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S1250................................................by JUDICIARY AND RULES
ESTATES - Amends and repeals existing law relating to homestead allowance
determinations of an estate to further define the right to a homestead
allowance, the value of exempt property, and a family allowance; and to
provide procedures in determination of homestead allowance, family
allowance and exempt property.
01/29 Senate intro - 1st rdg - to printing
01/30 Rpt prt - to Jud
02/12 Rpt out - rec d/p - to 2nd rdg
02/13 2nd rdg - to 3rd rdg
02/19 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
Calabretta, Cameron, Compton, Davis, Gannon, Geddes, Goedde, Hill,
Ingram, Keough, Little, Lodge, Malepeai, Marley, McKenzie,
McWilliams, Noble, Noh, Pearce, Richardson, Schroeder, Sorensen,
Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Darrington, Kennedy
Floor Sponsor - Richardson
Title apvd - to House
02/20 House intro - 1st rdg - to Rev/Tax
02/23 Rpt out - Ref'd to Jud
03/02 Rpt out - rec d/p - to 2nd rdg
03/03 2nd rdg - to 3rd rdg
03/09 3rd rdg - PASSED - 61-1-8
AYES -- Andersen, Bauer, Bayer, Bedke, Bell, Black, Block, Boe, Bolz,
Bradford, Campbell, Cannon, Collins, Crow, Cuddy, Deal, Denney,
Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18), Field(23),
Garrett, Harwood, Henbest, Jaquet, Jones, Kellogg, Kulczyk, Langford,
Langhorst, Martinez, McGeachin, Meyer, Miller, Mitchell, Moyle,
Naccarato, Nielsen, Pasley-Stuart, Raybould, Ridinger, Ring, Ringo,
Roberts, Robison, Sali, Sayler, Schaefer, Shepherd, Shirley, Skippen,
Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Mr.
Speaker
NAYS -- Clark
Absent and excused -- Barraclough, Barrett, Gagner, Lake, McKague,
Rydalch, Wills, Wood
Floor Sponsor - Edmunson
Title apvd - to Senate
03/10 To enrol
03/11 Rpt enrol - Pres signed
03/12 Sp signed
03/15 To Governor
03/19 Governor signed
Session Law Chapter 123
Effective: 07/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE SENATE
SENATE BILL NO. 1250
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO HOMESTEAD ALLOWANCE DETERMINATIONS OF AN ESTATE; AMENDING SECTION
3 15-2-402, IDAHO CODE, TO FURTHER DEFINE THE RIGHT TO A HOMESTEAD ALLOW-
4 ANCE; AMENDING SECTION 15-2-403, IDAHO CODE, TO FURTHER DEFINE THE VALUE
5 OF EXEMPT PROPERTY; AMENDING SECTION 15-2-404, IDAHO CODE, TO FURTHER
6 DEFINE A FAMILY ALLOWANCE; AMENDING SECTION 15-2-405, IDAHO CODE, TO PRO-
7 VIDE PROCEDURES IN DETERMINATIONS OF HOMESTEAD ALLOWANCE, FAMILY ALLOWANCE
8 AND EXEMPT PROPERTY; AND REPEALING SECTION 55-1010, IDAHO CODE.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Section 15-2-402, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 15-2-402. HOMESTEAD ALLOWANCE. If a surviving spouse of a decedent is
13 entitled to the homestead pursuant to section 55-1010, Idaho Code, then no
14 person is entitled to a homestead allowance. If a surviving spouse of a dece-
15 dent is not entitled to the homestead pursuant to section 55-1010, Idaho Code,
16 then the surviving spouse of a decedent is entitled to a homestead allowance.
17 If there is no surviving spouse, and if no homestead passes to the minor chil-
18 dren and/or dependent children of the decedent as set forth in section
19 55-1010, Idaho Code, each minor child and each dependent child of the decedent
20 is entitled to a homestead allowance in the amount determined hereafter
21 divided by the number of minor and dependent children of the decedent. The
22 homestead allowance is exempt from and has priority over all claims against
23 the estate except as hereinafter set forth. The homestead allowance is in
24 addition to any share passing to the surviving spouse or minor or dependent
25 child by the will of the decedent unless otherwise provided in the will, or by
26 intestate succession, or by way of elective share. The amount of the homestead
27 allowance shall be the sum set forth in the provisions of section 55-1003,
28 Idaho Code, as those provisions are in effect on the date of the decedent's
29 death. The homestead allowance is not a right to claim ownership of, or suc-
30 cession to, any homestead owned by the decedent at the time of the decedent's
31 death but is only the right to claim the sum set forth above. The right to a
32 homestead allowance is determined as follows:
33 (a) If there is a surviving spouse of the decedent, and the surviving
34 spouse does not, at the time of the death of the decedent, have a homestead,
35 which for purposes of this chapter shall have the same definition as set forth
36 in section 63-701(2), Idaho Code, the surviving spouse shall be entitled to a
37 homestead allowance unless the surviving spouse receives (by will or other
38 dispositive instrument, by intestate succession, by survivorship, or by other
39 means) such a homestead either from the decedent or due to the death of the
40 decedent;
41 (b) If there is no surviving spouse, and there are one (1) or more minor
42 and/or dependent children of the decedent, then each minor child and each
43 dependent child of the decedent is entitled to a portion of the homestead
2
1 allowance in the amount of the homestead allowance divided by the number of
2 minor and dependent children of the decedent entitled to receive the homestead
3 allowance, unless the minor child or dependent child receives (by will or
4 other dispositive instrument, by intestate succession, by survivorship, or by
5 other means) such a homestead either from the decedent or due to the death of
6 the decedent.
7 SECTION 2. That Section 15-2-403, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 15-2-403. EXEMPT PROPERTY. In addition to any homestead or homestead
10 allowance, the decedent's surviving spouse is entitled from the estate to
11 value, not exceeding ten thousand dollars ($10,000) in excess of any security
12 interests therein, in household furniture, automobiles, furnishings, appli-
13 ances and personal effects. If there is no surviving spouse, the decedent's
14 children are entitled jointly to the same value unless the decedent's will
15 provides otherwise. If encumbered chattels are selected and if the value in
16 excess of security interests, plus that of other exempt property, is less than
17 ten thousand dollars ($10,000), or if there is not ten thousand dollars
18 ($10,000) worth of exempt property in the estate, the spouse or children are
19 entitled to other assets of the estate, if any, to the extent necessary to
20 make up the ten thousand dollar ($10,000) value. Rights to exempt property and
21 assets needed to make up a deficiency of exempt property have priority over
22 all claims against the estate, except that the right to any assets to make up
23 a deficiency of exempt property shall abate as necessary to permit prior pay-
24 ment of homestead allowance and family allowance, and except as otherwise pro-
25 vided. These rights are in addition to any benefit or share passing to the
26 surviving spouse or children by the will of the decedent (unless otherwise
27 provided in the will), or by intestate succession, or by way of elective
28 share.
29 SECTION 3. That Section 15-2-404, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 15-2-404. FAMILY ALLOWANCE. (a) In addition to the right to a homestead
32 or homestead allowance and exempt property, the decedent's surviving spouse
33 and minor children whom the decedent was obligated to support and children who
34 were in fact being supported by the decedent are entitled to a reasonable
35 allowance in money out of the estate for their maintenance during the period
36 of administration, which allowance may not continue for longer than one (1)
37 year if the estate is inadequate to discharge allowed claims. The allowance
38 may be paid as a lump sum or in periodic installments. It is payable to the
39 surviving spouse, if living, for the use of the surviving spouse and minor and
40 dependent children; otherwise to the children, or persons having their care
41 and custody. If a minor child or dependent child is not living with the sur-
42 viving spouse, the allowance may be made partially to the child or the child's
43 guardian or other person having the child's care and custody, and partially to
44 the spouse, as their needs may appear. The family allowance is exempt from and
45 has priority over all claims except the homestead allowance, except as other-
46 wise provided.
47 (b) The family allowance is not chargeable against any benefit or share
48 passing to the surviving spouse or children by the will of the decedent unless
49 otherwise provided in the will, or by intestate succession, or by way of elec-
50 tive share. The death of any person entitled to family allowance terminates
51 the right to allowances not yet paid.
3
1 SECTION 4. That Section 15-2-405, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 15-2-405. SOURCE -- DETERMINATION -- DOCUMENTATION -- MISCELLANEOUS PRO-
4 VISIONS. If the estate is otherwise sufficient, property specifically devised
5 may not be used to satisfy rights to the homestead allowance, family allowance
6 or, and exempt property. Subject to this restriction, the surviving spouse,
7 the guardians of the minor children, or children who are adults may select
8 property of the estate as homestead allowance, family allowance, or and exempt
9 property. The personal representative may make these selections if the surviv-
10 ing spouse, the children or the guardians of the minor children are unable or
11 fail to do so within a reasonable time or if there is no guardian of a minor
12 child. The personal representative may execute an instrument or deed of dis-
13 tribution to establish the ownership of property taken as a homestead allow-
14 ance, family allowance, or exempt property. The personal representative may
15 determine the family allowance in a lump sum not exceeding eighteen thousand
16 dollars ($18,000) or periodic installments not exceeding one thousand five
17 hundred dollars ($1,500) per month for one (1) year, and may disburse funds of
18 the estate in payment of the family allowance and any part of the homestead
19 allowance payable in cash. The personal representative or any interested per-
20 son aggrieved by any selection, determination, payment, proposed payment, or
21 failure to act under this section may petition the court for appropriate
22 relief, which may include a family allowance other than that which the per-
23 sonal representative determined or could have determined. Despite any language
24 to the contrary in this chapter, the homestead allowance, family allowance,
25 and exempt property are not mandatory automatic allowances, but rather must be
26 applied for by the surviving spouse and/or children, as appropriate, as set
27 forth in this title. Even though these allowances and the right to apply for
28 exempt property are not claims against estates, the manner of and time period
29 for applying for these allowances or the exempt property shall be the same as
30 set forth in sections 15-3-801, 15-3-803 and 15-3-804, Idaho Code; provided
31 however, that the personal representative shall not be required to give actual
32 notice to a surviving spouse or a minor or dependent child of the right to
33 apply for these allowances or the exempt property, and provided further that
34 any notice actually given by the personal representative does not need to make
35 any additional or special reference to an application by the surviving spouse
36 or dependent or minor children also being barred if not submitted within the
37 time period set forth in the notice. Also, the personal representative shall
38 not be liable to the surviving spouse, minor or dependent child, any creditor,
39 or any other successor to the estate in the same manner as provided in section
40 15-3-801(c), Idaho Code, as a result of giving or failing to give notice. The
41 homestead allowance, family allowance, and exempt property may not be enforced
42 or applied for on behalf of a surviving spouse or a minor or dependent or
43 adult child of the decedent by a creditor of the surviving spouse or a minor
44 or dependent or adult child of the decedent, or by any person or entity claim-
45 ing by, through, or because of the surviving spouse or minor or dependent or
46 adult child of the decedent. Despite any language to the contrary in other
47 sections of this chapter, the homestead allowance, family allowance, and
48 exempt property do not take precedence over reasonable administrative costs
49 and expenses of the estate of the decedent.
50 SECTION 5. That Section 55-1010, Idaho Code, be, and the same is hereby
51 repealed.
STATEMENT OF PURPOSE
RS 13790
"Homestead" appears in two different areas of the Idaho Code. In
55-1001 et seq., homestead is defined in the context of an
exemption from seizure or execution under judgments and so forth.
Current Section 55-1010 contains a "devolution" that appears to
mandate that a homestead, if "selected" from community property,
mandatorily passes by operation of law to the surviving spouse of
a decedent. The other area is in the Probate Code, where 15-2-401
et seq. describe a "Homestead Allowance", "Exempt Property", and
"Family Allowance". The interplay between theses two areas of law,
and the application of the Probate Code terms and conditions, have
a source on constant problem to the probate bar. Judges have
interpreted the terms of sections 55-1010 and 15-2-401 et seq. in
multiple inconsistent ways. This bill clarifies the relationship
between the two different areas of law, and also clarifies how the
Probate Code provisions work.
(1) Devolution The bill deletes 55-1010. This solves numerous
problems caused by the automatic passage of the homestead to the
surviving spouse, which is often the direct opposite of the result
intended by the decedent, including in tax planning situations.
The homestead can still pass to the surviving spouse, but the
passage will be pursuant to the planning of the decedent.
(2) Homestead Allowance The existing statute has, as noted above,
interpreted in many ways, all conflicting, by attorneys and courts
in Idaho. The bill clarifies this allowance by providing:
(a) The homestead is an optional choice by the surviving
spouse or, if appropriate, minor or dependent children of the
decedent. It is not mandated and may be waived by the spouse
or children.
(b) The right to a homestead allowance depends on whether the
spouse (or children, as appropriate) already have a homestead
independently, or receive, because of the death of the
decedent a homestead. If so, no homestead allowance is given,
since the spouse, or children, already have an actual
homestead. If not, then the spouse, or children, are entitled
to a homestead allowance.
(c) The amount of the homestead allowance is the sum stated
in 55-1003 (currently $50,000.00). This is existing law.
However, the deletion of 55-1010 greatly clarifies when that
amount is available to the surviving spouse or children.
(d) 15-2-405 has substantial language added to the existing
language to clarify:
(1) The two allowances and exempt property are not
mandatory and automatic, but must be applied for by the
surviving spouse or children. The time period for
application is defined as being the same as for
creditor's claims under 15-3-801, 803, and 804.
(2) The Personal Representative is not required to give
actual notice to the surviving spouse or children of the
allowances or exempt property. This removes the Personal
Representative from a potential conflict of interest when
there are multiple beneficiaries of the estate. The
Personal Representative can give such notice, however.
(3) The allowances and exempt property can only be
applied for by the spouse or children. Creditors cannot
apply on behalf of the spouse or children.
(4) Finally, the allowances and exempt property do not
take precedence over the reasonable administrative costs
and expenses of the estate.
The net effect of the bill should be make clear and certain an area
of probate law that has been confused and conflicting. The
confusion has caused a great deal of court time to be wasted and
has lead to conflicting results on identical fact patterns.
FISCAL NOTE
This bill will have no fiscal impact.
CONTACT:
Name: Robert L. Aldridge
Phone: (208) 336-9880
STATEMENT OF PURPOSE/FISCAL NOTE S 1250