HB 287-UNIFORM ACT: PROPERTY INTEREST DISCLAIMER    1:58:03 PM CHAIR PASKVAN announced HB 287 to be up for consideration.[CSHB 287(JUD) was before the committee.] 1:57:01 PM REPRESENTATIVE MAX GRUENBERG, sponsor of HB 287, introduced Gretchen Staft, his chief of staff who is a member of the Alaska Bar. He said this updates the existing Uniform Probate law specifically, AS 13.12.801 that deals with "disclaimers." A disclaimer is a device in probate law where if a person is given a bequest, is a devisee under a will or is a beneficiary of a trust, he can say he doesn't want to take a particular asset. It can be done for a number of reasons: because for example the person isn't able to manage it if it's a business or a house that requires active management or for tax purposes. For example, if he leaves money to his son and he is elderly or in bad health and doesn't want to be taxed on that particular bequest he can disclaim it and it goes directly to his heir, the grandson. That saves a substantial amount of federal taxes. He explained that originally this issue was covered in a single section and since then the world of probate law has gotten more complex and tax law has changed. As a result the commissioners on uniform state laws have enacted the Uniform Disclaimer of Property Interest Act, which repeals the original section and updates it in a separate act. This just updates the existing law. REPRESENTATIVE GRUENBERG said they made very few changes, but one they did make was to the question of whether any creditor claims would survive. An amendment says you cannot escape child support obligations by disclaiming, because some people would rather see their money go away than see their ex-spouse get it and take care of the kids and that is not good public policy. 2:02:14 PM SENATOR MEYER noted that this started in 1999 and 16 states have adopted it since then. Why haven't more states jumped on board? REPRESENTATIVE GRUENBERG replied that he thinks that the Commission on Uniform State Laws has a lot of bills on a variety of subjects; some of them are very timely and important like the Uniform Electronic Signatures Act that has to keep pace with commerce. Others are less publicized, and only one or two probate laws get passed a year. Probate laws aren't very sexy and many lawyers don't deal with them. One of the bills they brought last year was the UCC update, which they did. Sometimes it has to politically find someone who wants to push it. That doesn't mean it's controversial. The only controversy he is aware of is a series of law review articles between the reporter who drafted this and one other practitioner from different parts of the country who have some basic philosophical differences. 2:05:00 PM TERRY THURBON, Chief Administrative Law Judge and Uniform Law Commissioner, State of Alaska, said she wasn't aware of anything in the Act that should be a problem for Alaska, and since 23 or 24 other states have enacted this already, that provides the needed momentum. REPRESENTATIVE GRUENBERG said this bill was introduced several years ago by Representative LeDoux, and the there was some controversy about the child support. That was cured and Representative LeDoux is no longer here, so it took a little while to pick it up again. He stated that the folks in Alaska brought this bill forward; it's a uniform act, but the commissioners traditionally only bring two or three bills a year to the legislature. 2:07:30 PM DAVE SHAFTEL, estate and trust attorney, Anchorage, Alaska, he is a member of an information group of lawyers who work in this area and have been working with the legislature since 1997 to suggest what they think would be good additions to Alaska law. This bill came to his attention a couple of years ago through Representative LeDoux and they asked for time to study it. They worked on it and consulted with a law professor at Florida State University who had written a number of articles about it. He was supportive but suggested changes that were very good. Some of them that they thought fit Alaska were incorporated into the legislation. They came back with the bill last year, which was a very busy year and the bill didn't get through then. They think it's a very good bill. 2:09:21 PM SENATOR THOMAS asked for an example of the situation on page 7, line 13, paragraph (e) that says "in the case of an interest created by a beneficiary designation made before the time the designation becomes irrevocable, disclaimer shall be delivered to the person making the beneficiary designation." MR. SHAFTEL explained that this whole section is procedural and describes how the knowledge of this disclaimer gets transferred according to the rules stated in this statute or according to directions in the instrument that created that property right and goes on to whomever is entitle to it. Lines 13-15 talk about an interest created beneficiary designation made before the time the designation becomes irrevocable. For example, you might have a life insurance policy and you might make a beneficiary designation in that policy of your son or daughter that is not irrevocable. That beneficiary designation can be changed at any time. But if your daughter does not want to receive that property and would rather it go to her children, she can disclaim that interest. The disclaimer's notice would be delivered back to the person making the beneficiary designation. He said these provisions attempt to answer questions of how to make a disclaimer effective. SENATOR THOMAS asked if someone passes away, does that create the situation where the designation becomes irrevocable. MR. SHAFTEL answered yes. CHAIR PASKVAN asked what his thoughts were about the addition of the child support obligation. MR. SHAFTEL said it is just fine. It's one exception that appears in other areas of trust law. 2:14:50 PM CHAIR PASKVAN closed public testimony. SENATOR THOMAS moved to report CSHB 287(JUD) from committee with individual recommendations and attached zero fiscal note. There were no objections and it was so ordered. 2:15:55 PM CHAIR PASKVAN found no further business to bring before the committee and adjourned the meeting at 2:15 p.m.