
created inter vivos. Subsection (b)(4) is an attempt to protect the deduction
in such cases by establishing a rule of construction requiring that funds
directed to be added to the trust be used to pay any required estate tax before
assets already in the trust itself are used. It seems unlikely that a decedent
would wish to negate this construction of decedent’s direction, but the decedent
has the power to do so by including an express statement to that effect in a
will or revocable trust instrument.
If a decedent had made an
irrevocable transfer during his life, over which the decedent did not retain a
power to make a subsequent transfer, and if that transfer is included in the
decedent’s gross estate for estate tax purposes, a portion of the estate tax
will be apportioned to the transferee unless the decedent effectively provides
otherwise in a will, revocable trust or other instrument. While, by an express
provision in the appropriate instrument, a decedent can reduce the amount of
tax apportioned to such inter vivos transfers, the decedent is not permitted to
increase the amount of tax apportioned to such a transferee. If a decedent attempts
to do so, whether directly by apportioning more estate tax to the inter vivos
transfer or indirectly by insulating some person interested in the gross estate
from all or part of that person’s share of the estate tax, the amount of estate
tax that is apportioned to the transferee of an irrevocable inter vivos
transfer will not be greater than the amount that would have been apportioned
to that transferee if the decedent had made no provision for apportionment in
another instrument.
Subsection (c) does not apply
to a decedent’s provision that no estate tax be apportioned to the recipient of
an interest who would be excluded from apportionment by the UETAA in the
absence of a contrary direction by the decedent. For example, a decedent’s
provision that no estate tax be apportioned to the recipient of property that
qualifies for a marital or charitable deduction is not subject to subsection
(c).
If a decedent transferred
property to a revocable trust prior to executing a will that directs the
apportionment of taxes to that trust, the apportionment direction will be valid
even if the decedent subsequently released the power of revocation so that the
trust became irrevocable prior to the decedent’s death. In such a case,
Subsection (c) does not invalidate the will’s direction.
If, immediately before the
decedent’s death, the decedent had a power of appointment, whether inter vivos
or testamentary, the decedent had the power to transfer the property interest
within the meaning of this provision.
Section 3-9A-104. Statutory
Apportionment Of Estate Taxes.
To
the extent that apportionment of an estate tax is not controlled by an
instrument described in Section 3-9A-103 and except as otherwise provided in
Sections 3-9A-106 and 3-9A-107, the following rules apply:
(1) Subject to paragraphs (2), (3),and (4), the
estate tax is apportioned ratably to each person that has an interest in the
apportionable estate.
(2)A
generation-skipping transfer tax incurred on a direct skip taking effect at
death is charged to the person to which the interest in property is
transferred.
(3) If property is included in the decedent’s
gross estate because of Section 2044 of the Internal Revenue Code of 1986 or
any similar estate tax provision, the difference between the total estate tax for
which the decedent’s estate is liable and the amount of estate tax for which
the decedent’s estate would have been liable if the property had not been
included in the decedent’s gross estate is apportioned ratably among the
holders of interests in the property. The balance of the tax, if any, is
apportioned ratably to each other person having an interest in the
apportionable estate.
(4) Except as otherwise provided in Section
3-9A-103(b)(4) and except as to
property to which Section 3-9A-107 applies, an estate tax apportioned to
persons holding interests in property subject to a time-limited interest must
be apportioned, without further apportionment, to the principal of that
property.
COMMENT
The value of an interest in
the apportionable estate is determined in accordance with Section 3-9A-102(7)
of this Part.
Property values subtracted
from the decedent’s gross estate in determining the apportionable estate under
Section 3-9A-102(1) are excluded from the apportionable estate, and
beneficiaries of those properties do not have any estate tax apportioned to
them because of their interest in those properties. This treatment is
consistent with the Restatement (Third) of Property: Wills and Other Donative
Transfers §1.1, comment g (1998). The UETAA adopts a method of equitable
apportionment of estate taxes, but does not follow the Restatement method which
allocates taxes apportioned to probate assets first to the residuary
beneficiaries and invites preferential treatment for beneficiaries of specific
and pecuniary gifts by will over beneficiaries of gifts by various non-probate
transfer methods.
A “direct skip” currently is
defined in §§ 2612(c) and 2613 of the Internal Revenue Code. Section 2603(b) of
the Internal Revenue Code states that, unless directed otherwise in the
governing instrument, the tax on a generation-skipping transfer is charged to
the property constituting the transfer.
Section 2603(a)(3) of the Internal Revenue Code imposes the duty of
paying the tax on a direct skip on the transferor of the property. Under
paragraph (2), the decedent’s personal representative will pay the
generation-skipping tax on a direct skip out of the transferred property (or
the proceeds from a sale of all or some of that property). To the extent that
it is not feasible or practical to pay the tax from the transferred property,
the transferees are to pay their proportionate share of the shortfall.
Paragraph (2) is consistent with the treatment provided by federal law.
The property to which
paragraph (3) applies is sometimes referred to as “QTIP property” since § 2044
of the Internal Revenue Code of 1986 deals with “qualified terminable interest
property.” See §§ 2044(b)(1), 2056(b)(7), and 2523(f) of the
Internal Revenue Code of 1986. Although the general rule of apportionment in
the UETAA is to apportion estate taxes on the basis of the average rate of tax,
the tax apportioned to the holders of interests in QTIP property by the UETAA
is based on the marginal rate of tax. Note that federal estate tax law grants
the decedent’s fiduciary the power to collect from the holders of the QTIP
property the estate tax generated by that property at the marginal estate tax
rate of the decedent’s estate. The UETAA tracks the federal law in this
respect.
It would be harsh to collect
the estate tax from persons holding discretionary or contingent interests in
property since they may not obtain possession for many years, if at all. Hence,
when the tax is apportioned to persons holding interests in property in which
there are time-limited interests, paragraph (4) requires the tax to be paid
from principal. This provision does not apply to property for which a special
elective benefit (as described in Section 3-9A-107) has been elected.
An estate tax that is
apportioned to an interest in property that cannot be reached because of legal
or practical obstacles but is not subject to a time-limited interest is to be
collected from the interest holder to the extent feasible. In that
circumstance, since there is no time-limited interest, the tax will not be
apportioned to a person who may not receive property for many years if at all.
When some of the interests in
property qualify for a charitable or marital deduction and some do not,
requiring the tax to be paid from the principal of the property may reduce the
amount of marital or charitable deduction that is allowable. Although the
likely intent of a decedent would be to maximize the marital and charitable
deductions available for the estate, paragraph (4) provides that the estate tax
is to be paid from the principal of the property, a choice that avoids
administrative complexity.
Section 3-9A-105. Credits
And Deferrals.
Except
as otherwise provided in Sections 3-9A-106 and 3-9A-107, the following rules
apply to credits and deferrals of estate taxes:
(1) A credit resulting from the payment of gift
taxes or from estate taxes paid on property previously taxed inures ratably to
the benefit of all persons to which the estate tax is apportioned.
(2) A credit for state or foreign estate taxes inures
ratably to the benefit of all persons to which the estate tax is apportioned,
except that the amount of a credit for a state or foreign tax paid by a
beneficiary of the property on which the state or foreign tax was imposed,
directly or by a charge against the property, inures to the benefit of the
beneficiary.
(3) If payment of a portion of an estate tax is
deferred because of the inclusion in the gross estate of a particular interest
in property, the benefit of the deferral inures ratably to the persons to which
the estate tax attributable to the interest is apportioned. The burden of any
interest charges incurred on a deferral of taxes and the benefit of any tax
deduction associated with the accrual or payment of the interest charge is
allocated ratably among the persons receiving an interest in the property.
COMMENT
Section 2013 of the Internal
Revenue Code of 1986 allows a credit for federal estate taxes paid on certain
properties that were included in the taxable estate of a person who died within
a relatively short time of the decedent’s death. This credit often is referred to as a credit
for property previously taxed.
A beneficiary of property
attracting a foreign or State death tax may have paid that tax directly or may
have paid it indirectly by virtue of the tax’s being paid out of the property
passing to that person. If that occurs, while the beneficiary’s payment of the
foreign or State tax reduces the amount that the beneficiary will receive, it
will not reduce the value of the beneficiary’s interest in the apportionable
estate according to the definition of “value” in the UETAA. See Section 3-9A-102(7). The UETAA mitigates
the beneficiary’s burden by giving the beneficiary the benefit of any estate
tax credit allowed for the foreign or State tax and paid by the beneficiary.
The benefits and burdens
described in paragraph (3) are to be allocated ratably among persons in
accordance with the amount of deferral or extension attributable to their
interests in the apportionable estate.
Section 3-9A-106. Insulated Property: Advancement Of Tax.
(a) In this section:
(1) “Advanced fraction” means a fraction that has as its numerator the
amount of the advanced tax and as its denominator the value of the interests in
insulated property to which that tax is attributable.
(2) “Advanced tax” means the aggregate amount of estate tax
attributable to interests in insulated property which is required to be
advanced by uninsulated holders under subsection (c).
(3) “Insulated property” means property subject to a time-limited
interest which is included in the apportionable estate but is unavailable for
payment of an estate tax because of impossibility or impracticability.
(4) “Uninsulated holder” means a person who has an interest in
uninsulated property.
(5) “Uninsulated property” means property included in the apportionable
estate other than insulated property.
(b) If an estate tax is to be advanced pursuant to
subsection (c) by persons holding interests in uninsulated property subject to
a time-limited interest other than property to which Section 3-9A-107 applies,
the tax must be advanced, without further apportionment, from the principal of
the uninsulated property.
(c) Subject to Section 3-9A-109(b) and (d), an
estate tax attributable to interests in insulated property must be advanced
ratably by uninsulated holders. If the value of an interest in uninsulated
property is less than the amount of estate taxes otherwise required to be
advanced by the holder of that interest, the deficiency must be advanced
ratably by the persons holding interests in properties that are excluded from
the apportionable estate under Section 3-9A-102(1)(B) as if those interests
were in uninsulated property.
(d) A court having jurisdiction to determine the
apportionment of an estate tax may require a beneficiary of an interest in
insulated property to pay all or part of the estate tax otherwise apportioned
to the interest if the court finds that it would be substantially more
equitable for that beneficiary to bear the tax liability personally than for
that part of the tax to be advanced by uninsulated holders.
(e) When a distribution of insulated property is
made, each uninsulated holder may recover from the distributee a ratable
portion of the advanced fraction of the property distributed. To the extent
that undistributed insulated property ceases to be insulated, each uninsulated
holder may recover from the property a ratable portion of the advanced fraction
of the total undistributed property.
(f) Upon a distribution of insulated property for
which, pursuant to subsection (d), the distributee becomes obligated to make a
payment to uninsulated holders, a court may award an uninsulated holder a
recordable lien on the distributee’s property to secure the distributee’s
obligation to that uninsulated holder.
COMMENT
The term “time-limited
interest” is defined in Section 3-9A-102(6).
Subsection (b) applies to
property in which at least one person has a time-limited interest and which
property can be reached by the personal representative of the decedent. In such cases, an estate tax that is payable
as an advanced tax under subsection (c), is charged against the principal of
the property, and is not apportioned among the several interests in that
property. While there is no express apportionment of the advanced tax to the
time-limited interests in the property, the holders of the time-limited
interests will bear a share of the tax burden in that the resulting reduction
of the value of the principal will reduce the value of the time-limited
interests, except that it will not reduce the value of a dollar annuity
interest. So, the holder of a dollar annuity interest will be exonerated from
sharing in the burden of estate taxes.
Since the estate tax
apportioned to the owners of insulated property cannot be collected from the
property, the tax is to be paid (as an advancement) by persons having interests
in other assets of the estate (uninsulated holders), provided however that the
total tax attributed to and advanced by an uninsulated holder cannot exceed the
value of that person’s interest in the uninsulated property. See Section
3-9A-109(d). If the amount of the aggregate tax apportioned to and to be
advanced by an uninsulated holder exceeds the value of that holder’s interest
in the uninsulated property, then the deficiency shall be apportioned to the
holders of interests in properties that otherwise qualify for charitable or
marital deductions. In such cases, those charitable and marital properties are
reclassified as uninsulated properties, and so the beneficiaries of those
properties will be uninsulated holders who will have a right of recovery from
the distributees of insulated properties for which they paid a portion of the
estate tax.
It would be harsh to make
persons holding future interests in insulated property pay tax on properties
that they will not receive until years later and may never receive. If they
were required to pay the tax at the time of decedent’s death, that could give
rise to widespread disclaimers of interests. Also, it would be difficult to
value the interests of discretionary beneficiaries. For that reason, with one
exception set forth in subsection (d), the tax attributable to insulated
properties is reallocated to uninsulated holders who are required to advance
the funds to pay the tax.
The tax attributable to the
insulated property that is required to be paid by the uninsulated holders is
referred to as an “advanced tax.” To
permit the uninsulated holders who bear the advanced tax to be reimbursed, the
UETAA effectively provides the uninsulated holders with a phantom percentage
interest in the property whose transfer is the source of the advanced tax.
While the phantom percentage interest of the uninsulated holder remains
constant, its value will increase or decrease as the value of the property
changes. The phantom percentage interest is determined by dividing the advanced
tax by the aggregate value of insulated properties as determined for purposes
of the estate tax. When a distribution of insulated property is made, a
percentage of that distribution must be paid over to the uninsulated holders;
and this is a personal obligation of the distributee. If it were not for this
Section, the uninsulated holders would have had a right of reimbursement under
Section 3-9A-110 for the amount of their outlay from the distributees; but
instead, subsection (e) gives them a right to a fraction of the distributed
amount rather than to a fixed dollar amount. The amount collected from a
distributee is divided among the uninsulated holders according to the
percentage of the advanced tax that they paid.
It is important to note that
the uninsulated holders do not have an actual interest in the insulated
property and have no lien or security interest in that property while it is in
the possession of the trust or fund. The uninsulated holders only have a claim
against the persons who receive distributions from the trust or fund which
holds the insulated property. The only exception is where previously insulated
property loses its insulation so that it can be reached by the uninsulated
holders without violating any prohibition against alienation of interests. Once
insulated property is in the hands of a distributee, subsection (f) permits the
uninsulated holders to seek a lien on the distributee’s property for the amount owed to them; but
there is no lien or other encumbrance on the insulated property while it is in
the possession of the trust or fund.
The operation of this Section
is illustrated in the following examples.
Ex. (1) X dies having a gross
estate and an apportionable estate of $10M and devises his probate property
(with a value of $8M) to A, B and C, with A and B each receiving 40% of the
probate estate, and C receiving 20%. In addition to the probate property, X had
an interest in a nonqualified pension plan at his death which interest had a
value of $2M. X’s contract with the plan provides that an annuity of $120,000
per year is to be paid to G for life, and upon G’s death the remainder of the
corpus is to be paid to L. The only estate tax to which X’s estate is subject
is the federal estate tax. The federal estate tax on X’s $10M gross estate is
$4M. So, the average rate of the estate tax is 40%. Under Section 3-9A-104(1),
the estate tax that is attributable to the $2M pension fund is $800,000 -- the
value of the property interests that G and L hold in the fund ($2M) is 20% of
the $10M value of the entire apportionable estate, and so 20% of the $4M estate
tax is attributable to the pension fund. Assume that under local law, the
assets of the pension fund cannot be reached by creditors or by the personal
representative of X’s estate in order to use those funds to pay estate taxes.
Under Subsection (c), the personal representative will collect 40% of the
$800,000 (i.e., $320,000) from A and a like amount from B; and the personal
representative will collect $160,000 from C.
The advanced fraction for the
pension fund is $800,000 (the amount of the estate tax that was advanced by A,
B, and C) divided by the $2M value of the fund (the insulated property), which
division results in a percentage of 40%.
Putting it differently, the $800,000 estate tax attributable to the fund
but not paid by those interested in the fund constitutes 40% of the $2M value
of the fund. To compensate A, B and C for paying the advanced tax, they obtain
what amounts to a 40% phantom interest in the fund. Their actual interest
arises only when distributions are made from the fund or, in the event that the
fund loses its insulation from creditors, when that occurs.
In Year One, the fund pays
$120,000 to G pursuant to the terms of the contract. Forty percent of that
distribution ($48,000) must be paid by G to A, B and C -- 40% or $19,200
payable to A and another $19,200 payable to B, and 20% or $9,600 payable to C,
since that is the proportion in which they bore the advanced tax. The next
year, the fund distributes another $120,000 to G, and the same payments must be
made to A, B and C. In the third year, G dies, and the fund distributes the
remaining principal of $2,400,000 to L; the value of the principal had
increased because of an increase in the value of the investments the fund held.
A, B, and C are entitled to 40% of that $2,400,000, and so L must pay them
$960,000, to be divided among them. A and B will each receive $384,000 (40% of
the $960,000), and C will receive $192,000 (20% of $960,000).
Ex. (2) X dies leaving a
taxable estate of $10,000,000 on which a federal estate tax of $5,000,000 is
payable (for convenience of computation, we treat all of X’s estate as subject
to a tax at a 50% marginal rate). X’s estate has no marital or charitable
deductions. X left $4,000,000 of assets in an offshore trust that cannot be
reached by X’s personal representative and so constitutes insulated property.
The federal estate tax attributable to that property is $2,000,000. X had other
nonprobate assets having an aggregate value of $2,000,000 and a residuary
estate of $4,000,000. The holders of the nonprobate assets will have $1,000,000
in federal estate taxes apportioned to them, and the holders of the residuary
interests will have $2,000,000 of federal estate taxes attributed to them. But,
the personal representative must also pay the $2,000,000 of federal estate
taxes attributable to the offshore assets. If the holders of interests in those
assets cannot be reached, and if the UETAA did not apply, the personal
representative would have to pay the $2,000,000 from the residuary of the
estate, thereby wiping it out completely. Under the UETAA, 1/3 of the
$2,000,000 of federal estate tax attributable to the offshore assets ($666,667)
will be paid by the holders of the other nonprobate assets, and the remaining
$1,333,333 of that tax will be paid by the beneficiaries of the residuary
estate. Under the UETAA, the holders of the other nonprobate assets will have
to bear their proportionate share of the tax on the offshore assets. When
distributions are made of the offshore assets, the distributees will be
personally liable to pay a portion of their distribution to the persons who
paid the estate tax on the offshore fund.
If undistributed insulated
property loses its insulation from claims, the uninsulated holders can collect
the balance of their interest from the property at that time.
In certain circumstances, it
would be more equitable to require the beneficiary of an interest in insulated
property to bear the tax on that interest than to reapportion it to others. For
example, if the beneficiary’s interest is one that will become possessory in a
short period of time, so that the beneficiary will soon have possession of
assets from the fund or trust, it would be more equitable to place personal
liability on that beneficiary; and the court has discretion to do so. In
determining whether a beneficiary is likely to obtain possession of all or a significant part of the
beneficiary’s interest in the insulated property, the court can consider not
only distributions that are required to be made to the beneficiary, but also
distributions that, based on an examination of the history of the
administration of the fund or trust, are likely to be made in the near future.
Subsection (d) provides the court with the discretion to make that
determination. While a beneficiary’s receipt of a distribution from the trust
or fund would make that beneficiary liable to uninsulated holders who paid the
advanced tax, that places a burden of collection on the uninsulated holders;
and so, when the distribution is likely to be made to a beneficiary within a
short period of time, it would be more equitable to have that beneficiary bear
the tax.
Section 3-9A-107. Apportionment
And Recapture Of Special Elective Benefits
(a) In this section:
(1) “Special elective benefit” means a reduction in an estate tax
obtained by an election for:
(A) a reduced valuation of specified property that is included in the
gross estate;
(B) a deduction from the gross estate, other than a marital or
charitable deduction, allowed for specified property; or
(C) an exclusion from the gross estate of specified property.
(2) “Specified property” means property for which an election has been
made for a special elective benefit.
(b) If an election is made for one or more special
elective benefits, an initial
apportionment of a hypothetical estate tax must be computed as if no election
for any of those benefits had been made. The aggregate reduction in estate tax
resulting from all elections made must be allocated among holders of interests
in the specified property in the proportion that the amount of deduction,
reduced valuation, or exclusion attributable to each holder’s interest bears to
the aggregate amount of deductions, reduced valuations, and exclusions obtained
by the decedent’s estate from the elections. If the estate tax initially
apportioned to the holder of an interest in specified property is reduced to
zero, any excess amount of reduction reduces ratably the estate tax apportioned
to other persons that receive interests in the apportionable estate.
(c) An additional estate tax imposed to recapture
all or part of a special elective benefit must be charged to the persons that
are liable for the additional tax under the law providing for the recapture.
COMMENT
The types of special elective
benefits at which this provision is aimed are currently set forth in §§
2031(c), 2032A, and 2057 of the Internal Revenue Code of 1986. Section 2032A
provides an election whereby “qualified real property” (real property that is
used for a specified purpose and is held by certain parties related to the
decedent) will be given a lower valuation for federal estate tax purposes than
otherwise would have been true. Under § 2032A(c), if within 10 years after the
decedent’s death the qualified heir disposes of an interest in the qualified
realty or ceases to use it for its required purpose, an additional estate tax
will be imposed to recapture some of the estate tax reduction that was obtained
through the election. The purpose of this Section is to define how the benefit
of an estate tax reduction of this or a similar type will be allocated and how any
additional estate tax imposed to recapture some of that tax benefit will be
allocated.
Another federal estate tax
provision to which this Section applies is § 2057 of the Internal Revenue Code
of 1986. That provision grants an election to receive a special estate tax
deduction for a “qualified family-owned business interest.” Under § 2057(f), if, within 10 years after
the decedent’s death, one of four listed events occurs, an additional federal
estate tax will be imposed in order to recapture some of the tax reduction obtained by electing to take
the deduction. This Section defines how the benefits of the election and the
burden of an additional tax will be apportioned. The Economic Growth and Tax
Relief Reconciliation Act of 2001 repealed § 2057 for the estates of decedent’s
dying after the year 2003. However, the 2001 Act retains the 10-year recapture
provision, and the sunset provision will reinstate § 2057 in the year 2011
unless the repeal is made permanent.
Section 2031(c) of the
Internal Revenue Code of 1986 provides an election whereby a portion of the
value of land that is subject to a qualified conservation easement, as defined
in § 2031(c)(8), is excluded from the gross estate. The exclusion does not
apply to the value of a retained development right; but if, prior to the date
for filing the estate tax return, all the persons who have an interest in the
land execute an agreement to extinguish some or all of the development rights,
an additional estate tax deduction will be allowed by § 2031(c)(5). A failure
to implement that agreement within a specified time will cause the imposition
of an additional estate tax to recapture that deduction. The allocation of the
benefits of the exclusion and of the deduction for making the agreement, and
the allocation of any additional estate tax, is determined by this Section.
The allocation of the
aggregate tax reduction obtained from all special elective benefits is made
among the holders of interests in the specified properties in accordance with
the reduction of the decedent’s taxable estate that is attributable to each
holder’s interest. Since the determination of the amount of estate tax benefit
is made by applying the marginal rate of estate tax to the reduced value of the
gross estate, it is necessary to aggregate the tax reduction obtained from all
of the special election benefits so that the greater tax reduction obtained
from using a marginal rate is not duplicated by applying that rate to several
distinct reductions.
Once the amount of estate tax
that is apportioned to the holder of an interest in specified property is
determined, it will have to be paid. The holders of interests in a specified
property may have difficulty paying that tax. To pay the tax, the holders will
have to sell the property, borrow against it, use other funds to pay the tax,
or defer the payment of the tax under tax deferral provisions and pay the tax
in installments with income produced by the property. If they were to sell the
property, the special elective benefit would be lost; so a sale is not a viable
option. Accordingly, the requirement of Sections 3-9A-103(b)(3), 3-9A-104(4),
and 3-9A-106(b) that the estate tax or
an advanced tax be paid from the principal of property subject to a time-limited
interest does not apply to properties for which an election for a special
elective benefit is made. The solution chosen in Section 3-9A-106(c) and (e) of
having other persons interested in the apportionable estate pay the tax and
then collect reimbursement from distributees of the property is not practical
here because there would be difficulty in determining what income was derived
from the property itself, and there would be no trustee or other fiduciary to
see that the amounts were turned over to the persons who paid the tax. So, that
approach was not adopted. Instead, Sections 3-9A-104(1) and this section
apportion the estate tax to the holders of the interests in the properties who,
facing the obligation to pay, can determine the best method for obtaining the
funds to make that payment.
If additional estate taxes
are imposed to recapture some or all of a special elective benefit, Section
3-9A-107 follows the allocation of liability imposed by the estate tax law that
generated the additional tax. The burden of the additional estate tax will be
borne by the persons who hold interests in the specified property at the time
that the additional tax payment is made, and those persons may not be the same
ones who held the specified property when the special elective benefit was
allowed and so derived the benefit of that election.
Section 3-9A-108. Securing
Payment Of Estate Tax From Property In Possession Of Fiduciary
(a) A fiduciary may defer a distribution of
property until the fiduciary is satisfied that adequate provision for payment
of the estate tax has been made.
(b) A fiduciary may withhold from a distributee an
amount equal to the amount of estate tax apportioned to an interest of the
distributee.
(c) As a condition to a distribution, a fiduciary may require the distributee to provide
a bond or other security for the portion of the estate tax apportioned to the
distributee.
COMMENT
Section 3-9A-108 grants a
fiduciary discretion either to retain funds or to require a distributee to
provide security for payment of that distributee’s share of the estate tax. The
fiduciary’s exercise of that discretion and use of retained properties are
subject to the fiduciary’s duty to treat the parties fairly.
Section 3-9A-109. Collection
Of Estate Tax By Fiduciary
(a) A fiduciary responsible for payment of an
estate tax may collect from any person the tax apportioned to and the tax
required to be advanced by the person.
(b) Except as otherwise provided in Section
3-9A-106, any estate tax due from a person that cannot be collected from the
person may be collected by the fiduciary from other persons in the following
order of priority:
(1) any person having an interest in the apportionable estate which is
not exonerated from the tax;
(2) any other person having an interest in the apportionable estate;
(3) any person having an interest in the gross estate.
(c) A domiciliary fiduciary may recover from an
ancillary personal representative the estate tax apportioned to the property
controlled by the ancillary personal representative.
(d) The total tax collected from a person pursuant
to this Part may not exceed the value of the person’s interest.
COMMENT
If a fiduciary is unable to
collect from a person the estate tax apportioned to that person or to be
advanced by that person, the fiduciary is authorized to collect the deficiency
from any person interested in the apportionable estate whose interest is not
exonerated from tax apportionment. The fiduciary is not obliged to collect the
deficiency ratably from such persons. At the fiduciary’s discretion, the
fiduciary is authorized to collect all of the deficiency from one person or
from several persons in any proportion that the fiduciary chooses. The reason
that the fiduciary is not required to collect a deficiency ratably is that the
payment of the estate tax should not be delayed because of difficulties in
collecting from a number of persons.
If the amount collected from
persons whose interests in the apportionable estate is not exonerated from tax
apportionment is insufficient to make up the deficiency, the fiduciary can then
collect any remaining deficiency from persons interested in the apportionable
estate whose interests are exonerated from tax apportionment. This class
excludes persons holding interests in property that qualified for a marital or
charitable deduction since those interests are excluded from the apportionable
estate. Again, the fiduciary is not required to collect the remaining
deficiency ratably from the persons holding exonerated interests.
Finally, if the amount
collected from persons holding exonerated interests is insufficient, the
fiduciary can collect the balance from persons holding interests that qualify
for a marital or charitable deduction. The fiduciary is not required to make
that collection ratably.
Anyone who pays more than his
share of an estate tax or an advanced tax has a ratable right of reimbursement
from those who did not pay their share. If requested, the fiduciary may assist
in collecting that reimbursement.
Section 3-9A-110. Right Of
Reimbursement
(a) A person required under Section 3-9A-109 to
pay an estate tax greater than the amount due from the person
under Section 3-9A-103 or 3-9A-104 has a right to reimbursement from
another person to the extent that the
other person has not paid the tax required by Section 3-9A-103 or 3-9A-104 and
a right to reimbursement ratably from other persons to the extent that each has
not contributed a portion of the amount collected under Section 3-9A-109(b).
(b) A fiduciary may enforce the right of
reimbursement under subsection (a) on behalf of the person that is entitled to
the reimbursement and shall take reasonable steps to do so if requested by the
person.
COMMENT
The UETAA does not include a
provision for interest on the collection of a reimbursement, and the question
of whether interest will be payable is left to the courts to decide.
Section 3-9A-111. Action
To Determine Or Enforce Part.
A fiduciary, transferee, or
beneficiary of the gross estate may maintain an action for declaratory judgment
to have a court determine and enforce this Part.
Section 3-9A-112.
[Reserved.]
Section 3-9A-113.
[Reserved.]
Section 3-9A-114. Delayed
Application
(a) Sections 3-9A-103 through 3-9A-107 do not
apply to the estate of a decedent who dies on or within [three] years after
[the effective date of this Part], nor to the estate of a decedent who dies
more than [three] years after [the effective date of this Part] if the decedent
continuously lacked testamentary capacity from the expiration of the
[three-year] period until the date of death.
(b) For the estate of a decedent who dies on or
after [the effective date of this Part] to which Sections 3-9A-103 through
3-9A-107 do not apply, estate taxes must be apportioned pursuant to the law in
effect immediately before [the effective date of this Part].
COMMENT
Testamentary capacity was
chosen as the standard for determining whether the preclusion for applying the
UETAA’s apportionment rules is extended beyond the statutory period despite the
fact that a different standard is employed to determine whether a person has
the capacity to execute non-testamentary instruments. Testamentary capacity is
employed in the UETAA because it has a well established meaning and will
provide a uniform standard. See Restatement (Third) of Property: Wills and
Other Donative Transfers, Section 8.1 (2003).
Section 3-9A-115.
Effective Date.
This Part takes effect…
PART 10
CLOSING ESTATES
Section 3‑1001.
Formal Proceedings Terminating Administration; Testate or Intestate; Order of
General Protection.
(a) A personal representative or any interested person may petition for
an order of complete settlement of the estate. The personal representative may
petition at any time, and any other interested person may petition after one
year from the appointment of the original personal representative except that
no petition under this section may be entertained until the time for presenting
claims which arose prior to the death of the decedent has expired. The petition
may request the Court to determine testacy, if not previously determined, to
consider the final account or compel or approve an accounting and distribution,
to construe any will or determine heirs and adjudicate the final settlement and
distribution of the estate. After notice to all interested persons and hearing
the Court may enter an order or orders, on appropriate conditions, determining
the persons entitled to distribution of the estate, and, as circumstances
require, approving settlement and directing or approving distribution of the estate
and discharging the personal representative from further claim or demand of any
interested person.
(b) If one or more heirs or devisees were omitted as parties in, or
were not given notice of, a previous formal testacy proceeding, the Court, on
proper petition for an order of complete settlement of the estate under this
section, and after notice to the omitted or unnotified persons and other
interested parties determined to be interested on the assumption that the
previous order concerning testacy is conclusive as to those given notice of the
earlier proceeding, may determine testacy as it affects the omitted persons and
confirm or alter the previous order of testacy as it affects all interested
persons as appropriate in the light of the new proofs. In the absence of
objection by an omitted or unnotified person, evidence received in the original
testacy proceeding shall constitute prima facie proof of due execution of any
will previously admitted to probate, or of the fact that the decedent left no
valid will if the prior proceedings determined this fact.
COMMENT
Subsection
(b) is derived from § 64(b) of the Illinois Probate Act (1967) [S.H.A. ch. 3, §
64(b)]. Section 3‑106 specifies that an order is binding as to all who
are given notice even though less than all interested persons were notified.
This section provides a method of curing an oversight in regard to notice which
may come to light before the estate is finally settled. If the person who failed to receive notice of
the earlier proceeding succeeds in obtaining entry of a different order from
that previously made, others who received notice of the earlier proceeding may
be benefitted. Still, they are not entitled to notice of the curative
proceeding, nor should they be permitted to appear.
See, also, Comment following
section 3‑1002.
Section 3‑1002.
Formal Proceedings Terminating Testate Administration; Order Construing Will
Without Adjudicating Testacy.
A personal representative administering an estate under an informally probated will or any devisee under an informally probated will may petition for an order of settlement of the estate which will not adjudicate the testacy status of the decedent. The personal representative may petition at any time, and a devisee may petition after one year, from the appointment of the original personal representative, except that no petition under this section may be entertained until the time for presenting claims which arose prior to the death of the decedent has expired. The petition may request the Court to consider the final account or compel or approve an accounting and distribution, to construe the will and adjudicate final settlement and distribution of the estate. After notice to all devisees and the personal representative and hearing, the Court may enter an order or orders, on appropriate conditions, determining the persons entitled to distribution of the estate under the will, and, as circumstances require, approving settlement and directing or approving distribution of the estate and discharging the personal representative from further claim or demand of any devisee who is a party to the proceeding and those he represents. If it appears that a part of the estate is intestate, the proceedings shall be dismissed or amendments made to meet the provisions of Section 3‑1001.
COMMENT
Section 3‑1002 permits a final
determination of the rights between each other and against the personal
representative of the devisees under a will when there has been no formal
proceeding in regard to testacy. Hence, the heirs in intestacy need not be made
parties. Section 3‑1001 permits a final determination of the rights
between each other and against the personal representative of all persons
interested in an estate. If supervised administration is used, Section 3‑505
directs that the estate be closed by use of procedures like those described in
Section 3‑1001. Of course, testacy will have been adjudicated before time
for the closing proceeding if supervised administration is used.
Section 3‑1003.
Closing Estates; By Sworn Statement of Personal Representative.
(a) Unless prohibited by order of the Court and except for estates
being administered in supervised administration proceedings, a personal
representative may close an estate by filing with the court no earlier than six
months after the date of original appointment of a general personal
representative for the estate, a verified statement stating that the personal
representatives or a previous personal representative, has:
(1) determined
that the time limited for presentation of creditors' claims has expired.
(2) fully
administered the estate of the decedent by making payment, settlement, or other
disposition of all claims that were presented, expenses of administration and
estate, inheritance and other death taxes, except as specified in the
statement, and that the assets of the estate have been distributed to the
persons entitled. If any claims remain
undischarged, the statement must state whether the personal representative has
distributed the estate subject to possible liability with the agreement of the
distributees or state in detail other arrangements that have been made to
accommodate outstanding liabilities; and
(3) sent a
copy of the statement to all distributees of the estate and to all creditors or
other claimants of whom the personal representative is aware whose claims are
neither paid nor barred and has furnished a full account in writing of the
personal representative's administration to the distributees whose interests
are affected thereby.
(b) If no proceedings involving the personal representative are pending
in the Court one year after the closing statement is filed, the appointment of
the personal representative terminates.
COMMENT
The
Code uses "termination" to refer to events which end a personal
representative's authority. See
Sections 3‑608, et seq. The word
"closing" refers to circumstances which support the conclusions that
the affairs of the estate either are, or have been alleged to have been, wound
up. If the affairs of the personal representative are reviewed and adjudicated
under either Sections 3‑1001 or 3‑1002, the judicial conclusion
that the estate is wound up serves also to terminate the personal
representative's authority. See
Section 3‑610(b). On the other hand, a "closing" statement
under 3‑1003 is only an affirmation by the personal representative that
he believes the affairs of the estate to be completed. The statement is
significant because it reflects that assets have been distributed. Any creditor
whose claim has not been barred and who has not been paid is permitted by
Section 3‑1004 to assert his claim against distributees. The personal
representative is also still fully subject to suit under Sections 3‑602
and 3‑608, for his authority is not "terminated" under Section
3‑610(a) until one year after a closing statement is filed. Even if his authority is
"terminated," he remains liable to suit unless protected by
limitation or unless an adjudication settling his accounts is the reason for
"termination". See Sections
3‑1005 and 3‑608.
From
a slightly different viewpoint, a personal representative may obtain a complete
discharge of his fiduciary obligations through a judicial proceeding after
notice. Sections 3‑1001 and 3‑1002 describe two proceedings which
enable a personal representative to gain protection from all persons or from
devisees only. A personal representative who neither obtains a judicial order
of protection nor files a closing statement, is protected by 3‑703 in
regard to acts or distributions which were authorized when done but which
become doubtful thereafter because of a change in testacy status. On the other
questions, the personal representative who does not take any of the steps
described by the Code to gain more protection, has no protection against later claims
of breach of his fiduciary obligation other than any arising from consent or
waiver of individual distributees who may have bound themselves by receipts
given to the personal representative.
This
section increases the prospects of full discharge of a personal representative
who uses the closing statement route over those of a personal representative
who relies on receipts. Full protection follows from the running of the six
months limitations period described in 3‑1005. But, 3‑1005's protection does not
prevent distributees from claiming lack of full disclosure. Hence, it offers little more protection than
a receipt. Still, it may be useful to decrease the likelihood of later claim of
non‑disclosure. Its more significant function, however, is to provide a
means for terminating the office of personal representative in a way that will
be obvious to third persons.
In
1989 the Joint Editorial Board recommended changing subparagraph (a)(1) to make
the time reference correspond to changes recommended for Section 3‑803.
Section 3‑1004.
Liability of Distributees to Claimants.
After assets of an estate have been distributed and subject to Section 3‑1006, an undischarged claim not barred may be prosecuted in a proceeding against one or more distributees. No distributee shall be liable to claimants for amounts received as exempt property, homestead or family allowances, or for amounts in excess of the value of his distribution as of the time of distribution. As between distributees, each shall bear the cost of satisfaction of unbarred claims as if the claim had been satisfied in the course of administration. Any distributee who shall have failed to notify other distributees of the demand made upon him by the claimant in sufficient time to permit them to join in any proceeding in which the claim was asserted against him loses his right of contribution against other distributees.
COMMENT
This
section creates a ceiling on the liability of a distributee of "the value
of his distribution" as of the time of distribution. The section indicates
that each distributee is liable for all that a claimant may prove to be due,
provided the claim does not exceed the value of the defendant's distribution
from the estate. But, each distributee may preserve a right of contribution
against other distributees. The risk of insolvency of one or more, but less
than all distributees is on the distributee rather than on the claimant.
In 1975, the Joint Editorial Board
recommended the addition, after "claimants for amounts" in the second
sentence, of "received as exempt property, homestead or family allowances,
or for amounts . . ." The purpose
of the addition was to prevent unpaid creditors of a decedent from attempting
to enforce their claims against a spouse or child who had received a
distribution of exempt values.
Section 3‑1005.
Limitations on Proceedings Against Personal Representative.
Unless previously barred by adjudication and except as provided in the closing statement, the rights of successors and of creditors whose claims have not otherwise been barred against the personal representative for breach of fiduciary duty are barred unless a proceeding to assert the same is commenced within 6 months after the filing of the closing statement. The rights thus barred do not include rights to recover from a personal representative for fraud, misrepresentation, or inadequate disclosure related to the settlement of the decedent's estate.
COMMENT
This and the preceding section make it clear
that a claimant whose claim has not been barred may have alternative remedies
when an estate has been distributed subject to his claim. Under this section,
he has six months to prosecute an action against the personal representative if
the latter breached any duty to the claimant. For example, the personal
representative may be liable to a creditor if he violated the provisions of
Section 3‑807. The preceding section describes the fundamental liability
of the distributees to unbarred claimants to the extent of the value received.
The last sentence emphasizes that a personal representative who fails to
disclose matters relevant to his liability in his closing statement and in the
account of administration he furnished to distributees, gains no protection
from the period described here. A personal representative may, however, use
Section 3‑1001, or, where appropriate, 3‑1002 to secure greater
protection.
Section 3‑1006.
Limitations on Actions and Proceedings Against Distributees.
Unless previously adjudicated in a formal testacy proceeding or in a proceeding settling the accounts of a personal representative or otherwise barred, the claim of a claimant to recover from a distributee who is liable to pay the claim, and the right of an heir or devisee, or of a successor personal representative acting in their behalf, to recover property improperly distributed or its value from any distributee is forever barred at the later of three years after the decedent's death or one year after the time of its distribution thereof, but all claims of creditors of the decedent, are barred one year after the decedent's death. This section does not bar an action to recover property or value received as a result of fraud.
COMMENT
This
section describes an ultimate time limit for recovery by creditors, heirs and
devisees of a decedent from distributees. It is to be noted: (1) Section 3‑108 imposes a general
limit of three years from death on one who must set aside an informal probate
in order to establish his rights, or who must secure probate of a late‑discovered
will after an estate has been administered as intestate. Hence the time limit
of 3‑108 may bar one who would claim as an heir or devisee sooner than
this section, although it would never cause a bar prior to three years from the
decedent's death. (2) This section would not bar recovery by a supposed
decedent whose estate has been probated. See
Section 3‑412. (3) The limitation of this section ends the
possibility of appointment of a personal representative to correct an erroneous
distribution as mentioned in Sections 3‑1005 and 3‑1008. If there
have been no adjudications under Section 3‑409, or possibly 3‑1001
or 3‑1002, estate of the decedent which is discovered after
administration has been closed may be the subject of different distribution
than that attending the estate originally administered.
The
last sentence excepting actions or suits to recover property kept from one by
the fraud of another may be unnecessary in view of the blanket provision
concerning fraud in Article I. See Section 1‑106.
In 1989, the Joint Editorial Board recommended changing the section so as to separate proceedings involving claims by claimants barred one year after decedent's death by Section 3‑803(a)(1), and other proceedings by unbarred claimants or by omitted heirs or devisees.
Section 3‑1007.
Certificate Discharging Liens Securing Fiduciary Performance.
After his appointment has terminated, the personal representative, his sureties, or any successor of either, upon the filing of a verified application showing, so far as is known by the applicant, that no action concerning the estate is pending in any court, is entitled to receive a certificate from the Registrar that the personal representative appears to have fully administered the estate in question. The certificate evidences discharge of any lien on any property given to secure the obligation of the personal representative in lieu of bond or any surety, but does not preclude action against the personal representative or the surety.
COMMENT
This section does not affect the liability of
the personal representative, or of any surety, but merely permits a release of
security given by a personal representative, or his surety, when, from the
passage of time and other conditions, it seems highly unlikely that there will
be any liability remaining undischarged. See
Section 3‑607.
Section 3‑1008.
Subsequent Administration.
If other property of the estate is discovered after an estate has been settled and the personal representative discharged or after one year after a closing statement has been filed, the Court upon petition of any interested person and upon notice as it directs may appoint the same or a successor personal representative to administer the subsequently discovered estate. If a new appointment is made, unless the Court orders otherwise, the provisions of this Code apply as appropriate; but no claim previously barred may be asserted in the subsequent administration.
COMMENT
This
section is consistent with Section 3‑108 which provides a general period
of limitations of three years from death for appointment proceedings, but makes
appropriate exception for subsequent administration.
PART 11
COMPROMISE OF CONTROVERSIES
Section 3‑1101.
Effect of Approval of Agreements Involving Trusts, Inalienable Interests, or
Interests of Third Persons.
A compromise of any controversy as to
admission to probate of any instrument offered for formal probate as the will
of a decedent, the construction, validity, or effect of any governing
instrument, the rights or interests in the estate of the decedent, of any
successor, or the administration of the estate, if approved in a formal
proceeding in the Court for that purpose, is binding on all the parties thereto
including those unborn, unascertained or who could not be located. An approved
compromise is binding even though it may affect a trust or an inalienable
interest. A compromise does not impair the rights of creditors or of taxing
authorities who are not parties to it.
COMMENT
1993 technical amendments to
this and the following section clarified original intention that the described
procedure would be available to resolve controversies other than those
concerning a will.
Section 3‑1102.
Procedure for Securing Court Approval of Compromise.
The procedure for securing
Court approval of a compromise is as follows:
(1) The terms
of the compromise shall be set forth in an agreement in writing which shall be
executed by all competent persons and parents acting for any minor child having
beneficial interests or having claims which will or may be affected by the
compromise. Execution is not required by
any person whose identity cannot be ascertained or whose whereabouts is unknown
and cannot reasonably be ascertained.
(2) Any
interested person, including the personal representative, if any, or a trustee,
then may submit the agreement to the Court for its approval and for execution
by the personal representative, the trustee of every affected testamentary
trust, and other fiduciaries and representatives.
(3) After
notice to all interested persons or their representatives, including the
personal representative of any estate and all affected trustees of trusts, the
Court, if it finds that the contest or controversy is in good faith and that
the effect of the agreement upon the interests of persons represented by
fiduciaries or other representatives is just and reasonable, shall make an
order approving the agreement and directing all fiduciaries subject to its
jurisdiction to execute the agreement. Minor children represented only by their
parents may be bound only if their parents join with other competent persons in
execution of the compromise. Upon the making of the order and the execution of
the agreement, all further disposition
of the estate is in accordance with the terms of the agreement.
COMMENT
This
section and the one preceding it outline a procedure which may be initiated by
competent parties having beneficial interests in a decedent's estate as a means
of resolving controversy concerning the estate. If all competent persons with beneficial
interests or claims which might be affected by the proposal and parents properly representing interests of their
children concur, a settlement scheme differing from that otherwise governing
the devolution may be substituted. The procedure for securing representation of
minors and unknown or missing persons with interests must be followed. See Section 1‑403. The ultimate
control of the question of whether the substitute proposal shall be accepted is
with the Court which must find: "that the contest or controversy is in
good faith and that the effect of the agreement upon the interests of parties
represented by fiduciaries is just and reasonable."
The
thrust of the procedure is to put the authority for initiating settlement
proposals with the persons who have beneficial interests in the estate, and to
prevent executors and testamentary trustees from vetoing any such proposal. The
only reason for approving a scheme of devolution which differs from that framed
by the testator or the statutes governing intestacy is to prevent dissipation
of the estate in wasteful litigation. Because executors and trustees may have
an interest in fees and commissions which they might earn through efforts to
carry out testator's intention, the judgment of the Court is substituted for
that of such fiduciaries in appropriate cases. A controversy which the Court
may find to be in good faith, as well as concurrence of all beneficially
interested and competent persons and parent‑representatives provide
prerequisites which should prevent the procedure from being abused. Thus, the
procedure does not threaten the planning of a testator who plans and drafts
with sufficient clarity and completeness to eliminate the possibility of good
faith controversy concerning the meaning and legality of his plan.
See Section 1‑403 for
rules governing representatives and appointment of guardians ad litem.
These
sections are modeled after Section 93 of the Model Probate Code. Comparable legislative provisions have proved
quite useful in
PART 12
COLLECTION OF PERSONAL PROPERTY BY
AFFIDAVIT AND SUMMARY
ADMINISTRATION PROCEDURE FOR SMALL
ESTATES
GENERAL
COMMENT
The
four sections which follow include two designed to facilitate transfer of small
estates without use of a personal representative, and two designed to simplify
the duties of a personal representative, who is appointed to handle a small
estate.
The
Flexible System of Administration described by earlier portions of Article III
lends itself well to situations involving small estates. Letters may be
obtained quickly without notice or judicial involvement. Immediately, the
personal representative is in a position to distribute to successors whose
deeds or transfers will protect purchasers. This route accommodates the need
for quick and inexpensive transfers of land of small value as well as other
assets. Consequently, it was unnecessary to frame complex provisions extending
the affidavit procedures to land.
Indeed,
transfers via letters of administration may prove to be less troublesome than
use of the affidavit procedure. Still,
it seemed desirable to provide a quick collection mechanism which avoids all
necessity to visit the probate Court.
For one thing, unpredictable local variations in probate practice may
produce situations where the alternative procedure will be very useful. For
another, the provision of alternatives is in line with the overall philosophy
of Article III to provide maximum flexibility.
Figures gleaned from a recent authoritative
report of a major survey of probated estates in
Section 3‑1201.
Collection of Personal Property by Affidavit.
(a) Thirty days after the death of a decedent, any person indebted to
the decedent or having possession of tangible personal property or an
instrument evidencing a debt, obligation, stock or chose in action belonging to
the decedent shall make payment of the indebtedness or deliver the tangible
personal property or an instrument evidencing a debt, obligation, stock or
chose in action to a person claiming to be the successor of the decedent upon
being presented an affidavit made by or on behalf of the successor stating
that:
(1) the value
of the entire estate, wherever located, less liens and encumbrances, does not
exceed $5,000;
(2) 30 days
have elapsed since the death of the decedent;
(3) no
application or petition for the appointment of a personal representative is
pending or has been granted in any jurisdiction; and
(4) the
claiming successor is entitled to payment or delivery of the property.
(b) A transfer agent of any security shall change the registered
ownership on the books of a corporation from the decedent to the successor or
successors upon the presentation of an affidavit as provided in subsection (a).
COMMENT
This
section provides for an easy method for collecting the personal property of a
decedent by affidavit prior to any formal disposition. Existing legislation
generally permits the surviving widow or children to collect wages and other
small amounts of liquid funds. Section 3‑1201 goes further in that it
allows the collection of personal property as well as money and permits any
devisee or heir to make the collection. Since the appointment of a personal
representative may be obtained easily under the Code, it is unnecessary to make
the provisions regarding small estates applicable to realty.
Section 3‑1202.
Effect of Affidavit.
The person paying, delivering, transferring, or issuing personal property or the evidence thereof pursuant to affidavit is discharged and released to the same extent as if he dealt with a personal representative of the decedent. He is not required to see to the application of the personal property or evidence thereof or to inquire into the truth of any statement in the affidavit. If any person to whom an affidavit is delivered refuses to pay, deliver, transfer, or issue any personal property or evidence thereof, it may be recovered or its payment, delivery, transfer, or issuance compelled upon proof of their right in a proceeding brought for the purpose by or on behalf of the persons entitled thereto. Any person to whom payment, delivery, transfer or issuance is made is answerable and accountable therefor to any personal representative of the estate or to any other person having a superior right.
COMMENT
Sections 3‑1201 and 3‑1202 apply
to any personal property located in this state whether or not the decedent died
domiciled in this state, to any successor to personal property located in this
state whether or not a resident of this state, and, to the extent that the laws
of this state may control the succession to personal property, to personal
property wherever located of a decedent who died domiciled in this state.
Section 3‑1203. Small Estates; Summary Administration Procedure.
If it appears from the inventory and
appraisal that the value of the entire estate, less liens and encumbrances,
does not exceed homestead allowance, exempt property, family allowance, costs
and expenses of administration, reasonable funeral expenses, and reasonable and
necessary medical and hospital expenses of the last illness of the decedent,
the personal representative, without giving notice to creditors, may
immediately disburse and distribute the estate to the persons entitled thereto
and file a closing statement as provided in Section 3‑1204.
COMMENT
This
section makes it possible for the personal representative to make a summary
distribution of a small estate without the necessity of giving notice to
creditors. Since the probate estate of many decedents will not exceed the
amount specified in the statute, this section will prove useful in many
estates.
Section 3‑1204.
Small Estates; Closing by Sworn Statement of Personal Representative.
(a) Unless prohibited by order of the Court and except for estates
being administered by supervised personal representatives, a personal
representative may close an estate administered under the summary procedures of
Section 3‑1203 by filing with the Court, at any time after disbursement
and distribution of the estate, a verified statement stating that:
(1) to the
best knowledge of the personal representative, the value of the entire estate,
less liens and encumbrances, did not exceed homestead allowance, exempt
property, family allowance, costs and expenses of administration, reasonable
funeral expenses, and reasonable, necessary medical and hospital expenses of
the last illness of the decedent;
(2) the
personal representative has fully administered the estate by disbursing and
distributing it to the persons entitled thereto; and
(3) the
personal representative has sent a copy of the closing statement to all
distributees of the estate and to all creditors or other claimants of whom he
is aware whose claims are neither paid nor barred and has furnished a full
account in writing of his administration to the distributees whose interests
are affected.
(b) If no actions or proceedings involving the personal representative
are pending in the Court one year after the closing statement is filed, the
appointment of the personal representative terminates.
(c) A closing statement filed under this section has the same effect as
one filed under Section 3‑1003.
COMMENT
The
personal representative may elect to close the estate under Section 3‑1002
in order to secure the greater protection offered by that procedure.
The
remedies for fraudulent statement provided in Section 1‑106 of course
would apply to any intentional misstatements by a personal representative.
ARTICLE IV
FOREIGN PERSONAL
REPRESENTATIVES;
ANCILLARY ADMINISTRATION
PART 1
DEFINITIONS
Section
4‑101. Definitions.
PART 2
POWERS OF FOREIGN PERSONAL
REPRESENTATIVES
Section
4‑201. Payment of Debt
and Delivery of Property to Domiciliary Foreign Personal Representative Without
Local Administration.
4‑202. Payment or
Delivery Discharges.
4‑203. Resident Creditor
Notice.
4‑204. Proof of Authority‑Bond.
4‑205. Powers.
4‑206. Power of
Representatives in Transition.
4‑207. Ancillary and
Other Local Administrations; Provisions Governing
PART 3
JURISDICTION OVER FOREIGN
REPRESENTATIVES
Section
4‑301. Jurisdiction by Act of Foreign Personal
Representative.
4‑302. Jurisdiction by Act of Decedent.
4‑303. Service on Foreign Personal Representative.
PART 4
JUDGMENTS AND PERSONAL
REPRESENTATIVE
Section
4‑401. Effect of Adjudication For or Against
Personal Representative.
______________
GENERAL COMMENT
This Article
concerns the law applicable in estate problems which involve more than a single
state. It covers the powers and
responsibilities in the adopting state of personal representatives appointed in
other states.
Some provisions
of the Code covering local appointment of personal representatives for non‑residents
appear in Article III. These include the
following: 3‑201 (venue), 3‑202
(resolution of conflicting claims regarding domicile), 3‑203 (priority as
personal representative of representative previously appointed at domicile), 3‑307(a)
(30 days delay required before appointment of a local representative for a non‑resident),
3‑803(a) (claims barred by non‑claim at domicile before local
administration commenced are barred locally) and 3‑815 (duty of personal
representative in regard to claims where estate is being administered in more
than one state. See also 3‑308,
3‑611(a) and 3‑816. Also, see
Section 4‑207.
The recognition
provisions contained in Article IV and the various provisions of Article III
which relate to administration of estates of non‑residents are designed
to coerce respect for domiciliary procedures and administrative acts to the
extent possible.
The first part
of Article IV contains some definitions of particular relevance to estates
located in two or more states.
The second part
of Article IV deals with the powers of foreign personal representatives in a
jurisdiction adopting the Uniform Probate Code. There are different types of
power which may be exercised. First, a foreign personal representative has the
power under Section 4‑201 to receive payments of debts owed to the
decedent or to accept delivery of property belonging to the decedent. The
foreign personal representative provides an affidavit indicating the date of
death of the non‑resident decedent, that no local administration has been
commenced and that the foreign personal representative is entitled to payment
or delivery. Payment under this provision can be made any time more than 60
days after the death of the decedent. When made in good faith the payment
operates as a discharge of the debtor. A protection for local creditors of the
decedent is provided in Section 4‑203, under which local debtors of the
non‑resident decedent can be notified of the claims which local creditors
have against the estate. This notification will prevent payment under this
provision.
A second type of
power is provided in Sections 4‑204 to 4‑206. Under these
provisions a foreign personal representative can file with the appropriate
Court a copy of his appointment and official bond if he has one. Upon so
filing, the foreign personal representative has all of the powers of a personal
representative appointed by the local Court. This would be all of the powers
provided for in an unsupervised administration as provided in Article III of
the Code.
The third type
of power which may be obtained by a foreign personal representative is
conferred by the priority the domiciliary personal representative enjoys in
respect to local appointment. This is covered by Section 3‑203. Also, see Section 3.611(b).
Part 3 provides
for power in the local Court over foreign personal representatives who act
locally. If a local or ancillary administration has been started, provisions in
Article III subject the appointee to the power of the Court. See Section 3‑602. In Part 3 of
this Article, it is provided that a foreign personal representative submits
himself to the jurisdiction of the local Court by filing a copy of his
appointment to get the powers provided in Section 4‑205 or by doing any
act which would give the state jurisdiction
over him as an individual. In addition, the collection of funds as provided in
Section 4‑201 gives the Court quasi‑in‑rem jurisdiction over
the foreign personal representative to the extent of the funds collected.
Finally, Section
4‑303 provides that the foreign personal representative is subject to the
jurisdiction of the local Court "to the same extent that his decedent was
subject to jurisdiction immediately prior to death." This is similar to
the typical non‑resident motorist provision that provides for
jurisdiction over the personal representative of a deceased non‑resident
motorist, see Note, 44 Iowa L. Rev.
384 (1959). It is, however, a much broader provision. Section 4‑304
provides for the mechanical steps to be taken in serving the foreign personal
representatives.
Part 4 of the
Article deals with the res judicata effect to be given adjudications for or
against a foreign personal representative. Any such adjudication is to be
conclusive on a local personal representative "unless it resulted from
fraud or collusion . . . to the prejudice of the estate." This provision
must be read with Section 3‑408 which deals with certain out‑of‑state
findings concerning a decedent's estate.
PART 1
DEFINITIONS
Section 4‑101. Definitions.
In
this Article:
(1) "local administration" means administration by a personal representative appointed in this state pursuant to appointment proceedings described in Article III.
(2) "local personal representative" includes any personal
representative appointed in this State pursuant to appointment proceedings described in Article III and
excludes foreign personal representatives who acquire the power of a local
personal representative pursuant to Section 4‑205.
(3) "resident creditor" means a person domiciled in, or doing
business in this State, who is, or could be, a claimant against an estate of a
non‑resident decedent.
COMMENT
Section 1‑201
includes definitions of "foreign personal representative",
"personal representative" and "non‑resident
decedent".
PART 2
POWERS OF FOREIGN PERSONAL REPRESENTATIVES
Section 4‑201. Payment of Debt and Delivery of Propertyto
Domiciliary Foreign Personal Representative Without Local Administration.
At any time after the
expiration of sixty days from the death of a nonresident decedent, any person
indebted to the estate of the nonresident decedent or having possession or
control of personal property, or of an instrument evidencing a debt,
obligation, stock or chose in action belonging to the estate of the nonresident
decedent may pay the debt, deliver the personal property, or the instrument
evidencing the debt, obligation, stock or chose in action, to the domiciliary
foreign personal representative of the nonresident decedent upon being
presented with proof of his appointment and an affidavit made by or on behalf of
the representative stating:
(1) the date of the death of the
nonresident decedent,
(2) that no local administration, or application or petition therefor, is pending in this state,
(3) that the domiciliary foreign
personal representative is entitled to payment or delivery.
COMMENT
Section 3‑201(d)
refers to the location of tangible personal estate and intangible personal
estate which may be evidenced by an instrument. The instant section includes
both categories. Transfer of securities is not covered by this section since
that is adequately covered by Section 3 of the Uniform Act for Simplification
of Fiduciary Security Transfers.
Section 4‑202. Payment or Delivery Discharges.
Payment or delivery made in
good faith on the basis of the proof of authority and affidavit releases the
debtor or person having possession of the personal property to the same extent
as if payment or delivery had been made to a local personal representative.
Section 4‑203. Resident Creditor Notice.
Payment or delivery under
Section 4‑201 may not be made if a resident creditor of the nonresident
decedent has notified the debtor of the nonresident decedent or the person
having possession of the personal property belonging to the nonresident
decedent that the debt should not be paid nor the property delivered to the
domiciliary foreign personal representative.
COMMENT
Similar to provision in
Colorado Revised Statute, 153‑6‑9.
Section 4‑204. Proof of Authority‑Bond.
If no local administration
or application or petition therefor is pending in this state, a domiciliary
foreign personal representative may file with a Court in this State in a
[county] in which property belonging to the decedent is located, authenticated
copies of his appointment and of any official bond he has given.
Section 4‑205. Powers.
A domiciliary foreign personal representative who has complied with Section 4‑204 may exercise as to assets in this state all powers of a local personal representative and may maintain actions and proceedings in this state subject to any conditions imposed upon nonresident parties generally.
Section 4‑206. Power of Representatives in Transition.
The power of a domiciliary
foreign personal representative under Section 4‑201 or 4‑205 shall
be exercised only if there is no administration or application therefor pending
in this state. An application or petition for local
administration of the estate terminates the power of the foreign personal
representative to act under Section 4‑205, but the local Court may allow
the foreign personal representative to exercise limited powers to preserve the
estate. No person who, before receiving actual notice of a pending local
administration, has changed his position in reliance upon the powers of a
foreign personal representative shall be prejudiced by reason of the
application or petition for, or grant of, local administration. The local personal representative is subject
to all duties and obligations which have accrued by virtue of the exercise of
the powers by the foreign personal representative and may be substituted for
him in any action or proceedings in this state.
Section 4‑207. Ancillary and Other Local Administrations; Provisions Governing.
In respect to a nonresident
decedent, the provisions of Article III of this Code govern: (1) proceedings,
if any, in a Court of this state for probate of the will, appointment, removal,
supervision, and discharge of the local personal representative, and any other
order concerning the estate; and (2) the status, powers, duties and liabilities
of any local personal representative and the rights of claimants, purchasers,
distributees and others in regard to a local administration.
COMMENT
The purpose of this section
is to direct attention to Article III for sections controlling local probates
and administrations. See in particular,
1‑301, 3‑201, 3‑202, 3‑203, 3‑307(a), 3‑308,
3‑611(b), 3‑803(a), 3‑815 and 3‑816.
PART 3
JURISDICTION OVER FOREIGN
REPRESENTATIVES
Section 4‑301. Jurisdiction by Act of Foreign Personal Representative.
A foreign personal
representative submits personally to the jurisdiction of the Courts of this
state in any proceeding relating to the estate by (1) filing authenticated
copies of his appointment as provided in Section 4‑204, (2) receiving
payment of money or taking delivery of personal property under Section 4‑201,
or (3) doing any act as a personal representative in this state which would
have given the state jurisdiction over him as an individual. Jurisdiction under (2) is limited to the
money or value of personal property collected.
COMMENT
The words "courts of
this state" are sufficient under federal legislation to include a federal
court having jurisdiction in the adopting state.
A foreign personal
representative appointed at the decedent's domicile has priority for
appointment in any local administration proceeding. See
Section 3‑203(g). Once appointed,
a local personal representative remains subject to the jurisdiction of the
appointing Court under Section 3‑602.
In 1975, the Joint Editorial
Board recommended substitution of the word "personally" for
"himself", in the preliminary language of the first sentence. Also,
language restricting the submission to jurisdiction to cases involving the
estate was added in 1975.
Section 4‑302. Jurisdiction by Act of Decedent.
In addition to jurisdiction
conferred by Section 4‑301, a foreign personal representative is subject
to the jurisdiction of the courts of this state to the same extent that his
decedent was subject to jurisdiction immediately prior to death.
Section 4‑303. Service on Foreign Personal Representative.
(a) Service of process may be made upon the foreign personal
representative by registered or certified mail, addressed to his last
reasonably ascertainable address, requesting a return receipt signed by
addressee only. Notice by ordinary first
class mail is sufficient if registered or certified mail service to the
addressee is unavailable. Service may be made upon a foreign personal
representative in the manner in which service could have been made under other
laws of this state on either the foreign personal representative or his
decedent immediately prior to death.
(b) If service is made upon a foreign personal representative as
provided in subsection (a), he shall be allowed at least [30] days within which
to appear or respond.
COMMENT
The provision for ordinary
mail as a substitute for registered or certified mail is provided because,
under the present postal regulations, registered mail may not be available to
reach certain addresses, 39 C.F.R. Sec. 51.3(c), and also certified mail may
not be available as a process for service because of the method of delivery
used, 39 C.F.R. Sec. 58.5(c) (rural delivery) and (d) (star route delivery.)
PART 4
JUDGMENTS AND PERSONAL
REPRESENTATIVES
Section 4‑401. Effect of Adjudication For or Against Personal Representative.
An adjudication rendered in
any jurisdiction in favor of or against any personal representative of the
estate is as binding on the local personal representative as if he were a party
to the adjudication.
COMMENT
Adapted
from Uniform Ancillary Administration of Estates Act, Section 8.
ARTICLE V
PROTECTION OF PERSONS UNDER DISABILITY
AND THEIR PROPERTY
PART 1
GENERAL PROVISIONS
Section
5-101. Short Title.
5-102. Definitions.
5-103. [Reserved].
5-104. Facility of Transfer.
5-105. Delegation of Power by Parent or Guardian.
5-106. Subject-Matter Jurisdiction.
5-107. Transfer of Jurisdiction.
5-108.
Venue.
5-109.
[Reserved].
5-110.
Letters of Office.
5-111. Effect of Acceptance of Appointment.
5-112. Termination of or Change in Guardian’s or
Conservator’s Appointment.
5-113. Notice.
5-114. Waiver of Notice.
5-115. Guardian Ad Litem.
5-116. Request For Notice; Interested Persons.
5-117. Multiple Appointments or Nominations.
PART 2
GUARDIANSHIP
OF MINOR
Section
5-201. Appointment and Status of Guardian.
5-202. Parental Appointment of Guardian.
5-203. Objection by Minor or Others to Parental
Appointment.
5-204. Judicial Appointment of Guardian: Conditions
Appointment.
5-205.
Judicial Appointment of
Guardian: Procedure.
5-206. Judicial Appointment of Guardian: Priority
of Minor’s Nominee; Limited Guardianship.
5-207. Duties of Guardian.
5-208. Powers of Guardian.
5-209. Rights and Immunities of Guardian.
5-210. Termination of Guardianship; Other Proceedings After Appointment.
PART 3
GUARDIANSHIP
OF INCAPACITATED PERSON
Section
5-301. Appointment and Status of Guardian.
5-302. Appointment of Guardian By Will or Other
Writing.
5-303. Appointment of Guardian By Will or Other
Writing: Effectiveness; Acceptance; Confirmation.
5-304.
Judicial Appointment of Guardian: Petition.
5-305.
udicial Appointment of Guardian: Preliminaries to Hearing.
5-306.
Judicial Appointment of Guardian: Professional Evaluation.
5-307.
Confidentiality of Records.
5-308. Judicial Appointment of Guardian: Presence
and Rights at Hearing.
5-309. Notice.
5-310. Who May Be Guardian: Priorities.
5-311. Findings; Order of Appointment.
5-312. Emergency Guardian.
5-313. Temporary Substitute Guardian.
5-314. Duties of Guardian.
5-315. Powers of Guardian.
5-316. Rights and Immunities of Guardian;
Limitations.
5-317. Reports; Monitoring of Guardianship.
5-318. Termination or Modification of Guardianship.
PART 4
PROTECTION OF
PROPERTY OF PROTECTED PERSON
Section
5-401. Protective Proceeding.
5-402. Jurisdiction Over Business Affairs of
Protected Person.
5-403. Original Petition for Appointment or
Protective Order.
5-404. Notice.
5-405. Original Petition: Minors; Preliminaries to
Hearing.
5-406. Original Petition: Preliminaries to Hearing.
5-407. Confidentiality of Records.
5-408. Original Petition: Procedure at Hearing.
5-409. Original Petition: Orders.
5-410. Powers of Court.
5-411. Required Court Approval.
5-412. Protective Arrangements and Single
Transactions.
5-413. Who May be Conservator: Priorities.
5-414. Petition for Order Subsequent to
Appointment.
5-415. Bond.
5-416. Terms and Requirements of Bond.
5-417. Compensation and Expenses.
5-418. General Duties of Conservator; Plan.
5-419. Inventory; Records.
5-420. Reports; Appointment of Visitor; Monitoring.
5-421. Title by Appointment.
5-422. Protected Person’s Interest Inalienable.
5-423.
5-424. Protection of Person Dealing With
Conservator.
6-425. Powers of Conservator In Administration.
5-426. Delegation.
5-427. Principles of Distribution by Conservator.
5-428. Death of Protected Person.
5-429. Presentation and Allowance of Claims.
5-430. Personal Liability of Conservator.
5-431. Termination of Proceedings.
5-432. Payment of Debt and Delivery of Property to
Foreign Conservator Without Local Proceedings.
5-433. Foreign Conservator: Proof of Authority;
Bond; Powers.
PART 5
DURABLE POWER OF ATTORNEY
Section
5-501. Definition.
5-502. Durable Power of Attorney Not Affected By
Lapse of Time, Disability Or Incapacity.
5-503. Relation of Attorney in Fact to
Court-Appointed Fiduciary.
5-504. Power of Attorney Not Revoked Until Notice.
5-505. Proof of Continuance of
Durable and Other Powers of Attorney by Affidavit.
______________
The
following free-standing Acts are associated with Article V:
Uniform
Guardianship and Protective Proceedings Act (1997)
Article
V, Parts 1 through 4, have also been adopted as the Uniform Guardianship and
Protective Proceedings Act (1997).
Uniform Durable
Power of Attorney Act
Article
V, Part 5, has also been adopted as the Uniform Durable Power of Attorney Act.
Adoption of
Uniform Guardianship and Protective Proceedings Act (1997)
Reproduced in Parts 1-4 of
this article is the Uniform Guardianship and Protective Proceedings Act (1997),
which replaces the 1982 Act of the same name. Similar to the 1982 Act, the 1997
revision can be enacted either as a free-standing act or as part of the Uniform
Probate Code.
Approval of the 1997 Act
necessitated technical amendments elsewhere in the UPC, consisting of
correction of definitions and cross-references.
The following sections were amended: 1-201, 3-303, 3-308, and
3-915.
In addition, UGPPA (1997)
Sections 103 (Supplemental General Principles of Law Applicable) and 109
(Practice in Court) are not incorporated into the UPC because they duplicate
provisions in UPC Article 1. To preserve
comparable numbering of sections between UPGGA (1997) and the UPC, UPC Sections
5-103 and 5-109 are titled “Reserved.”
PREFATORY NOTE
TO PARTS 1-4
The
topics covered in UPC Article V, Parts 1-4 include minors’ guardianships,
adults’ guardianships, and conservatorships of both minors and adults. Part 1 contains definitions and general
provisions applicable to both guardianships and conservatorships, including
provisions that relate to the office of guardian and conservator and to the
jurisdiction of the courts, many of which were previously scattered throughout
Article V. Part 2 contains provisions on
guardianships for minors, whether by the court or the parent. Part 3 contains provisions for guardianships
for incapacitated persons, who will most often be adults, but who may also be
minors whose need for guardianship is unrelated to their age. Part 4 covers conservatorships and other
protective arrangements for both minors and adults, including the procedures
for appointment of conservators and the process for implementing a protective
arrangement.
The
Code’s provisions on guardianship and conservatorship codified in Parts 1-4 of
this article are copied from the 1997 revision of the Uniform Guardianship and
Protective Proceedings Act (UGPPA).
These provisions replace the 1982 UGPPA, which in turn replaced the
guardianship and protective provisions of the original UPC.
The
1997 revisions were precipitated by a two year study by the A.B.A. Senior
Lawyers Division Task Force on Guardianship Reform. The Task Force consisted of representatives
not only of the Senior Lawyers Division, but also of other A.B.A. entities, including
the Real Property Probate and Trust Law Section and the Commissions on Legal
Problems of the Elderly and Mental and Physical Disability Law, as well as a
variety of other groups interested in guardianship, such as AARP and the
National Senior Citizens Law Center. The Task Force generated a report that
served as the starting point for the redrafting of the Uniform Guardianship and
Protective Proceedings Act. The drafting committee of the Uniform Law
Commissioners began the drafting of the revision in 1995. The revised Act was
approved at the 1997 Annual Meeting of the National Conference of Commissioners
on Uniform State Laws, with amendments to the provisions on appointment of
counsel approved at the 1998 Annual Meeting of the National Conference of
Commissioners on Uniform State Laws, and subsequently approved by the A.B.A.
House of Delegates at its 1998 annual meeting. The National Conference, at its
1998 Annual Meeting, also approved the 1997 Act for integration into the UPC.
Significant
developments in the areas of guardianship and conservatorship occurred in the
late 1980s and early 1990s, as states revised their guardianship and
conservatorship statutes. The 1982
UGPPA, with its emphasis on limited guardianship and conservatorship, was
groundbreaking in its support of autonomy. The 1997 revision builds on this and on developments occurring
in the states, by providing that guardianship and conservatorship should be
viewed as a last resort, that limited guardianships or conservatorships should
be used whenever possible, and that the guardian or conservator should consult
with the ward or protected person, to the extent feasible, when making
decisions.
The
1997 revision makes other substantial changes. The following discussion
summarizes those of most significance.
The
1997 revision bases the definition of incapacitated person on functional
abilities, recognizing that a person may have the capacity to do some things
while needing help with others. Before a guardian may be appointed for an adult
or a minor for reasons other than age, the individual must be determined to be
incapacitated, that is, the individual must be
“unable to receive and evaluate information or make or communicate
decisions to such an extent that the individual lacks the ability to meet
essential requirements for physical health, safety, or self-care, even with
appropriate technological assistance.”
Section 5-102(4)). If assistive
technology is available that may enable the individual to receive and evaluate
information or to make or communicate decisions, then the individual may not be
an “incapacitated person.”
A
parent or spouse may appoint a guardian to take office immediately upon the
need. Parts 2 and 3 contain provisions for a parental or spousal appointment of
a “standby” guardian: by a parent for a minor child under Part 2 and by a
parent for an adult disabled child or by a spouse for an incapacitated spouse
under Part 3. The addition of these provisions was spurred by the increasing
number of single-parent families in the
A
guardian or a conservator should be appointed only if there are no other lesser
restrictive alternatives that will meet the respondent’s needs. The Code
encourages the use of alternatives to guardianship or conservatorship and views
the appointment of a guardian or a conservator as a last resort. The court may
not appoint a guardian for an incapacitated person unless the court makes a
finding that the respondent’s needs cannot be met by any less restrictive
means. Section 5-311(a)(1)(B). The visitor
appointed by the court to investigate the appropriateness of the guardianship
or conservatorship requested for an adult, must investigate whether
alternatives are available and report this to the court. Sections 5-305(e), 5-406(e).
Additionally,
procedural steps are specified which must be met before a guardian for an
incapacitated person or conservator may be appointed or a protective order
entered. Specific information is required in the petition (Sections 5-304,
5-403), the respondent must be personally served with the notice of the hearing
and the petition at least fourteen days in advance of the hearing and others
must receive copies (Sections 5-113, 5-309, 5-404), and the court must appoint
a visitor (Sections 5-305,
5-406). Enacting jurisdictions must
choose between requiring counsel if requested by the respondent, recommended by
the visitor, or if the court
otherwise orders (Alternative 1 to Sections 5-305(b) and 5-406(b)), or
requiring counsel for the respondent in all cases (Alternative 2 to Sections
5-305(b) and 5-406(b)). In guardianships, the court must order a professional
evaluation of the respondent if the respondent requests one or the court
determines one to be appropriate (Section 5-306), while in a conservatorship
proceeding, the court may order a professional evaluation. Section 5-406(f).
The respondent and proposed guardian or conservator must attend the hearing
unless excused by the court for good cause. Sections 5-308(a),5-408(a).
The
committee which drafted UGPPA (1997) preferred Alternative 1 to Sections
5-305(b) and 5-406(b). Under the committee’s preferred process, a visitor is
appointed in every proceeding for appointment of a guardian under Part 3, with
counsel appointed on the respondent’s request, the visitor’s recommendation, or
the court’s determination that a counsel is needed. See Section 5-305.
Concomitantly, in Part 4, a visitor is appointed in every case where a
petition for appointment of conservator is filed and may be appointed when a
protective arrangement is sought and the respondent is not already represented
by counsel. See Section
5-406.
Alternative
2 for Sections 5-305(b) and 5-406(b) was included at the request of the
American Bar Association (A.B.A.) Commission on Legal Problems of the Elderly.
Emphasized
throughout Parts 1-4 of this article are the concepts of limited guardianship
and limited conservatorship. Only when
no alternative to guardianship or conservatorship is available should the court
create a guardianship or conservatorship. Courts are directed to tailor the
guardianship or conservatorship to fit the needs of the incapacitated person
and only remove those rights that the incapacitated person no longer can
exercise or manage. Sections 5-311(b), 5-409(b). If an unlimited guardianship
or conservatorship is requested, the petition must state why a limited
guardianship or conservatorship is not being sought. Sections 5-304(b)(8),
5-403(c)(3). The guardian or conservator must take the views of the ward or
protected person into account when making decisions. The guardian must maintain
sufficient contact with the ward so that the guardian knows of the
capabilities, limitations, needs and opportunities of the ward (Sections
5-207(b)(1), 5-314(b)(1)). The guardian
or conservator must encourage the ward or protected person to participate in
decisions, to act on his or her own behalf, and to develop or regain capacity
to manage personal or financial affairs. Sections 5-314(a), 5-418(b). The guardian must consider the ward’s
expressed desires and personal values when making decisions (Section 5-314(a)),
while the conservator, in making decisions with respect to the protected
person’s estate plan, or the court, in deciding on a protective arrangement,
must rely, when possible, on the decision the protected person would have made.
Sections 5-411(c), 5-412(b).
The
position of the drafting committee is that appointment of counsel should not be
mandated in every guardianship under Part 3 or every conservatorship under Part
4. Alternative provisions are instead provided. Sections 5-305(b) and 5-406(b). The enacting jurisdiction must choose between
requiring counsel only when requested by the respondent, recommended by the
visitor, or otherwise ordered by the court, or requiring counsel for the
respondent in all cases. The appointment
of counsel is in addition to the requirement that a visitor be appointed, a
requirement in all proceedings where a guardian for an incapacitated person is
requested or where the appointment of a conservator is sought. (Sections 5-305(a) and 5-406(a)).
The
burden of proof in establishing a guardianship or conservatorship is clear and
convincing evidence (see Sections
5-311,
5-401) while the burden of proof for terminating a guardianship or
conservatorship is prima facie evidence.
See Sections 5-318(c),
5-431(d). This distinction was made in recognition that a guardianship or
conservatorship, as vehicles that take away from individuals their rights,
should require a higher burden of proof (and thus more protections) to
establish than should be required to restore rights to an individual.
Monitoring of guardianships and conservatorships is critical. Guardians must present a written report to the court within thirty days of appointment and annually thereafter (Section 5-317), while the conservator is required to file a plan and an inventory with the court within sixty days of appointment and annual reports thereafter. Sections 5-418(c), 5-419, 5-420. Both the guardian and the conservator, in their reports, make recommendations as to whether the guardianship or conservatorship should be continued or modified. The court is required to establish a monitoring system. Sections 5-317(c), 5-420(d). The court may use visitors as part of the monitoring system. Sections 5-317(b), 5-420(c). Suggestions on what an effective monitoring system should contain can be found in Sally Balch Hurme, Steps to Enhance Guardianship Monitoring (A.B.A. 1991).
PART 1
GENERAL PROVISIONS
Section 5-101 Short Title.
Parts
1-4 of this Article may be cited as the Uniform Guardianship and Protective
Proceedings Act.
Section 5-102 Definitions.
In
Parts 1-4 of this Article:
(1) "Conservator"
means a person who is appointed by a court to manage the estate of a protected
person. The term includes a limited
conservator.
(2) "Court"
means the [designate appropriate court].
(3) "Guardian"
means a person who has qualified as a guardian of a minor or incapacitated
person pursuant to appointment by a parent or spouse, or by the court. The term
includes a limited, emergency, and temporary substitute guardian but not a
guardian ad litem.
(4) "Incapacitated person" means an individual who, for reasons other than being a minor, is unable to receive and evaluate information or make or communicate decisions to such an extent that the individual lacks the ability to meet essential requirements for physical health, safety, or self-care, even with appropriate technological assistance.
(5) "Legal
representative" includes a representative payee, a guardian or conservator
acting for a respondent in this State or elsewhere, a trustee or custodian of a
trust or custodianship of which the respondent is a beneficiary, and an agent
designated under a power of attorney, whether for health care or property, in
which the respondent is identified as the principal.
(6) "Minor" means an unemancipated individual who has not attained [18] years of age.
(7) "Parent"
means a parent whose parental rights have not been terminated.
(8) "Protected
person" means a minor or other individual for whom a conservator has been
appointed or other protective order has been made.
(9) "Respondent"
means an individual for whom the appointment of a guardian or conservator other
protective order is sought.
(10) "Ward" means an individual for whom a guardian has been appointed.
COMMENT
The concepts of limited guardian and limited
conservator embraced in this article are reflected in the definitions of
“guardian” (see paragraph (3)) and “conservator” (see paragraph (1)).
While
Part 4 authorizes the appointment of a conservator with limited powers, no provision
is made for the appointment of an emergency or temporary conservator, a type of
conservatorship usually denoting an appointment of limited duration. In
situations where other statutes might permit the appointment of a temporary,
emergency or special conservator, Part 4 instead allows the Court to appoint a
“master.” See Sections 5-405(b),
5-406(g) and 5-412(c). This is a departure from the 1982 UGPPA, which provided
for the appointment of special conservators, but not of temporary or emergency
conservators. See, e.g., UPC Section
5-408(c) (1982).
Like
the 1982 UGPPA, the 1997 revision allows the appointment of a guardian by a
parent or spouse by will or other signed writing, but subjects the appointment
to significantly different requirements. See
Sections 5-202 and 5-302. The definition of guardian (see paragraph (3)) includes a limited guardian, an emergency
guardian, or a temporary substitute guardian. See Sections 5-204, 5-311, 5-312, and 5-313. There is a distinction
between an emergency guardian and a temporary substitute guardian. Compare Sections 5-312 and 5-313.
Guardian ad litem is specifically excluded from the definition of guardian, as
a guardian ad litem is generally viewed as having a separate and limited role
in the proceedings.
A
finding that a person is an “incapacitated person” is required before a
guardian may be appointed for reasons other than that the respondent is a
minor. The definition of “incapacitated person” (see paragraph (4)) requires that the respondent have an inability
to receive and evaluate information or to make or communicate decisions to the
point that the person’s ability to care for his or her health, safety or self
is compromised. This definition emphasizes the importance of functional
assessment and recognizes that the more appropriate measure of a person’s
incapacity is a measurement of the person’s abilities. Like other areas of the
law where the concept of capacity is used, the required incapacity for the
appointment of a guardian is no longer considered an all or nothing proposition
but instead it is recognized as having varying degrees. This definition is
designed to work with the concepts of least restrictive alternative and limited
guardianship or conservatorship-only removing those rights that the incapacitated
person cannot exercise, and not establishing a guardianship or conservatorship
if a lesser restrictive alternative exists. See
Sections 5-311 and 5-409 for examples. These concepts are carried
throughout the article.
The
definition of incapacitated person differs significantly from the definition in
the 1982 UGPPA. The requirement that the person be unable to make “responsible”
decisions is deleted, as is the requirement that the person have an impairment
by reason of a specified disability or other cause, a requirement which may
have led the trier of fact to focus unduly on the type of the respondent’s
disabling condition, as opposed to the respondent’s actual ability to
function. The revised definition is based
on recommendations of the 1988 Wingspread conference on guardianship reform,
the report of which should be referred to for additional background. See Guardianship: An Agenda For Reform
15 (A.B.A. 1989). See also Stephen J. Anderer,
Determining Competency in Guardianship Proceedings (A.B.A. 1990). Courts
seeking guidance on particular factors to consider should also consult the
California Due Process in Competency Determination Act, California Probate Code
Section 811.
The
definition of “legal representative” (see
paragraph (5)) expands beyond the traditional lawyer to include as well those
who act in a legally recognized representative capacity, such as a
representative payee, trustee, custodian, and agent, as well as those who hold
Court appointments, such as the traditional guardian and conservator. This definition serves to identify those
persons who must receive notice of both guardianship and protective
proceedings, the lawyer, if any, as well as those others holding nominated
positions. See Sections 5-304, 5-403.
The
definition of “minor” (paragraph (6)) excludes a minor who has been
emancipated. The effect of this definition is to preclude the appointment of
either a guardian or conservator for an emancipated minor unless the
appointment is made for reasons other than the minor’s age. A guardianship or
conservatorship for a minor also terminates upon the minor’s emancipation. See Sections 5-210, 5-431. Under the
1982 UGPPA, the appointment of a guardian terminated upon the minor’s marriage
but not other emancipation, and the appointment of a conservator could continue
until the minor attained age 21, without regard to marriage or other
emancipating event.
The drafters of the 1997 revision intentionally
chose not to define parent (other than as those whose parental rights have not
been terminated), instead leaving the definition up to the enacting state’s
probate code. Thus, the definition of “parent” (see paragraph (7)) may or may
not include a step-parent. A parent whose parental rights have been terminated,
however, is not a parent as so defined even if the parent is allowed to inherit
from the child under the enacting state’s probate code. Because such a parent
has been found to be unfit, the parent is denied a continued role in
determining the child’s custody, including the appointment of a guardian,
whether by parental or Court appointment.
See Sections 5-202, 5-204,
5-205 and 5-403.
The person who is the subject of a proceeding is
referred to as the “respondent.” See paragraph
(9). Once a guardianship is established, the incapacitated person or minor is
referred to as the “ward.” See paragraph (10). Once the
conservatorship is established or other protective order entered, the
respondent who was the subject of the proceeding is referred to as the
“protected person.” See paragraph (8).
A person for whom a guardian and a conservator has been appointed or other
protective order made is both a ward and a protected person.
Section 5-103. [Reserved.]
COMMENT
Section
103 of the 1997 UGPPA, which is titled “Supplemental General Principles of Law
Applicable,” is identical to Section 1-103 of this Code and therefore need not
be duplicated here. Section 1-103
provides in its entirety, “ Unless displaced by the particular provisions of
this Code, the principles of law and equity supplement its provisions.” The
Section is marked as reserved in order to preserve the comparable numbering of
sections between the UGPPA and Parts 1-4 of this article.
Section 5-104. Facility Of Transfer.
(a) Unless a
person required to transfer money or personal property to a minor knows that a
conservator has been appointed or that a proceeding for appointment of a
conservator of the estate of the minor is pending, the person may do so, as to
an amount or value not exceeding [$5,000] a year, by transferring it to:
(1) a person who has the care and custody of the
minor and with whom the minor resides;
(2) a guardian of the minor;
(3) a custodian under the Uniform Transfers To Minors Act or custodial trustee under the Uniform Custodial Trust Act; or
(4) a financial institution as a deposit in an
interest-bearing account or certificate in the sole name of the minor and
giving notice of the deposit to the minor.
(b) A person
who transfers money or property in compliance with this section is not
responsible for its proper application.
(c) A guardian or other person who receives money or property for a minor under subsection (a)(1) or (2) may only apply it to the support, care, education, health, and welfare of the minor, and may not derive a personal financial benefit except for reimbursement for necessary expenses. Any excess must be preserved for the future support, care, education, health, and welfare of the minor, and any balance must be transferred to the minor upon emancipation or attaining majority.
COMMENT
When
a minor annually receives from a specific payer property or cash of $5,000 or
less, in all likelihood it will be expended for the ward’s support within the
year and it would be cumbersome and unnecessarily expensive to require the
establishment of a conservatorship to handle the payments. This section allows
the person required to transfer the property to do so in a more expeditious
way.
The
person required to transfer the property has the option of making the transfer
to the person having care and custody of the minor when the minor resides with
that person, or may instead make payments to the minor’s guardian, a custodian
under the Uniform Transfers to Minors Act or the custodial trustee under the
Uniform Custodial Trust Act, or to a financial institution where an
interest-bearing account or certificate in only the minor’s name is located.
The
protections of this section do not apply if the person required to make the
transfer knows that a conservator has been appointed or that there is a
proceeding pending for the appointment of a conservator. Consequently, the fact
that a guardian has been appointed does not require that payment be made to
that guardian. A guardian of a minor may receive payments but has no power to
compel payment from a third person. See
Section 5-208. Should a guardian desire such authority, the appropriate course
is for the guardian to petition the Court to be appointed as conservator.
Although
the person making the transfer has no duty or obligation to see that the money
or property is properly applied, this section is a default statute and does not
override any specific provisions in a will or trust instrument relating to
monies to be paid to a minor. In those cases, the duty of the person making the
transfer would be dictated by the terms of the instrument. This section also
does not override the provisions of other statutes in the enacting jurisdiction
such as the Uniform Transfers to Minors Act, which allow payment by alternative
means based on the size of the minor’s estate, as opposed to this section,
which allows payment based on the annual payment obligation of the person
making the payment.
The
section limits the use of the money or property to the minor’s support, care,
education, health or welfare. Only necessary expenses may be reimbursed from
this money or property, with the balance being preserved for the minor’s future
education, health, support, care or welfare. This section is not applicable to
child support payments made pursuant to a Court order because child support
payments are made to another for the minor’s benefit.
While
a recipient of funds is not a fiduciary in the normally understood sense of a
person appointed by the Court or by written instrument, a recipient under this
section is subject to fiduciary obligations. Under subsection (c), the
recipient may not derive any personal benefit from the transfer and must
preserve funds not used for the minor’s benefit and transfer any balance to the
minor upon emancipation or attainment of majority. Should the recipient misapply the funds or
property transferred, the recipient, given this fiduciary role, would be liable
for breach of trust.
The person receiving the monies may consider, in
appropriate cases, the purchase of an annuity or some other financial arrangement
whereby payout occurs at a time subsequent to the minor’s attainment of
majority. But to provide more certainty for the transaction, the recipient
should consider petitioning the Court under Section 5-412 for approval of the
purchase as a protective arrangement.
This section is derived from the UGPPA (1982)
Section 1-106 (UPC Section 5-101 (1982)).
Section 5-105. Delegation Of Power By Parent Or Guardian.
A
parent or guardian of a minor or incapacitated person, by a power of attorney,
may delegate to another person, for a period not exceeding six months, any
power regarding care, custody, or property of the minor or ward, except the
power to consent to marriage or adoption.
COMMENT
This
section provides for a temporary delegation of powers by the parent or
guardian. This section does not create a guardianship or grant a
parent powers not previously possessed – it merely allows delegation of the
powers that the individual already
has. Thus, the ability to make a
delegation under this section may be quite limited for a divorced parent
without day-to-day custody of a child and, depending on the state’s other laws,
may not exist at all for a parent of an adult child. But this section could be useful, for example,
in other types of situations when a parent or a guardian becomes ill or has to
be away from home for less than six months.
The parent or guardian under this section could execute a power of
attorney delegating to another some or all of the powers of the parent or
guardian. For example, a single parent
in the military who has to go on a tour of duty that will not exceed six months
could use this section to grant a power of attorney relating to the care of the
parent’s minor children. Should the tour
of duty exceed six months, the parent would then need to renew the power. Also, this section may be used when consent
to emergency treatment is needed.
This
section does not supersede the rights of persons, prior to their incapacity, to
delegate powers relating to their own financial or health-care decisions. This
section only authorizes the delegation of powers that are held by other
persons, and then only powers held by parents or guardians.
In
appropriate circumstances, a parent may wish to use a delegation under this
section in lieu of a standby appointment of a guardian under Sections 5-202 and
5-302. Because no preconditions are imposed, a delegation under this section is
easier to accomplish, although a renewal every six months will be required. A
parent with a potential personal incapacity may conclude that it is better to
secure the more permanent appointment of a guardian under Parts 2 or 3 rather
than to rely on a temporary delegation to an agent under this section.
Although
this section refers to a delegation of power over property, the application of
this section to management of property is in fact quite limited. Parts 2 and 3
of this article grant a guardian only limited powers over a ward’s property,
and the powers of a parent are similarly restricted. Should it become necessary
to secure powers over a minor’s or ward’s property, the appropriate step is to
petition the Court for appointment of a conservator. In particular, this
section does not grant a guardian appointed in the enacting jurisdiction
authority to manage the property of a ward located in another state. A
conservator would have such authority, however. See Sections 5-425(b)(1) and 5-433.
This
provision is based on UGPPA (1982) Section 1-107 (UPC Section 5-102 (1982)).
Section 5-106. Subject-Matter Jurisdiction.
Parts
1-4 of this Article apply to, and the court has jurisdiction over, guardianship
and related proceedings for individuals domiciled or present in this State,
protective proceedings for individuals domiciled in or having property located
in this State, and property coming into the control of a guardian or
conservator who is subject to the laws of this State.
COMMENT
This
section provides a clear delineation of jurisdiction over guardianships and
protective proceedings. Under the Act, jurisdiction over an individual’s person
is based on the person’s domicile or person’s physical location while
jurisdiction over a person’s property is based on the person’s domicile or the
property’s location. Consequently, location of property alone does not grant a Court
the authority to appoint a guardian for the person who owns the property. The
person must also be domiciled or physically located in the jurisdiction. Nor
does the physical location of a person alone grant the Court authority to
appoint a conservator or enter another protective order. The person must also be domiciled in or have
property located in the jurisdiction.
This
section should be read in conjunction with Sections 5-107 and 5-108. Section
5-107 allows for transfer of jurisdiction to a Court in another state or
foreign country, whether or not the Court in the other governmental unit
originally had jurisdiction to appoint a guardian or conservator or make
another protective order. Section 5-108, which contains the rules on venue,
acts as a restraint on the expansive jurisdiction granted under this section.
While the presence of property alone grants the Courts of a particular state
the jurisdiction to appoint a conservator, should the respondent be a resident
of a particular county within that state, only that county has authority to
make the appointment. Also, while physical presence alone generally grants the
Courts of a particular place jurisdiction to appoint a guardian, only the place
where an incapacitated person permanently resides has authority to appoint a
guardian on other than an emergency or temporary basis. Physical presence alone merely grants the
Court of the person’s location the authority to appoint an emergency or
temporary guardian.
This
section is pre-empted in part by the Parental Kidnaping Prevention Act (PKPA)
which, despite its name, is a comprehensive federal statute regulating all
types of interstate custody issues for minors, including appointment of
guardians. Under PKPA, the Court
supervising a minor’s guardianship will normally lose jurisdiction six months
after the minor’s removal from the state, even if the Court was not consulted
about the transfer. The federal statute,
however, does not apply with respect to proceedings relating to property or to
any proceeding involving an adult. For a discussion of the impact of PKPA and
related legislation on minors’ guardianships, see David M. English, Minors’
Guardianship in an Age of Multiple Marriage, 29 Inst. on Est. Plan. ¶ 500 et seq (1995).
Section 5-107. Transfer Of Jurisdiction.
(a) After the
appointment of a guardian or conservator entry of another protective order, the
court making the appointment or entering the order may transfer the proceeding
to a court in another [county] in this State or to another State if the court
is satisfied that a transfer will serve the best interest of the ward or
protected person.
(b) If a
guardianship or protective proceeding is pending in another state or foreign
country and a petition for guardianship or protective proceeding is filed in a
court in this State, the court in this State shall notify the original court
and, after consultation with the original court, assume or decline
jurisdiction, whichever is in the best interest of the ward or protected
person.
(c) A guardian, conservator, or like fiduciary appointed in another State may petition the court for appointment as a guardian or conservator in this State if venue in this State is or will be established. The appointment may be made upon proof of appointment in the other State and presentation of a certified copy of the portion of the court record in the other State specified by the court in this State. Notice of hearing on the petition, together with a copy of the petition, must be given to the ward or protected person, if the ward or protected person has attained 14 years of age, and to the persons who would be entitled to notice if the regular procedures for appointment of a guardian or conservator under this Article were applicable. The court shall make the appointment in this State unless it concludes that the appointment would not be in the best interest of the ward or protected person. Upon the filing of an acceptance of office and any required bond, the court shall issue appropriate letters of guardianship or conservatorship. Within 14 days after an appointment, the guardian or conservator shall send or deliver a copy of the order of appointment to the ward or protected person, if the ward or protected person has attained 14 years of age, and to all persons given notice of the hearing on the petition.
COMMENT
This
section is based on South Dakota Codified Laws Sections 29A-5-109 and
29A-5-114. This section sets out the process for transferring cases to another
county, state, or foreign country and the procedures by which a case
transferred in from another state or foreign country is to be received. In the
case of a guardianship for a minor under Part 2, the Uniform Child Custody
Jurisdiction and Enforcement Act should be consulted for additional rules on
when a case may be transferred and the procedures to be used when more than one
Court is involved in making these determinations.
This
section, and Section 5-108, which addresses the appropriate venue for the
appointment of a guardian or conservator, are designed to limit forum shopping
in which some guardians and conservators have engaged and also assist the
Courts in keeping track of guardianships and conservatorships. Some guardians and conservators have
attempted to thwart a Court’s authority by moving the ward or protected person
to another county, state, or foreign country.
The standard for transferring a guardianship or protective proceeding
under this section is always the best interest of the ward or protected person.
The
use of a best interest of the ward or protected person standard may be
differentiated for adults and minors. When dealing with an adult, the personal
values and current and past expressed desires of the ward or protected person
should be considered. To the extent that these personal values and expressed
desires are unknown, the guardian or conservator should make an effort to learn
the ward’s or protected person’s values and ask about the ward’s or protected
person’s desires. Considering the
personal values and expressed desires of the ward or protected person is also a
priority for decision making by guardians and conservators in general. See Sections 5-314(a), 5-411(c), and
5-418(b).
Once
the guardianship is established, the Court does not lose jurisdiction because
of a change in location of the guardian or the ward. See
Sections 5-201 and 5-301.
In
the case of intra-state transfer of proceedings, transfers should be made only
when the best interest of the ward or protected person will be advanced, and
care should be used by the Court to determine that this is not an attempt to
secure more favorable venue for other reasons. Under subsection (a), Courts
should be particularly cognizant in minors’ guardianships of attempts to use
such transfers to circumvent school district assignments or tuition payment
rules.
When
a guardianship or protective proceeding is started in one state and a
guardianship or conservatorship already exists in another state, the Courts
from those two states should communicate with each other. For purposes of subsection (b), the original
Court is the Court where the petition is first filed, not necessarily where the
appointment was first made. The second Court, only after consultation with the
Should a transfer of jurisdiction be appropriate, subsection (c) provides a simplified procedure for transferring the case. The subsection assumes that the appointment in the prior jurisdiction is appropriate and that there is consequently no need to duplicate the documentation and evaluations required in the original proceeding. The establishment of the new guardianship or protective proceeding is not automatic, however. In addition to the authority to decide that jurisdiction should not be transferred, the Court may also determine that the appointment is no longer in the best interest of the ward or protected person. The procedure made available in subsection (c) will most often be used for the appointment of a guardian when both the guardian and ward no longer reside in the state of the original appointment. The procedure will also prove useful when the appointment of an ancillary conservator is needed to administer property located in a state other than the state of the protected person’s domicile. The appointment of a guardian in the second state would be ineffective in such circumstances because a guardian does not have general authority to manage the ward’s property. Should a guardian discover that the ward has property located in another state, the guardian should explore the possibility of being appointed conservator in that or state.
Section 5-108. Venue.
(a) Venue for
a guardianship proceeding for a minor is in the [county] of this State in which
the minor resides or is present at the time the proceeding is commenced.
(b) Venue for
a guardianship proceeding for an incapacitated person is in the [county] of
this State in which the respondent resides and, if the respondent has been
admitted to an institution by order of a court of competent jurisdiction, in
the [county] in which the court is located. Venue for the appointment of an
emergency or a temporary substitute guardian of an incapacitated person is also
in the [county] in which the respondent is present.
(c) Venue for
a protective proceeding is in the [county] of this State in which the respondent
resides, whether or not a guardian has been appointed in another place or, if
the respondent does not reside in this state, in any [county] of this State in
which property of the respondent is located.
(d) If a proceeding under Parts 1-4 of this Article brought in more than one [county] of this State, the court of the [county] in which the proceeding is first brought has the exclusive right to proceed unless that court determines that venue is properly in another court or that the interests of justice otherwise require that the proceeding be transferred.
COMMENT
This
section consolidates but otherwise generally follows the venue provisions of
the 1982 UGPPA except that it allows for the appointment of a permanent
guardian for an incapacitated person only in the place where the incapacitated
person resides.
While
the venue provisions are generally consolidated in this section, there is one
exception. The venue provisions for the appointment of a guardian by a parent
or spouse without prior Court approval are contained in Sections 5-202 and
5-303. However, the subsequent petition
to the Court to confirm the parental or spousal appointment is subject to the
venue requirements of this section.
Section 5-109. [Reserved.]
COMMENT
Section 109 of the 1997 UGPPA, which is titled
“Practice in Court,” is similar to Sections 1-302(d) and 1-304 of this Code and
therefore need not be duplicated here. The Section is marked as “reserved” in
order to preserve the comparable numbering of sections between the UGPPA and
Parts 1-4 of this article.
Section 1-302(d) provides: “If both guardianship and
protective proceedings as to the same person are commenced or pending in the
same Court, the proceedings may be consolidated.”
Section
1-304 provides, “Unless specifically provided to the contrary in this Code or
unless inconsistent with its provisions, the rules of civil procedure,
including the rules concerning of vacation of orders and appellate review
govern formal proceedings under this Code.” Guardianship and conservatorship proceedings,
because they are conducted in front of a judge with notice to interested
persons, are classified as formal proceedings under the Code. See Section 1-201(17).
Section
5-110. Letters Of Office.
Upon the guardian’s filing of an acceptance of office, the court shall issue appropriate letters of guardianship. Upon the conservator’s filing of an acceptance of office and any required bond, the court shall issue appropriate letters of conservatorship. Letters of guardianship must indicate whether the guardian was appointed by the court, a parent, or the spouse. Any limitation on the powers of a guardian or conservator or of the assets subject to a conservatorship must be endorsed on the guardian’s or conservator’s letters.
COMMENT
A
guardian must file an acceptance of office while a conservator must file an
acceptance of office as well as any required bond. Any limits on the powers of
the guardian or conservator must be stated in the letters. This requirement
helps to secure the recognition and honoring of limited guardianships and
conservatorships.
Under Section 5-424(a), third persons are charged with knowledge of the restrictions endorsed on the letters of office and are subject to possible liability for failing to act in accordance with those restrictions. Either a certified or authenticated copy of the letters may serve as proof of authority by appointment.
Section 5-111. Effect Of Acceptance Of Appointment.
By accepting appointment, a guardian or conservator submits personally to the jurisdiction of the court in any proceeding relating to the guardianship or conservatorship. The petitioner shall send or deliver notice of any proceeding to the guardian or conservator at the guardian’s or conservator’s address shown in the court records and at any other address then known to the petitioner.
COMMENT
Once
the guardian or conservator accepts the appointment, the court has jurisdiction
over the guardian or conservator in any proceeding relating to the guardianship
or conservatorship. Regardless of where
the guardian or conservator may move, jurisdiction over the guardian or
conservator continues. See Sections
5-201 and 5-301. For purposes of giving notice of proceedings to a guardian or
conservator, petitioners may use the address of the guardian or conservator
that is in the court file, any other address known to the petitioner, or any
other procedure available under the enacting state’s rules of civil procedure.
It is incumbent on the guardian and the conservator to keep their current
addresses in the Court file.
Section 5-112. Termination Of Or Change In Guardian’s Or
Conservator's Appointment.
(a) The appointment of a guardian or conservator terminates upon the death, resignation, or removal of the guardian or conservator or upon termination of the guardianship or conservatorship. A resignation of a guardian or conservator is effective when approved by the court. [A parental or spousal appointment as guardian under an informally probated will terminates if the will is later denied probate in a formal proceeding.] Termination of the appointment of a guardian or conservator does not affect the liability of either for previous acts or the obligation to account for money and other assets of the ward or protected person.
(b) A ward, protected person, or person interested in the welfare of a ward or protected person may petition for removal of a guardian or conservator on the ground that removal would be in the best interest of the ward or protected person or for other good cause. A guardian or conservator may petition for permission to resign. A petition for removal or permission to resign may include a request for appointment of a successor guardian or conservator.
(c) The court may appoint an additional guardian or conservator at any time, to serve immediately or upon some other designated event, and may appoint a successor guardian or conservator in the event of a vacancy or make the appointment in contemplation of a vacancy, to serve if a vacancy occurs. An additional or successor guardian or conservator may file an acceptance of appointment at any time after the appointment, but not later than 30 days after the occurrence of the vacancy or other designated event. The additional or successor guardian or conservator becomes eligible to act on the occurrence of the vacancy or designated event, or the filing of the acceptance of appointment, whichever last occurs. A successor guardian or conservator succeeds to the predecessor’s powers, and a successor conservator succeeds to the predecessor’s title to the protected person’s assets.
COMMENT
Although a guardian or conservator may submit a
resignation at any time, the resignation is not effective until the Court has
approved it. A guardian or conservator, regardless of how the appointment ended,
is still liable for previous acts as well as the duty to account for the money
and assets of the ward or protected person. In the event of a termination of
appointment due to the guardian’s or conservator’s death, the duty to account
is normally performed by the personal representative of the guardian or
conservator. In the event of the removal of a guardian or conservator due to
the guardian’s or conservator’s own incapacity, the duty to account will
normally be performed by the guardian’s or conservator’s own guardian,
conservator or other legal representative.
Those
who may petition for removal of the guardian or conservator are the
incapacitated person, the protected person or a person interested in the
welfare of the incapacitated or protected person. Under subsection (b), the
ground for removal is the best interest of the ward or the protected person. In
determining whether it is in the best interest of the ward or protected person
for the guardian or conservator to be removed, the use of a best interest of
the ward or protected person standard in relation to an adult may be
differentiated from that used in reference to minors. When dealing with an
adult, every effort should be made to determine the wishes of the ward or
protected person regarding the removal of the guardian or conservator. In
determining the best interest of the adult ward or protected person, the ward’s
or protected person’s personal values and expressed desires, past or present,
should be considered. Considering the personal values and expressed desires of
the ward or protected person is also a priority consideration for decision
making by guardians and conservators in general. See
Sections 5-314(a), 5-411(c) and 5-418(b).
While
the section adopts a best interest of the ward or protected person standard,
Courts seeking more precisely stated reasons for removal may wish to consult
their state’s law on removal of a trustee. For a statutory list of reasons
directed specifically at removal of guardians or conservators, see South Dakota Codified Laws Section
29A-5-504.
Among
the reasons justifying removal under the South Dakota statute are: (1) securing
of the letters by material misrepresentation or mistake; (2) incapacity or
illness, including substance abuse,
affecting fitness for office; (3) conviction of a crime reflecting on
fitness; (4) wasting or mismanagement of the estate; (5) neglecting the care
and custody of the ward, protected person or legal dependents; (6) having an
adverse interest that poses a substantial risk that the guardian or conservator
will fail to properly perform duties; (7) failure to timely file a required
account or report or otherwise comply with a Court order; and (8) avoidance of
service of process or notice.
Under
subsection (c), the Court can appoint an additional guardian or conservator,
effective either upon appointment or upon a future contingency.
The
ability to appoint a successor or additional guardian to take office in the
future is different from the type of standby appointments authorized in
Sections 5-202 and 5-302. Those types of
appointments permit a guardian to be appointed to take office in the future
even though no guardian is currently in office. Under this section, only the
appointment of a successor or additional guardian or conservator is allowed.
Section 5-113. Notice.
(a) Except as
otherwise ordered by the court for good cause, if notice of a hearing on a
petition is required, other than a notice for which specific requirements otherwise provided, the petitioner shall give
notice of the time and place of the hearing to the person to be notified.
Notice must be given in compliance with [insert the applicable rule of civil
procedure], at least 14 days before the hearing.
(b) Proof of
notice must be made before or at the hearing and filed in the proceeding.
(c) A notice
under Parts 1-4 of this Article must be given in plain language.
COMMENT
Notice
may be provided by mail as well as by private courier or delivery service. If the adopting states’s rules allow, a faxed
copy of the notice may be an appropriate method of providing notice. This section does not supersede specific
notice requirements provided elsewhere in this article. Special notice
requirements apply to a petition for the appointment of an emergency guardian
and to service on the respondent of a petition for the appointment of a
guardian or conservator or other protective order. See Sections 5-309, 5-312, and 5-404. The requirement of at least
fourteen days’ prior notice is copied from the 1982 UGPPA. A fourteen day prior
notice provision has also been part of the UPC, including its provisions on
guardianships and protective proceedings, since the inception of the Code.
Under this section, notice should be given using the method of notice provided
in the enacting jurisdiction’s applicable rule of civil procedure. However, the
time limit for notice contained in subsection (a) should be applied, even if
different from that in the state’s applicable rule.
Subsection (c) provides that the notice be in
plain language. The requirement that all notices be given in plain language is
based on a recommendation of the Wingspread conference on guardianship reform. See Guardianship:
An Agenda for Reform 9 (A.B.A. 1989). Although this section does not
require it, if English is not the respondent’s primary language, best practice
and due process would direct that a copy of the notice be provided in the
respondent’s primary language.
Section 5-114. Waiver Of Notice.
A
person may waive notice by a writing signed by the person or the person’s
attorney and filed in the proceeding.
However, a respondent, ward, or protected person may not waive notice.
COMMENT
Waivers in this section include both specific and
general waivers. Under no circumstances may the respondent, ward, or protected
person waive notice. The protection provided by this section applies to all
petitions brought under Parts 1-4 of this article but is particularly pertinent
to original petitions for appointment of a guardian or conservator or other
protective order. See Sections 5-309
and 5-404. In consequence, except as ordered by the Court under Section 5-113
for good cause, a period of at least fourteen days must elapse between the
filing of the petition and the hearing whenever notice to a respondent, ward,
or protected person is required. The source
of this section in UGGPPA (1992) Section 1-402.
Section 5-115. Guardian Ad Litem.
At
any stage of a proceeding, a court may appoint a guardian ad litem if the court
determines that representation of the interest otherwise would be
inadequate. If not precluded by a
conflict of interest, a guardian ad litem may be appointed to represent several
individuals or interests. The court
shall state on the record the duties of the guardian ad litem and its reasons for
the appointment.
COMMENT
Appointments under this section will be infrequent.
If the respondent is currently represented, the attorney representing the
respondent should not be appointed as the guardian ad litem because of the
conflict of interest, since there is a distinct difference between the role of
the attorney as an advocate and as a guardian ad litem. It is important that
the Court, when appointing a guardian ad litem, advise the guardian ad litem of
his or her role. This section encourages the giving of such advice by requiring
that the Court record the duties of the guardian ad litem and its reasons for
the appointment. The source of this
section is UGPPA (1982) Section 1-403 (UPC Section 1-403(4) (1982)).
Section 5-116. Request For Notice; Interested Persons.
An
interested person not otherwise entitled to notice who desires to be notified
before any order is made in a guardianship proceeding, including a proceeding
after the appointment of a guardian, or in a protective proceeding, may file a
request for notice with the clerk of the court in which the proceeding is
pending. The clerk shall send or deliver
a copy of the request to the guardian and to the conservator if one has been
appointed. A request is not effective unless it contains a statement showing
the interest of the person making it and the address of that person or a lawyer
to whom notice is to be given. The
request is effective only as to proceedings conducted after its filing. A
governmental agency paying or planning to pay benefits to the respondent or
protected person is an interested person in a protective proceeding.
COMMENT
This section allows an interested person not
otherwise entitled to notice to file a request for special notice with the
guardian or conservator. For purposes of this section, an interested person in
a protective proceeding includes a creditor, secured or otherwise. The section also specifically provides that
an interested person in a protective proceeding includes a governmental agency
that is or will be paying benefits to the respondent or protected person.
Whether a creditor, governmental agency or other person is an interested person
as the term is used elsewhere in Parts 1-4 of this article must be determined
according to the particular issue involved. For example, under certain circumstances
an interested person could include a member of the media or a “watch-dog”
agency. For a request for special notice
to be effective, a statement of the person’s interest must be contained in the
request.
This section is based on UGPPA (1982) Section 1-404
(UPC Section 5-104 (1982)).
Section 5-117. Multiple Appointments Or Nominations.
If
a respondent or other person makes more than one written appointment or
nomination of a guardian or a conservator, the most recent controls.
COMMENT
The
most recent appointment or nomination would be the one with the most recent
date during the period when the respondent had capacity to make the appointment
or nomination. If the most recent appointment is determined invalid due to the
respondent’s lack of capacity, the prior appointment would control.
PART 2
GUARDIANSHIP
OF MINOR
Section 5-201. Appointment And Status Of Guardian.
A
person becomes a guardian of a minor by parental appointment or upon
appointment by the court. The
guardianship continues until terminated, without regard to the location of the
guardian or minor ward.
COMMENT
This
part provides for the creation and administration of guardianship over minors.
The Court’s ability to appoint a guardian for a minor under this part is in
certain cases partially or wholly superseded by special legislation relating to
custody of minors. Reference should also be made to the Uniform Child Custody
Jurisdiction and Enforcement Act, the Parental Kidnaping Prevention Act, 28
U.S.C. § 1738A, and the Indian Child Welfare Act, 25 U.S.C. § 1901 et seq.
For a discussion of the jurisdictional limitations, see David M. English, Minors’
Guardianship in an Age of Multiple Marriage, 29 Inst. on Est. Plan. ¶¶ 500,
502 (1995).
This
section recognizes the creation of a guardianship by parental appointment under
Section 5-202 as well as those created by the Court under Section 5-205. A
guardian or the ward can move from the jurisdiction in which the Court is
located, yet the guardianship will continue until terminated and remains under
the Court’s jurisdiction. See Section
5-107 regarding transfers of jurisdiction and Section 5-111 regarding the
effect of acceptance of appointment.
This section is the same as UGPPA (1992) Section
2-101 (UPC Section 5-201 (1982)).
Section 5-202. Parental Appointment Of Guardian.
(a) A guardian
may be appointed by will or other signed writing by a parent for any minor
child the parent has or may have in the future.
The appointment may specify the desired limitations on the powers to be
given to the guardian. The appointing parent may revoke or amend the
appointment before confirmation by the court.
(b) Upon
petition of an appointing parent and a finding that the appointing parent will
likely become unable to care for the child within [two] years, and after notice as provided in Section 5-205(a), the
court, before the appointment becomes effective, may confirm the parent’s
selection of a guardian and terminate the rights of others to object.
(c) Subject to Section 5-203, the appointment of a guardian becomes effective upon the appointing parent’s death, an adjudication that the parent is an incapacitated person, or a written determination by a physician who has examined the parent that the parent is no longer able to care for the child, whichever first occurs.
(d) The
guardian becomes eligible to act upon the filing of an acceptance of
appointment, which must be filed within 30 days after the guardian’s
appointment becomes effective. The guardian shall:
(1) file the acceptance of appointment and a copy of the will with the court of the [county] in which the will was or could be probated or, in the case of another appointing instrument, file the acceptance of appointment and the appointing instrument with the court of the [county] in which the minor resides or is present; and
(2) give written notice of the acceptance of
appointment to the appointing parent, if living, the minor, if the minor has
attained 14 years of age, and a person other than the parent having care and
custody of the minor.
(e) Unless the
appointment was previously confirmed by the court, the notice given under
subsection (d)(2) must include a statement of the right of those notified to
terminate the appointment by filing a written objection in the court as
provided in Section 5-203.
(f) Unless the
appointment was previously confirmed by the court, within 30 days after filing
the notice and the appointing instrument, a guardian shall petition the court
for confirmation of the appointment, giving notice in the manner provided in
Section 5-205(a).
(g) The
appointment of a guardian by a parent does not supersede the parental rights of
either parent. If both parents are dead or have been adjudged incapacitated
persons, an appointment by the last parent who died or was adjudged
incapacitated has priority. An appointment by a parent which is effected by
filing the guardian’s acceptance under a will probated in the State of the
testator’s domicile is effective in this State.
(h) The powers
of a guardian who timely complies with the requirements of subsections (d) and
(f) relate back to give acts by the guardian which are of benefit to the minor
and occurred on or after the date the appointment became effective the same
effect as those that occurred after the filing of the acceptance of the
appointment.
(i) The
authority of a guardian appointed under this section terminates upon the first
to occur of the appointment of a guardian by the court or the giving of written
notice to the guardian of the filing of an objection pursuant to Section 5-203.
COMMENT
This
section enables a parent to make an advance appointment of a “standby” guardian
whose powers become effective upon the occurrence of certain specified
contingencies. The standby appointment procedure under this section is available
to all parents, but is particularly beneficial for parents with pending
incapacities which will likely render them unable to care for their children at
some point prior to their deaths. The section, like UGPPA (1982) Section 2-102
(UPC Section 5-202 (1982)), allows for the appointment of a guardian effective
upon a parent’s death or adjudication of incapacity. Additionally, following
the lead of a growing number of free-standing standby guardianship statutes
enacted by several states, it allows for an appointment to become effective
upon a determination that the parent is no longer able to provide care. For
analysis of these state]\ statutes, see Joshua
S. Rubenstein, Standby Guardianship
Legislation: Preparing Before the Tidal Wave Hits, 22 ACTEC Notes 60
(1996). The parent can make either type of appointment in a will or other
signed writing, including a power of attorney, a trust or a document executed
for the sole purpose of appointing the guardian.
Under
subsection (c), the contingencies upon which the authority of the standby
guardian will become effective are the parent’s death, adjudication of
incapacity or written determination by a physician who has examined the parent
that the parent is no longer able to care for a minor child. The physician making
the written determination should be the parent’s treating physician whenever
possible, to avoid the possibility of the other parent manipulating this
process in a custody battle.
In
the case of a parent who has disappeared, the appointment of an emergency
guardian should be sought under Section 5-204(e). Under that section,
preference will be given to the nominated guardian absent a showing that it is
not in the best interest of the minor child for that person to be appointed.
Subsection
(a) recognizes that the appointing parent may have additional children after
making the appointment, so the provision allows a parent to appoint a guardian
for children who may later be born, adopted or whose custody may be given to
the appointing parent, without the need to re-execute the nomination.
The
appointment of a person as guardian under this section creates a rebuttable
presumption that the appointed person should be appointed as guardian and that
the Court should not disregard the appointment without good cause. A person who
chooses not to accept the appointment is not liable for failing to act.
Under
subsection (b), the appointing parent may petition the Court prior to the
triggering event for advance confirmation of the appointment. Advance Court confirmation terminates both
the right of others to object, including an objection by the child’s other
parent, and the right of the appointing parent to revoke the appointment. Subsection (b) provides that a petition for
advance Court confirmation may be made at anytime within the recommended two
years from the date of the likely need, but this time limit is placed in
brackets to indicate that the enacting jurisdiction is free to select a
different time period. Depending on the
length of time set by the enacting states, Courts may need to show flexibility
regarding the time limit. It may be difficult for the appointing parent to
prove with absolute certainty that the appointing parent will become unable to
care for the child within the specified period of time. Courts should liberally
construe this provision in favor of the appointing parent. For this reason,
subsection (b) does not require absolute certainty, and instead uses the
standard that it is “likely” that the guardian will be needed within the time
period. If the Court confirms the guardian in advance and the stated deadline
(e.g., two years) has passed without the guardian’s filing the acceptance of
appointment required under subsection (d), the Court should hold a hearing to
determine the appointing parent’s status and whether the advance confirmation
should continue.
While
this section allows the Court to confirm an appointment in advance, more
typically the guardian will assume duties based solely on the parent’s written
appointment. A guardian so appointed must then seek Court confirmation, thereby
turning the standby appointment into a regular guardianship. Allowing the guardian’s appointment to become
effective immediately upon the triggering event avoids gaps in the care and
custody of the child. The purpose of the confirmation of appointment process
contained in subsections (d)-(f) is to convert a nominated guardianship into a
regular guardianship as soon as possible.
The Court should develop procedures to monitor the conversions.
The
section does not specifically enumerate the contents of the petition for
confirmation of appointment to be filed by the guardian. In order for the Court
to make an informed review, the petition should include the name and address of
the minor; the identity and whereabouts of all persons having parental rights
or serving as guardian; the petitioner’s name and address, relationship to the
parent and child, interest in the appointment, and a statement of the
petitioner’s willingness to serve; information about any custody orders; any
limitations the appointing parent has placed on the powers of the appointed
guardian, the powers to be given the guardian, and if an unlimited
guardianship, a statement why a limited guardianship would not work; and
reasons why the appointment should be confirmed. The petition should be
accompanied by a death certificate, an order of adjudication of incapacity or a
written statement by the physician who has examined the appointing parent that
the appointing parent is no longer able to care for the minor child. In this
last case, the written statement should include the prognosis and diagnosis of
the parent’s condition, as well as the date of the doctor’s examination of the
parent. The petition should be accompanied by a copy of the appointing
instrument, as well as any other relevant documents, such as a custody order or
an order terminating parental rights. If the selection as guardian was
previously confirmed pursuant to subsection (b), a copy of the order of
confirmation should accompany the required notice.
Under
subsection (g), the appointment of a guardian by a parent does not supersede
the parental rights of either parent.
Until the appointment is confirmed by the Court, the rights of the
parent and the rights of the guardian coexist. While parental rights are not
terminated, at least in theory, the guardian will often supersede the parental
rights in fact. The parent making the appointment will no longer be able to
provide care for the child, even though not yet legally incapacitated, and the
other parent may be uninterested or unable to provide care for the child. To
provide more certainty to the situation, the appointee should seek Court
confirmation of the parental appointment as soon as possible.
At
the hearing on the petition for confirmation, if the Court finds that the
appointing parent will not regain the ability to care for the minor child, the
Court should enter an order confirming the appointment, absent evidence
rebutting the presumption that the appointment is in the child’s best interest.
If the Court finds that the parent may regain ability to care for the minor
child, the Court should enter an order confirming the appointment for a period
of time deemed appropriate by the Court.
An order of confirmation cuts off the right to object of the minor, the
other parent, or a person other than a parent having care and custody of the
minor. The confirmation also supersedes
the rights of the non-appointing parent.
Until
the parental appointment is confirmed by the Court, the minor, the other parent
or the person other than the parent having care and custody of the minor may
file an objection to the appointment under Section 5-203. See subsections (c) and (e). If an objection is filed, the
appointed guardian has no authority to act and instead must petition the Court
for appointment as guardian under Section 5-205.
Section
(h) provides that the timely performance of the requirements for the guardian’s
acceptance of office relate back to give any acts performed between the
appointment becoming effective and the guardian’s filing of the notice of
acceptance the same effect as those occurring after the filing of the notice of
acceptance, as long as the prior acts are beneficial to the minor. In the event
of a dispute regarding whether a guardian’s prior act should be validated, the
Court first determines whether the act was beneficial to the minor, and if the
Court determines the act was beneficial, then subsection (h) will apply.
Unless
stated to the contrary in this section, the other provisions of this article
relating to guardians apply to a guardian appointed under this section,
including the provisions relating to the duties and powers of guardians.
Section 5-203. Objection By Minor Or Others To Parental
Appointment.
Until
the court has confirmed an appointee under Section 5-202, a minor who is the
subject of an appointment by a parent and who has attained 14 years of age, the
other parent, or a person other than a parent or guardian having care or
custody of the minor may prevent or terminate the appointment at any time by
filing a written objection in the court in which the appointing instrument is
filed and giving notice of the objection to the guardian and any other persons
entitled to notice of the acceptance of the appointment. An objection may be
withdrawn, and if withdrawn is of no effect. The objection does not preclude
judicial appointment of the person selected by the parent. The court may treat
the filing of an objection as a petition for the appointment of an emergency or
a temporary guardian under Section 5-204, and proceed accordingly.
COMMENT
This
section provides a mechanism for a listed group of individuals to object to a
parental appointment made under Section 5-202 and to turn the appointment into
a contested proceeding. The individuals who may object include the minor, if at
least fourteen years old, as well as the other parent or a person other than a
parent or guardian who has care or custody of the minor. The objection must be
in writing and can be filed at any time prior to the Court’s confirmation of
the appointment.
If
an objection is filed, the appointee has no authority to act and instead must
file a petition for appointment as guardian under Section 5-205. Although the
minor, the other parent, or the person who has care or custody of the minor may
object to the appointment, the Court still may appoint the person selected by
the parent over the objection. An objection that is not timely filed will not
prevent the appointment.
When
an objection is filed, the Court may choose to treat the objection as a
petition for the appointment of an emergency (or in appropriate cases,
temporary) guardian under Section 5-204, and use the expedited process
contained therein.
This
section is based on UGPPA (1982) Section 2-103 (UPC Section 5-203 (1982)).
Section 5-204. Judicial Appointment Of Guardian: Conditions For Appointment.
(a) A minor or
a person interested in the welfare of a minor may petition for appointment of a
guardian.
(b) The court
may appoint a guardian for a minor if the court finds the appointment is in the
minor’s best interest, and:
(i) the parents consent;
(ii) all parental rights have been terminated; or
(iii)the
parents are unwilling or unable to exercise their parental rights.
(c) If a guardian
is appointed by a parent pursuant to Section 5-202 and the appointment has not
been prevented or terminated under Section 5-203, that appointee has priority
for appointment. However, the court may proceed with another appointment upon a
finding that the appointee under Section 5-202 has failed to accept the
appointment within 30 days after notice of the guardianship proceeding.
(d) If
necessary and on petition or motion and whether or not the conditions of
subsection (b) have been established, the court may appoint a temporary
guardian for a minor upon a showing that an immediate need exists and that the
appointment would be in the best interest of the minor. Notice in the manner
provided in Section 5-113 must be given to the parents and to a minor who has
attained 14 years of age. Except as otherwise ordered by the court, the
temporary guardian has the authority of an unlimited guardian, but the duration
of the temporary guardianship may not exceed six months. Within five days after
the appointment, the temporary guardian shall send or deliver a copy of the
order to all individuals who would be entitled to notice of hearing under
Section 5-205.
(e) If the
court finds that following the procedures of this part will likely result in
substantial harm to a minor’s health or safety and that no other person appears
to have authority to act in the circumstances, the court, on appropriate
petition, may appoint an emergency guardian for the minor. The duration of the guardian’s authority may
not exceed [30] days and the guardian may exercise only the powers specified in
the order. Reasonable notice of the time and place of a hearing on the petition
for appointment of an emergency guardian must be given to the minor, if the
minor has attained 14 years of age, to each living parent of the minor, and a
person having care or custody of the minor, if other than a parent. The court
may dispense with the notice if it finds from affidavit or testimony that the
minor will be substantially harmed before a hearing can be held on the
petition. If the guardian is appointed without notice, notice of the
appointment must be given within 48 hours after the appointment and a hearing
on the appropriateness of the appointment held within [five] days after the
appointment.
COMMENT
The Court, in order to make an informed decision on
a petition for appointment, must have as much information as possible. The Court should require that the following
specific information be contained in a petition filed under subsection (a): the
name, age and address of the minor; the name and address of the petitioner and
the petitioner’s relationship to the minor; the name and address of the
proposed guardian, the proposed guardian’s relationship to the minor and the
proposed guardian’s qualifications to serve as guardian; whether the minor’s
school district would change if a guardian is appointed; and information about
the parents of the minor, their whereabouts, and if missing or absent, the
circumstances surrounding their absence and whether any Court has entered any
order regarding their parental rights. The petition should also include
information about the minor’s property and, if the guardian is appointed, where
the minor would live, as well as any other information that the Court would
deem relevant. The Court should examine the petition to make sure this
information has been supplied as fully as possible and should reject any
petitions that provide insufficient information.
Subsection
(a) allows a petition to be filed either by the minor or by any person
interested in the minor’s welfare. A person interested in the minor’s welfare
is any person with a serious interest or concern for the minor’s welfare,
including both relatives and non-relatives having knowledge of the
circumstances, as well as public officials from relevant agencies. Should the
Court determine that the petitioner’s concerns stem from interests other than
the welfare and best interest of the minor, the Court may dismiss the petition.
Under
this section, the appointment can be made in one of three situations: when the
parents consent, when all parental rights have been terminated or when the
parents are unable or unwilling to exercise their parental rights. In the last
situation, the Court must decide whether a parent is unwilling or unable to
act. See David M. English, Minors’ Guardianship in an Age of Multiple
Marriage, 29 Inst. on Est. Plan. ¶¶ 500, 503 (1995), for a discussion of
criteria applied in determining unwillingness or unfitness of a parent to care
for a minor child. This section is not
to be used to resolve custody disputes between parents that are more
appropriately resolved in a family law proceeding. See comments to UGPPA (1982) Section 2-104 (UPC Section 5-204
(1982)).
If
the parent has made an appointment pursuant to Section 5-202, this section
provides the parental appointee with priority for appointment if a petition for
appointment of guardian of the minor is subsequently filed. Where, however, the
appointee failed to timely accept the appointment as required in Section 5-202,
the Court can appoint another to serve as the guardian. The parental appointee has priority for
appointment by the Court even over the nominee of a minor age fourteen or
older.
On
occasion, parents have established a guardianship for their minor child in
order to change the child’s school district.
Allowing for such use of guardianship is inconsistent with the intent of
this section. For that reason, the recommended information to be contained in
the petition includes a statement as to whether the child’s school district
will change. This information puts the
Court on notice that the parents may be attempting to use a guardianship to
manipulate a school assignment. The Court should inquire whether there will be
a change in the minor’s school assignment if a guardian is appointed. Even when
a change of school districts is not mentioned, the Court should inquire whether
there will be a change in the minor’s school district if a guardian is
appointed.
Subsection
(d) provides for the appointment of a temporary guardian on appropriate
petition or motion, when the Court finds that an immediate need exists and it
is in the minor’s best interest for a temporary guardian to be appointed. The
temporary guardianship provision is based on South Dakota Codified Laws Section
29A-5-210. Notice is required as provided in Section
5-113.
The temporary guardian has the same authority as an unlimited guardian, but the
guardianship may not last for more than six months. If the need for a guardian
continues beyond six months, then the temporary guardian should file a petition
under Section 5-205 to be appointed as unlimited guardian.
All
individuals listed in Section 5-205(a) are required to receive notice in a
temporary guardianship proceeding under subsection (d). The six month
limitation on the temporary guardianship does not prevent the renewal or
extension of the guardianship by Court order at the expiration of the six
months.
However,
if the duration needs to be extended, the Court should examine whether a
regular guardianship of the minor would be more appropriate.
Under
subsection (e), in emergencies, where following the procedures specified in
Section 5-205 would result in serious harm to the minor’s health or safety and
where there is no one with authority or who is willing to act, the Court, on
petition, may appoint an emergency guardian for up to thirty days. Prior notice
is required unless the Court finds from affidavit or testimony that the minor
will be seriously harmed during the time needed to give notice. Only then may
the Court act without notice.
Section 5-205. Judicial Appointment Of Guardian: Procedure.
(a) After a petition for appointment of a guardian is filed, the court shall schedule a hearing, and the petitioner shall give notice of the time and place of the hearing, together with a copy of the petition, to:
(1) the minor, if the minor has attained 14 years
of age and is not the petitioner;
(2) any person alleged to have had the primary
care and custody of the minor during the 60 days before the filing of the
petition;
(3) each living parent of the minor or, if there
is none, the adult nearest in kinship that can be found;
(4) any person nominated as guardian by the minor
if the minor has attained 14 years of age;
(5) any appointee of a parent whose appointment
has not been prevented or terminated under Section 5-203; and
(6) any guardian or conservator currently acting
for the minor in this State or
elsewhere.
(b) The court, upon hearing, shall make the appointment if it finds that a qualified person seeks appointment, venue is proper, the required notices have been given, the conditions of Section 5-204(b) have been met, and the best interest of the minor will be served by the appointment. In other cases, the court may dismiss the proceeding or make any other disposition of the matter that will serve the best interest of the minor.
(c) If the court determines at any stage of the proceeding, before or after appointment, that the interests of the minor are or may be inadequately represented, it may appoint a lawyer to represent the minor, giving consideration to the choice of the minor if the minor has attained 14 years of age.
COMMENT
If
the conditions for appointment set out in subsection (b) have not been met, or
if the appointment is not in the minor’s best interest, the Court should
dismiss the petition or make any other order that serves the minor’s best
interest, including, where appropriate, treating the petition as one for the
appointment of a conservator or other protective order under Part 4.
Under
subsection (a)(3), if both parents are dead, notice and a copy of the petition
must be given to the adult nearest in kinship. Where there is more than one
adult in the same class, notice to one is sufficient.
The Court may, at any stage of the proceeding,
appoint a lawyer to represent the minor if the conditions in subsection (c) are
met. If the minor is at least fourteen years old, the minor’s preference for a
lawyer must be considered by the Court in appointing counsel.
This section is based on UGPPA (1982) Section 2-106
(UPC Section 5-206 (1982)).
Section 5-206. Judicial Appointment Of Guardian: Priority Of
Minor’s Nominee; Limited Guardianship.
(a) The court
shall appoint as guardian a person whose appointment will be in the best
interest of the minor. The court shall
appoint a person nominated by the minor, if the minor has attained 14 years of
age, unless the court finds the appointment will be contrary to the best
interest of the minor.
(b) In the interest
of developing self-reliance of a ward or for other good cause, the court, at
the time of appointment or later, on its own motion or on motion of the minor
ward or other interested person, may limit thereby create a limited
guardianship. Following the same procedure, the court may grant additional
powers or withdraw powers previously granted.
COMMENT
Absent
a parental appointment, the only person having preference for appointment as
guardian under this section is the person nominated by a minor age fourteen or
older, as long as that person’s appointment would be in the minor’s best
interest. The priority granted under this section
does not override the preference given to the parental appointee under Section
5-204(c). Regardless of the preference granted, the standard used by the Court
in determining whom to appoint as guardian is the minor’s best interest.
Subsection
(b) applies the concept of limited guardianship to minors. A Court, whenever
possible, should only grant to the guardian those powers actually needed. The
Court should be specific about identifying the powers of the guardian regarding
the minor’s education, care, health, safety, and welfare. This section gives
the Court flexibility to design the guardianship in a way to empower the minor
as much as possible to make the minor’s own decisions, either at the time of
appointment or at a later date. Subsection (b) can be used by the Court to
either expand or limit the guardian’s
powers. Although the Court can grant additional powers, the Court cannot grant
powers beyond those provided in Part 2.
Subsection (a) is based on UGPPA (1982) Section 2-107 (UPC Section 5-207 (1982)). Subsection (b) is based on UGPPA (1982) Section 2-109(e) (UPC Section 5-209(e) (1982)).
Section 5-207. Duties Of Guardian.
(a) Except as
otherwise limited by the court, a guardian of a minor ward has the duties and
responsibilities of a parent regarding the ward’s support, care, education,
health, and welfare. A guardian shall act at all times in the ward’s best interest
and exercise reasonable care, diligence, and prudence.
(b) A guardian
shall:
(1) become or remain personally acquainted with
the ward and maintain sufficient contact with the ward to know of the ward’s
capacities, limitations, needs, opportunities, and physical and mental health;
(2) take reasonable care of the ward’s personal
effects and bring a protective proceeding if necessary to protect other
property of the ward;
(3) expend money of the ward which has been received by the guardian for the ward’s current needs for support, care, education, health, and welfare;
(4) conserve any excess money of the ward for the ward’s future needs, but if a conservator has been appointed for the estate of the ward, the guardian shall pay the money at least quarterly to the conservator to be conserved for the ward’s future needs;
(5) report the condition of the ward and account for money and other assets in the guardian’s possession or subject to the guardian’s control, as ordered by the court on application of any person interested in the ward’s welfare or as required by court rule; and
(6) inform the court of any change in the ward’s custodial dwelling or address.
COMMENT
A
guardian of a minor is basically a substitute parent, but without the personal
financial responsibility for the minor’s support. The standard of care for the
guardian is contained in subsection (a). As provided in subsection (a), the
duties of a parent to which the guardian succeeds are those relating to the
minor’s support, care, education, health, and welfare. A guardian also has
certain fiduciary responsibilities. A guardian must at all times act in the
minor’s best interest and exercise reasonable care, diligence, and prudence.
Subsection (b) of this section, and Sections 5-208 and 5-209 are in substantial
part expansions on these underlying responsibilities, specifying subsidiary
duties and the powers and immunities necessary to properly implement this role.
A
guardian is more than a caretaker. To properly perform the office of guardian,
it is essential that the guardian, as required by subsection (b)(1), become or
remain personally acquainted with the ward and maintain sufficient contact with
the ward to know of the capacities, limitations, needs, opportunities, and
physical and mental health of the ward. Such contact is also essential if the
guardian is to act in the best interest of the ward.
The
development of the self-reliance of the ward is one of the major themes of the
Code, as demonstrated by the emphasis on limited guardianship, both for minors
and adults. See Section 5-206(b). To develop the self-reliance of the minor,
whether the guardianship for the minor ward is limited or unlimited, it is
essential that the minor be involved in decision making, that the guardian
ascertain the minor’s views and that the guardian, whenever appropriate, make
decisions in line with the minor’s expressed preferences. In line with this
philosophy, Section 5-208(b)(6) permits the guardian, if reasonable under all
of the circumstances, to delegate to the ward certain responsibilities for
decisions affecting the ward’s well-being.
A
guardian’s powers with respect to the property of the ward are very limited. If
the ward has significant property that requires management, the guardian should
petition the court for the appointment of a conservator or other protective
order as provided in subsection (b)(2). However, subsection (b)(3) requires
that the guardian use the ward’s funds, including government benefits received
for the ward, for the ward’s support, care, education, health, and welfare. The
guardian must conserve any excess funds not expended for the ward’s future
needs, and periodically turn over the excess to the conservator, if one has
been appointed. See subsection
(b)(4). A guardian may also be required to report the ward’s condition to the
court as well as to account for money and other assets in the guardian’s
possession or subject to the guardian’s control. See subsection (b)(5).
Subsection
(b)(6), which is new to the Act, requires that the court be informed whenever
there is a change in the custodial dwelling or address of the ward. Temporary
absences, such as for vacations, need not be reported. This required reporting
to the court is consistent with the recommendation in National Probate Court Standards, Standard 3.3.14 “Reports by the
Guardian” (1993). Keeping the court informed of the minor ward’s location will
enable the court to exercise appropriate oversight of the guardianship. If the
ward is removed to another state, it will also prevent the court from losing
jurisdiction over the case without the court’s knowledge. See also Section 5-208(b)(2), which requires the permission of the
court before the ward may be relocated to another state.
This
section is based on UGPPA (1982) Section 2-109(a)-(b) (UPC Section 5-209(a)-(b)
(1982)).
Section 5-208. Powers Of Guardian.
(a) Except as
otherwise limited by the court, a guardian of a minor ward has the powers of a
parent regarding the ward’s support, care, education, health, and welfare.
(b) A guardian
may:
(1) apply for and receive money for the support of
the ward otherwise payable to the ward’s parent, guardian, or custodian under
the terms of any statutory system of benefits or insurance or any private
contract, devise, trust, conservatorship, or custodianship;
(2) if otherwise consistent with the terms of any order by a court of competent jurisdiction relating to custody of the ward, take custody of the ward and establish the ward’s place of custodial dwelling, but may only establish or move the ward’s custodial dwelling outside the State upon express authorization of the court;
(3) if a conservator for the estate of a ward has
not been appointed with existing authority, commence a proceeding, including an administrative
proceeding, or take other appropriate action to compel a person to support the
ward or to pay money for the benefit of the ward;
(4) consent to medical or other care, treatment,
or service for the ward;
(5) consent to the marriage of the ward; and
(6) if reasonable under all of the circumstances,
delegate to the ward certain responsibilities for decisions affecting the
ward’s well-being.
(c) The court
may specifically authorize the guardian to consent to the adoption of the ward.
COMMENT
This
section should be read with Section 5-207.
Section 5-207 sets out the duties of the guardian: those
responsibilities which a guardian may not ignore. This section sets out the
guardian’s powers, the grant of which are necessary in order for the guardian
to carry out the duties specified in Section 5-207.
Section 5-207(a) imposes on the guardian certain of
the duties of a parent. To enable the guardian to properly carry out those
duties, subsection (a) of this section grants the guardian corresponding powers
of a parent with regard to the support, care, education, health, and welfare of
the ward. Subsection (b) then lays out specific applications of the general
powers granted in subsection (a).
Subsections
(b)(1) and (b)(3) enable the guardian to carry out the guardian’s limited
duties with respect to the management of the property of the ward. For these
duties, see subsections (b)(2)-(5) of
Section 5-207. The powers of the guardian over the minor ward’s property are
quite limited, recognizing that a conservator should be appointed or other
protective order sought for the minor in appropriate circumstances. The
guardian is authorized under subsection (b)(1) to apply for government benefits
to which the ward is entitled. Under Section 5-207(b)(3), the guardian must use
those benefits for the ward’s support, care, education, health, and welfare.
Upon appointment, a guardian should also investigate whether proper application
has been made for all governmental benefits to which the ward may be entitled.
It may also be necessary for the guardian to seek appointment as a
representative payee, should the governmental agency in question use a
representative payee mechanism for making payments on behalf of beneficiaries
without legal capacity.
Subsection
(b)(2) recognizes that other courts may have a role in determining the custody
of the ward. While a guardian generally has a right to take custody of the
ward, the guardian is denied this power if to assume custody would be
inconsistent with the custody order of a court of competent jurisdiction. Such an order may have been entered by a
juvenile court, by a court responsible for making involuntary mental health
commitments, or even by the court supervising the guardianship.
Subsection
(b)(2) also prevents the guardian from moving the minor out of the state
without the court’s prior approval. The court must determine whether such move
would be in the best interest of the minor ward. The court should make certain
that this provision is not used to circumvent a custody order or to avoid a
determination of custody by an appropriate court. Under the Parental Kidnapping
Prevention Act, 28 U.S.C. § 1738A, the courts of the former state will
generally lose jurisdiction over custody of a minor six months following the
minor’s removal from the state. If there is no conservator, subsection (b)(3)
authorizes the guardian to file a proceeding to collect child support. In implementing this power, the guardian
should consult the state’s applicable child support statutes, which should be
read as if incorporated into this section.
Under subsection (b)(4), the guardian may consent to
the medical or other care, treatment or service for the ward. The guardian may
ordinarily make health-care decisions for the ward without prior court
authorization, but for certain types of health-care decisions, prior court
approval may be required or at least be considered. For example, a guardian may
ordinarily consent to elective surgery for the ward, but the guardian is
strongly advised to consider seeking prior court authorization before
consenting to experimental medical treatment. While this Code does not
specifically require that a guardian seek prior court approval before making a
particular health-care decision, such prior court approval may be required by
other statute, especially when the minor’s constitutional rights are in
question. For example, a guardian may
not be able to place a minor ward in a mental health care facility or consent
to electroconvulsive therapy (ECT) or other types of shock therapy without the
court’s order. State statutes may require that specific procedures be followed
before a guardian can consent to an abortion or certain medical treatment for
the minor ward. Because of the important
and competing interests at stake, a guardian should at least consult with, and
may need to obtain an order from, the court if the guardian plans to refuse
medical treatment on behalf of the minor ward on the grounds of the minor
ward’s religious beliefs.
Under
subsection (c), the court may specifically authorize the guardian to consent to
the ward’s adoption. This section conforms to the requirements of the Uniform
Adoption Act that the guardian be given specific authority from a court in
order to consent to the minor ward’s adoption.
The applicable section of the Uniform Adoption Act, Section 2-101
provides:
(a) The only persons who may place a minor for
adoption are:
. . .
(2)
a guardian expressly authorized by the court to place the minor for adoption .
. . ,
which
the comment to that section of the Uniform Adoption Act then notes is intended
to refer to the court supervising the guardianship. This court is chosen
because under Section 5-210 adoption of the ward will have the effect of
terminating the guardianship. If the
enacting jurisdiction has not enacted the Uniform Adoption Act, the state
should verify that subsection (c) is in harmony with the state’s existing
adoption laws.
Like
the adoption of the minor ward, a guardianship also terminates upon the
marriage of the ward. But unlike an
adoption, the guardian’s consent and the court’s approval is not necessarily
required. Whether such consent is
required will depend on the state’s laws on the requirements of marriage. But to the extent that the guardian’s consent
may be necessary, subsection (b)(5) does allow a guardian to consent to the
marriage of the ward.
This section is based on UGPPA (1982) Section
2-109(c) (UPC Section 5-209(c) (1982)).
Section 5-209. Rights And Immunities Of Guardian.
(a) A guardian is entitled to reasonable compensation for services as guardian and to reimbursement for room, board, and clothing provided by the guardian to the ward, but only as approved by the court. If a conservator, other than the guardian or a person who is affiliated with the guardian, has been appointed for the estate of the ward, reasonable compensation and reimbursement to the guardian may be approved and paid by the conservator without order of the court.
(b) A guardian need not use the guardian’s personal funds for the ward’s expenses. A guardian is not liable to a third person for acts of the ward solely by reason of the guardianship. A guardian is not liable for injury to the ward resulting from the negligence or act of a third person providing medical or other care, treatment, or service for the ward except to the extent that a parent would be liable under the circumstances.
COMMENT
Subsection
(a) recognizes that a guardian has a right to reasonable compensation. The
amount determined to be reasonable may vary from state to state and from one
geographical area to another within a state. In addition, factors to be
considered by the Court in setting compensation will vary. See
the comments to Section 5-417 for a thorough discussion on the factors to be
considered by the Court in determining compensation.
If there is a conservator appointed, the
conservator, without the necessity of prior Court approval, may pay the
guardian reasonable compensation as well as reimburse the guardian for room,
board and clothing the guardian has provided to the ward. However, if the Court
determines that the compensation paid to the guardian is excessive or the
expenses reimbursed were inappropriate, the Court may order the guardian to
repay the excessive or inappropriate amount to the estate. See Section
5-417.
Under
subsection (b), the guardian has no duty to use the guardian’s personal funds
for the ward. Nor is a guardian liable for the acts of a third person,
including negligent medical care, treatment or service provided to the ward
except if a parent would be liable in the same circumstances. The guardian is
not liable, just by reason of being the guardian, if the ward harms a third
person. The guardian is liable only if personally at fault.
This
section is based on subsections (a) and (d) of the 1982 UGPPA Section 2-109
(subsections (a) and (d) of UPC Section 5-209 (1982)).
Section 5-210. Termination Of Guardianship; Other
Proceedings After Appointment.
(a) A
guardianship of a minor terminates upon the minor’s death, adoption,
emancipation or attainment of majority or as ordered by the court.
(b)
A ward or a person interested in the welfare of a ward may petition for
any order that is in the best interest of the ward. The petitioner shall give notice of the hearing on the petition to the ward, if the
ward has attained 14 years of age and
is not the petitioner, the guardian,
and any other person as ordered by the court.
COMMENT
Subsection
(a) lists the traditional grounds for terminating a guardianship for a minor
created by reasons of the minor’s age. Guardianships created because the minor
is also an incapacitated person are governed by Part 3 and may last into
adulthood. While a guardianship terminates upon emancipation of a minor, the
grounds of emancipation are left to the state’s law on the subject, but in many states a minor is
emancipated by marriage, military service, or order of emancipation. Even
though the guardianship is terminated, the guardian is still liable for
previous acts and the obligation to account for the funds of the ward within
the guardian’s possession or control. See
Section 5-112.
Subsection
(b) can be used to seek termination of the guardianship or to expand or
restrict the guardian’s powers, in furthering the ward’s self-reliance. See Section 5-206.
Subsection
(a) is based on UGPPA (1982) Section 2-110 (UPC Section 5-210 (1982)), but has
been broadened to allow termination by any act of emancipation, not merely
marriage. Subsection (b) is based on UPC
Section 5-212 (1982).
PART 3
GUARDIANSHIP
OF INCAPACITATED PERSON
Section 5-301. Appointment And Status Of Guardian.
A person becomes a guardian of an incapacitated person by a parental or spousal appointment or upon appointment by the court. The guardianship continues until terminated, without regard to the location of the guardian or ward.
COMMENT
This
part provides for the creation and administration of guardianships for
incapacitated persons. The definition of incapacitated person is found in
Section 5-102(4). While an incapacitated person will typically be an adult,
appointment can be made for a minor under this part if the reason for the
appointment is an incapacity other than the minor’s age. If an appointment is
made under this part for a minor, there is no need to petition for a new
guardianship upon the minor’s attainment of majority.
This
section is new, although it has a counterpart in Section 5-201. This section
recognizes the ability of the spouse or parent of an adult individual who meets
the definition of incapacitated person to appoint a guardian by spousal or
parental appointment under Section 5-302, as well as that of the Court to
appoint a guardian under Section 5-311. A guardian or the ward can move from
the jurisdiction in which the Court is located, yet the guardianship will
continue until terminated and remains under the Court’s jurisdiction. See Section 5-107 regarding transfers of
jurisdiction and Section 5-112 regarding termination of appointments.
Section 5-302. Appointment Of Guardian By Will Or Other
Writing.
(a) A parent,
by will or other signed writing, may appoint a guardian for an unmarried child
who the parent believes is an incapacitated person, specify desired limitations
on the powers to be given to the guardian, and revoke or amend the appointment
before confirmation by the court.
(b) An
individual, by will or other signed writing, may appoint a guardian for the
individual’s spouse who the appointing spouse believes is an incapacitated
person, specify desired limitations on the powers to be given to the guardian,
and revoke or amend the appointment before confirmation by the court.
(c) The
incapacitated person, the person having care or custody of the incapacitated
person if other than the appointing parent or spouse, or the adult nearest kinship to the incapacitated person may file
a written objection to an appointment, unless the court has confirmed the
appointment under subsection (d). The filing of the written objection
terminates the appointment. An objection may be withdrawn and, if withdrawn, is
of no effect. The objection does not preclude judicial appointment of the
person selected by the parent or spouse. Notice of the objection must be given
to the guardian and any other person entitled to notice of the acceptance of
the appointment. The court may treat the
filing of an objection as a petition for the appointment of an emergency
guardian under Section 5-312 or for the appointment of a limited or unlimited
guardian under Section 5-304 and proceed accordingly.
(d) Upon petition of the appointing parent or spouse, and a finding that the appointing parent or spouse will likely become unable to care for the incapacitated person within [two] years, and after notice as provided in this section, the court, before the appointment becomes effective, may confirm the appointing parent’s or spouse’s selection of a guardian and terminate the rights of others to object.
COMMENT
This
section enables a parent or spouse to make an advance appointment of a
“standby” guardian whose powers become effective upon the occurrence of certain
specified contingencies. The appointment can be made by will or other
instrument, which can include a durable power of attorney, a trust instrument
or a specific document for the spousal or parental appointment of the guardian.
The appointment is temporary. Section 5-303(e) requires that a guardian
appointed under this section seek Court confirmation no more than thirty days
following the filing of notice of acceptance of office.
Sections
5-302 and 5-303 together are comparable to the standby guardianship provisions
for minors in Section 5-202. The provisions for incapacitated persons are more
tentative, since adults, unlike minors, are presumed to have the legal capacity
to make their own decisions. For this reason, an appointment under this section
is easily terminable. See subsection
(c). Also, an appointment under this section is not a determination of the
person’s incapacity. See Section
5-303(g).
Despite
these limitations, this section is very useful, especially for parents of
developmentally disabled children. For such parents, the need for a guardian
for the developmentally disabled child often arises only on the parent’s death
or other event that necessitates that care be transferred to another. This section, by allowing a guardian of the
parent’s selection to step in immediately upon the necessitating event, can
provide the parents with assurance of mind that care of their children will not
be neglected. This section is also useful for a spouse of an individual
stricken by Alzheimer’s disease, when the spouse no longer is able to care for
the Alzheimer’s victim.
A
parent of an adult unmarried child whom the parent believes is incapacitated
may make an appointment under this section as may a spouse for the other spouse
whom the appointing spouse believes to be incapacitated. Under subsection (c),
the adult disabled child or the incapacitated spouse as well as the person
having care or custody of the child or spouse or the adult nearest in kinship
have the right to object to the guardian’s appointment. If an objection is
filed, the guardian’s authority terminates, and the guardian must file a
petition for appointment of guardian by the Court under Section 5-304. If an
objection is withdrawn, it has no effect. An objection does not prohibit the
Court from appointing the parental or spousal appointee as the guardian.
The
appointing spouse or parent may petition the Court prior to the triggering
event for advance confirmation of the appointment. Advance Court confirmation
terminates the right to object and the right of the appointing spouse or parent
to revoke the appointment. Advance Court confirmation is available in
situations where the appointment is needed due to the pending incapacity of the
appointing spouse or parent. This process provides appointing spouses and
parents with peace of mind, knowing that the Court has confirmed their
selection of guardian.
A
petition for advance Court confirmation may be made at any time within a
recommended two years from the date of likely need, but this time limit is
placed in brackets to indicate that the enacting jurisdiction is free to select
a different period. Depending on the
length of time set by the enacting state, Courts may need to show flexibility
regarding the time limit. It may be difficult for the appointing spouse or
parent to prove with absolute certainty that the appointing spouse or parent
will likely become unable to care for the incapacitated spouse or the adult
disabled child within the stated period of time. Courts should liberally
construe this provision in favor of the appointing spouse or parent. For this
reason, subsection (d) does not require absolute certainty, only that the need
for a guardian within the specified time frame is “likely.” If the Court confirms the guardian in advance
and the stated deadline (two years) has passed without the guardian’s filing
the acceptance of appointment required under Section 5-303(b), the Court should
hold a hearing to determine the status of the appointing spouse or parent and
whether the advance confirmation should continue.
Unless
otherwise specified in this section, the other provisions of this Act,
including the provisions relating to the duties and powers of guardians, apply
to a guardian appointed by a will or other writing.
This
section is based on UGPPA (1982) Section 2-201 (UPC Section 5-301 (1982)).
However, the 1982 UGPPA did not require court confirmation of the appointment.
Section 5-303. Appointment Of Guardian By Will Or Other
Writing: Effectiveness; Acceptance; Confirmation.
(a) The
appointment of a guardian under Section 5-302 becomes effective upon the death
of the appointing parent or spouse, the adjudication of incapacity of the
appointing parent or spouse, or a written determination by a physician who has
examined the appointing parent or spouse that the appointing parent or spouse
is no longer able to care for the incapacitated person, whichever first occurs.
(b) A guardian
appointed under Section 5-302 becomes eligible to act upon the filing of an
acceptance of appointment, which must be filed within 30 days after the
guardian’s appointment becomes effective. The guardian shall:
(1) file the notice of acceptance of appointment
and a copy of the will with the court of the [county] in which the will was or
could be probated or, in the case of another appointing instrument, file the
acceptance of appointment and the appointing instrument with the court in the
[county] in which the incapacitated person resides or is present; and
(2) give written notice of the acceptance of
appointment to the appointing parent or spouse if living, the incapacitated
person, a person having care or custody of the incapacitated person other than
the appointing parent or spouse, and the adult nearest in kinship.
(c) Unless the
appointment was previously confirmed by the
court, the notice given under subsection (b)(2) must include a statement
of the right of those notified to terminate the appointment by filing a written
objection as provided in Section 5-302.
(d) An
appointment effected by filing the guardian’s acceptance under a will probated
in the State of the testator’s domicile is effective in this State.
(e) Unless the
appointment was previously confirmed by the court, within 30 days after filing
the notice and the appointing instrument, a guardian appointed under Section
5-302 shall file a petition in the court for confirmation of the appointment.
Notice of the filing must be given in the manner provided in Section 5-309.
(f) The
authority of a guardian appointed under Section 5-302 terminates upon the
appointment of a guardian by the court or the giving of written notice to the
guardian of the filing of an objection pursuant to Section 5-302, whichever
first occurs.
(g) The
appointment of a guardian under this section is not a determination of
incapacity.
(h) The powers of a guardian who timely complies with the requirements of subsections (b) and (e) relate back to give acts by the guardian which are of benefit to the incapacitated person and occurred on or after the date the appointment became effective the same effect as those that occurred after the filing of the acceptance of appointment.
COMMENT
The
appointment of a guardian for an incapacitated person by will or other writing
becomes effective on the first to occur of: the death of the appointing parent
or spouse; adjudication of incapacity of that parent or spouse; or a written
determination by a doctor who has examined the appointing parent or spouse that
the appointing parent or spouse can no longer care for the adult disabled child
or the incapacitated spouse.
The
guardian’s authority terminates upon the timely filing of an objection or upon
the appointing parent or spouse regaining the ability to care for the
incapacitated person, or if a guardian is appointed for the incapacitated
person.
Within
thirty days of the contingency giving rise to the guardianship, the guardian
must file a notice of acceptance of appointment along with the appointing
instrument. If the appointment was not previously confirmed by the Court, the
guardian also must give written notice of the acceptance and of the right to
file an objection to the appointing parent or spouse, if living, the
incapacitated person for whom the appointment was made, the person having care
or custody of the incapacitated person, if other than the appointing parent or
spouse, and to an adult nearest in kinship.
Subsection
(e) requires that the guardian file for confirmation of the appointment no more
than thirty days following the filing of the notice of acceptance. Also,
because an appointment under Sections 5-302 and 5-303 is based on a belief as
to the person’s incapacity, in seeking confirmation of the appointment by the
Court, the regular procedures for the appointment of a guardian will apply. See Sections 5-304 through 5-310.
The
petition for confirmation of appointment to be filed by a guardian must comply
with the requirements of Section 5-304 but should be tailored to reflect the
special circumstances of the prior parental or spousal appointment. The
petition should include: the name and address of the incapacitated spouse or
the adult disabled child, the identity and whereabouts of the adult children of
the incapacitated spouse, if any, or if none, then the living parents of the
incapacitated spouse, if any, or if none, then the living siblings of the
incapacitated spouse; the living parents, if any, or if none, the living
siblings of the adult disabled child; all persons serving as guardian; the
petitioner’s name and address, relationship to the married couple or to the
parent and the adult disabled child, interest in the appointment, and a
statement of the petitioner’s willingness to serve; any limitations placed by
the appointing spouse or parent on the powers of the appointed guardian;
information about the petitioner; and reasons why the appointment should be
confirmed.
The
petition should also indicate any limitations placed on the appointed guardian
and the powers to be given to the guardian, and if an unlimited guardianship,
why a limited guardianship would not work. The petition should be accompanied
by a death certificate, an order of adjudication of incapacity or a written
statement by the physician who has examined the appointing spouse or parent
that the appointing spouse or parent is no longer able to care for the
incapacitated spouse or the adult disabled child. The written statement should
be made by the treating physician of the appointing parent or spouse and the
statement should include the prognosis and diagnosis for the spouse or parent
as well as the date of the physician’s examination of the appointing parent or
spouse. The petition should be accompanied by a copy of the appointing
instrument, as well as any other relevant documents. If the selection as
guardian was previously confirmed pursuant to Section 5-302(d), a copy of the
order of confirmation should accompany the required notice.
In
the hearing on the petition for confirmation, if the Court finds that the
appointing spouse or parent will not regain the ability to care for the
incapacitated spouse or adult disabled child, the Court should enter an order
confirming the appointment, absent evidence rebutting the presumption of
appointment. If the Court finds that the appointing spouse or parent may regain
ability to care for the incapacitated spouse or adult disabled child, the Court
should enter an order confirming the appointment for a period of time deemed
appropriate by the Court. An order of
confirmation cuts off the rights of others, including the incapacitated adult
or the adult disabled child, to object.
The
determination of whether the parental or spousal appointment should be
converted into a regular guardianship should be made as soon as possible. The
Court should develop procedures for monitoring the conversions.
Subsection
(h) provides that the timely performance of the requirements for the guardian’s
acceptance of office relate back to give any acts performed between the
appointment becoming effective and the guardian’s filing of the notice of
acceptance the same effect as those occurring after the filing of the notice of
acceptance, as long as those prior acts are beneficial to the incapacitated
person. In the event of a dispute regarding whether a guardian’s prior act
should be validated, the Court first determines whether the act was beneficial
to the incapacitated person, and if the Court determines that the act was
beneficial, then subsection (h) will apply.
Section 5-304. Judicial Appointment Of Guardian: Petition.
(a) An
individual or a person interested in the individual’s welfare may petition for
a determination of incapacity, in whole or in part, and for the appointment of
a limited or unlimited guardian for the individual.
(b) The
petition must set forth the petitioner’s name, residence, current address if
different, relationship to the respondent, and interest in the appointment and,
to the extent known, state or contain the following with respect to the
respondent and the relief requested:
(1) the respondent’s name, age, principal
residence, current street address, and, if different, the address of the
dwelling in which it is proposed that the respondent will reside if the
appointment is made;
(2) the name and address of the respondent’s:
(A) spouse, or if the respondent has none, an
adult with whom the respondent has resided for more than six months before the filing of the
petition; and
(B) adult children or, if the respondent has none,
the respondent’s parents and adult brothers and sisters, or if the respondent
has none, at least one of the adults nearest in kinship to the respondent who
can be found;
(3) the name and address of any person responsible for care or custody of the respondent;
(4) the name and address of any legal
representative of the respondent;
(5) the name and address of any person nominated
as guardian by the respondent;
(6) the name and address of any proposed guardian
and the reason why the proposed guardian should be selected;
(7) the reason why guardianship is necessary,
including a brief description of the nature and extent of the respondent’s
alleged incapacity;
(8) if an unlimited guardianship is requested, the reason why limited guardianship is inappropriate and, if a limited guardianship is requested, the powers to be granted to the limited guardian; and
(9) a general statement of the respondent’s
property with an estimate of its value, including any insurance or pension, and
the source and amount of any other anticipated income or receipts.
COMMENT
This
section lists the information that must be contained in the petition for
appointment of a guardian. Although the section allows a prospective ward to
petition for appointment of a guardian, the court should scrutinize such a
petition closely to confirm that the petition is truly voluntary, and that the
petitioner has the requisite capacity to file a petition. Normally, in such a case it would be better
for the individual to execute a durable power of attorney.
Specifying
the required contents of the petition is in accordance with the recommendations
of both the Wingspread conference on guardianship reform and the Commission on
National Probate Court Standards. See
Guardianship: An Agenda For Reform 9
(A.B.A. 1989); National Probate Court
Standards, Standard 3.3.1, “Petition” (1993).
Subsections
(b)(2)-(6) require the listing in the petition of family members and others who
may have information useful to the court and to whom notice of the proceeding
must be given under Section 5-309(b). These persons will likely have the
greatest interest in protecting the respondent and in making certain that the
proposed guardianship is appropriate.
Subsection
(b)(2)(A) requires that the petition contain the name and address of the spouse
or, if none, then an adult with whom the respondent has resided for more than
six months before the petition is filed. Included among the persons with whom
the respondent may have resided are domestic partners and companions. Note that
there is no requirement that the respondent have resided for more than six
months immediately prior to the
filing of the petition, just that the requirement have been met at some point
in time before the petition was filed. In applying this provision, the court
should focus on the purpose of this provision - i.e., to obtain a list of persons who likely have a significant
interest in the respondent’s welfare. Courts should use a reasonableness
standard so that the petitioner does not have to give the name of every person
with whom the respondent has resided in the respondent’s entire life and whose
current interest in the respondent’s welfare may be quite remote. Also, in
interpreting what is meant by “resided,” the closeness of the relationship to
the respondent should be taken into account-for example, the on-site manager of
a 50-apartment complex whose contact with the respondent was limited to
collecting the rent should not be considered as fitting within the
definition. However, for a nursing home
resident, the term might include her best friend who resides on the next floor.
Courts
should consider whether they wish to exclude persons providing care for a fee
from the class of persons with whom it is considered that the respondent
resided. This would limit the application of subsection (b)(2)(A) to
individuals with whom the respondent has a close personal relationship, a
relative, or to a domestic partner or companion, and would eliminate a
professional relationship such as that of a housekeeper, landlord, or owner of
a board and care facility. The committee that drafted Parts 1-4 of this article
originally used the language “domestic partner or companion,” and intended to
limit the application of this section to the spouse, domestic partner or
companion, but at the 1997 Annual Meeting of the Uniform Law Commissioners,
where the most recent revision of the Uniform Guardianship and Protective
Proceedings Act (Parts 1-4 of this article) was approved, this phrase was
replaced by the phrase “with whom the respondent has resided for more than six
months.” The intent behind this amendment was not to substantially broaden the
concept but only to expand it to include other individuals who have had an
enduring relationship with the respondent for at least a six-month period and
who, because of this relationship, should be given notice.
Subsection
(b)(2)(B) requires that the petition contain the names and addresses of the
respondent’s adult children or, if none, parents and adult brothers and sisters
or, if none, a relative of nearest degree in which a relation can be found.
However, if there are several adults of equal degree of kinship to the
respondent, the name and address of one is all that is required, not the names
and addresses of the members of the entire class.
Under
subsection (b)(4), if the respondent has a legal representative, the
representative’s name and address must be included in the petition. A “legal
representative” is defined in Section 5-102(5). Notice to such representative,
as required by Section 5-309(b), is especially critical for ascertaining
whether a guardianship is really necessary. For example, the court may conclude
that there is no need to appoint a guardian if a guardian has already been
appointed elsewhere or the respondent has executed a durable power of attorney
with authority in the agent to make health and personal care decisions.
Subsection
(b)(8) emphasizes the importance of limited guardianship, the encouragement of
which is a major theme of the Act. The petitioner, when requesting an unlimited
guardianship, must state in the petition why a limited guardianship would not
work. If a limited guardianship is requested, the petition must set out the
recommended powers to be granted to the guardian.
Subsection
(b)(9) requires the petitioner to include a general statement of the
respondent’s property, including an estimated value, insurance and pension
information and information about other anticipated income or receipts. This
information should be as detailed as possible to enable the visitor to
expeditiously complete the required report (see
Section 5-305), and to enable the court to determine whether a protective order
will be needed. See Section 5-311.
Section 5-305. Judicial Appointment Of Guardian: Preliminaries To Hearing.
(a) Upon receipt of a petition to establish a
guardianship, the court shall set a date and time for hearing the petition and
appoint a [visitor]. The duties and reporting requirements of the [visitor] are
limited to the relief requested in the petition. The [visitor] must be an
individual having training or experience in the type of incapacity alleged.
ALTERNATE
PROVISIONS ON APPOINTMENT OF A LAWYER
ALTERNATIVE
1
[(b) The court shall appoint a lawyer to represent
the respondent in the proceeding if:
(1) requested
by the respondent;
(2) recommended
by the [visitor]; or
(3) the court
determines that the respondent needs representation.]
ALTERNATIVE
2
[(b) Unless the respondent is represented by a
lawyer, the court shall appoint a lawyer to represent the respondent in the
proceeding.]
END OF
ALTERNATE PROVISIONS
(c) The
[visitor] shall interview the respondent in person and, to the extent that the
respondent is able to understand:
(1) explain to the respondent the substance of the petition, the nature, purpose, and effect of the proceeding, the respondent’s rights at the hearing, and the general powers and duties of a guardian;
(2) determine the respondent’s views about the
proposed guardian, the proposed guardian’s powers and duties, and the scope and
duration of the proposed guardianship;
(3) inform the respondent of the right to employ
and consult with a lawyer at the respondent’s own expense and the right to
request a court-appointed lawyer; and
(4) inform the respondent that all costs and
expenses of the proceeding, including respondent’s attorney’s fees, will be
paid from the respondent’s estate.
(d) In
addition to the duties imposed by subsection (c), the [visitor] shall:
(1) interview the petitioner and the proposed
guardian;
(2) visit the respondent's present dwelling and any dwelling in which the respondent will live if the appointment is made;
(3) obtain information from any physician or other
person who is known to have treated, advised, or assessed the respondent’s
relevant physical or mental condition; and
(4) make any other investigation the court
directs.
(e) The
[visitor] shall promptly file a report in writing with the court, which must
include:
(1) a recommendation as to whether a lawyer should be appointed to represent the respondent;
(2) a summary of daily functions the respondent
can manage without assistance, could manage with the assistance of supportive
services or benefits, including use of appropriate technological assistance,
and cannot manage;
(3) recommendations regarding the appropriateness
of guardianship, including as to whether less restrictive means of intervention
are available, the type of guardianship, and, if a limited guardianship, the
powers to be granted to the limited guardian;
(4) a statement of the qualifications of the proposed guardian, together with a statement as to whether the respondent approves or disapproves of the guardian, and the powers and duties proposed or the scope of the guardianship;
(5) a statement as to whether the proposed
dwelling meets the respondent’s individual needs;
(6) a recommendation as to whether a professional
evaluation or further evaluation is necessary; and
(7) any other matters the court directs.
Legislative
Note: Those states that enact Alternative 2 of subsection (b) which requires
appointment of counsel for the respondent in all proceedings for appointment of
a guardian should not enact subsection (e)(1).
COMMENT
Alternative
provisions are offered for subsection (b).
Alternative 1 was favored by the drafting committee. Alternative 1 relies on an expanded role for
the “visitor,” who can be chosen or selected to provide the court with advice
on a variety of matters other than legal issues. Appointments of a lawyer, nevertheless, is required under Alternative 1 when the
court determines that the respondent needs representation, or counsel is
requested by the respondent or recommended by the visitor.
Alternative
2 is derived from UGPPA (1982) Section 2-203 (UPC Section 5-303 (1982)). It is
expected that in states enacting Alternative [2] of subsection (b), counsel
will be appointed in virtually all of the cases. Alternative 2 was favored by
the A.B.A. Commission on Legal Problems of the Elderly, which attached great
significance to expressly making appointment of counsel “mandatory.” Therefore, for states which wish to provide
for “mandatory appointment” of counsel, Alternative 2 should be enacted.
In
Alternative 1 for subsection (b), then, appointment of counsel for an
unrepresented respondent is mandated when requested by the respondent, when
recommended by the visitor, or when
the court determines the respondent needs representation. This requirement is
in accord with the National Probate Court Standards. National Probate Court Standards, Standard 3.3.5 “Appointment of
Counsel” (1993), which provides:
(a) Counsel
should be appointed by the probate court to represent the respondent when:
(1) requested by an unrepresented respondent;
(2) recommended by a court visitor;
(3) the court, in the exercise of its discretion,
determines that the respondent is in need of representation; or
(4) otherwise required by law.
(b) The role
of counsel should be that of an advocate for the respondent.
Alternative
1 of subsection (b) follows the National Probate Court Standards, Standard
3.3.5(a)(1) through (a)(3). Alternative 2 perhaps may be said to be in accord
with the National Probate Court Standards, Standard 3.3.5(a)(4).
The
drafting committee for the 1997 UGPPA (Parts 1-4 of this article) debated at
length whether to mandate appointment of counsel or to expand the role of the
visitor. The drafting committee
concluded that as between the two, the visitor may be more helpful to the court
in providing information on a wider variety of issues and concerns, by acting
as the eyes and ears of the court as well as determining the respondent’s
wishes and conveying them to the court.
The committee was concerned that including mandatory appointment of
counsel would cause many to view the Act as a “lawyer’s bill” and thus severely
handicap the Act’s acceptance and adoption.
It is the intent of the committee that counsel for respondent be
appointed in all but the most clear cases, such as when the respondent is clearly
incapacitated.
For
jurisdictions enacting Alternative 1 under subsection (b), the visitor needs to
be especially sensitive to the fact that if the respondent is incapacitated,
then the respondent may not have sufficient capacity to intelligently and knowingly
waive appointment of counsel. A court
should err on the side of protecting the respondent’s rights and appoint
counsel in most cases.
Appointment
of a visitor is mandatory (subsection (a)), regardless of which alternative is
enacted under subsection (b). The visitor serves as the information gathering
arm of the court. The visitor can be a physician, psychologist, or other
individual qualified to evaluate the alleged impairment, such as a nurse,
social worker, or individual with pertinent expertise. It is imperative that
the visitor have training or experience in the type of incapacity alleged. The
visitor must individually meet with the respondent, the petitioner and the
proposed guardian. The visitor’s report must contain information and recommendations
to the court regarding the appropriateness of the guardianship, whether lesser
restrictive alternatives might meet the respondent’s needs, recommendations
about further evaluations, powers to be given the guardian, and the appointment
of counsel. If the petition is withdrawn prior to the appointment of the
visitor, no appointment of the visitor is necessary.
National Probate Court
Standards,
Standard 3.3.4 “Court Visitor” (1993) provides:
The
probate court should require a court appointee to visit with the respondent in
a guardianship petition to (1) explain the rights of the respondent; (2)
investigate the facts of the petition; and (3) explain the circumstances and
consequences of the action. The visitor
should investigate the need for additional court appointments and should file a
written report with the court promptly after the visit.
The
visitor must visit the respondent in person and explain a number of items to
the respondent to the extent the respondent can understand. If the respondent does not have a good
command of the English language, then the visitor should be accompanied by an
interpreter. The drafters did not
mandate that the visitor be able to speak the respondent’s primary language,
but good practice and due process protections dictate the use of interpreters
when needed for the respondent to understand.
The phrase “to the extent that the respondent is able to understand” is
a recognition that some respondents may be so impaired that they are unable to
understand. If assistive devices are
needed in order for the visitor to explain to the respondent in a manner
necessary so that the respondent can understand, then the visitor should use
those assistive devices. The visitor is
also charged with confirming compliance with the Americans With Disabilities
Act when visiting the respondent’s dwelling and the proposed dwelling in which
it is expected that the respondent will reside.
Subsection
(c)(4) puts the respondent on notice that if the respondent has an estate,
costs and expenses are paid from the estate, including attorney’s fees and
visitor’s fees. If there is an estate,
those entitled to compensation would be paid from the estate. If there is no
estate, those entitled to compensation will ordinarily be compensated by whatever
process the enacting state has for indigent proceedings, such as from the
county general fund, unless the
enacting jurisdiction has made other arrangements. If a conservatorship exists, payment is made
pursuant to the procedures provided in Section 5-417, otherwise the guardian
must file a fee petition. See Section 5-316.
The
visitor must talk with the physician
or other person who is known to have assessed, treated or advised about the
respondent’s relevant physical or mental condition. This information is crucial to the court in
making a determination of whether to grant the petition, since a professional
evaluation will no longer be required in every case. See
Section 5-306. If the doctor refuses to
talk to the visitor, the visitor may need to seek from the appointing court an
order authorizing the release of the information.
The
visitor’s report must be in writing and include a list of recommendations or
statements. For states enacting
Alternative 1 to subsection (b), if the visitor does not recommend that a
lawyer be appointed, the visitor should
include in the report the reasons why a lawyer should not be appointed. States enacting Parts 1-4 of this article
should consider developing a checklist for the items enumerated in subsection
(e).
“Visitor”
is bracketed in recognition that states use and may wish to substitute
different words to refer to this position.
Section 5-306. Judicial Appointment Of Guardian:
Professional Evaluation.
At or before a hearing under this part, the court
may order a professional evaluation of the respondent and shall order the
evaluation if the respondent so demands. If the court orders the evaluation,
the respondent must be examined by a physician, psychologist, or other
individual appointed by the court who is qualified to evaluate the respondent’s
alleged impairment. The examiner shall promptly file a written report with the
court. Unless otherwise directed by the court, the report must contain:
(1) a
description of the nature, type, and extent of the respondent’s specific
cognitive and functional limitations;
(2) an
evaluation of the respondent’s mental and physical condition and, if
appropriate, educational potential, adaptive behavior, and social skills;
(3) a
prognosis for improvement and a recommendation as to the appropriate treatment
or habilitation plan; and
(4) the date
of any assessment or examination upon which the report is based.
COMMENT
Under
the 1982 UGPPA, a professional evaluation was mandatory. See UGPPA (1982) Section 2-203(b) (UPC Section 5-303(b) (1982)). This section is a major
departure. The Court may order a professional evaluation but shall order the evaluation only if the respondent demands it. If an
evaluation is ordered, then it must be performed by a professional who is
qualified to evaluate the alleged impairment of the respondent. When counsel is
appointed, the respondent may demand the evaluation through counsel. If the
respondent is truly incapacitated and not represented by counsel, it is
unlikely that the respondent will demand an evaluation. The Court still has the
ability to order a professional evaluation either on the visitor’s recommendation or on its own motion.
Although a reading of this section may leave the impression that a professional
evaluation will be ordered sparingly, the converse is true. A Court should
order a professional evaluation any time it is not absolutely clear, based on
its own assessment or on the visitor’s report, that the respondent is
incapacitated. Further, by providing the Court with an expert evaluation of the
respondent’s abilities and limitations, the professional evaluation will be
crucial to the Court in establishing a limited guardianship.
The
evaluation of the respondent’s physical and mental condition referred to in
paragraph (2) should include a summary of the consultation with the
respondent’s treating physician. Even
though the visitor’s report required
by Section 5-305 may contain information from the treating physician, it is
crucial for the accuracy of the evaluation that the professional evaluator
consult about the respondent’s treatment, and include in the evaluation a
summary of the information received and relied upon and the date of the
consultation.
Section 5-307. Confidentiality Of Records.
The written report of a [visitor] and any
professional evaluation are confidential and must be sealed upon filing, but
are available to:
(1) the court;
(2) the
respondent without limitation as to use;
(3) the
petitioner, the [visitor], and the
petitioner’s and respondent’s lawyers, for purposes of the proceeding; and
(4) other
persons for such purposes as the court may order for good cause.
COMMENT
This
section is new, although a number of states have a comparable provision. This
section is designed to protect the respondent’s privacy, but still make records
accessible when needed, to any of the involved parties or to others on a
showing of good cause. The drafting committee recognized that the media and
“watch-dog” groups perform essential functions of deterring abuse and
facilitating reform, and in drafting this provision balanced the need to
protect the respondent’s privacy with the need to access to the information.
Section 5-308. Judicial Appointment Of Guardian: Presence
And Rights At Hearing.
(a) Unless excused by the court for good cause, the proposed guardian shall attend the hearing. The respondent shall attend and participate in the hearing, unless excused by the court for good cause. The respondent may present evidence and subpoena witnesses and documents; examine witnesses, including any court-appointed physician, psychologist, or other individual qualified to evaluate the alleged impairment, and the [visitor]; and otherwise participate in the hearing. The hearing may be held in a location convenient to the respondent and may be closed upon the request of the respondent and a showing of good cause.
(b) Any person may request permission to participate in the proceeding. The court may grant the request, with or without hearing, upon determining that the best interest of the respondent will be served. The court may attach appropriate conditions to the participation.
COMMENT
The
proposed guardian is required to attend the hearing, although the Court may
excuse the proposed guardian’s attendance on a showing of good cause. This
provision is based on a recommendation from National
Probate Court Standards, Standard 3.3.8(c), “Hearing” (1993). The
guardian’s presence at the hearing gives the Court the opportunity to determine
the guardian’s appropriateness for appointment and to make any other inquiry of
the guardian that the Court deems to be appropriate as well as to emphasize to
the guardian the gravity of the guardian’s responsibilities.
Also
new is the requirement that the respondent must attend the hearing unless
excused by the Court on a showing of good cause. The respondent has the right
to take an active role in the hearing. There may be instances where
circumstances dictate that the Court hold the hearing where the respondent is
located.
The
respondent can request that the hearing be closed, but good cause must again be
shown for this to occur. Others may make a request to participate, which can be
granted by the Court without a hearing if the Court finds that the respondent’s
best interest is served by the participation. The Court’s order granting the
request to participate should indicate the extent to which participation will
be allowed.
This
section contains elements of subsections (c) and (d) of UGPPA (1982) Section
2-303 (subsections (c) and (d) of UPC Section 5-303 (1982)).
Section 5-309. Notice.
(a) A copy of a petition for guardianship and notice of the hearing on the petition must be served personally on the respondent. The notice must include a statement that the respondent must be physically present unless excused by the court, inform the respondent of the respondent’s rights at the hearing, and include a description of the nature, purpose, and consequences of an appointment. A failure to serve the respondent with a notice substantially complying with this subsection precludes the court from granting the petition.
(b) In a
proceeding to establish a guardianship, notice of the hearing must be given to
the persons listed in the petition.
Failure to give notice under this subsection does not preclude the appointment
of a guardian or the making of a protective order.
(c) Notice of
the hearing on a petition for an order after appointment of a guardian,
together with a copy of the petition, must be given to the ward, the guardian,
and any other person the court directs.
(d) A guardian
shall give notice of the filing of the guardian’s report, together with a copy
of the report, to the ward and any other person the court directs. The notice must be delivered or sent within
14 days after the filing of the report.
COMMENT
Personal
service of the petition and notice of hearing on the respondent is required. A
failure to personally serve the respondent is jurisdictional, as is a notice
that does not substantially comply with the requirements of subsection (a). Notice of hearing must be given to the
persons who are listed in the petition but failing to give notice to those
listed (other than the respondent) is not jurisdictional.
Subsection
(c) addresses the notice requirements on hearings on petitions for orders subsequent
to the appointment of a guardian – the ward and the guardian, as well as anyone
else the Court directs, must be given copies of any notice of hearing and a
copy of any petition. This provision, along with subsection (d), requiring that
the ward receive a copy of the guardian’s report and a copy of the notice of
filing of the report, ensures that the ward is kept informed of developments in
the guardianship.
The
National Probate Court Standards,
Standard 3.3.7 “Notice” (1993), provides that the respondent should receive
timely notice prior to the hearing and that written notice should be in both
plain language and in large type, indicating, at a minimum, the place and time
of the hearing, the nature and possible consequences of the hearing, and the respondent’s
rights. Similar recommendations are contained in the report of the Wingspread
conference on guardianship reform, which also recommends, in line with Section
5-113 of this Act, that the respondent be given at least fourteen days notice
of hearing on a petition for the appointment of a guardian. See Guardianship:
An Agenda for Reform 9-12 (A.B.A. 1989).
This
section is based on UGPPA (1982) Section 2-204 (UPC Section 5-304 (1982)).
Section 5-310. Who May Be Guardian: Priorities.
(a) Subject to
subsection (c), the court in appointing a guardian shall consider persons
otherwise qualified in the following order of priority:
(1) a guardian, other than a temporary or
emergency guardian, currently acting for the respondent in this State or
elsewhere;
(2) a person nominated as guardian by the
respondent, including the respondent’s most recent nomination made in a durable
power of attorney, if at the time of the nomination the respondent had
sufficient capacity to express a preference;
(3) an agent appointed by the respondent under [a
durable power of attorney for health care] [the Uniform Health-Care Decisions
Act];
(4) the spouse of the respondent or a person nominated by will or other signed writing of a deceased spouse;
(5) an adult child of the respondent;
(6) a parent of the respondent, or an individual nominated by will or other signed writing of a deceased parent; and
(7) an adult with whom the respondent has resided
for more than six months before the filing of the petition.
(b) With respect to persons having equal priority, the court shall select the one it considers best qualified. The court, acting in the best interest of the respondent, may decline to appoint a person having priority and appoint a person having a lower priority or no priority.
(c) An owner, operator, or employee of [a long-term-care institution] at which the respondent is receiving care may not be appointed as guardian unless related to the respondent by blood, marriage, or adoption.
COMMENT
This
section gives top priority for appointment as guardian to existing guardians
appointed elsewhere, to the respondent’s nominee for the position, and to the
respondent’s agent, in that order. Existing guardians are granted a first
priority for two reasons. First, many of these cases will involve transfers of
a guardianship from another state. To assure a smooth transition, the currently
appointed guardian, whether appointed in this state or another, should have the
right to the appointment at the new location. Second, other cases will involve
situations where a guardianship appointment is sought despite the appointment
in another place. Granting the existing guardian priority will deter such forum
shopping. If the existing guardian is inappropriate for some reason, subsection
(b) permits the Court to pass over the existing guardian and appoint another
with or without priority. While an existing guardian is generally granted a
first priority for appointment, a temporary substitute and an emergency
guardian are excluded from priority because of the short-term nature of their
involvement.
A
guardian or individual nominated by the respondent or the agent named in the
respondent’s health care power of attorney has priority for appointment over
the respondent’s relatives. The nomination may include anyone nominated orally
at the hearing, if the respondent has sufficient capacity at the time to
express a preference. The nomination may also be made by a separate document.
While it is generally good practice for an individual to nominate as the guardian
the agent named in a durable power of attorney, the section grants such an
agent a preference even in the absence of a specific nomination. The agent is
granted a preference on the theory that the agent is the person the respondent
would most likely prefer to act. The nomination of the agent will also make it
more difficult for someone to use a guardianship to thwart the authority of the
agent. To assure that the agent will be in a position to assert this priority,
Sections 5-304(b)(4) and 5-309(b) require that the agent receive notice of the
proceeding. Also, until the Court has acted to approve the revocation of that
authority, Section 5-316(c) provides that the authority of an agent for
health-care decisions takes precedence over that of the guardian.
Subsection
(a)(7) gives a seventh-level preference to a domestic partner or companion or
an individual who has a close, personal relationship with the respondent. Note
that there is no requirement that the respondent had resided with the adult for
more than six months immediately prior
to the filing of the petition, just that the requisite residency have occurred
at some point in time before the petition is filed. Courts should use a reasonableness standard
in applying this subsection so that priority is given to someone with whom the
respondent has had a close, enduring relationship. For factors to consider in
making this determination, see the comment to Section 5-304, which discusses
the interpretation of the phrase “an adult with whom the respondent has resided
for more than six months before the filing of the petition” within the context
of the persons required to be listed in the petition for appointment. Note that
although the phrase can be interpreted quite broadly, it is intended to be
descriptive of those individuals who have had an enduring relationship with the
respondent for at least a six month period and who, because of this
relationship, should be given a priority for consideration as guardian.
Subsection
(c) prohibits anyone affiliated with a long-term care institution at which the
respondent is receiving care from being appointed as guardian absent a blood,
marital or adoptive relationship. Strict application of this subsection is
crucial to avoid a conflict of interest and to protect the ward. Each state
enacting Parts 1-4 of this article needs to insert the particular term or terms
used in the state for those
facilities considered to be long-term care institutions.
A
professional guardian, including a public agency or nonprofit corporation, was
specifically not given priority for appointment as guardian because those given
priority are limited to individuals with whom the ward has a close
relationship. The committee which drafted the 1997 revision of the Uniform
Guardianship and Protective Proceedings Act (Parts 1-4 of this article)
recognized the valuable service that a professional guardian, a public agency
or nonprofit corporation provides. A professional guardian can still be
appointed guardian if no one else with priority is available and willing to
serve or if the Court, acting in the respondent’s best interest, declines to
appoint a person having priority. A
public agency or nonprofit corporation is eligible to be appointed guardian as
long as it can provide an active and suitable guardianship program and is not
otherwise providing substantial services or assistance to the respondent, but
is not entitled to statutory priority in appointment as guardian.
This
section is based on UGPPA (1982) Section 2-205 (UPC Section 5-305 (1982)).
Section 5-311. Findings; Order Of Appointment.
(a) The court may:
(1) appoint a limited or unlimited guardian for a
respondent only if it finds by clear and convincing evidence that:
(A) the respondent is an incapacitated person; and
(B) the respondent’s identified needs cannot be
met by less restrictive means, including use of appropriate technological
assistance; or
(2) with appropriate findings, treat the petition
as one for a protective order under Section 5-401, enter any other appropriate
order, or dismiss the proceeding.
(b) The court,
whenever feasible, shall grant to a guardian only those powers necessitated by
the ward’s limitations and demonstrated needs and make appointive and other
orders that will encourage the development of the ward’s maximum self-reliance
and independence.
(c) Within 14 days after an appointment, a guardian shall send or deliver to the ward and to all other persons given notice of the hearing on the petition a copy of the order of appointment, together with a notice of the right to request termination or modification.
COMMENT
A
guardian may be appointed only when no less restrictive alternative will meet
the respondent’s identified needs. The clear and convincing evidence standard
for the appointment of a guardian is new to the Act, but mandated by the
Constitution and strongly recommended by many commentators on guardianship. See, e.g., Sabrosky v. Denver Dep’t Social Services, 781 P.2d 106 (Colo. Ct.
App. 1989); In re Guardianship of Reyes,
731 P.2d 130 (Ariz. Ct. App. 1986); In re
Estate of Boyer, 636 P.2d 1085 (Utah 1981), all three of which involve the
interpretation of the predecessor version of this Act. See also Guardianship: An
Agenda for Reform 16 (A.B.A. 1989).
The
use of limited guardianship is emphasized in this section. If a guardian is to
be appointed, the guardian shall be given only those powers needed to meet the
ward’s needs and limitations. The Court
must specify the powers granted to the guardian and the limits on the
incapacitated person’s rights. The Act’s
emphasis on less restrictive alternatives, a high evidentiary standard and the
use of limited guardianship is consistent with the Act’s philosophy that a
guardian should be appointed only when necessary, only for as long as
necessary, and with only those powers as are necessary. The concept of limited
guardianship is also emphasized in the National
Probate Court Standards, Standard 3.3.10, “Less Intrusive Alternatives”
(1993), requiring a finding of no less intrusive alternative before appointing a
guardian and mandating the consideration and utilization of limited
guardianships.
If
appropriate technological assistance is available to meet the respondent’s
needs, then the respondent is not an “incapacitated person” within the meaning
of Section 5-102(4) and no guardianship may be established. The drafting
committee discussed whether to put any modification or limitation on the
technological assistance, such as that which is reasonably available or a
limitation on availability based on cost. Given the importance of the
respondent’s rights, the committee decided to reject any modification or
limitation whatsoever on required consideration of technological assistance.
Therefore, if appropriate technological assistance exists that can meet the
respondent’s needs, regardless of the cost, then that assistance must be
treated by the Court as meeting the respondent’s identified needs by a less
restrictive means, and the guardianship petition must be denied.
Subsection
(a)(2) allows the Court to consider the petition as a petition for a protective
order and either proceed appropriately under Part 4 or dismiss the Part 3
proceeding. To guarantee the respondent the maximum possible personal liberty,
the Court should proceed under this subsection whenever it concludes that the
respondent’s needs can be met by the entry of orders with respect to the
respondent’s property without the need to limit the respondent’s freedom.
In
keeping with the concept of limited guardianship, subsection (c) requires the
guardian to provide the ward and all those persons given notice of the hearing
a copy of the order of appointment along with a notice of the right to request
a termination or a modification of the guardianship. The reason for requiring
notice to persons other than the ward is to make certain that those who were
originally notified of the petition will also be notified of the results
because they are the ones most likely to have a continuing interest in the
ward’s welfare. The modification
contemplated by this subsection only applies to reduction of the guardian’s
powers from those originally granted, not their enlargement.
Section 5-312. Emergency Guardian.
(a) If the court finds that compliance with the procedures of this part will likely result in substantial harm to the respondent’s health, safety, or welfare, and that no other person appears to have authority and willingness to act in the circumstances, the court, on petition by a person interested in the respondent’s welfare, may appoint an emergency guardian whose authority may not exceed [60] days and who may exercise only the powers specified in the order. Immediately upon receipt of the petition for an emergency guardianship, the court shall appoint a lawyer to represent the respondent in the proceeding. Except as otherwise provided in subsection (b), reasonable notice of the time and place of a hearing on the petition must be given to the respondent and any other persons as the court directs.
(b) An
emergency guardian may be appointed without notice to the respondent and the
respondent’s lawyer only if the court finds from affidavit or testimony that
the respondent will be substantially harmed before a hearing on the appointment
can be held. If the court appoints an
emergency guardian without notice to the respondent, the respondent must be
given notice of the appointment within 48 hours after the appointment. The
court shall hold a hearing on the appropriateness of the appointment within
[five] days after the appointment.
(c) Appointment
of an emergency guardian, with or without notice, is not a determination of the
respondent’s incapacity.
(d) The court may remove an emergency guardian at any time. An emergency guardian shall make any report the court requires. In other respects, the provisions of this article concerning guardians apply to an emergency guardian.
COMMENT
There
are limited circumstances where there is no one else willing or able to act
when following the normal process for appointment of a guardian would, due to
the time involved to follow the procedures, likely lead to substantial harm to
the respondent’s health, safety or welfare. The classic example of when an
emergency guardianship is needed is when the respondent needs a medical
procedure, lacks capacity to consent, has no health care power of attorney, and
no one else is willing or in a position to make the health-care decision. This
section requires appointment of counsel for the respondent.
An
emergency guardian may only be appointed without prior notice when there is
testimony that the respondent would be immediately and substantially harmed
before the hearing on the appointment. In such case, notice must be given
within forty-eight hours and a hearing held within five days. (Section 5-113
provides the procedures for giving notice.)
States
enacting Parts 1-4 of this article should look at their requirements for an ex
parte hearing and determine whether to adopt the time limit contained in this
section or whether to impose different time limits. Five days seems to be the
most common time period for a return hearing following an ex parte appointment.
If the enacting state uses a different time period for a hearing following an
ex parte appointment of a guardian, the time period used should be relatively
short.
The
National Probate Court Standards,
Standard 3.3.6 “Emergency Appointment of a Temporary Guardian” (1993) provides:
(a) Ex parte
appointment of a temporary guardian by the probate Court should occur only:
(1) upon the showing of an emergency;
(2) in connection with the filing of a petition
for a permanent guardianship;
(3) where the petition is set for hearing on the
proposed permanent guardianship on an expedited basis; and
(4) when notice of the temporary appointment is
promptly provided to the respondent.
This
section deviates from the above standard by permitting an emergency guardian to
be appointed without the need of filing a petition for a permanent appointment.
The drafting committee was concerned that requiring the filing of a petition
for a permanent appointment would lend an air of inevitability that a permanent
guardian should be appointed. Frequently, the need for an emergency guardian is
temporary only and the respondent’s long-term needs can be met by mechanisms
other than guardianship. Consistent with
this, subsection (c) provides that the appointment of an emergency guardian is
in no way a finding of incapacity. For purposes of appointing a regular
guardian, the same quantum of proof is required whether or not an emergency
guardian has been appointed.
Unless stated to the contrary in this
section, other sections of Part 3 apply to an emergency guardian appointed
under this section, including the provisions relating to the duties of
guardians.
Section 5-313. Temporary Substitute Guardian.
(a) If the
court finds that a guardian is not effectively performing the guardian’s duties
and that the welfare of the ward requires immediate action, it may appoint a
temporary substitute guardian for the ward for a specified period not exceeding
six months. Except as otherwise ordered
by the court, a temporary substitute guardian so appointed has the powers set
forth in the previous order of appointment. The authority of any unlimited or
limited guardian previously appointed by the court is suspended as long as a
temporary substitute guardian has authority. If an appointment is made without
previous notice to the ward or the affected guardian, the court, within five
days after appointment, shall inform the ward or guardian of the appointment.
(b) The court may remove a temporary substitute guardian at any time. A temporary substitute guardian shall make any report the court requires. In other respects, the provisions of this Article concerning guardians apply to a temporary substitute guardian.
COMMENT
This
section differs from Section 5-312 since this section is used when there is a
guardian, but the guardian is not discharging the functions of office. The role
of the temporary substitute guardian, as the name implies, is to literally fill
in for the regular guardian, whose powers are suspended for the duration of the
appointment. This section also differs from Section 5-204(d). A temporary
guardian for a minor is appointed under Section 5-204(d) in situations where
there is no guardian, whereas under this section, the temporary substitute
guardian is temporarily substituted for another non-performing guardian.
The
standard for appointment under this section is that the ward’s welfare requires
immediate action and that the appointed guardian is not effectively performing the
duties of office. This is not the same
as the best interest standard applied in the selection of the original
guardian. The standard instead invokes the sense of urgency usually involved in
these cases, most of which involve possible abuse by the regularly-appointed
guardian.
If,
at the end of the six months, the ward still needs a guardian, the Court should
appoint a permanent guardian rather than granting an extension to the temporary
substitute guardian. A temporary
substitute guardian does not automatically have preference to be appointed as
guardian in such cases.
In
some cases, circumstances may dictate the appointment of the temporary
substitute guardian without notice being given to the ward or current guardian.
If that occurs, within five days of the appointment of the temporary substitute
guardian, the Court must inform either the ward or the guardian. Since the
authority of the regularly-appointed guardian is suspended by the appointment
of the temporary substitute guardian, the Court should make every effort to
inform the guardian of the appointment. In keeping with the concept of limited
guardianship and empowerment of the ward, the Court should also notify the ward
of the appointment of the temporary substitute guardian if the ward has the
ability to understand.
States
adopting Parts 1-4 of this Article are free to enact a notice period of less
than five days but are encouraged to not enact a notice period of more than
five days.
This section is based on UGPPA (1982) Section 2-208(b) (UPC Section 5-308(b) (1982)).
Section 5-314. Duties Of Guardian.
(a) Except as otherwise limited by the court, a guardian shall make decisions regarding the ward’s support, care, education, health, and welfare. A guardian shall exercise authority only as necessitated by the ward’s limitations and, to the extent possible, shall encourage the ward to participate in decisions, act on the ward’s own behalf, and develop or regain the capacity to manage the ward’s personal affairs. A guardian, in making decisions, shall consider the expressed desires and personal values of the ward to the extent known to the guardian. A guardian at all times shall act in the ward’s best interest and exercise reasonable care, diligence, and prudence.
(b) A guardian
shall:
(1) become or remain personally acquainted with
the ward and maintain sufficient contact with the ward to know of the ward’s
capacities, limitations, needs, opportunities, and physical and mental health;
(2) take reasonable care of the ward’s personal
effects and bring protective proceedings if necessary to protect the property
of the ward;
(3) expend money of the ward that has been
received by the guardian for the ward’s current needs for support, care,
education, health, and welfare;
(4) conserve any excess money of the ward for the
ward’s future needs, but if a conservator has been appointed for the estate of
the ward, the guardian shall pay the money to the conservator, at least
quarterly, to be conserved for the ward’s future needs;
(5) immediately notify the court if the ward’s
condition has changed so that the ward is capable of exercising rights
previously removed; and
(6) inform the court of any change in the ward’s custodial dwelling or address.
COMMENT
Under
Section 2-209 of the 1982 UGPPA (UPC. Section 5-309 (1982)), the guardian of an
incapacitated person was simply granted the powers of guardian of a minor. As a
result of the 1997 revision, this and the sections which follow now list the
guardian’s powers and duties in detail instead of referring to the provisions
on minor’s guardianship. The general duty of the guardian of an incapacitated
person, as expressed in subsection (a), also differs significantly from that
for a guardian of a minor.
Subsection
(a) sets out the guardian’s reasonable standard of care. Subsection (b) of this
Section, and Sections 5-315 and 5-316 are in substantial part expansions on the
fundamental responsibilities stated in subsection (a), specifying subsidiary
duties and the powers and immunities necessary to properly implement this role.
For a discussion of the duties listed in subsection (b), see the comment to Section 5-207.
Subsection
(a) emphasizes the importance of the concept of limited guardianship by
directing that the guardian only exercise the authority needed due to the
ward’s limitations. In the 1982 UGPPA, the phrase “encourage the development of
maximum self-reliance and independence of the incapacitated person and make
appointive and other orders only to the extent necessitated by the
incapacitated person’s mental and adaptive limitations” was used as a standard
to encourage the use of limited guardianships.
That phrase may still be useful for Courts in tailoring a guardianship
to the needs of the incapacitated person. The guardian is admonished to
encourage the ward’s participation in decisions and in developing or regaining
capacity to act without a guardian. The ward’s personal values and expressed
desires, whether past or present, are to be considered when making decisions.
Although the guardian only need consider the ward’s desires and values “to the
extent known to the guardian,” that phrase should not be read as an escape or
excuse for the guardian. Instead, the guardian needs to make an effort to learn
the ward’s personal values and ask the ward about the ward’s desires before the
guardian makes a decision. Subsection
(a) requires the guardian to act in the ward’s best interest. In determining
the best interest of the ward, the guardian should again consider the ward’s
personal values and expressed desires.
In
furtherance of the limited guardianship and least restrictive alternative
concepts, subsection (b)(5) requires the guardian to immediately notify the
Court if the ward’s condition has improved, so that the ward may have rights
restored. The guardian is not to wait
until the next reporting period.
Section 5-315. Powers Of Guardian.
(a) Except as
otherwise limited by the court, a guardian may:
(1) apply for and receive money payable to the ward or the ward’s guardian or custodian for the support of the ward under the terms of any statutory system of benefits or insurance or any private contract, devise, trust, conservatorship, or custodianship;
(2) if otherwise consistent with the terms of any order by a court of competent jurisdiction relating to custody of the ward, take custody of the ward and establish the ward’s place of custodial dwelling, but may only establish or move the ward’s place of dwelling outside this State upon express authorization of the court;
(3) if a conservator for the estate of the ward
has not been appointed with existing authority, commence a proceeding,
including an administrative proceeding, or take other appropriate action to
compel a person to support the ward or to pay money for the benefit of the
ward;
(4) consent to medical or other care, treatment,
or service for the ward;
(5) consent to the marriage [or divorce] of the
ward; and
(6) if reasonable under all of the circumstances,
delegate to the ward certain responsibilities for decisions affecting the
ward’s well-being.
(b) The court
may specifically authorize the guardian to consent to the adoption of the ward.
COMMENT
Subsection
(a)(1) authorizes the guardian to apply for or receive the ward’s government
benefits. Subsection (a)(2) prohibits the guardian from moving the ward out of
the state without the Court’s prior express authorization. This provision
should be strictly applied for the protection of the ward and to prevent forum
shopping.
Although
subsection (a)(4) gives the guardian the power to consent to medical treatment,
the guardian must ascertain whether a health care directive is in effect. If
there is a valid health-care power of attorney, the decision of the health care
agent takes precedence over that of the guardian, absent a Court order to the
contrary. Further, the guardian may not revoke a health-care power of attorney
except on Court order. See Section 5-316(c). If the health-care
directive does not appoint an agent, the guardian may proceed to make a
health-care decision but must follow the ward’s wishes as expressed in the
directive.
Additionally,
statutes in many states prohibit a guardian from consenting to certain
procedures without prior Court order or without first complying with detailed
statutory requirements, especially procedures which implicate the incapacitated
person’s constitutional rights. For
example, a guardian may not commit a ward to a mental health-care institution
without following the state’s statute on civil commitment. See Section 5-316(d). There may be similar requirements regarding a
guardian’s consent to electroconvulsive therapy (ECT) or other shock treatment,
experimental treatment, sterilization, forced medication with psychotropic
drugs, or abortion.
The phrase “or divorce” in subsection (a)(5) is placed in brackets in recognition of the split among the jurisdictions over whether a guardian has power to initiate a divorce for the ward. Jurisdictions that do not allow the guardian to i