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S1031...................................................by JUDICIARY AND RULES
NONPROBATE TRANSFERS - Repeals and adds to existing law to provide the
liability of nonprobate transferees for creditor claims and statutory
allowances; to define nonprobate transfer; to provide the limits of liability
of the nonprobate transferee; to provide the order of liability of such
transferees; to allow apportionment of liability in various instruments; to
provide time limits within which an action must be brought and conditions
precedent for such an action; to provide for release of liability for certain
third party holders of interests; and to provide for proportionate liability
for transferees in certain situations.
01/27 Senate intro - 1st rdg - to printing
01/28 Rpt prt - to Jud
02/06 Rpt out - rec d/p - to 2nd rdg
02/07 2nd rdg - to 3rd rdg
02/10 3rd rdg - PASSED - 34-0-1
AYES -- Bailey, Brandt, Bunderson, Burkett, Burtenshaw, Calabretta,
Cameron, Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill,
Ingram, Kennedy, Keough, Little, Lodge, Malepeai, Marley, McKenzie,
McWilliams, Noble, Noh, Pearce, Richardson, Schroeder, Sorensen,
Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Andreason
Floor Sponsor - Sweet
Title apvd - to House
02/11 House intro - 1st rdg - to Jud
02/28 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/05 3rd rdg - PASSED - 67-2-1
AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter,
Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Collins, Crow,
Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Gagner, Garrett, Harwood, Henbest, Jaquet, Jones,
Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez, McGeachin,
McKague, Meyer, Miller, Mitchell, Naccarato, Nielsen, Raybould,
Ridinger, Ringo, Roberts, Robison, Rydalch, Sali, Sayler, Schaefer,
Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass,
Stevenson, Tilman, Trail, Wills, Wood, Mr. Speaker
NAYS -- Clark, Moyle
Absent and excused -- Ring
Floor Sponsor - Nielsen
Title apvd - to Senate
03/06 To enrol
03/07 Rpt enrol - Pres signed
03/10 Sp signed
03/11 To Governor
03/13 Governor signed
Session Law Chapter 61
Effective: 07/01/03
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE SENATE
SENATE BILL NO. 1031
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO DECEDENT'S ESTATES; REPEALING SECTION 15-6-107, IDAHO CODE, RELAT-
3 ING TO RIGHTS OF CREDITORS IN DECEDENT'S ESTATE PROCEEDINGS; AMENDING PART
4 1, CHAPTER 6, TITLE 15, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
5 15-6-107, IDAHO CODE, TO PROVIDE THE LIABILITY OF NONPROBATE TRANSFEREES
6 FOR CREDITOR CLAIMS AND STATUTORY ALLOWANCES, TO DEFINE "NONPROBATE TRANS-
7 FER," TO PROVIDE THE LIMITS OF LIABILITY OF THE NONPROBATE TRANSFEREE, TO
8 PROVIDE THE ORDER OF LIABILITY OF SUCH TRANSFEREES, TO ALLOW APPORTIONMENT
9 OF LIABILITY IN VARIOUS INSTRUMENTS, TO PROVIDE TIME LIMITS WITHIN WHICH
10 AN ACTION MUST BE BROUGHT AND CONDITIONS PRECEDENT FOR SUCH AN ACTION, TO
11 PROVIDE FOR RELEASE OF LIABILITY FOR CERTAIN THIRD PARTY HOLDERS OF INTER-
12 ESTS AND TO PROVIDE FOR PROPORTIONATE LIABILITY OF TRANSFEREES IN CERTAIN
13 SITUATIONS.
14 Be It Enacted by the Legislature of the State of Idaho:
15 SECTION 1. That Section 15-6-107, Idaho Code, be, and the same is hereby
16 repealed.
17 SECTION 2. That Part 1, Chapter 6, Title 15, Idaho Code, be, and the same
18 is hereby amended by the addition thereto of a NEW SECTION, to be known and
19 designated as Section 15-6-107, Idaho Code, and to read as follows:
20 15-6-107. LIABILITY OF NONPROBATE TRANSFEREES FOR CREDITOR CLAIMS AND
21 STATUTORY ALLOWANCES. (1) In this section, "nonprobate transfer" means a valid
22 transfer effective at death, other than of a survivorship interest in a joint
23 tenancy of real estate, by a transferor whose last domicile was in this state
24 to the extent that the transferor immediately before death had power, acting
25 alone, to prevent the transfer by revocation or withdrawal and instead to use
26 the property for the benefit of the transferor to apply it to discharge claims
27 against the transferor's probate estate.
28 (2) Except as otherwise provided by statute, a transferee of a nonprobate
29 transfer is subject to liability to the decedent's probate estate for allowed
30 claims against the decedent's probate estate and statutory allowances to the
31 decedent's surviving spouse, minor children and dependent children to the
32 extent the decedent's probate estate is insufficient to satisfy those claims
33 and allowances. The liability of a nonprobate transferee may not exceed the
34 value of nonprobate transfers received or controlled by that transferee.
35 (3) Nonprobate transferees are liable for the insufficiency described in
36 subsection (2) of this section in the following order:
37 (a) As provided in the decedent's will or any other governing instrument;
38 (b) To the extent of the value of the nonprobate transfer received or
39 controlled by the trustee of a trust serving as the principal nonprobate
40 instrument in the decedent's estate plan as shown by its designation as
41 devisee of the decedent's residuary estate or by other facts or circum-
42 stances;
2
1 (c) Other nonprobate transferees, in proportion to the values received.
2 (4) Unless otherwise provided by the trust instrument, interests of bene-
3 ficiaries in all trusts incurring liabilities under this section shall abate
4 as necessary to satisfy the liability as if all of the trust instruments were
5 a single will and the interests were devises under it.
6 (5) A provision made in one (1) instrument may direct the apportionment
7 of the liability among the nonprobate transferees taking under that or any
8 other governing instrument. If a provision in one (1) instrument conflicts
9 with a provision in another, the later one prevails.
10 (6) Upon due notice to a nonprobate transferee, the liability imposed by
11 this section is enforceable in proceedings in this state, wherever the trans-
12 feree is located.
13 (7) A proceeding under this section may not be commenced unless the per-
14 sonal representative of the decedent's estate has received from the surviving
15 spouse or one acting for a minor or dependent child, to the extent that statu-
16 tory allowances are affected, or a creditor, a written demand for the proceed-
17 ing. If the personal representative declines or fails to commence a proceeding
18 after demand, a person making demand may commence the proceeding in the name
19 of the decedent's estate, at the expense of the person making the demand and
20 not of the estate. A personal representative who declines in good faith to
21 commence a requested proceeding incurs no personal liability for declining.
22 (8) A proceeding under this section must be commenced within two (2)
23 years after the decedent's death, but a proceeding on behalf of a creditor
24 whose claim was allowed after proceedings challenging disallowance of the
25 claim may be commenced within sixty (60) days after final allowance of the
26 claim.
27 (9) Unless a written notice asserting that a decedent's probate estate is
28 insufficient to pay allowed claims and statutory allowances has been received
29 from the decedent's personal representative the following rules apply:
30 (a) Payment or delivery of assets by a financial institution, registrar
31 or other obligor to a nonprobate transferee in accordance with the terms
32 of the governing instrument controlling the transfer releases the obligor
33 from all claims for amounts paid or assets delivered.
34 (b) A trustee receiving or controlling a nonprobate transfer is released
35 from liability under this section on any assets distributed to the trust's
36 beneficiaries. Each beneficiary to the extent of the distribution received
37 becomes liable for the amount of the trustee's liability attributable to
38 that asset imposed by subsections (2) and (3) of this section.
STATEMENT OF PURPOSE
RS 12630
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 . corn
STATEMENT OF PURPOSE/FISCAL NOTE S 1031