Bill Text: IA HF367 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act relating to probate and estate-related laws, including the deduction of administrative expenses on the Iowa fiduciary income tax return, the Iowa inheritance tax, fiduciaries' right to property and information, and the surviving spouse's elective share, and including applicability provisions. (Formerly HSB 41) (See Cmte. Bill HF 661)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2015-06-02 - Withdrawn. H.J. 1116. [HF367 Detail]
Download: Iowa-2015-HF367-Introduced.html
House File 367 - Introduced HOUSE FILE BY COMMITTEE ON JUDICIARY (SUCCESSOR TO HSB 41) A BILL FOR 1 An Act relating to probate and estate=related laws, including 2 the deduction of administrative expenses on the Iowa 3 fiduciary income tax return, the Iowa inheritance tax, 4 fiduciaries' right to property and information, and 5 the surviving spouse's elective share, and including 6 applicability provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1061HV (2) 86 jh/rj PAG LIN 1 1 DIVISION I 1 2 FIDUCIARY INCOME TAX 1 3 Section 1. Section 422.7, Code 2015, is amended by adding 1 4 the following new subsection: 1 5 NEW SUBSECTION. 57. On the Iowa fiduciary income tax 1 6 return, subtract the amount of administrative expenses that 1 7 were not taken or allowed as a deduction in calculating net 1 8 income for federal fiduciary income tax purposes. 1 9 DIVISION II 1 10 INHERITANCE TAX 1 11 Sec. 2. Section 450.9, Code 2015, is amended to read as 1 12 follows: 1 13 450.9 Individual exemptions. 1 14 In computing the tax on the net estate, the entire 1 15 amount of property, interest in property, and income 1 16 passing to the surviving spouse,and parents, grandparents, 1 17 great=grandparents, and otherlineal ascendants,children 1 18 including legally adopted children and biological children 1 19 entitled to inherit under the laws of this state, stepchildren, 1 20 and grandchildren, great=grandchildren, and otherlineal 1 21 descendants, and stepchildren and their lineal descendants are 1 22 exempt from tax. "Lineal descendants" includes descendants by 1 23 adoption. 1 24 DIVISION III 1 25 FIDUCIARY WRITTEN REQUESTS 1 26 Sec. 3. Section 633.78, Code 2015, is amended by striking 1 27 the section and inserting in lieu thereof the following: 1 28 633.78 Fiduciary written request and third=party protection. 1 29 1. A fiduciary under this chapter may present a written 1 30 request to any person for the purpose of obtaining property 1 31 owned by a decedent or by a ward of a conservatorship for 1 32 which the fiduciary has been appointed, or property to which 1 33 a decedent or ward is entitled, or for information about such 1 34 property needed to perform the fiduciary's duties. The request 1 35 must contain statements confirming all of the following: 2 1 a. The fiduciary's authority has not been revoked, modified, 2 2 or amended in any manner which would cause the representations 2 3 in the request to be incorrect. 2 4 b. The request has been signed by all fiduciaries acting on 2 5 behalf of the decedent or ward. 2 6 c. The request has been sworn and subscribed to under 2 7 penalty of perjury before a notary public as provided in 2 8 chapter 9B. 2 9 d. A photocopy of the fiduciary's letters of appointment is 2 10 being provided with the request. 2 11 2. A person to whom a request is presented under this 2 12 section may require that the fiduciary presenting the request 2 13 provide proof of the fiduciary's identity. 2 14 3. A person who in good faith provides the property or 2 15 information a fiduciary requests under this section, after 2 16 taking reasonable steps to verify the identity of the fiduciary 2 17 and who has no knowledge that the representations contained in 2 18 the request are incorrect, shall not be liable to any person 2 19 for so acting and may assume without inquiry the existence of 2 20 the facts contained in the request. The period of time to 2 21 verify the fiduciary's authority shall not exceed ten business 2 22 days from the date the person received the request. Any right 2 23 or title acquired from the fiduciary in consideration of the 2 24 provision of property or information under this section is not 2 25 invalid in consequence of a misapplication by the fiduciary. A 2 26 transaction, and a lien created by a transaction, entered into 2 27 by the fiduciary and a person acting in reliance upon a request 2 28 under this section is enforceable against the assets for which 2 29 the fiduciary has responsibility. 2 30 4. If a person refuses to provide the requested property 2 31 or information within ten business days after receiving a 2 32 request under this section, the fiduciary may bring an action 2 33 to recover the property or information or compel its delivery 2 34 against the person to whom the fiduciary presented the written 2 35 request. An action brought under this section must be brought 3 1 within one year after the date of the act or failure to act. 3 2 If the court finds that the person acted unreasonably in 3 3 failing to deliver the property or information as requested 3 4 in the written request, the court may award any or all of the 3 5 following to the fiduciary: 3 6 a. Damages sustained by the decedent's or ward's estate. 3 7 b. Costs of the action. 3 8 c. A penalty in an amount determined by the court, but 3 9 not less than five hundred dollars or more than ten thousand 3 10 dollars. 3 11 d. Reasonable attorney fees, as determined by the court, 3 12 based on the value of the time reasonably expended by the 3 13 attorney and not by the amount of the recovery on behalf of the 3 14 fiduciary. 3 15 5. This section does not limit or change the right of 3 16 beneficiaries, heirs, or creditors to estate property to which 3 17 they are otherwise entitled. 3 18 DIVISION IV 3 19 ELECTIVE SHARE OF SURVIVING SPOUSE 3 20 Sec. 4. Section 633.238, Code 2015, is amended to read as 3 21 follows: 3 22 633.238 Elective share of surviving spouse. 3 23 1. The elective share of the surviving spouse shall be 3 24 limited to all of the following: 3 25 a. One=third in value of all the legal or equitable estates 3 26 in real property possessed by the decedent at any time during 3 27 the marriage which have not been sold on execution or other 3 28 judicial sale, and to which the surviving spouse has made no 3 29 express written relinquishment of right, including but not 3 30 limited to any relinquishments of rights described in paragraph 3 31 "d". 3 32 b. All personal property that, at the time of death, was in 3 33 the hands of the decedent as the head of a family, exempt from 3 34 execution. 3 35 c. One=third of all personal property of the decedent that 4 1 is not necessary for the payment of debts and charges. 4 2 d. (1) One=third in value of the property held in trust 4 3 not necessary for the payment of debts and charges over which 4 4 the decedent was agrantorsettlor and retained at the time of 4 5 death the power to alter, amend, or revoke the trust, or over 4 6 which the decedent waived or rescinded any such power within 4 7 one year of the date of death, and to which the surviving 4 8 spouse has not made any express written relinquishment in 4 9 compliance with subparagraph (2). 4 10 (2) The elective share of the surviving spouse shall not 4 11 include the value of the property held in a trust described in 4 12 subparagraph (1), if both of the following are true: 4 13 (a) The decedent created the trust after the date of 4 14 decedent's marriage to the surviving spouse. 4 15 (b) Every transfer of property into the trust, except 4 16 for tangible personal property, included a written statement 4 17 which complied with this subparagraph division. The written 4 18 statement shall be in boldface type of a minimum size of ten 4 19 points, signed and dated by the surviving spouse with a valid 4 20 notarial acknowledgment, and in substantially the following 4 21 form: 4 22 By signing below, I acknowledge that I am giving up all 4 23 rights to enjoyment of the property described above, regardless 4 24 of whether or not I survive my spouse and regardless of any 4 25 rights Iowa law otherwise gives to me with respect to such 4 26 property. I am specifically waiving my elective share in the 4 27 property described in this waiver. 4 28 This waiver shall apply regardless of any changes made to the 4 29 trust in the future, including any change to the beneficiaries 4 30 of the trust. 4 31 2. When a settlor of a revocable trust transfers real 4 32 property to the trustee of the revocable trust and the 4 33 settlor's spouse signs a conveyance of the real property to 4 34 such trustee which includes a general waiver of rights of 4 35 dower, homestead, and distributive share, the spouse is only 5 1 relinquishing the right to that real property and its value 5 2 under subsection 1, paragraph "a", for the purpose of conveying 5 3 marketable title to a subsequent purchaser from the trustee 5 4 and is not relinquishing the right to the value of the real 5 5 estate under subsection 1, paragraph "d", unless the spouse 5 6 specifically states in writing an intent to relinquish the 5 7 right to the value of the real estate under subsection 1, 5 8 paragraph "d". The relinquishment of right under subsection 5 9 1, paragraph "a" shall not prevent the surviving spouse from 5 10 electing one=third in value of such real property under 5 11 subsection 1, paragraph "d". 5 122.3. The elective share described in this section shall 5 13 be in lieu of any property the spouse would otherwise receive 5 14 under the last will and testament of the decedent, through 5 15 intestacy, or under the terms of a revocable trust. 5 16 DIVISION V 5 17 APPLICABILITY 5 18 Sec. 5. APPLICABILITY. 5 19 1. The section of this Act amending section 422.7 applies to 5 20 Iowa fiduciary income tax returns filed for tax years ending on 5 21 or after July 1, 2015. 5 22 2. The sections of this Act amending sections 450.9 and 5 23 633.238 apply to estates of decedents dying on or after July 5 24 1, 2015. 5 25 3. The section of this Act amending section 633.78 applies 5 26 to written requests presented by a fiduciary on or after July 5 27 1, 2015. 5 28 EXPLANATION 5 29 The inclusion of this explanation does not constitute agreement with 5 30 the explanation's substance by the members of the general assembly. 5 31 This bill relates to probate and estate=related laws and the 5 32 deductibility of administrative expenses on the Iowa fiduciary 5 33 income tax return, the individual exemptions from the Iowa 5 34 inheritance tax, rights of fiduciaries of decedents and wards 5 35 under the probate code to information and property, and the 6 1 surviving spouse's elective share. 6 2 DIVISION I ==== FIDUCIARY INCOME TAX. This division amends 6 3 the definition of net income for an Iowa fiduciary income tax 6 4 return to allow administrative expenses not taken or allowed 6 5 as a deduction in calculating net income for federal fiduciary 6 6 income tax purposes to be subtracted from adjusted gross income 6 7 when calculating net income. This division applies to Iowa 6 8 fiduciary income tax returns filed for tax years ending on or 6 9 after July 1, 2015. 6 10 DIVISION II ==== INHERITANCE TAX. This division amends the 6 11 individual exemptions from the Iowa inheritance tax to include 6 12 a decedent's stepchildren and their lineal descendants. Lineal 6 13 descendants include descendants by adoption. This division 6 14 applies to estates of decedents dying on or after July 1, 2015. 6 15 DIVISION III ==== FIDUCIARY WRITTEN REQUESTS. Under current 6 16 law, a person who in good faith pays or transfers money 6 17 or other property to a fiduciary, which the fiduciary is 6 18 authorized to receive, is not responsible for the proper 6 19 application by the fiduciary. This division amends current 6 20 law to permit fiduciaries of decedents or wards to present 6 21 a written request to any person to obtain property to which 6 22 the decedent or ward is entitled or for information needed 6 23 to perform the fiduciaries' duties. The division specifies 6 24 the representations required to be in the request. If the 6 25 person receiving the request takes reasonable steps to verify 6 26 the identity of the fiduciary and has no knowledge that the 6 27 representations in the request are incorrect, the person who 6 28 provides the property or information requested shall not be 6 29 liable to any person for so acting. The person who received 6 30 the request has 10 business days to provide the information or 6 31 property. After 10 days, the fiduciary may bring an action to 6 32 recover the property or information or compel its delivery. If 6 33 the fiduciary prevails in the court action, the court may also 6 34 award damages sustained by the decedent's or ward's estate, 6 35 costs of the action, a penalty determined by the court of 7 1 not less than $500 and not more than $10,000, and reasonable 7 2 attorney fees. This division applies to written requests 7 3 presented by a fiduciary on or after July 1, 2015. 7 4 DIVISION IV ==== ELECTIVE SHARE OF THE SURVIVING SPOUSE. 7 5 This division relates to a surviving spouse's elective share 7 6 with regard to the value of property held in the deceased 7 7 spouse's revocable trust. Under current law, the surviving 7 8 spouse may waive the surviving spouse's right to include the 7 9 value of property held in the deceased spouse's revocable 7 10 trust with an express written relinquishment. This division 7 11 specifies the form of the express written relinquishment and 7 12 adds new requirements that the deceased owner's revocable 7 13 trust be created after the date of the marriage between the 7 14 deceased owner and the surviving spouse and that every transfer 7 15 of property must include an express written relinquishment. 7 16 This division also states when a settlor of a revocable trust 7 17 transfers real property to the trustee of the revocable trust 7 18 and the settlor's spouse executes a conveyance which includes a 7 19 waiver of rights of dower, homestead, and distributive share, 7 20 the spouse does not waive the right to include the value of 7 21 the real property in the elective share unless the spouse 7 22 also specifically states an intent to do so in writing. This 7 23 division applies to estates of decedents dying on or after July 7 24 1, 2015. LSB 1061HV (2) 86 jh/rj
