View Daily Data Tracking History
View Bill Text
View Statement of Purpose / Fiscal Impact
S1317................................................by JUDICIARY AND RULES
NONPROBATE TRANSFERS - Repeals and adds to existing law to provide for the
liability of nonprobate transferees for creditor claims and statutory
allowance.
01/22 Senate intro - 1st rdg - to printing
01/23 Rpt prt - to Jud
02/04 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/07 3rd rdg - PASSED - 30-0-5
AYES -- Andreason, Boatright, Branch(Bartlett), Bunderson,
Burtenshaw, Cameron, Davis, Deide, Dunklin, Frasure, Geddes, Goedde,
Hawkins, Hill, Ingram, Ipsen, Little, Lodge, Marley, Noh, Risch,
Sandy, Schroeder, Sims, Sorensen, Stegner, Stennett, Thorne, Wheeler,
Williams
NAYS -- None
Absent and excused -- Brandt, Darrington, Keough, King-Barrutia,
Richardson
Floor Sponsor - Davis
Title apvd - to House
02/08 House intro - 1st rdg - to Jud
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1317
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO NONPROBATE TRANSFERS; REPEALING SECTION 15-6-107, IDAHO CODE, AND
3 AMENDING CHAPTER 6, TITLE 15, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
4 15-6-107, IDAHO CODE, TO PROVIDE FOR THE LIABILITY OF NONPROBATE TRANS-
5 FEREES FOR CREDITOR CLAIMS AND STATUTORY ALLOWANCES.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 15-6-107, Idaho Code, be, and the same is hereby
8 repealed.
9 SECTION 2. That Chapter 6, Title 15, Idaho Code, be, and the same is
10 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
11 ignated as Section 15-6-107, Idaho Code, and to read as follows:
12 15-6-107. LIABILITY OF NONPROBATE TRANSFEREES FOR CREDITOR CLAIMS AND
13 STATUTORY ALLOWANCES. (1) In this section, "nonprobate transfer" means a valid
14 transfer effective at death, other than of a survivorship interest in a joint
15 tenancy of real estate, by a transferor whose last domicile was in this state
16 to the extent that the transferor immediately before death had power, acting
17 alone, to prevent the transfer by revocation or withdrawal and instead to use
18 the property for the benefit of the transferor or apply it to discharge claims
19 against the transferor's probate estate.
20 (2) Except as otherwise provided by statute, a transferee of a nonprobate
21 transfer is subject to liability to the decedent's probate estate for allowed
22 claims against the decedent's probate estate and statutory allowances to the
23 decedent's surviving spouse, minor children and dependent children to the
24 extent the decedent's probate estate is insufficient to satisfy those claims
25 and allowances. The liability of a nonprobate transferee may not exceed the
26 value of nonprobate transfers received or controlled by that transferee.
27 (3) Nonprobate transferees are liable for the insufficiency described in
28 subsection (2) of this section in the following order:
29 (a) As provided in the decedent's will or any other governing instrument;
30 (b) To the extent of the value of the nonprobate transfer received or
31 controlled by the trustee of a trust serving as the principal nonprobate
32 instrument in the decedent's estate plan as shown by its designation as
33 devisee of the decedent's residuary estate or by other facts or circum-
34 stances;
35 (c) Other nonprobate transferees, in proportion to the values received.
36 (4) Unless otherwise provided by the trust instrument, interests of bene-
37 ficiaries in all trusts incurring liabilities under this section shall abate
38 as necessary to satisfy the liability, as if all of the trust instruments were
39 a single will and the interests were devises under it.
40 (5) A provision made in one instrument may direct the apportionment of
41 the liability among the nonprobate transferees taking under that or any other
42 governing instrument. If a provision in one instrument conflicts with a provi-
2
1 sion in another, the later one prevails.
2 (6) Upon due notice to a nonprobate transferee, the liability imposed by
3 this section is enforceable in proceedings in this state, wherever the trans-
4 feree is located.
5 (7) A proceeding under this section may not be commenced unless the per-
6 sonal representative of the decedent's estate has received from the surviving
7 spouse or one acting for a minor or dependent child, to the extent that stat-
8 utory allowances are affected, or a creditor, a written demand for the pro-
9 ceeding. If the personal representative declines or fails to commence a pro-
10 ceeding after demand, a person making demand may commence the proceeding in
11 the name of the decedent's estate, at the expense of the person making the
12 demand and not of the estate. A personal representative who declines in good
13 faith to commence a requested proceeding incurs no personal liability for
14 declining.
15 (8) A proceeding under this section must be commenced within two (2)
16 years after the decedent's death, but a proceeding on behalf of a creditor
17 whose claim was allowed after proceedings challenging disallowance of the
18 claim may be commenced within sixty (60) days after final allowance of the
19 claim.
20 (9) Unless a written notice asserting that a decedent's probate estate is
21 insufficient to pay allowed claims and statutory allowances has been received
22 from the decedent's personal representative, the following rules apply:
23 (a) Payment or delivery of assets by a financial institution, registrar,
24 or other obligor, to a nonprobate transferee in accordance with the terms
25 of the governing instrument controlling the transfer releases the obligor
26 from all claims for amounts paid or assets delivered.
27 (b) A trustee receiving or controlling a nonprobate transfer is released
28 from liability under this section on any assets distributed to the trust's
29 beneficiaries. Each beneficiary to the extent of the distribution received
30 becomes liable for the amount of the trustee's liability attributable to
31 that asset imposed by sections (2) and (3) of this section.
STATEMENT OF PURPOSE
RS 11692
Nonprobate transfers are becoming increasingly used in Idaho to transfer
assets at death, with examples being revocable and irrevocable trusts, life
insurance, and multiple-party accounts (stock accounts, certificates of
deposit, checking accounts, and so forth). This process can greatly impact
the provisions of the Idaho Probate Code giving protections to surviving
spouses, minor and dependent children, and creditors. The original 15-6-107
has been outdated by new and often sophisticated nonprobate methods of
transfer. The language in the bill is that of the Uniform Laws Commissioners
amendments to the Uniform Probate Act adopted by the National Conference of
Commissioners on Uniform State Laws at its meeting July 24-31, 1998, with
minor revisions to reflect existing Idaho probate law (for example, allowing
two years instead of one year after death to seek collection of the transfer).
The bill still retains the protection of third party holders of accounts, such
as banks or trustees, acting in good faith. This bill is part of an ongoing
review and revision of this complex area to reflect modern estate planning
methods while preserving basic protections for family of the deceased.
FISCAL NOTE
This bill will have no fiscal impact.
CONTACT: Robert L. Aldridge
1209 North Eighth Street
Boise, Idaho 83702-4297
Telephone: office: (208) 336-9880 home: (208) 888-4668
Fax: (208) 336-9882
e-mail: rlaldridge@hotmail.com
STATEMENT OF PURPOSE/FISCAL NOTE S 1317