Relates to renunciation of property interests

BILL NUMBER:S7144

Title of bill

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

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.

EPTL 2-1.11(d)(5) authorizes the personal representative of a decedent to renounce property to which the decedent became entitled but did not receive before death, so long as the personal representative is authorized to do so by the court having jurisdiction of the decedent's estate. The most common situation in which a disclaimer by a personal representative is useful involves spouses who have wills giving all to the surviving spouse and, if the spouse does not survive, to the couple's descendants. The result is no matter which spouse dies first the same beneficiaries take the couples' property. If the spouses both die within a short period of time the first estate must transfer all of the property to the second estate so that the second estate can make distribution of the property to the beneficiaries. Property in the estate of the first to die, therefore, is subject to the expenses of administration twice even though the beneficiaries of both estates are ultimately the same (the problem is the same if the spouses die intestate with respect to the surviving spouse's share in intestacy). If the second spouse dies within nine months of the date of the death of the first spouse, a renunciation by the personal representative of the second to die's estate will keep the renounced property in the estate of the first spouse to die allowing it to pass directly to the beneficiaries without first having to pass through the estate of the second spouse to die.

Because such a renunciation does not alter the identity of the beneficiaries of either estate, requiring court authorization results in unnecessary expense and delay, and delay can be fatal because of the nine-month deadline for making a renunciation. The renunciation will appear in the personal representative's accounting to the beneficiaries of the estate of the second spouse to die and, under EPTL 2-1.11(c)(2), notice must be given to the personal representative of the estate of the first spouse to die (who will often be the same as the personal representative of the estate of the second spouse to die) and to the beneficiaries of the estate of the first spouse to die whose interest in that estate will be increased.

Finally the amendment only removes the requirement of court approval. A personal representative who desires to may still seek court approval for a renunciation.

This measure, which would have no impact on the public treasury, would take effect immediately and apply to the estates of decedents dying on or after its effective date.

Legislative History:

None. New Proposal.