Legislature(2013 - 2014)BELTZ 105 (TSBldg)
04/16/2014 09:30 AM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB127 | |
| HB60 | |
| HB140 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 127 | TELECONFERENCED | |
| + | HB 140 | TELECONFERENCED | |
| + | HB 60 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 60-UNIFORM REAL PROPERTY TRANSFERS ON DEATH
9:44:41 AM
CHAIR COGHILL reconvened the meeting and announced the
consideration of HB 60. "An Act adopting and relating to the
Uniform Real Property Transfer on Death Act; relating to
establishing the law governing certain trusts; and relating to
disclaimers of property interests. " This was the first hearing.
9:45:54 AM
REPRESENTATIVE MAX GRUENBERG, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 60, said this legislation does two things.
First, it has a provision that models a Delaware Supreme Court
case which said that if a trust instrument is silent as to the
choice of law and it is administered in Delaware, the choice of
law would be Delaware. The House Judiciary Committee added this
provision in Section 1 of the bill. It helps keep Alaska's trust
laws as competitive and trust-friendly as possible.
The rest of the bill adds a new chapter to AS 13 called the
"Uniform Real Property Transfer on Death Act." This avoids
probate and legal fees for estates that aren't huge or
complicated. The property owner records a deed that says it
becomes effective upon their death. The property owner has the
ability to change the deed but it must be recorded so that it is
in the chain of title and easily ascertainable. This protects
the title and any of the people who may be involved.
REPRESENTATIVE GRUENBERG noted that the bill contains forms for
the deed and the revocation of the deed. It has been thoroughly
vetted through the Bar probate and real property sections and
they suggest seeking legal advice if there is any doubt. About
23 states have these laws. The first was passed in the 1980s and
then the Uniform Commissioners promulgated this Act about six or
seven years ago and it is gaining appeal.
9:51:31 AM
SENATOR WIELECHOWSKI asked if there was a financial limit on the
size of an estate that can be deeded.
REPRESENTATIVE GRUENBERG said no.
SENATOR WIELECHOWSKI asked if the property has to be in Alaska.
REPRESENTATIVE GRUENBERG said yes and whether a TOD deed would
be effective depends upon the law in the state where the
property is located. For example, Missouri has a similar law so
a TOD deed would apply, whereas California does not so a TOD
deed would not apply.
CHAIR COGHILL asked how Section 1 applies to the Uniform Act.
REPRESENTATIVE GRUENBERG explained that that provision applies
to states in which trusts are administered. It clarifies that it
is the law of Alaska generally that applies if the trust is
administered here regardless of where the property is located,
the trust was drafted, and the donors and beneficiaries reside.
9:56:10 AM
SENATOR WIELECHOWSKI asked if this would allow parties in other
states to bypass estate taxes.
REPRESENTATIVE GRUENBERG clarified that it is not a tax saving
device. A transfer on death is subject to estate taxes.
SENATOR WIELECHOWSKI asked if the main advantage is to avoid
probate.
REPRESENTATIVE GRUENBERG said yes.
SENATOR DYSON questioned the provision in paragraph (4) on page
5, lines 6-7.
REPRESENTATIVE GRUENBERG explained that the transfer doesn't
occur until the transferor's death.
SENATOR WIELECHOWSKI asked if the contents of a property
transfer along with the property.
REPRESENTATIVE GRUENBERG replied only something like a shed that
is affixed to the land would transfer with the property.
SENATOR WIELECHOWSKI asked Mr. Orzeske if there were inheritance
tax implications.
10:02:12 AM
BEN ORZESKE, Uniform Law Commissioner, Chicago, Illinois, said
the bill removes the property from the probate estate for
administrative purposes, but would not remove it from the
taxable estate under federal law.
REPRESENTATIVE GRUENBERG added that it would be subject to death
tax.
MR. ORZESKE agreed that the bill doesn't affect whatever tax it
would be if the property were transferred any other way.
SENATOR MCGUIRE requested a list of the states that have TOD
deeds.
Unidentified speaker said the packets should contain Mr.
Orzeske's written testimony that has an attachment showing those
states.
MR. ORZESKE reported that since he submitted his testimony,
Washington state and West Virginia enacted the Uniform Act
bringing the total to 23.
10:04:54 AM
SENATOR MCGUIRE moved to report HB 60 from committee with
individual recommendations and attached fiscal note(s).
CHAIR COGHILL announced that without objection, CSHB 60(JUD) was
reported from the Senate Judiciary Standing Committee.