S T A T E   O F   N E W   Y O R K
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    S. 3528--A                                            A. 7132--A
    Cal. No. 357                                        Cal. No. 626

                       2009-2010 Regular Sessions

                      S E N A T E - A S S E M B L Y

                             March 23, 2009
                               ___________

IN SENATE -- Introduced by Sen. SAMPSON -- read twice and ordered print-
  ed,  and when printed to be committed to the Committee on Judiciary --
  reported favorably from said committee, ordered to  first  and  second
  report,  ordered  to a third reading, substituted by Assembly Bill No.
  7132, substitution reconsidered and  vote  reconsidered,  restored  to
  third  reading,  amended and ordered reprinted, retaining its place in
  the order of third reading

IN ASSEMBLY -- Introduced by M. of A. LAVINE, WEINSTEIN -- read once and
  referred to the Committee on  Judiciary  --  passed  by  Assembly  and
  delivered  to the Senate, recalled from the Senate, vote reconsidered,
  bill amended, ordered reprinted, retaining its place on the  order  of
  third reading

AN  ACT  to  amend the estates, powers and trusts law, the general obli-
  gations law and the mental hygiene law, in relation to  the  renuncia-
  tion of property interests

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 2-1.11 of the estates, powers and  trusts  law,  as
amended  by chapter 570 of the laws of 1980, subparagraph 1 of paragraph
(a) as amended by chapter 325 of the laws  of  2005,  paragraph  (c)  as
added  by  chapter  589 of the laws of 2003, paragraph (d) as amended by
chapter 515 of the laws of 1993 and paragraph (j) as separately  amended
by chapter 417 of the laws of 1980, is amended to read as follows:
S 2-1.11 Renunciation of property interests
  (a)  A  RENUNCIATION  MADE  IN  COMPLIANCE WITH THE PROVISIONS OF THIS
SECTION SHALL NOT NECESSARILY CONSTITUTE A QUALIFIED  DISCLAIMER  WITHIN
THE  MEANING  OF  SECTION  2518 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, OR FOR THE PURPOSES OF THE TAXES IMPOSED BY ARTICLE  TWENTY-SIX
OF THE TAX LAW.
  (B) For purposes of this section:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD09664-03-9

S. 3528--A                          2                         A. 7132--A

  (1) The term "disposition" shall include a disposition created under a
will or trust agreement including, without limitation, the granting of a
power  of appointment, a disposition created by the exercise or nonexer-
cise of a power of appointment, a  distributive  share  under  4-1.1,  a
transfer  created  by  a  trust  account as defined in 7-5.1, a transfer
created by a life insurance or annuity contract, a transfer [created by]
RESULTING FROM THE CREATION OF a joint tenancy or tenancy by the entire-
ty, A TRANSFER CREATED BY THE DEATH OF A JOINT TENANT OR TENANT  BY  THE
ENTIRETY,  a transfer under an employee benefit plan (including, without
limitation, any pension,  retirement,  death  benefit,  stock  bonus  or
profit-sharing  plan,  system  or  trust), a transfer of a security to a
beneficiary pursuant to part 4 of article 13 of this chapter, any  other
disposition  or  transfer created by any testamentary or nontestamentary
instrument, or by operation of law, and any of the foregoing created  or
increased by reason of a renunciation made by another person.
  (2) The effective date of the disposition for purposes of this section
shall be:
  A.  If the disposition is created by will, the exercise or nonexercise
of a testamentary power  of  appointment,  a  distribution  pursuant  to
4-1.1,  the deposit of money in a trust account as defined in 7-5.1, THE
REGISTRATION OF A SECURITY IN BENEFICIARY FORM PURSUANT  TO  PART  4  OF
ARTICLE  13  OF  THIS CHAPTER, a life insurance or annuity contract, THE
DEATH OF a joint [tenancy] TENANT or [tenancy] TENANT by  the  entirety,
or an employee benefit plan, the date of death of the deceased testator,
holder  of  the  power  of  appointment, intestate, creator of the trust
account, REGISTERED OWNER OF THE  SECURITY,  insured,  annuitant,  other
joint tenant or tenant by the entirety, or employee, as the case may be;
  B. If the disposition is created by trust agreement, the exercise of a
presently  exercisable  power  of  appointment,  THE CREATION OF A JOINT
TENANCY OR TENANCY BY THE ENTIRETY, or the renunciation of a disposition
created by another, the date [of the trust agreement,] AS OF  WHICH  THE
TRANSFER  IN  TRUST  IS  IRREVOCABLE AND IS A COMPLETED GIFT FOR FEDERAL
GIFT TAX PURPOSES (REGARDLESS OF WHETHER A GIFT TAX IS  IMPOSED  ON  THE
COMPLETED  GIFT),  THE DATE OF THE exercise of the power of appointment,
THE CREATION OF A JOINT TENANCY OR TENANCY BY THE ENTIRETY, or renuncia-
tion, as the case may be; and
  C. If the disposition is created by any other testamentary or  nontes-
tamentary  instrument,  or by operation of law, the date of the event by
which the beneficiary is finally ascertained.
Notwithstanding the foregoing, the effective date of a disposition which
is of a future estate shall be the date on which it becomes an estate in
possession.
  [(b)] (C) (1) Any beneficiary of a disposition  may  renounce  all  or
part  of  [his]  SUCH  BENEFICIARY'S interest; provided, however, that a
surviving joint tenant or tenant by the entirety [may not renounce  that
portion of an interest in joint property or property held by the entire-
ty  which  is allocable to amounts contributed by him to the interest in
such property] MAY RENOUNCE THE INTEREST TO WHICH SUCH TENANT  SUCCEEDS,
BY  OPERATION OF LAW UPON THE DEATH OF ANOTHER JOINT TENANT OR TENANT BY
THE ENTIRETY, TO THE EXTENT SUCH INTEREST COULD  BE  THE  SUBJECT  OF  A
QUALIFIED  DISCLAIMER  UNDER  SECTION 2518 OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED.
  (2) Such renunciation shall be in writing, signed and acknowledged  by
the  person renouncing, and shall be filed in the office of the clerk of
the court having jurisdiction over the will or trust agreement governing
the property of which the disposition would otherwise  be  made  or  the

S. 3528--A                          3                         A. 7132--A

court  which issued letters of administration, or if there is no probate
or administration, then in a surrogate's court provided by  law  as  the
place of probate or administration of the decedent's estate, within nine
months  after  the effective date of the disposition.  Such renunciation
shall be accompanied by an affidavit of the renouncing party  that  [he]
SUCH  PARTY  has not received and is not to receive any consideration in
money or money's worth for such renunciation from a  person  or  persons
whose  interest  is  to be accelerated, unless payment of such consider-
ation has been authorized by the court.  Notice  of  such  renunciation,
which  shall  include  a  copy  of  the  renunciation,  shall  be served
personally or in such manner as the court may direct upon the  fiduciary
directed  by the will or trust agreement to make the disposition or upon
the administrator or such other person who  was  directed  to  make  the
disposition  or upon any other person having custody or possession of or
legal title to the property, an interest in which  is  being  renounced,
and  by  mail or in such manner as the court may direct upon all persons
whose interest may be created or increased by reason of  such  renuncia-
tion.   The time to file and serve such renunciation may be extended, in
the discretion of the court, on a petition showing reasonable cause  and
on  notice  to  such persons and in such manner as the court may direct.
The time limited in this section for filing and serving  such  renuncia-
tion  is  exclusive, and shall not be suspended or otherwise affected by
any other provision of law; such renunciation shall be effective  as  of
the  date of such filing, notwithstanding that notice thereof may there-
after be required by the court.
  [(c)] (D) A renunciation may be made by:
  (1) The guardian of the property of an infant, when so  authorized  by
the court having jurisdiction of the estate of the infant.
  (2)  The  committee  of an incompetent when so authorized by the court
that appointed the committee.
  (3) The conservator of a conservatee, when so authorized by the  court
that appointed the conservator.
  (4)  A  guardian  appointed  under  article  eighty-one  of the mental
hygiene law, when so authorized by the court that appointed the  guardi-
an.
  (5)  The  personal representative of a decedent, when so authorized by
the court having jurisdiction of the estate of the decedent.
  (6) An attorney-in-fact, when so  authorized  under  a  duly  executed
power of attorney, provided, however, that any renunciation by an attor-
ney-in-fact  of  a person under disability shall not be effective unless
it is further authorized by the court with which the  renunciation  must
be  filed under subparagraph two of paragraph [(b)] (C) of this section,
and provided, further, that a renunciation by an attorney-in-fact  of  a
person  not  under  disability  may be made without court authorization,
unless the property which would have passed under said renunciation  is,
by  reason  of said renunciation, disposed of in favor of such attorney-
in-fact or the spouse or issue of such attorney-in-fact, in  which  case
such  renunciation  shall not be effective unless either (A) the instru-
ment appointing such attorney-in-fact expressly authorizes  a  renuncia-
tion  in  favor  of such attorney-in-fact or the spouse or issue of such
attorney-in-fact, or (B) such renunciation has been  authorized  by  the
court  with  which the renunciation must be filed under subparagraph two
of paragraph [(b)] (C) OF THIS SECTION.
  [(d)]  (E)  Unless  the  creator  of  the  disposition  has  otherwise
provided, the filing of a renunciation, as provided in this section, has
the  same  effect  with  respect to the renounced interest as though the

S. 3528--A                          4                         A. 7132--A

renouncing person had predeceased the creator or the decedent or, if the
renounced interest is a future estate, as though the  renouncing  person
had  died  at the time of filing or just prior to its becoming an estate
in  possession,  whichever is earlier in time, and shall have the effect
of accelerating the possession and enjoyment  of  subsequent  interests,
but  shall  have  no effect upon the vesting of a future estate which by
the terms of the disposition is limited upon a  preceding  estate  other
than  the  renounced  interest.  If, pursuant to the preceding sentence,
there would occur a per stirpes disposition of the renounced interest or
a disposition or distribution of the  renounced  interest  by  represen-
tation,  then  solely  for purposes of applying 1-2.14 or 1-2.16, as the
case may be, the renouncing person shall be treated as  having  died  on
the  same date as, but immediately after, the creator or decedent or, if
the renounced interest is a future estate, as having died  on  the  same
date as, but immediately after, its becoming an estate in possession or,
if the time of filing is earlier in time, on the same date as, but imme-
diately  after,  such  filing.   Such renunciation is retroactive to the
creation of the disposition. A person who has a  present  and  a  future
interest  in  property and renounces the present interest in whole or in
part shall be deemed to have renounced the future interest to  the  same
extent.
  [(e)] (F) A beneficiary may accept one disposition and renounce anoth-
er, may renounce a disposition in whole or in part, or with reference to
specific  amounts, parts, fractional shares or assets thereof.  Notwith-
standing the provisions of paragraph [(d)] (E) of this section, a renun-
ciation by a surviving spouse of a decedent of a disposition created  by
said decedent shall not be deemed to be a renunciation by such spouse of
all  or any part of any other disposition to or in favor of such spouse,
regardless of whether the property which would have  passed  under  said
renounced  disposition  is by reason of said renunciation disposed of to
or in favor of such spouse. Unless  a  renouncing  person  has  provided
otherwise  in  his renunciation, the effect of a renunciation of a frac-
tional part of a disposition is to renounce such fraction of all proper-
ty to which the renouncing person is entitled under the disposition.
  [(f)] (G) A renunciation may not  be  made  under  this  section  with
respect  to  any property which a renouncing person has accepted, except
that an acceptance does not preclude a person  from  renouncing  all  or
part  of  any  property  to which [he] SUCH PERSON becomes entitled when
another person renounces after such acceptance.  For  purposes  of  this
paragraph,  a person accepts an interest in property if [he] SUCH PERSON
voluntarily transfers or encumbers, or contracts to transfer or encumber
all or part of such interest, or accepts  delivery  or  payment  of,  or
exercises  control  as  beneficial  owner  over  all or part thereof, or
executes a written waiver of the right to renounce, or  otherwise  indi-
cates  acceptance  of  all or part of such interest. A written waiver of
the right to renounce shall be binding on the  person  waiving  and  all
parties claiming by, through or under [him] SUCH PERSON.
  [(g)] (H) A renunciation filed under this section is irrevocable.
  [(h)]  (I) This section shall not abridge the right of any beneficiary
or any other person to assign, convey, release or renounce any  property
or  interest  therein arising under any other section of this chapter or
other statute or under common law.
  [(i)] (J) Except as specifically provided in the trust instrument, the
will, any other instrument creating the disposition, or in this section,
this section shall apply to each disposition the effective date of which
(as defined in this section) is on or after the effective date  of  this

S. 3528--A                          5                         A. 7132--A

section, except that with respect to the renunciation of a future inter-
est  this  section  shall  apply  as  well  to  dispositions  created or
increased prior to the effective date of this section.
  [(j)  In  determining  whether or not a valid disclaimer has been made
for the purposes of the taxes imposed by articles twenty-six  and  twen-
ty-six-A  of the tax law, the provisions of such law shall be applicable
to such determination, notwithstanding any provisions  to  the  contrary
contained in this section or any other section of this chapter.]
  S  2. Subdivision 3 of section 5-1502G of the general obligations law,
as amended by chapter 589 of the laws of 2003, is  amended  to  read  as
follows:
  3.  Subject to the provisions of paragraph [(c)] (D) of section 2-1.11
of the estates, powers and trusts law, to accept, to reject, to receive,
to receipt for, to sell, to assign, to release, to pledge, to  exchange,
or  to  consent  to  a  reduction in or modification of, any share in or
payment from any estate, trust or other fund;
  S 3. Paragraph 10 of subdivision (a) of section 81.21  of  the  mental
hygiene law, as amended by chapter 32 of the laws of 1993, is amended to
read as follows:
  10.  renounce  or  disclaim  any  interest  by  testate  or  intestate
succession or by inter vivos transfer consistent  with  paragraph  [(c)]
(D) of section 2-1.11 of the estates, powers and trusts law;
  S  4. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.