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S1330................................................by JUDICIARY AND RULES ESTATES - EXEMPT PROPERTY - Amends and adds to existing law relating to estates to provide an allowance for certain tangible personal property; to remove provisions dealing with encumbered chattels and deficiencies of exempt property; to provide limitations on exempt property and family allowance by will; and to remove provisions dealing with petitioning the court for an exempt property allowance claim under certain circumstances. 01/22 Senate intro - 1st rdg - to printing 01/23 Rpt prt - to Jud
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE SENATE SENATE BILL NO. 1330 BY JUDICIARY AND RULES COMMITTEE 1 AN ACT 2 RELATING TO EXEMPT PROPERTY AND ALLOWANCES; AMENDING SECTION 15-2-403, IDAHO 3 CODE, TO PROVIDE FOR AN ALLOWANCE FOR CERTAIN TANGIBLE PERSONAL PROPERTY 4 AND TO REMOVE PROVISIONS DEALING WITH ENCUMBERED CHATTELS AND DEFICIENCIES 5 OF EXEMPT PROPERTY; AMENDING CHAPTER 2, TITLE 15, IDAHO CODE, BY THE ADDI- 6 TION OF A NEW SECTION 15-2-406, IDAHO CODE, TO PROVIDE LIMITATIONS ON 7 EXEMPT PROPERTY AND FAMILY ALLOWANCE BY WILL; AND AMENDING SECTION 56-218, 8 IDAHO CODE, TO REMOVE PROVISIONS DEALING WITH PETITIONING THE COURT FOR AN 9 EXEMPT PROPERTY ALLOWANCE CLAIM UNDER CERTAIN CIRCUMSTANCES AND TO MAKE 10 TECHNICAL CORRECTIONS. 11 Be It Enacted by the Legislature of the State of Idaho: 12 SECTION 1. That Section 15-2-403, Idaho Code, be, and the same is hereby 13 amended to read as follows: 14 15-2-403. EXEMPT PROPERTY. In addition to any homestead allowance, the 15 decedent's surviving spouse is entitled from the estate to value, not exceed- 16 ing ten thousand dollars ($10,000) in excess of any security interests 17 therein, in tangible personal property, including, but not limited to, house- 18 hold furniture, automobiles, furnishings, appliances, family heirlooms and 19 personal effects, subject to the terms of section 15-2-406, Idaho Code. If 20 there is no surviving spouse, the decedent's children are entitled jointly to 21 the samevalue unless the decedent's will provides otherwise. If encumbered22chattels are selected and if the value in excess of security interests, plus23that of other exempt property, is less than ten thousand dollars ($10,000), or24if there is not ten thousand dollars ($10,000) worth of exempt property in the25estate, the spouse or children are entitled to other assets of the estate, if26any, to the extent necessary to make up the ten thousand dollar ($10,000)27valuetangible personal property, subject to the terms of section 15-2-406, 28 Idaho Code. Rights to exempt propertyand assets needed to make up a defi-29ciency of exempt propertyhave priority over all claims against the estate,30except that the right to any assets to make up a deficiency of exempt property31shall abate as necessary to permit prior payment of homestead allowance and32family allowance, and except as otherwise provided. These rights are in addi- 33 tion to any benefit or share passing to the surviving spouse or children by 34 the will of the decedent (unless otherwise provided in the will), or by intes- 35 tate succession, or by way of elective share. 36 SECTION 2. That Chapter 2, Title 15, Idaho Code, be, and the same is 37 hereby amended by the addition thereto of a NEW SECTION, to be known and des- 38 ignated as Section 15-2-406, Idaho Code, and to read as follows: 39 15-2-406. LIMITATIONS ON EXEMPT PROPERTY AND FAMILY ALLOWANCE BY WILL. 40 The decedent may provide by will that a surviving spouse and/or adult chil- 41 dren, but not minor or disabled children: 2 1 (1) Are not entitled to any exempt property or family allowance; or 2 (2) Are entitled to limited exempt property or a limited family allow- 3 ance, as provided in the will; but 4 (3) May not condition such elimination or limitation upon whether the 5 estate of the decedent is subject to a claim for estate recovery for medicaid 6 benefits paid to the decedent or to a spouse of the decedent. 7 SECTION 3. That Section 56-218, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 56-218. RECOVERY OF CERTAIN MEDICAL ASSISTANCE. (1) Except where exempted 10 or waived in accordance with federal law medical assistance pursuant to this 11 chapter paid on behalf of an individual who was fifty-five (55) years of age 12 or older when the individual received such assistance may be recovered from 13 the individual's estate, and the estate of the spouse, if any, for such aid 14 paid to either or both: 15 (a) There shall be no adjustment or recovery until after the death of 16 both the individual and the spouse, if any, and only at a time when the 17 individual has no surviving child who is under twenty-one (21) years of 18 age or is blind or permanently and totally disabled as defined in 42 19 U.S.C. 1382c. 20 (b) While one (1) spouse survives, except where joint probate will be 21 authorized pursuant to section 15-3-111, Idaho Code, a claim for recovery 22 under this section may be established in the estate of the deceased 23 spouse. 24 (c) The claim against the estate of the first deceased spouse must be 25 made within the time provided by section 15-3-801(b), Idaho Code, if the 26 estate is administered and actual notice is given to the director as 27 required by subsection (5) of this section. However, if there is no admin- 28 istration of the estate of the first deceased spouse, or if no actual 29 notice is given to the director as required by subsection (5) of this sec- 30 tion, no claim shall be required until the time provided for creditor 31 claims in the estate of the survivor. 32 (d) Nothing in this section authorizes the recovery of the amount of any 33 aid from the estate or surviving spouse of a recipient to the extent that 34 the need for aid resulted from a crime committed against the recipient. 35 (2) Transfers of real or personal property, on or after the look-back 36 dates defined in 42 U.S.C. 1396p, by recipients of such aid, or their spouses, 37 without adequate consideration are voidable and may be set aside by an action 38 in the district court. 39 (3) Except where there is a surviving spouse, or a surviving child who is 40 under twenty-one (21) years of age or is blind or permanently and totally dis- 41 abled as defined in 42 U.S.C. 1382c, the amount of any medical assistance paid 42 under this chapter on behalf of an individual who was fifty-five (55) years of 43 age or older when the individual received such assistance is a claim against 44 the estate in any guardianship or conservatorship proceedings and may be paid 45 from the estate. 46 (4) For purposes of this section, the term "estate" shall include: 47 (a) All real and personal property and other assets included within the 48 individual's estate, as defined for purposes of state probate law; and 49 (b) Any other real and personal property and other assets in which the 50 individual had any legal title or interest at the time of death,(to the 51 extent of such interest), including such assets conveyed to a survivor, 52 heir, or assign of the deceased individual through joint tenancy, tenancy 53 in common, survivorship, life estate, living trust or other arrangement. 3 1 (5) Claims made pursuant to this section shall be classified and paid as 2 a debt with preference as defined in section 15-3-805(5), Idaho Code. Any dis- 3 tribution or transfer of the estate prior to satisfying such claim is voidable 4 and may be set aside by an action in the district court. The personal repre- 5 sentative of every estate subject to a claim under this section must, within 6 thirty (30) days of the appointment, give notice in writing to the director of 7 his or her appointment to administer the estate.However, if an exempt prop-8erty allowance claim is made in an estate subject to a claim under this sec-9tion by one (1) or more persons not described in subsection (2) of this sec-10tion, then, to the extent such exempt property allowance claim exceeds the11fair market value of the actual personal property of the decedent held by the12estate subject to a claim under this section (including, but not limited to,13such items as household furniture, automobiles, furnishings, appliances, and14personal effects), the persons making such exempt property allowance claim15must file with the court, and with the personal representative or administra-16tor of the estate, and with the department, a written statement under oath17containing the following:18(a) A statement that no personal property of the decedent has been trans-19ferred without adequate consideration to any person or entity, including20any one (1) or more of the persons making the exempt property allowance21claim, to the actual knowledge of any of the persons making the exempt22property allowance claim, within a time period commencing one (1) year23prior to the death of the decedent and ending on the date of the state-24ment; or25(b) A statement that personal property of the decedent has been trans-26ferred without adequate consideration to any person or entity, including27one (1) or more of the persons making the exempt property allowance claim,28within a time period commencing one (1) year prior to the death of the29decedent and ending on the date of the statement, to the actual knowledge30of any of the persons making the exempt property allowance claim, and31stating the fair market value of the personal property so transferred, and32stating a reasonable description of such property, and stating the method33of determining the fair market value of the personal property so trans-34ferred.35If the written statement indicates that there has been such a transfer of per-36sonal property, then the fair market value of the personal property so trans-37ferred shall be subtracted from the remaining exempt property allowance claim,38after subtraction of the personal property held by the estate, as described39above, and only any still remaining portion of the exempt property claim may40be paid by the estate to the persons making the exempt property allowance41claim. The statement submitted under paragraph (a) or (b) of this subsection,42must be signed under oath by all persons making the exempt property claim.43 (6) The department may file a notice of lien against the property of any 44 estate subject to a claim under this section. 45 (a) In order to perfect a lien against real or personal property, the 46 department shall, within ninety (90) days after the personal representa- 47 tive or successor makes a written request for prompt action to the direc- 48 tor, or three (3) years from the death of the decedent, whichever is 49 sooner, file a notice of lien in the same general form and manner as pro- 50 vided in section 56-218A(3)(a), Idaho Code, in the office of the secretary 51 of state, pursuant to section 45-1904, Idaho Code. Failure to file a 52 notice of lien does not affect the validity of claims made pursuant to 53 this section. 54 (b) The department may release the lien in whole or in part to permit the 55 estate property to be administered by a court-appointed personal represen- 4 1 tative. 2 (c) The department may foreclose its lien, without probate, in any of the 3 following circumstances: 4 (i) Where no personal representative has been appointed after one 5 (1) year from the date of death of the survivor of both the individ- 6 ual and spouse, if any; 7 (ii) Where the property has been abandoned by the decedent's heirs 8 or successors, if any; 9 (iii) Where the real property taxes that are due and payable have 10 remained unpaid for two (2) years and, after demand by the depart- 11 ment, the heirs or successors, if any, have failed to seek appoint- 12 ment or pay the property taxes; or 13 (iv) Where all parties interested in the estate consent to foreclo- 14 sure of the lien. 15 (7) The director shall promulgate rules reasonably necessary to implement 16 this section including, but not limited to, rules establishing undue hardship 17 waivers for the following circumstances: 18 (a) The estate subject to recovery is income-producing property that pro- 19 vides the primary source of support for other family members; or 20 (b) The estate has a value below an amount specified in the rules; or 21 (c) Recovery by the department will cause the heirs of the deceased indi- 22 vidual to be eligible for public assistance. 23 (8) The cause of action to void a transfer without adequate consideration 24 established in this section shall not be deemed to have accrued until the 25 department discovers, or reasonably could have discovered, the facts consti- 26 tuting the transfer without adequate consideration.
STATEMENT OF PURPOSE
RS: 17514
This is a companion bill to a more comprehensive amendment of the
probate allowances. This bill contains only the exempt property
allowance provisions of the more comprehensive bill, and is brought
in case the more comprehensive bill is not enacted.
The allowances in the Idaho Probate Code for surviving spouses and
children (especially adult children) have caused endless problems
in interpretation and implementation. Additionally, such
allowances have created problems because of the Deficit Reduction
Act changes to Medicaid and also interpretations of existing rules
and statutes by Idaho Medicaid estate recovery. This bill, done in
consultation with Medicaid Estate Recovery as to Medicaid issues,
restructures the exempt property allowance to meet its original
intent.
The bill greatly simplifies the exempt property allowance by
limiting it to only tangible personal property of certain types and
eliminating any cash equivalent. This solves a number of Medicaid
estate recovery problems, and allows the much more complex
provisions in Section 56-218 (Section Three of this bill), which
were implemented several sessions ago in an attempt to solve those
problems, to be eliminated. This will greatly clarify and simplify
the interaction between Medicaid estate recovery and the exempt
property provisions.
FISCAL NOTE
This bill will have no fiscal impact.
CONTACT:
Robert L. Aldridge, Trust & Estate Professionals of Idaho, Inc.
Telephone: office: (208) 336-9880 Cell: (208) 631-2481
STATEMENT OF PURPOSE/FISCAL NOTE S 1330