Provides that the term "disposition" shall include succession to an interest occurring by operation of law by death of a joint tenant or tenant by the entirety

BILL NUMBER:S4584

Title of bill

An act to amend the estates, powers and trusts law, in relation to the renunciation of interests in jointly held property

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Surrogate's Court Advisory Committee.

This measure would clarify the application of section 2-1.11 of the EPTL, the renunciation statute, to renunciations by joint tenants and tenants by the entirety.

The amendment of EPTL 2-1.11 by chapter 27 of the Laws of 2010, among other changes, modified the list in subsection (b)(1) of dispositions which may be renounced by replacing the reference to "a transfer created by a joint tenancy or a tenancy by the entirety" with language referring to two different transfers: "a transfer resulting from the creation of a joint tenancy or tenancy by the entirety," and "a transfer created by the death of a joint tenant or tenant by the entirety."

The new language accurately draws a distinction between the transfer that occurs on the creation of a joint tenancy or tenancy by the entirety and the succession to the deceased joint tenant's or tenant by the entirety's interest by the survivor. The regulations to Internal Revenue Code §2518 dealing with tax qualified disclaimers draw the same distinction. Section 25.2518-2(c)(4) requires a qualified disclaimer "of the interest to which the disclaimant succeeds upon creation of the tenancy" be made within nine months of creation. A tax qualified disclaimer "of the survivorship interest to which the survivor succeeds by operation of law upon the death of the first joint tenant to die" must be made within nine months of the death under the same regulation.

The 2010 amendment to section 2-111(b)(1) therefore does make clear that a renunciation can be made when the joint tenancy is created or at the death of a joint tenant. However, the reference to two "transfers" is confusing and might lead to the conclusion that the two transfers are the same transfer which in turn would lead to the conclusion that the disclaimer of the "transfer" occurring on the death of a joint tenant must be made within nine months of the creation of the joint tenancy.

The proposed amendment clarifies the distinction between the two dispositions involved in joint tenancies and tenancies by the entirety-one at creation of the tenancy and one at the death of one of the tenants-by using the word "succession" to describe the second disposition. This language is consistent with the language used in the gift tax regulation cited above as well as in EPTL 2-1.11(c)(1) which, as amended in 2010, authorizes a surviving joint tenant or tenant by the entirety to renounce "the interest to which such tenant

succeeds, by operation of law upon the death of another joint tenant or tenant by the entirety...."

This measure would have no fiscal impact on the State. It would take effect immediately and shall apply to estates of decedents dying 011 or after such date.

Legislative history

None. New proposal.