Chapter 245 Oregon Laws 2001

AN ACT

SB 123

Relating to disclaimers of property interests; creating new provisions; and repealing ORS 105.625, 105.627, 105.630, 105.632, 105.635, 105.637, 105.640, 112.650, 112.652, 112.655, 112.657, 112.660, 112.662, 112.665 and 112.667.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Short title. Sections 1 to 18 of this 2001 Act may be cited as the Uniform Disclaimer of Property Interests Act.

SECTION 2. Definitions. As used in sections 1 to 18 of this 2001 Act:

(1) “Disclaimant” means the person to whom a disclaimed interest or power would have passed had the disclaimer not been made.

(2) “Disclaimed interest” means the interest that would have passed to the disclaimant had the disclaimer not been made.

(3) “Disclaimer” means the refusal to accept an interest in property or a power over property.

(4) “Fiduciary” means a personal representative, trustee, agent acting under a power of attorney or other person authorized to act as a fiduciary with respect to the property of another person.

(5) “Jointly held property” means property held in the name of two or more persons under an arrangement pursuant to which:

(a) All holders have concurrent interests; and

(b) The last surviving holder is entitled to the whole of the property.

(6) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, public corporation or any other legal or commercial entity.

(7) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan native village, recognized by federal law or formally acknowledged by another state.

(8) “Trust” means:

(a) A charitable or noncharitable express trust, including any additions made to the trust, whenever and however created; and

(b) A trust created pursuant to a statute, judgment or decree that requires the trust to be administered in the same manner as an express trust.

SECTION 3. Scope. Sections 1 to 18 of this 2001 Act apply to disclaimers of any interest in or power over property without regard to when the interest or power that is disclaimed was created.

SECTION 4. Effect on other law. (1) Unless displaced by a provision of sections 1 to 18 of this 2001 Act, the principles of law and equity supplement sections 1 to 18 of this 2001 Act.

(2) Sections 1 to 18 of this 2001 Act do not limit any right of a person to waive, release, disclaim or renounce an interest in property, or power over property, under a law other than sections 1 to 18 of this 2001 Act.

SECTION 5. Power to disclaim; general requirements; when irrevocable. (1) A person may disclaim, in whole or part, any interest in property or any power over property, including a power of appointment. A person may disclaim the interest or power even if the person who created the interest or power imposed a spendthrift provision or similar restriction on transfer or imposed a restriction or limitation on the right to disclaim.

(2) Except to the extent that a fiduciary’s right to disclaim is expressly restricted or limited by another statute of this state or by the instrument creating the fiduciary relationship, a fiduciary may disclaim, in whole or part, any interest in property or power over property, including a power of appointment, without regard to whether the fiduciary is acting in a personal or representative capacity. A fiduciary may disclaim the interest or power even if the creator of the interest or power imposed a spendthrift provision or similar restriction on transfer or a restriction or limitation on the right to disclaim, or an instrument other than the instrument that created the fiduciary relationship imposed a restriction or limitation on the right to disclaim.

(3) To be effective, a disclaimer must:

(a) Be in writing or otherwise recorded by inscription on a tangible medium or by storage in an electronic or other medium in a manner that allows the disclaimer to be retrieved in perceivable form;

(b) Declare that the person disclaims the interest in the property or in the power;

(c) Describe the interest in property or power over property that is disclaimed;

(d) Be signed by the person making the disclaimer; and

(e) Be delivered or filed in the manner provided in section 12 of this 2001 Act.

(4) A partial disclaimer may be expressed as a fraction, percentage, monetary amount, term of years, limitation of a power or as any other interest or estate in the property.

(5) A disclaimer is irrevocable when the disclaimer is delivered or filed pursuant to section 12 of this 2001 Act or when the disclaimer becomes effective as provided in sections 6 to 11 of this 2001 Act, whichever occurs later.

(6) A disclaimer made under sections 1 to 18 of this 2001 Act is not a transfer, assignment or release.

SECTION 6. Disclaimer of interest in property. (1) For the purposes of this section:

(a) “Time of distribution” means the time when a disclaimed interest would have taken effect through possession or enjoyment.

(b) “Future interest” means an interest that takes effect through possession or enjoyment, if at all, at a time later than the time that the interest is created.

(2) Except for a disclaimer governed by section 7 or 8 of this 2001 Act, the following rules apply to a disclaimer of an interest in property:

(a) The disclaimer takes effect when the instrument creating the interest becomes irrevocable or, if the interest arises under the law of intestate succession, when the decedent dies.

(b) The disclaimed interest passes according to any provision in the instrument creating the interest providing for the disposition of the specific interest in the event the interest is disclaimed, or according to any provision in the instrument creating the interest providing for the disposition of interests in general in the event the interests created by the instrument are disclaimed.

(c) If the instrument creating the interest does not contain a provision described in subsection (2) of this section, the following rules apply:

(A) If the disclaimant is an individual, the disclaimed interest passes as if the disclaimant had died immediately before the time of distribution. However, if by law or under the instrument the descendants of the disclaimant would share in the disclaimed interest by any method of representation had the disclaimant died before the time of distribution, the disclaimed interest passes only to the descendants of the disclaimant who survive the time of distribution.

(B) If the disclaimant is not an individual, the disclaimed interest passes as if the disclaimant did not exist.

(d) Upon the disclaimer of a preceding interest, a future interest held by a person other than the disclaimant takes effect as if the disclaimant had died or ceased to exist immediately before the time of distribution, but a future interest held by the disclaimant is not accelerated in possession or enjoyment.

SECTION 7. Disclaimer of rights of survivorship in jointly held property. (1) Upon the death of a holder of jointly held property, a surviving holder may disclaim, in whole or part, the

greater of:

(a) A fractional share of the property determined by dividing the number one by the number of joint holders alive immediately before the death of the holder to whose death the disclaimer relates; or

(b) All of the property except that part of the value of the entire interest attributable to the contribution furnished by the disclaimant.

(2) A disclaimer under subsection (1) of this section takes effect upon the death of the holder of jointly held property to whose death the disclaimer relates.

(3) An interest in jointly held property disclaimed by a surviving holder of the property passes as if the disclaimant predeceased the holder to whose death the disclaimer relates.

SECTION 8. Disclaimer of interest by trustee. If a trustee disclaims an interest in property that otherwise would have become trust property, the interest does not become trust property.

SECTION 9. Disclaimer of power of appointment or other power not held in fiduciary capacity. If a holder disclaims a power of appointment or other power not held in a fiduciary capacity, the following rules apply:

(1) If the holder has not exercised the power, the disclaimer takes effect as of the time the instrument creating the power becomes irrevocable.

(2) If the holder has exercised the power and the disclaimer is of a power other than a presently exercisable general power of appointment, the disclaimer takes effect immediately after the last exercise of the power.

(3) The instrument creating the power is construed as if the power expired when the disclaimer became effective.

SECTION 10. Disclaimer by appointee, object or taker in default of exercise of power of appointment. (1) A disclaimer of an interest in property by an appointee of a power of appointment takes effect as of the time the instrument by which the holder exercises the power becomes irrevocable.

(2) A disclaimer of an interest in property by a person who is an object of an exercise of a power of appointment, or by a person who is a taker in default of an exercise of a power of appointment, takes effect as of the time the instrument creating the power becomes irrevocable.

SECTION 11. Disclaimer of power held in fiduciary capacity.(1) If a fiduciary disclaims a power held in a fiduciary capacity that has not been exercised, the disclaimer

takes effect as of the time the instrument creating the power becomes irrevocable.

(2) If a fiduciary disclaims a power held in a fiduciary capacity that has been exercised, the disclaimer takes effect immediately after the last exercise of the power.

(3) A disclaimer under this section applies to another fiduciary if the disclaimer so provides and the fiduciary disclaiming has the authority to bind the estate, trust or other person for whom the fiduciary is acting.

SECTION 12. Delivery or filing. (1) As used in this section, “beneficiary designation” means an instrument, other than an instrument creating a trust, naming the beneficiary of:

(a) An annuity or insurance policy;

(b) An account with a designation for payment on death;

(c) A security registered in beneficiary form;

(d) A pension, profit-sharing, retirement or other employment-related benefit plan; or

(e) Any other nonprobate transfer at death.

(2) Subject to subsections (3) to (12) of this section, delivery of a disclaimer may be made by personal delivery, first class mail or any other method likely to result in receipt of the disclaimer.

(3) If the interest to be disclaimed is created under the law of intestate succession or an interest created by will, other than an interest in a testamentary trust:

(a) A disclaimer must be delivered to the personal representative of the decedent’s estate; or

(b) If a personal representative is not serving at the time the disclaimer is made, the disclaimer must be filed with a court having authority to appoint the personal representative.

(4) In the case of an interest in a testamentary trust:

(a) A disclaimer must be delivered to the trustee;

(b) If a trustee is not serving at the time the disclaimer is made but a personal representative for the decedent’s estate is serving, the disclaimer must be delivered to the personal representative; or

(c) If neither a trustee nor a personal representative is serving at the time the disclaimer is made, the disclaimer must be filed with a court having authority to enforce the trust.

(5) In the case of an interest in an inter vivos trust:

(a) A disclaimer must be delivered to the trustee serving at the time the disclaimer is made;

(b) If a trustee is not serving at the time the disclaimer is made, the disclaimer must be filed with a court having authority to enforce the trust; or

(c) If the disclaimer is made before the time the instrument creating the trust becomes irrevocable, the disclaimer must be delivered to the settlor of a revocable trust or the transferor of the interest.

(6) In the case of an interest created by a beneficiary designation made before the time the designation becomes irrevocable, a disclaimer must be delivered to the person making the beneficiary designation.

(7) In the case of an interest created by a beneficiary designation made after the time the designation becomes irrevocable, a disclaimer must be delivered to the person obligated to distribute the interest.

(8) In the case of a disclaimer by a surviving holder of jointly held property, the disclaimer must be delivered to the person to whom the disclaimed interest passes.

(9) In the case of a disclaimer by a person who is an object of an exercise of a power of appointment or a taker in default of an exercise of a power of appointment at any time after the power was created:

(a) The disclaimer must be delivered to the holder of the power or to the fiduciary acting under the instrument that created the power; or

(b) If a fiduciary is not serving at the time the disclaimer is made, the disclaimer must be filed with a court having authority to appoint the fiduciary.

(10) In the case of a disclaimer by an appointee of a nonfiduciary power of appointment:

(a) The disclaimer must be delivered to the holder of the power, the personal representative of the holder’s estate or to the fiduciary under the instrument that created the power; or

(b) If a fiduciary is not serving at the time the disclaimer is made, the disclaimer must be filed with a court having authority to appoint the fiduciary.

(11) In the case of a disclaimer by a fiduciary of a power over a trust or estate, the disclaimer must be delivered as provided in subsection (3), (4) or (5) of this section as if the power disclaimed were an interest in property.

(12) In the case of a disclaimer of a power by an agent, the disclaimer must be delivered to the principal or the principal’s representative.

SECTION 13. When disclaimer barred or limited. (1) A disclaimer is barred by a written waiver of the right to disclaim.

(2) A disclaimer of an interest in property is barred if any of the following events occurs before the disclaimer becomes effective:

(a) The disclaimant accepts the interest sought to be disclaimed;

(b) The disclaimant voluntarily assigns, conveys, encumbers, pledges or transfers the interest sought to be disclaimed or contracts to do so; or

(c) The interest sought to be disclaimed is sold pursuant to a judicial sale.

(3) A disclaimer, in whole or part, of the future exercise of a power held in a fiduciary capacity is not barred by the previous exercise of the power.

(4) A disclaimer, in whole or part, of the future exercise of a power not held in a fiduciary capacity is not barred by its previous exercise unless the power is exercisable in favor of the disclaimant.

(5) A disclaimer is barred or limited if so provided by a law other than sections 1 to 18 of this 2001 Act.

(6) A disclaimer of a power over property that is barred under this section is ineffective. A disclaimer of an interest in property that is barred under this section takes effect as a transfer of the interest disclaimed to the persons who would have taken the interest under sections 1 to 18 of this 2001 Act had the disclaimer not been barred.

SECTION 14. Tax qualified disclaimer. Notwithstanding any other provision of sections 1 to 18 of this 2001 Act, if as a result of a disclaimer or transfer the disclaimed or transferred interest is treated pursuant to the provisions of the Internal Revenue Code and the regulations promulgated under that code, as in effect on the effective date of this 2001 Act, as never having been transferred to the disclaimant, then the disclaimer or transfer is effective as a disclaimer under sections 1 to 18 of this 2001 Act.

SECTION 15. Recording of disclaimer. If an instrument transferring an interest in property or a power over property that is subject to a disclaimer is required or permitted by law to be filed, recorded or registered, the disclaimer may be so filed, recorded or registered. Failure to file, record or register the disclaimer does not affect the validity of the disclaimer as between the disclaimant and persons to whom the property interest or power passes by reason of the disclaimer.

SECTION 16. Application to existing relationships. Except as otherwise provided in section 13 of this 2001 Act, an interest in property or power over property existing on the effective date of this 2001 Act may be disclaimed in the manner provided by sections 1 to 18 of this 2001 Act after the effective date of this 2001 Act unless the time for delivering or filing a disclaimer had expired under law in effect immediately before the effective date of this 2001 Act.

SECTION 17. Sections 1 to 18 of this 2001 Act do not allow any person to disclaim an interest in property, including any jointly held property, if the purpose or effect of the disclaimer is to prevent recovery of money or property under ORS 411.620.

SECTION 18. Uniformity of application and construction. In applying and construing sections 1 to 18 of this 2001 Act, consideration must be given to the need to promote uniformity of the law with respect to disclaimers among states that enact versions of the Uniform Disclaimer of Property Interests Act.

SECTION 19. Repeals. ORS 105.625, 105.627, 105.630, 105.632, 105.635, 105.637, 105.640, 112.650, 112.652, 112.655, 112.657, 112.660, 112.662, 112.665 and 112.667 are repealed.

SECTION 20. Applicability. Sections 1 to 18 of this 2001 Act apply only to disclaimers made on or after the effective date of this 2001 Act.

SECTION 21. Captions. The section captions used in this 2001 Act are provided only for the convenience of the reader and do not become part of the statutory law of this state or express any legislative intent in the enactment of this 2001 Act.

Approved by the Governor May 30, 2001

Filed in the office of Secretary of State May 30, 2001

Effective date January 1, 2002

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