S 179 — An act relating to the Uniform Disclaimer of Property Interests Act

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 BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 8 of 24 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.

§ 4107.

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) of this section 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.

§ 4108.

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.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 9 of 24 § 4109.

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.

§ 4110.

DISCLAIMER BY APPOINTEE, OBJECT, OR TAKER IN DEFAULT OF EXERCISE OF POWER OF APPOINTMENT (a) A disclaimer of an interest in property by an appointee of a power of appointment takes effect as of the time the instrument by which the holder exercises the power becomes irrevocable.

(b) A disclaimer of an interest in property by a permissible appointee 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.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 10 of 24 § 4111.

DISCLAIMER OF POWER HELD IN FIDUCIARY CAPACITY (a) If a fiduciary disclaims a power held in a fiduciary capacity that 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 that 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.

§ 4112.

DELIVERY OR FILING (a) As used 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, including an enhanced life estate deed created pursuant to 27 V.S.A.

chapter 6.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 11 of 24 (b) Subject to subsections (c)–(m) of this section, 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) the disclaimer shall be delivered to the personal representative of the decedent’s estate;

or (2) if no personal representative is then serving, the disclaimer shall be filed with a court having jurisdiction to appoint the personal representative.

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

(1) the disclaimer shall be delivered to the 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 then serving, the disclaimer shall be filed with a court having jurisdiction to enforce the trust.

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

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

(2) if no trustee is then serving, the disclaimer shall be filed with a court having jurisdiction to enforce the trust;

or BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 12 of 24 (3) if the disclaimer is made before the time the instrument creating the trust becomes irrevocable, the disclaimer shall 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 that is disclaimed before the designation becomes irrevocable, the disclaimer shall be delivered to the person making the beneficiary designation.

(g) In the case of an interest in personal property created by a beneficiary designation that is disclaimed after the designation becomes irrevocable, the disclaimer shall be delivered to the person obligated to distribute the interest.

(h) If real property or an interest in real property is disclaimed, a copy of the disclaimer shall be recorded in the land records of the town in which the property or interest disclaimed is located.

(i) In the case of a disclaimer by a surviving holder of jointly held property, the disclaimer shall be delivered to the person to whom the disclaimed interest passes.

(j) In the case of a disclaimer by a permissible appointee or taker in default of exercise of a power of appointment at any time after the power was created:

(1) the disclaimer shall 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, the disclaimer shall be filed with a court having authority to appoint the fiduciary.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 13 of 24 (k) In the case of a disclaimer by an appointee of a nonfiduciary power of appointment:

(1) the disclaimer shall be delivered to the holder, the personal representative of the holder’s estate or to the fiduciary under the instrument that created the power;

or (2) if no fiduciary is then serving, the disclaimer shall be filed with a court having authority to appoint the fiduciary.

(l) In the case of a disclaimer by a fiduciary of a power over a trust or estate, the disclaimer shall be delivered as provided in subsection (c), (d), or (e) of this section, as if the power disclaimed were an interest in property.

(m) In the case of a disclaimer of a power by an agent, the disclaimer shall be delivered to the principal or the principal’s representative.

§ 4113.

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.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 14 of 24 (c) A disclaimer, in whole or part, of the future exercise of a power held in a fiduciary capacity is not barred by its previous exercise.

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

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

(f) A disclaimer of a power over property that is barred by this section is ineffective.

A disclaimer of an interest in property that is barred by this section takes effect as a transfer of the interest disclaimed to the persons who would have taken the interest under this chapter had the disclaimer not been barred.

§ 4114.

TAX QUALIFIED DISCLAIMER Notwithstanding any other provision of this chapter, if as a result of a disclaimer or transfer the disclaimed or transferred interest is treated pursuant to the provisions of the Internal Revenue Code, as may be amended, or any regulations promulgated under it, as never having been transferred to the disclaimant, then the disclaimer or transfer is effective as a disclaimer under this chapter.

§ 4115.

RECORDING OF DISCLAIMER BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 15 of 24 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, then 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.

§ 4116.

APPLICATION TO EXISTING RELATIONSHIPS Except as otherwise provided in section 4113 of this title, an interest in or power over property existing on the effective date of this chapter as to which the time for delivering or filing a disclaimer under law superseded by this chapter has not expired may be disclaimed after the effective date of this chapter.

§ 4117.

RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT This chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C.

§ 7001, et seq.) but does not modify, limit, or supersede Section 101(c) of that act (15 U.S.C.

§ 7001(c)) or authorize electronic delivery of any of the notices described in Section 103(b) of that act (15 U.S.C.

§ 7003(b)).

§ 4118.

UNIFORMITY OF APPLICATION AND CONSTRUCTION BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 16 of 24 In applying and construing this uniform act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

§ 4119.

SEVERABILITY CLAUSE If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

Sec.

2.

REPEAL 14 V.S.A.

chapter 83 (Uniform Disclaimer of Property Interests Act) is repealed.

Sec.

3.

EFFECTIVE DATE This act shall take effect on passage Sec.

1.

14 V.S.A.

chapter 129 is added to read:

CHAPTER 129.

VERMONT DISCLAIMER OF PROPERTY INTERESTS ACT § 4101.

SHORT TITLE This chapter may be cited as the “Vermont Uniform Disclaimer of Property Interests Act.” § 4102.

DEFINITIONS As used in this chapter:

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

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 17 of 24 (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, governmental agency, governmental instrumentality, public corporation, or any other legal or commercial entity.

(7) “Personal representative” means a duly appointed representative of a probate estate, such as an executor or administrator.

(8) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

The term includes an Indian tribe or band, or Alaskan native village, recognized by federal law or formally acknowledged by a state.

(9) “Trust” means:

(A) an express trust, charitable or noncharitable, with additions thereto, whenever and however created;

or (B) a trust created pursuant to a statute, judgment, or decree that requires the trust to be administered in the manner of an express trust.

§ 4103.

SCOPE This chapter applies to disclaimers of any interest in or power over property, whenever created.

§ 4104.

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

(b) This chapter does not limit any right of a person to waive, release, disclaim, or renounce an interest in or power over property under a law other than this chapter.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 18 of 24 § 4105.

POWER TO DISCLAIM;

GENERAL REQUIREMENTS;

WHEN IRREVOCABLE (a) A person may disclaim, in whole or in part, any interest in or power over property, including a power of appointment.

A fiduciary may disclaim the interest or power even if its creator imposed a spendthrift VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 4 of 15 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.

and VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 5 of 15 (B) with present intent to authenticate or adopt a record to:

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 19 of 24 (e) 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.

VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 6 of 15 (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.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 20 of 24 (D) If the disclaimed interest would pass to the disclaimant’s estate had the disclaimant died before the time of distribution, the disclaimed interest VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 7 of 15 instead passes by representation to the descendants of the disclaimant who survive the time of distribution.

or VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 8 of 15 (2) all of the property except that part of the value of the entire interest attributable to the contribution furnished by the disclaimant.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 21 of 24 (1) If the holder has not exercised the power, the disclaimer takes effect as of the time the instrument creating the power becomes irrevocable.

VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 9 of 15 (3) The instrument creating the power is construed as if the power expired when the disclaimer became effective.

VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 10 of 15 § 4112.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 22 of 24 (b) Subject to subsections (c)–(m) of this section, delivery of a disclaimer may be effected by personal delivery, first-class mail, or any other method likely to result in its receipt.

VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 11 of 15 (d) In the case of an interest in a testamentary trust:

VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 12 of 15 (h) If real property or an interest in real property is disclaimed, a copy of the disclaimer shall be recorded in the land records of the town in which the property or interest disclaimed is located.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 23 of 24 (1) the disclaimer shall be delivered to the holder of the power or to the fiduciary acting under the instrument that created the power;

VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 13 of 15 (l) In the case of a disclaimer by a fiduciary of a power over a trust or estate, the disclaimer shall be delivered as provided in subsection (c), (d), or (e) of this section, as if the power disclaimed were an interest in property.

VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 14 of 15 (f) A disclaimer of a power over property that is barred by this section is ineffective.

BILL AS INTRODUCED AND PASSED BY SENATE S.179 Page 24 of 24 § 4114.

APPLICATION TO EXISTING RELATIONSHIPS Except as otherwise provided in section 4113 of this title, an interest in or power over property existing on the effective date of this chapter as to which VT LEG #387976 v.1 AS PASSED BY SENATE S.179 Page 15 of 15 the time for delivering or filing a disclaimer under law superseded by this chapter has not expired may be disclaimed after the effective date of this chapter.

§§ 7001, 7001, et seq., but does not modify, limit, or supersede Section 101(c) of that act (15 U.S.C.

§§ 7001(c)) 7001(c)) or authorize electronic delivery of any of the notices described in Section 103(b) of that act (15 U.S.C.

§§ 7003(b)). 7003(b)).

REPEAL 14 V.S.A.

VT LEG #387976 v.1