Legislature(1993 - 1994)

03/10/1994 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 307 - UNIFORM PROBATE CODE                                                
  CHAIRMAN VEZEY opened discussion on SSHB 307.                                
  Number 067                                                                   
  sponsor statement for SSHB 307.  The sponsor summary reads                   
  as follows:                                                                  
  "SSHB 307 would provide a comprehensive upgrade of Alaska's                  
  probate code by adopting revisions to AS 13.11 and AS 13.31,                 
  as recommended by the National Conference of Commissioners                   
  on Uniform State Law (NCCUSL).  Revisions to AS 13.11                        
  involve Intestacy, Wills, and Donative Transfers.  There                     
  would also be changes to AS 13.06, General Provisions, and                   
  to AS 13.16, Probate of Wills and Administration.                            
  "Changes to AS 13.11 are primarily aimed at enhanced spousal                 
  and family protection, reduced risk of technical                             
  invalidation of wills, and greater harmony of the rules of                   
  presumed intention for property transfers at death.                          
  "Changes to AS 13.31 center on the clarification of the law                  
  of joint tenancy and tenancy in common for deposit accounts                  
  held by multiple parties.  It also includes Transfer-On-                     
  Death provisions for investment security accounts.                           
  "The Sponsor Substitute added the changes to AS 13.31, the                   
  Nonprobate Transfers.  It also deletes some definitions as                   
  found in the NCCUSL language, which are duplicative or                       
  unnecessary.  Other modifications convert NCCUSL language                    
  into Alaska's drafting style.  This version also places the                  
  registry for international wills in the Department of                        
  Commerce and Economic Development..."                                        
  MR. BENINTENDI stated the registry for international wills                   
  may eventually be placed in the court system, but without                    
  the court system completing its review of SSHB 307, they                     
  were not prepared to recommend this change.                                  
  The sponsor summary continued:                                               
  "HB 307 is supported by the Attorney General, the Alaska                     
  Uniform Law Commission, and the American Association of                      
  Retired Persons.  The Alaska Court System is currently                       
  reviewing its provisions.  It carries zero fiscal notes from                 
  DCED, LAW, and the Court System."                                            
  Number 126                                                                   
  CHAIRMAN VEZEY commented SSHB 307 dealt with a very                          
  complicated subject.  ART PETERSON was asked to be the next                  
  individual to testify.  CHAIRMAN VEZEY stated he had                         
  received a letter from MR. PETERSON earlier in the week.                     
  Number 166                                                                   
  COMMISSIONER, testified in favor of SSHB 307.  He stated                     
  SSHB 307 is an attempt by the NCCUSL, in conjunction with                    
  the Joint Editorial Board for the Uniform Probate Code, to                   
  update discrepancies they have found in Uniform Law.  He                     
  noted families are not the same as they were when the                        
  original version of Uniform Law was being drafted. Families                  
  now have multiple parents due to divorces and remarriages,                   
  and mixed children within them.  He stated questions arise                   
  when a decedent, in his will says, "I give to my children                    
  all of my property," because it is hard to define which                      
  children, out of which marriage, are to be included in the                   
  MR. PETERSON stated if a person dies without a will,                         
  currently the Intestacy provisions divide the assets of the                  
  deceased.  SSHB 307 will rearrange some of the traditional                   
  provisions on Intestacy.  The surviving spouse will get a                    
  larger share under the amendments in SSHB 307.  In second                    
  marriage situations, the second marriage may occur much                      
  later in life; therefore, SSHB 307 recognizes the number of                  
  years of marriage will go to the percentage that the                         
  survivor will receive.  Descendants and parents of the                       
  decedent will have distribution changes.                                     
  MR. PETERSON mentioned the Alaska delegation to the National                 
  Conference supports SSHB 307.  He commented SSHB 307 really                  
  only has one provision which has a state impact which is the                 
  registry for international wills.  This would be a state                     
  repository for performing international wills registration.                  
  He stated SSHB 307 regulates the distribution of property                    
  among private individuals.                                                   
  MR. PETERSON said the letter the committee received from the                 
  Association of Retired Persons to REPRESENTATIVE MOSES,                      
  December 1, 1993, highlights SSHB 307 well.                                  
  MR. PETERSON explained there were two basic parts to SSHB
  307, Article II, Intestacy and Wills, and Article IV,                        
  Nonprobate Transfers.  Alaska already has some provisions                    
  which regard the concept of "pay on death," whereby a                        
  decedent's bank account can automatically be transferred                     
  into a survivor's name.  Current law, however, relates to                    
  multiple party accounts, and the amendment in SSHB 307 would                 
  allow the law to address single party accounts.  The                         
  transfer provisions for securities will be expanded to cover                 
  an individual's certain range of assets, whereby upon death,                 
  a person's stocks would avoid probate and be transferred                     
  directly to the property of a designated person.                             
  (REPRESENTATIVE SANDERS left the meeting at 8:15 a.m.)                       
  Number 353                                                                   
  CHAIRMAN VEZEY noticed the section of SSHB 307 regarding                     
  Alaska Native Corporation stock and pointed out it did not                   
  sound like a national issue.                                                 
  Number 360                                                                   
  MR. PETERSON responded the Alaska Native Corporation stock                   
  section was an "Alaska wrinkle."  When he worked with House                  
  Judiciary in the early 1970s, they amended the probate code                  
  to include that provision because the Alaska Native Claims                   
  Settlement Act (ANCSA) had just passed in 1971.  He noted                    
  certain provisions of state law had to be enacted to                         
  implement the federal law.  Therefore, the special situation                 
  of ANCSA stock had to be recognized in SSHB 307.                             
  MR. PETERSON pointed out the provision was on page 9, lines                  
  18-20, which states, "The intested share of the surviving                    
  spouse in settlement common stock, or other inalienable                      
  stock, in a corporation organized under ANCSA..."  He noted                  
  there have been attempts to tailor SSHB 307 to fit both the                  
  Alaska format in drafting style, as well as a "wrinkle" such                 
  as the ANCSA provision.                                                      
  Number 380                                                                   
  CHAIRMAN VEZEY asked MR. PETERSON to explain what SSHB 307                   
  would do with Native corporation stock.                                      
  (REPRESENTATIVE OLBERG left the meeting at 8:20 a.m.)                        
  Number 385                                                                   
  MR. PETERSON replied when there is no will, the surviving                    
  spouse will get all of the decedents assets if there are no                  
  children.  If there are children, the surviving spouse would                 
  get half of the assets.                                                      
  Number 390                                                                   
  CHAIRMAN VEZEY questioned the phrase "surviving issue."                      
  Number 392                                                                   
  MR. PETERSON responded SSHB 307 helps clarify and improve                    
  terminology such as "child, children, issue, descendants,                    
  etc..."  "Surviving issue" would normally be the descendant                  
  Number 401                                                                   
  CHAIRMAN VEZEY commented the revision of Uniform Probate                     
  Code has been worked on for 20 or more years and he observed                 
  society has not necessarily changed.  He noted the divorce                   
  rate in Alaska today is less than that of 25 years ago.  He                  
  asked if MR. PETERSON had been referring to societal changes                 
  which had been occurring from the mid-1970s to the current                   
  Number 416                                                                   
  MR. PETERSON answered he was referring to the complete                       
  continuum.  He said he based his testimony on the comments                   
  produced by the drafters when SSHB 307 came out.  The                        
  drafters were addressing the changes which occurred during                   
  the 20 year original promulgation and enactment of the                       
  original version of the Uniform Probate Code.  The drafters                  
  pointed out along with the substantial divorce rate, there                   
  is a substantial remarriage rate.  Remarriages produce                       
  children with multiple sets of parents and SSHB 307 deals                    
  with the questions that arise because of these changes in                    
  the family.                                                                  
  (REPRESENTATIVE OLBERG returned to the meeting at 8:24 a.m.)                 
  Number 442                                                                   
  CHAIRMAN VEZEY stated the biggest change he was aware of in                  
  the last 30 years was the number of illegitimate births.                     
  MR. PETERSON agreed, assuming CHAIRMAN VEZEY meant the                       
  parties are out of wedlock and may or may not be living                      
  together.  He stated SSHB 307 tries to simplify both the                     
  intested, and will situation, so there is an emphasis on                     
  executing the intent of the person with the will.  Secondly,                 
  for those without a will, SSHB 307 tries to determine what                   
  the decedent would most want to have happen to their                         
  property.  He noted SSHB 307 does not specifically point out                 
  illegitimate children, but it does define "children" as                      
  including adopted children, and in a single parent situation                 
  a "child" is still defined as a child.                                       
  Number 469                                                                   
  REPRESENTATIVE G. DAVIS inquired if there had been any                       
  attempts to ensure that residents of a state do have a will                  
  in trying to reduce the amount of probate problems that                      
  MR. PETERSON did not know of a state that has made the                       
  making of wills an official state policy by some state                       
  agency.  He knew Bar Associations around the country are                     
  encouraging people to get wills and make their intent clear.                 
  (REPRESENTATIVE SANDERS returned to the meeting at 8:27                      
  Number 483                                                                   
  CHAIRMAN VEZEY asked what changes there are in circumstances                 
  that would trigger a person's estate going to the state.                     
  Number 487                                                                   
  MR. PETERSON did not believe there were significant changes                  
  by SSHB 307 in the circumstances.  An estate goes the state                  
  when there is no will and there is no identifiable                           
  descendant or antecedent who could inherit from the                          
  Number 495                                                                   
  REPRESENTATIVE JERRY SANDERS referred to AS 13.12.108 on                     
  page 11, which states,"after born heirs, an individual in                    
  gestation at a particular time is treated as living."  He                    
  inquired as to the definition of "a particular time."                        
  Number 500                                                                   
  MR. PETERSON assumed "particular time" means the time of                     
  death of the decedent.  In the case of the woman who dies                    
  while a child is in gestation, typically the child would                     
  also die.  He stated the example of a father who dies and                    
  his will speaks before his child is born.  AS 13.12.108                      
  attempts to address this problem if the individual lives 120                 
  hours more after the birth.                                                  
  Number 511                                                                   
  REPRESENTATIVE SANDERS clarified the newborn child could not                 
  be disinherited.                                                             
  Number 515                                                                   
  MR. PETERSON said the child would be treated as a living                     
  child if it survived 120 hours after birth.  He noted the                    
  120 hours were similar to the provisions in the Simultaneous                 
  Death Act, which Alaska now has and is slightly modified by                  
  SSHB 307.                                                                    
  Number 521                                                                   
  REPRESENTATIVE BETTYE DAVIS asked if there had not been any                  
  changes to the Uniform Probate Code since it was enacted 20                  
  years ago.                                                                   
  Number 525                                                                   
  MR. PETERSON answered there had been no comprehensive                        
  Number 526                                                                   
  REPRESENTATIVE B. DAVIS questioned if there was a mandate                    
  for the changes, or were the Uniform Probate Code changes                    
  reviewed and the states were left to decide if they should                   
  implement them.                                                              
  Number 530                                                                   
  MR. PETERSON answered there was not a federal mandate for                    
  the Uniform Probate Code changes, although there is an                       
  international convention in effect which the United States                   
  has not signed onto yet.  He stated if states were to adopt                  
  the international wills provisions in SSHB 307, it would                     
  encourage the federal government sign on.                                    
  Number 535                                                                   
  REPRESENTATIVE B. DAVIS clarified the changes started on a                   
  state by state basis.                                                        
  Number 536                                                                   
  MR. PETERSON affirmed REPRESENTATIVE B. DAVIS.                               
  Number 542                                                                   
  MR. PETERSON pointed out in Article II there are some random                 
  amendments, but basically the Uniform Code in the 1972                       
  version.  He stated the Joint Editorial Board for the                        
  Uniform Probate Code is comprised of several component                       
  organizations that bring the topics together.  The Uniform                   
  Laws Conference then creates a drafting committee who then                   
  works for a minimum of two, or more years to reach the final                 
  stages.  The drafting committee then brings the draft to the                 
  floor of the National Uniform Laws Conference where it is                    
  debated by the entire group for two separate years.                          
  Number 557                                                                   
  CHAIRMAN VEZEY introduced JOHN GEORGE as the next individual                 
  to testify.                                                                  
  Number 561                                                                   
  concerns about SSHB 307.  He stated life insurance agencies                  
  are very concerned about SSHB 307 because the beneficiary to                 
  a life insurance policy is designated by the person buying                   
  the policy, or there are contingent beneficiaries, assuming                  
  the named beneficiary is deceased.  He noted SSHB 307 might                  
  change the beneficiary of the life insurance policy to                       
  someone other than designated.  Insurance would be pulled                    
  into probate, whereas before life insurance policies have                    
  been excluded from probate.                                                  
  Number 583                                                                   
  CHAIRMAN VEZEY clarified the American Council of Life                        
  Insurance is asking for more time to review SSHB 307.                        
  Number 587                                                                   
  MR. GEORGE felt MR. PETERSON and other researchers should                    
  review SSHB 307 with them.  He noted SSHB 307 had a number                   
  of committee referrals and there would probably be time to                   
  go over SSHB 307 and deal with any problems they may find in                 
  another committee.                                                           
  Number  596                                                                  
  REPRESENTATIVE B. DAVIS asked MR. PETERSON to speak to MR.                   
  GEORGE's concern.                                                            
  CHAIRMAN VEZEY added he had received communication from five                 
  attorneys in the Fairbanks area who practice probate and                     
  have asked for time to review SSHB 307.  They stated the                     
  Probate Committee for the Alaska Bar Association had not                     
  reviewed SSHB 307.                                                           
  Number 604                                                                   
  MR. PETERSON responded the Alaska Bar Association, Probate                   
  Section, has had the opportunity to study and review SSHB
  307.  The Bar Association puts out a monthly newsletter                      
  listing the different sections of the bar, and in that                       
  schedule for 1992-1993, they were taking up Article II                       
  revisions in several meetings.  He noted the Bar Association                 
  has had SSHB 307 in their formal study system for nearly two                 
  years.  He said the chair of the probate section advised him                 
  that some members expressed serious concerns to him (the                     
  chair).  He wrote back, October 4, 1993, and asked them for                  
  their concerns so they could get them straightened out.  In                  
  the same letter he gave an example of a concern and offered                  
  alternative approaches to solve the problem.  MR. PETERSON                   
  said he still has not received a response to his October 4,                  
  1994, letter and he doubted the seriousness of their                         
  MR. PETERSON referred to Former Attorney General, Charlie                    
  Cole, who supported SSHB 307.  He stated in reference to the                 
  section on spousal share, Mr. Cole supported a more extreme                  
  version which gave the spouse even more.                                     
  MR. PETERSON would like to know the specific comments by the                 
  Fairbanks attorneys because he felt they had had time to                     
  study SSHB 307.                                                              
  MR. PETERSON did not quite understand MR. GEORGE'S                           
  statement, therefore, he felt it would be good to meet with                  
  his organization and discuss their concerns.                                 
  Number 647                                                                   
  CHAIRMAN VEZEY commented the letters received by the                         
  attorneys would become public record and MR. PETERSON would                  
  have access to them.  Due to the complex nature of SSHB 307,                 
  CHAIRMAN VEZEY decided to hold SSHB 307 in committee and it                  
  would be rescheduled at a later date.                                        

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