84R12447 KFF-F

By: Rodríguez S.B. No. 994

A BILL TO BE ENTITLED

AN ACT

relating to the adoption of the Texas Uniform Disclaimer of Property Interests Act.

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

SECTION 1. The Property Code is amended by adding Title 13 to read as follows:

TITLE 13. DISCLAIMER OF PROPERTY INTERESTS

CHAPTER 240. TEXAS UNIFORM DISCLAIMER OF PROPERTY INTERESTS ACT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 240.001. SHORT TITLE. This chapter may be cited as the "Texas Uniform Disclaimer of Property Interests Act."

Sec. 240.002. DEFINITIONS. In this chapter:

(1) "Disclaimant" means:

(A) the person to whom a disclaimed interest or power would have passed had the disclaimer not been made;

(B) the estate to which a disclaimed interest or power would have passed had the disclaimer not been made by the personal representative of the estate;

(C) the ward to whom a disclaimed interest or power would have passed had the disclaimer not been made by the guardian of the ward's estate; or

(D) the trust into which a disclaimed interest or power would have passed had the disclaimer not been made by the trustee of the trust.

(2) "Disclaimed interest" means the interest that would have passed to the disclaimant had the disclaimer not been made.

(3) "Disclaimed power" means the power that would have been possessed by the disclaimant had the disclaimer not been made.

(4) "Disclaimer" means the refusal to accept an interest in or power over property.

(5) "Estate" has the meaning assigned by Section 22.012, Estates Code.

(6) "Guardian" has the meaning assigned by Section 1002.012, Estates Code.

(7) "Fiduciary" means a personal representative, a trustee, an attorney in fact or agent acting under a power of attorney, or any other person authorized to act as a fiduciary with respect to the property of another person.

(8) Notwithstanding Section 311.005, Government Code, "person" means an individual, corporation, including a public corporation, business trust, partnership, limited liability company, association, joint venture, governmental entity, including a political subdivision, agency, or instrumentality, or any other legal entity.

(9) "Personal representative" has the meanings assigned by Sections 22.031 and 1002.028, Estates Code.

(10) "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.

(11) "Survivorship property" means property held in the name of two or more persons under an arrangement in which, on the death of one of the persons, the property passes to and is vested in the other person or persons. The term includes:

(A) property held by an agreement described in Section 111.001, Estates Code;

(B) property held by a community property survivorship agreement defined in Section 112.001, Estates Code; and

(C) property in a joint account held by an agreement described in Section 113.151, Estates Code.

(12) "Trust" means a trust described in Section 111.003.

(13) "Ward" has the meaning assigned by Section 22.033, Estates Code.

Sec. 240.003. APPLICABILITY OF CHAPTER. This chapter applies to disclaimers of any interest in or power over property, whenever created.

Sec. 240.004. CHAPTER 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.

Sec. 240.005. UNIFORMITY OF APPLICATION AND CONSTRUCTION. In applying and construing this chapter, consideration must be given to the need to promote uniformity of the law, with respect to the subject matter of this chapter, among states that enact a law similar to this chapter.

Sec. 240.006. POWER TO DISCLAIM BY PERSON OTHER THAN FIDUCIARY. (a) A person other than a fiduciary may disclaim, in whole or in part, any interest in or power over property, including a power of appointment.

(b) A person other than a fiduciary may disclaim an interest or power under this section even if the creator of the interest or power imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim.

Sec. 240.007. POWER TO DISCLAIM POWER HELD IN FIDUCIARY CAPACITY BY PERSON DESIGNATED TO SERVE AS OR SERVING AS FIDUCIARY. (a) Except to the extent the person's right to disclaim is expressly restricted or limited by a law of this state or by the instrument creating the fiduciary relationship, a person designated to serve or serving as a fiduciary may disclaim, in whole or in part, any power over property, including a power of appointment, held in a fiduciary capacity.

(b) A person designated to serve or serving as a fiduciary may disclaim a power under this section even if:

(1) the creator of the power imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim; or

(2) an instrument other than the instrument that created the fiduciary relationship imposed a restriction or limitation on the right to disclaim.

Sec. 240.008. POWER TO DISCLAIM BY FIDUCIARY ACTING IN FIDUCIARY CAPACITY. (a) Subject to Subsection (e) and except to the extent the fiduciary's right to disclaim is expressly restricted or limited by a law of this state or by the instrument creating the fiduciary relationship, a fiduciary acting in a fiduciary capacity may disclaim, in whole or in part, any interest in or power over property, including a power of appointment, that would have passed to the ward, estate, trust, or principal with respect to which the fiduciary was acting had the disclaimer not been made.

(b) A fiduciary acting in a fiduciary capacity may disclaim an interest or power under this section even if the creator of the power or duty 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) Except for a disclaimer by a personal representative subject to court supervision or a disclaimer by the trustee of a management trust described in Chapter 1301, Estates Code, a disclaimer by a fiduciary acting in a fiduciary capacity does not require court approval to be effective unless the instrument that created the fiduciary relationship requires court approval.

(d) In the absence of a court-appointed guardian, without court approval, a natural guardian as described by Section 1104.051, Estates Code, may disclaim on behalf of a minor child of the natural guardian, in whole or in part, any interest in or power over property, including a power of appointment, that the minor child is to receive solely as a result of another disclaimer, but only if the disclaimed interest or power does not pass to or for the benefit of the natural guardian as a result of the disclaimer.

(e) A disclaimer by a fiduciary acting in a fiduciary capacity must be compatible with the fiduciary's fiduciary obligations, unless a court of proper jurisdiction orders otherwise.

Sec. 240.009. POWER TO DISCLAIM; GENERAL REQUIREMENTS; WHEN IRREVOCABLE. (a) To be effective, a disclaimer must:

(1) be in writing;

(2) declare the disclaimer;

(3) describe the interest or power disclaimed;

(4) be signed by the person making the disclaimer; and

(5) be delivered or filed in the manner provided by Subchapter C.

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

(c) A disclaimer is irrevocable on the later of the date the disclaimer:

(1) is delivered or filed under Subchapter C; or

(2) takes effect as provided in Sections 240.051-240.056.

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

SUBCHAPTER B. TYPE AND EFFECT OF DISCLAIMER

Sec. 240.051. 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 the interest's creation.

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

(b) This section applies to a disclaimer of an interest in property other than a disclaimer subject to Section 240.052 or 240.053.

(c) A 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.

(d) A disclaimed interest passes according to any provision in the instrument creating the interest that provides for:

(1) the disposition of the interest if the interest were to be disclaimed; or

(2) the disposition of disclaimed interests in general.

(e) If the instrument creating the disclaimed interest does not contain a provision described by Subsection (d) and:

(1) if the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist; or

(2) if the disclaimant is an individual:

(A) except as otherwise provided in Paragraph (B) or (C), the disclaimed interest passes as if the disclaimant had died immediately before the time of distribution;

(B) if by law or under the instrument the descendants of a 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; and

(C) if the disclaimed interest would have passed 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.

(f) If a descendant of the disclaimant does not survive the time of distribution under Subsection (e)(2)(C), the disclaimed interest passes to those persons, including the state but excluding the disclaimant, and in such shares as would have succeeded 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, except that if the transferor's surviving spouse is living but is remarried at the time of distribution, the transferor is considered to have died unmarried at the time of distribution.

(g) On 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.

Sec. 240.052. DISCLAIMER OF RIGHTS IN SURVIVORSHIP PROPERTY. (a) On the death of a holder of survivorship property, a surviving holder may disclaim, in whole or in part:

(1) if the survivorship property is held by a community property survivorship agreement defined by Section 112.001, Estates Code, one-half of the survivorship property; or

(2) if the survivorship property is held by an agreement described in Section 111.001, Estates Code, or in a joint account held by an agreement described in Section 113.151, Estates Code, the greater of:

(A) a fractional share of the property determined by dividing the number one by the number of holders alive immediately before the death of the holder to whose death the disclaimer relates; or

(B) 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 survivorship property to whose death the disclaimer relates.

(c) An interest in survivorship property disclaimed by a surviving holder of the property passes as if the disclaimant predeceased the holder to whose death the disclaimer relates.

Sec. 240.053. 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.

Sec. 240.054. DISCLAIMER OF POWER OF APPOINTMENT OR OTHER POWER NOT HELD IN FIDUCIARY CAPACITY. (a) If a holder disclaims a power of appointment or other power not held in a fiduciary capacity, this section applies.

(b) If the holder:

(1) has not exercised the power, the disclaimer takes effect as of the time the instrument creating the power becomes irrevocable; or

(2) has exercised the power and the disclaimer is of a power other than a presently exercisable general power of appointment, the disclaimer takes effect immediately after the last exercise of the power.

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

Sec. 240.055. DISCLAIMER BY APPOINTEE, OBJECT, OR TAKER IN DEFAULT OF EXERCISE OF POWER OF APPOINTMENT. (a) A disclaimer of an interest in property by an appointee of a power of appointment takes effect as of the time the instrument by which the holder exercises the power becomes irrevocable.

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

Sec. 240.056. DISCLAIMER OF POWER HELD IN FIDUCIARY CAPACITY. (a) If a person designated to serve or serving as a fiduciary disclaims a power held or to be 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 person designated to serve or serving as a fiduciary disclaims a power held or to be held in a fiduciary capacity that has been exercised, the disclaimer takes effect immediately after the last exercise of the power.

(c) A disclaimer subject to this section is effective as to another person designated to serve or serving as a fiduciary if:

(1) the disclaimer provides that it is effective as to another person designated to serve or serving as a fiduciary; and

(2) the person disclaiming has the authority to bind the estate, trust, or other person for whom the person is acting.

Sec. 240.057. 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 under the Internal Revenue Code of 1986 or any successor law as never having been transferred to the disclaimant, the disclaimer or transfer is effective as a disclaimer under this chapter.

SUBCHAPTER C. DELIVERY OR FILING

Sec. 240.101. DELIVERY OR FILING GENERALLY. (a) Subject to applicable requirements of this subchapter, a disclaimant may deliver a disclaimer by personal delivery, first-class mail, facsimile, e-mail, or any other method likely to result in the disclaimer's receipt.

(b) If a disclaimer is mailed to the intended recipient by certified mail, return receipt requested, at an address the disclaimant in good faith believes is likely to result in the disclaimer's receipt, delivery is considered to have occurred on the date of mailing regardless of the date of receipt.

Sec. 240.102. DISCLAIMER OF INTEREST CREATED UNDER INTESTATE SUCCESSION OR WILL. 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, a disclaimer must be filed in the official public records of the county in which the decedent:

(A) was domiciled; or

(B) owned real property.

Sec. 240.103. DISCLAIMER OF INTEREST IN TESTAMENTARY TRUST. In the case of an interest in a testamentary trust:

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

(2) if no trustee is then serving, a disclaimer must be delivered to the personal representative of the decedent's estate; or

(3) if no trustee or personal representative is then serving, a disclaimer must be filed in the official public records of the county in which the decedent:

(A) was domiciled; or

(B) owned real property.

Sec. 240.104. DISCLAIMER OF INTEREST IN INTER VIVOS TRUST. In the case of an interest in an inter vivos trust:

(1) a disclaimer must be delivered to the trustee then serving, or, if no trustee is then serving, a disclaimer must be filed:

(A) with a court having jurisdiction to enforce the trust; or

(B) in the official public records of the county in which:

(i) the situs of administration of the trust is maintained; or

(ii) the settlor is domiciled or was domiciled at the date of the settlor's death; or

(2) if a disclaimer is made before the time the instrument creating the trust becomes irrevocable, a disclaimer must be delivered to the settlor of a revocable trust or the transferor of the interest.

Sec. 240.105. DISCLAIMER OF INTEREST CREATED BY BENEFICIARY DESIGNATION. (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) In the case of an interest created by a beneficiary designation that is disclaimed before the designation becomes irrevocable, the disclaimer must be delivered to the person making the beneficiary designation.

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

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

(2) a disclaimer of an interest in real property must be recorded in the official public records of the county where the real property that is the subject of the disclaimer is located.

Sec. 240.106. DISCLAIMER BY SURVIVING HOLDER OF SURVIVORSHIP PROPERTY. In the case of a disclaimer by a surviving holder of survivorship property, the disclaimer must be delivered to the person to whom the disclaimed interest passes.

Sec. 240.107. DISCLAIMER OF CERTAIN POWERS OF APPOINTMENT. 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, a disclaimer must be filed:

(A) with a court having authority to appoint the fiduciary; or

(B) in the official public records of the county in which the creator of the power is domiciled or was domiciled at the date of the creator's death.

Sec. 240.108. DISCLAIMER BY CERTAIN APPOINTEES. In the case of a disclaimer by an appointee of a nonfiduciary power of appointment:

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

(2) if no fiduciary is then serving, the disclaimer must be filed:

(A) with a court having authority to appoint the fiduciary; or

(B) in the official public records of the county in which the creator of the power is domiciled or was domiciled at the date of the creator's death.

Sec. 240.109. DISCLAIMER BY CERTAIN FIDUCIARIES. In the case of a disclaimer by a fiduciary of a power over a trust or estate, the disclaimer must be delivered as provided by Section 240.102, 240.103, or 240.104 as if the power disclaimed were an interest in property.

Sec. 240.110. DISCLAIMER OF POWER BY AGENT. 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.

Sec. 240.111. RECORDING OF DISCLAIMER. If an instrument transferring an interest in or power over property subject to a disclaimer is required or authorized by law to be filed, recorded, or registered, the disclaimer may be filed, recorded, or registered as that instrument. Except as otherwise provided by Section 240.105(c)(2), failure to file, record, or register the disclaimer does not affect the disclaimer's validity between the disclaimant and persons to whom the property interest or power passes by reason of the disclaimer.

SUBCHAPTER D. DISCLAIMER BARRED OR LIMITED

Sec. 240.151. 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) the interest sought to be disclaimed is sold under a judicial sale.

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

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

(e) A disclaimer is barred or limited if provided by other law.

(f) A disclaimer of:

(1) a power over property that is barred by this section is ineffective; and

(2) 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 Subchapter B had the disclaimer not been barred.

(g) A disclaimer by a child support obligor is barred as to disclaimed property that could be applied to satisfy the disclaimant's child support obligations if those obligations have been:

(1) administratively determined by the Title IV-D agency as defined by Section 101.033, Family Code, in a Title IV-D case as defined by Section 101.034, Family Code; or

(2) confirmed and reduced to judgment as provided by Section 157.263, Family Code.

(h) The child support obligee to whom child support arrearages are owed may enforce the child support obligation against the disclaimant as to disclaimed property by a lien or by any other remedy provided by law.

SECTION 2. The heading to Chapter 122, Estates Code, is amended to read as follows:

CHAPTER 122. [DISCLAIMERS AND] ASSIGNMENTS

SECTION 3. Section 122.201, Estates Code, is amended to read as follows:

Sec. 122.201. ASSIGNMENT. A person who is entitled to receive property or an interest in property from a decedent under a will, by inheritance, or as a beneficiary under a life insurance contract, and does not disclaim the property under Chapter 240, Property Code, [this chapter] may assign the property or interest in property to any person.

SECTION 4. Section 122.202, Estates Code, is amended to read as follows:

Sec. 122.202. FILING OF ASSIGNMENT. An assignment may, at the request of the assignor, be delivered or filed as provided for the delivery or filing of a disclaimer under Subchapter C, Chapter 240, Property Code [B].

SECTION 5. Section 122.204, Estates Code, is amended to read as follows:

Sec. 122.204. FAILURE TO COMPLY. Failure to comply with Chapter 240, Property Code, [Subchapters A, B, C, and D] does not affect an assignment.

SECTION 6. Section 122.205, Estates Code, is amended to read as follows:

Sec. 122.205. GIFT. An assignment under this chapter [subchapter] is a gift to the assignee and is not a disclaimer under Chapter 240, Property Code [Subchapters A, B, C, and D].

SECTION 7. Section 122.206, Estates Code, is amended to read as follows:

Sec. 122.206. SPENDTHRIFT PROVISION. An assignment of property or interest that would defeat a spendthrift provision imposed in a trust may not be made under this chapter [subchapter].

SECTION 8. The following provisions are repealed:

(1) Subchapters A, B, C, and D, Chapter 122, Estates Code;

(2) the heading to Subchapter E, Chapter 122, Estates Code;

(3) Section 122.203, Estates Code; and

(4) Sections 112.010(b), (c), (c-1), (c-2), (d), and (e), Property Code.

SECTION 9. Title 13, Property Code, as added by this Act, applies to an interest in or power over property existing on or after the effective date of this Act if the time for delivering or filing a disclaimer under former law, including the time for filing a written memorandum of disclaimer under Section 122.055, Estates Code, or the time for delivering notice of the disclaimer under Section 122.056, Estates Code, as those sections existed immediately before the effective date of this Act, has not elapsed. If the time for filing or delivering notice of a written memorandum of disclaimer under former law has elapsed, the former law applies and is continued in effect for that purpose.

SECTION 10. Chapter 122, Estates Code, as amended by this Act, applies to property or an interest in or power existing on or after the effective date of this Act if the time for delivering or filing an assignment under former law, including the time for filing an assignment under Section 122.202, Estates Code, or the time for delivering notice of the filing of assignment under Section 122.203, Estates Code, as those sections existed immediately before the effective date of this Act, has not elapsed. If the time for filing or delivering notice of an assignment under former law has elapsed, the former law applies and is continued in effect for that purpose.

SECTION 11. This Act takes effect September 1, 2015.