Bill Text: IA SSB1012 | 2021-2022 | 89th General Assembly | Introduced


Bill Title: A bill for an act relating to trusts, including requirements for certifications of trust and the general order of abatement.(See SF 173.)

Spectrum: Committee Bill

Status: (Introduced) 2021-01-27 - Committee report approving bill, renumbered as SF 173. [SSB1012 Detail]

Download: Iowa-2021-SSB1012-Introduced.html
Senate Study Bill 1012 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON ZAUN) A BILL FOR An Act relating to trusts, including requirements for 1 certifications of trust and the general order of abatement. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1233XC (2) 89 cm/jh
S.F. _____ Section 1. Section 633A.4604, subsection 2, Code 2021, is 1 amended by adding the following new paragraphs: 2 NEW PARAGRAPH . 0a. State the names of all the currently 3 acting trustees. 4 NEW PARAGRAPH . 00a. If there is more than one currently 5 acting trustee, state whether the trustees may act individually 6 or must act by majority decision or must act by unanimous 7 decision. 8 Sec. 2. Section 633A.4604, subsection 2, paragraph c, Code 9 2021, is amended to read as follows: 10 c. Be dated and certified under penalty of perjury 11 and pursuant to the laws of the state of Iowa that the 12 certification of trust is true and correct or be subscribed and 13 sworn to under penalty of perjury before a notary public as 14 provided in chapter 9B . 15 Sec. 3. Section 633A.4703, subsection 4, Code 2021, is 16 amended to read as follows: 17 4. Notwithstanding subsections 1, 2, or 3 , a disposition in 18 favor of the settlor’s surviving spouse who does not take an 19 elective share shall not be abated where such abatement would 20 have the effect of increasing the amount of federal estate or 21 federal gift taxes payable by a person or an entity last . 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill relates to trusts, including requirements for a 26 certification of trust and abatement of a disposition in favor 27 of a surviving spouse who did not take an elective share. 28 Current law prescribes certain requirements to be included 29 in certifications of trusts. Under the bill, certifications 30 of trust must also state the names of all currently acting 31 trustees and, if there is more than one trustee, whether the 32 trustees may act individually, or must act as a majority or 33 unanimously. Under current law, a certification of trust must 34 be subscribed and sworn to under penalty of perjury before 35 -1- LSB 1233XC (2) 89 cm/jh 1/ 2
S.F. _____ a notary public. The bill provides that, in lieu of this 1 procedure, a certification of trust may be dated and certified 2 under penalty of perjury. 3 Under current law, abatement occurs when the equitable 4 assets of a deceased person are not sufficient to satisfy 5 debts, creditors, or taxes. Code section 633A.4703 provides 6 a default order of abatement if the governing instrument is 7 silent. Currently, shares allocated to residuary beneficiaries 8 are abated first on a pro rata basis, followed by shares 9 defined by dollar amount on a pro rata basis, and lastly the 10 shares described as specific items of property are abated 11 by the trustee among the beneficiaries as equitably as 12 circumstances reasonably allow. A disposition in favor of 13 a surviving spouse who has not taken an elective share is 14 not abated when the abatement would result in increasing the 15 amount of federal taxes payable by a person or entity. The 16 bill provides that a disposition in favor of the surviving 17 spouse who did not take an elective share is abated last, 18 notwithstanding the current order of abatement which remains 19 the same, and strikes the prohibition on such abatements which 20 have the effect of increasing the amount of federal taxes 21 payable by a person or entity. 22 -2- LSB 1233XC (2) 89 cm/jh 2/ 2
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