Legislature(2007 - 2008)BELTZ 211
04/01/2008 09:00 AM Senate STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB198 | |
| HB92 | |
| HB196 | |
| HB351 | |
| SB227 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 227 | TELECONFERENCED | |
| + | SB 228 | TELECONFERENCED | |
| + | HB 196 | TELECONFERENCED | |
| + | SB 198 | TELECONFERENCED | |
| += | HB 92 | TELECONFERENCED | |
| + | HB 351 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 196-HANDLING MATTERS AFTER A PERSON'S DEATH
10:08:48 AM
CHAIR MCGUIRE announced the consideration of HB 196. [Before the
committee was CSHB 196(JUD).]
The committee took a brief at ease at 10:09:06 AM.
10:10:11 AM
REPRESENTATIVE JAY RAMRAS, Alaska State Legislature, said HB 196
is an excellent update on wills and related material. It is a
little esoteric. Concerns of Senator Bunde were taken care of in
the Senate Labor and Commerce committee. The issue of anatomical
gifts is related, and he is prepared to roll HB 420 into HB 196.
10:12:30 AM
JANE PIERSON, Staff to Representative Ramras, said HB 196
clarifies and updates Alaska statute governing estates. It
provides a penalty clause for contesting a will or instituting
other proceedings even if probable cause exists. This will align
wills with revocable trusts, which are often used in wills. It
amends AS13.16.680 (a) to change the statement in an affidavit
to be used by a decedent's successor to collect personal
property in a small estate. It was changed in the previous
committee with an amendment by Senator Bunde. It will raise the
limit from $15,000 to $100,000 for personal property. It will
also count for $100,000 in vehicles. The bill also lays out
protections for benefits paid under life insurance and
retirement plans, so debtors cannot get into that money.
10:14:39 AM
CHAIR MCGUIRE said Version K includes anatomical gifts. She
declared a conflict because she has a bill on the Senate side.
SENATOR BUNDE moved to adopt the committee substitute (CS),
labeled 25-LS0447\K, as the working document. Hearing no
objections, Version K was before the committee.
CHAIR MCGUIRE said her father is on the Life Alaska board and
advocates organ and tissue donations.
10:15:46 AM
STEVE GREER, Attorney, Anchorage, said Section 1 of HB 196
conforms to current trust laws. Sections 2 and 3, which are the
subjects of the labor and commerce amendment, raise the amount
whereby it is not necessary to go through a probate process.
Currently if someone dies with more than $15,000, it has to go
through probate, and that was entirely too low. It is $50,000 in
Oregon with a provision for real estate. Washington has a
provision dealing solely with personal property, and that is
$100,000. There is concern that by raising it to $100,000, it
could be abused by beneficiaries. For example, a bad brother
goes into a bank with the affidavit and gets the money to
himself. But that affidavit procedure cannot occur until at
least 30 days after death, and someone could be appointed as a
personal representative by then and render the affidavit
procedure moot. A person can go back to the court and get a
personal representative appointed and get an order to turn the
money over. But if the money is gone, it is gone. It was felt
that it was a bit high, and $50,000 is an amount that everyone
can live with, although no one really objects to the higher
amount. Section 4 is very important, and he gave an example of a
person with a business calamity who had life insurance for a
spouse and child. Currently, if the money is paid directly it
would be exempt from creditor claims, but if the money is paid
to a minor child in trust, there is no provision protecting
those proceeds. So Section 4 fills that void in law.
10:19:43 AM
SENATOR FRENCH said Section 1 makes Alaska consistent with
trusts, but it is reversing a long-standing provision.
MR. GREER said Section 1 is really a penalty clause. For
example, if "a decedent wanted to leave property solely to one
child to the exclusion of the other child … but they're leaving
the child who isn't to receive as much, let's say a sum of
$25,000. What this does, if the decedent chose to include a
incontestability clause, which says that if the person who is to
receive the lesser amount -- and this was the choice of the
decedent -- were to contest this thing, and if they were to lose
… then they are being put to the test because they very well may
lose the $25,000 amount that they would otherwise receive. On
the other hand, if it turns out that the will was done
fraudulently or under duress, and the will is thrown out, then,
of course, this clause doesn't apply at all." California has a
similar provision. This was part of Alaska's uniform probate
code that was enacted in the early 1980s, and there have been
many, many changes made in the code by other states. "We have
decided this year that … we should bring this in line with our
present trust statutes, which have been brought current with
other states."
10:22:08 AM
SENATOR FRENCH asked why it wouldn't apply. The bill says it
will apply even if probable cause exists. "If I institute
proceedings because I think there's been fraud, and a judge
finds there's probable cause to support my belief that there's
been fraud," it says the penalty provision is enforceable.
MR. GREER said in that case, the will would be thrown out, and
the incontestability clause would have no force at all. Probable
cause and winning the case are two different standards. A person
who contested and lost would be penalized for having brought
that cause of action. It is meant to prevent needless and
miscellaneous litigation that sometimes occurs when people don't
get what they think they are entitled to.
SENATOR FRENCH said he still has great concerns. It seems to
prevent people from having an opportunity to have their claims
heard, and it makes them walk away when there is probable cause
to believe there is something wrong with the will.
10:24:24 AM
MR. GREER said he does his estate planning through revocable
trusts and not wills. "I would like to avoid the whole probate
process to begin with." He is part of a group trying to keep
Alaska's laws current with other states. The group wanted to
make will laws conform to trust laws. He understands Senator
French's point and can't dispute it. But there is a protective
provision. It does put the aggrieved party to the test. If they
have a strong case and prevail, the will gets thrown out. It is
meant to prevent cases brought about for harassment or to try to
hold the estate hostage.
CHAIR MCGUIRE said it is a difficult issue, and she noted the
business of attracting individuals who want enforceability in
wills. It is likely that they want the provisions to be as
enforceable as possible. Mr. Greer would like to draw more
business to Alaska and stay competitive with other states. But
if you were the person who didn't get what you thought you
should, you wouldn't like this provision.
10:26:52 AM
SENATOR BUNDE said it is a turf battle. The final wishes of the
deceased should have precedence. Someone in a dysfunctional
family should be able to write someone out of a will.
SENATOR BUNDE moved to report the Senate committee substitute to
HB 196, labeled 25-LS0447\K, from committee with individual
recommendations and attached fiscal note(s). There being no
objection, SCS CSHB 196 (STA) passed out of committee.
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