H. B. No. 160 As Reported by the House Civil and Commercial Law Committee

As Reported by the House Civil and Commercial Law Committee

127th General Assembly

Regular Session

2007-2008

H. B. No. 160

Representative Bubp

Cosponsors: Representatives Latta, Seitz, Book

A BILL

To amend section 5815.36 of the Revised Code to 1
clarify and modify the law relating to disclaimers 2
under the Ohio Trust Code. 3

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That section 5815.36 of the Revised Code be 4
amended to read as follows: 5

       Sec. 5815.36. (A) As used in this section: 6

       (1) "Disclaimant" means any person, any guardian or personal 7
representative of a person or estate of a person, or any 8
attorney-in-fact or agent of a person having a general or specific 9
authority to act granted in a written instrument, who is any of 10
the following: 11

       (a) With respect to testamentary instruments and intestate 12
succession, an heir, next of kin, devisee, legatee, donee, person 13
succeeding to a disclaimed interest, surviving joint tenant, 14
surviving tenant by the entireties, surviving tenant of a tenancy 15
with a right of survivorship, beneficiary under a testamentary 16
instrument, or person designated to take pursuant to a power of 17
appointment exercised by a testamentary instrument; 18

       (b) With respect to nontestamentary instruments, a grantee, 19
donee, person succeeding to a disclaimed interest, surviving joint 20
tenant, surviving tenant by the entireties, surviving tenant of a 21
tenancy with a right of survivorship, beneficiary under a 22
nontestamentary instrument, or person designated to take pursuant 23
to a power of appointment exercised by a nontestamentary 24
instrument; 25

       (c) With respect to fiduciary rights, privileges, powers, and 26
immunities, a fiduciary under a testamentary or nontestamentary 27
instrument. ~~This~~Division (A)(1)(c) of this section does not 28
authorize a fiduciary who disclaims fiduciary rights, privileges, 29
powers, and immunities to ~~disclaim~~cause the rights of 30
~~beneficiaries~~any beneficiary to be disclaimed unless the 31
instrument creating the fiduciary relationship authorizes the 32
fiduciary to make such a disclaimer. 33

       (d) Any person entitled to take an interest in property upon 34
the death of a person or upon the occurrence of any other event. 35

       (2) "Personal representative" includes any fiduciary as 36
defined in section 2109.01 of the Revised Code and any executor, 37
trustee, guardian, or other person or entity having a fiduciary 38
relationship with regard to any interest in property passing to 39
the fiduciary, executor, trustee, guardian, or other person or 40
entity by reason of a disclaimant's death. 41

        (3) "Property" means all forms of property, real and 42
personal, tangible and intangible. 43

       (B)(1) A disclaimant, other than a fiduciary under an 44
instrument who is not authorized by the instrument to disclaim the 45
interest of a beneficiary, may disclaim, in whole or in part, the 46
succession to any property by executing and by delivering, filing, 47
or recording a written disclaimer instrument in the manner 48
provided in this section. 49

       (2) A disclaimant who is a fiduciary under an instrument may 50
disclaim, in whole or in part, any right, power, privilege, or 51
immunity, by executing and by delivering, filing, or recording a 52
written disclaimer instrument in the manner provided in this 53
section. 54

       (3) The written instrument of disclaimer shall be signed and 55
acknowledged by the disclaimant and shall contain all of the 56
following: 57

       (a) A reference to the donative instrument; 58

       (b) A description of the property, part of property, or 59
interest disclaimed, and of any fiduciary right, power, privilege, 60
or immunity disclaimed; 61

       (c) A declaration of the disclaimer and its extent. 62

       (4) The guardian of the estate of a minor or an incompetent, 63
or the personal representative of a deceased person, whether or 64
not authorized by the instrument to disclaim, with the consent of 65
the probate division of the court of common pleas, may disclaim, 66
in whole or in part, the succession to any property, or interest 67
in property, that the ward, if an adult and competent, or the 68
deceased, if living, might have disclaimed. The guardian or 69
personal representative, or any interested person may file an 70
application with the probate division of the court of common pleas 71
that has jurisdiction of the estate, asking that the court order 72
the guardian or personal representative to execute and deliver, 73
file, or record the disclaimer on behalf of the ward or, estate, 74
or deceased person. The court shall order the guardian or personal 75
representative to execute and deliver, file, or record the 76
disclaimer if the court finds, upon hearing after notice to 77
interested parties and such other persons as the court shall 78
direct, that: 79

       (a) It is in the best interests of those interested in the 80
estate of the person and of those who will take the disclaimed 81
interest; 82

       (b) It would not materially, adversely affect the minor or 83
incompetent, or the beneficiaries of the estate of the decedent, 84
taking into consideration other available resources and the age, 85
probable life expectancy, physical and mental condition, and 86
present and reasonably anticipated future needs of the minor or 87
incompetent or the beneficiaries of the estate of the decedent. 88

       A written instrument of disclaimer ordered by the court under 89
this division shall be executed and be delivered, filed, or 90
recorded within the time and in the manner in which the person 91
could have disclaimed if the person were living, an adult, and 92
competent. 93

       (C) A partial disclaimer of property that is subject to a 94
burdensome interest created by the donative instrument is not 95
effective unless the disclaimed property constitutes a gift that 96
is separate and distinct from undisclaimed gifts. 97

       (D) The disclaimant shall deliver, file, or record the 98
disclaimer, or cause the same to be done, ~~not later than nine~~ 99
~~months~~prior to accepting any benefits of the disclaimed interest 100
and at any time after the latest of the following dates: 101

       (1) The effective date of the donative instrument if both the 102
taker and the taker's interest in the property are finally 103
ascertained on that date; 104

       (2) The date of the occurrence of the event upon which both 105
the taker and the taker's interest in the property become finally 106
ascertainable; 107

       (3) The date on which the disclaimant attains ~~twenty-one~~ 108
eighteen years of age or is no longer an incompetent, without 109
tendering or repaying any benefit received while the disclaimant 110
was under ~~twenty-one~~eighteen years of age or an incompetent, and 111
even if a guardian of a minor or incompetent had filed an 112
application pursuant to division (B)(4) of this section and the 113
probate division of the court of common pleas involved did not 114
consent to the guardian executing a disclaimer. 115

       (E) No disclaimer instrument is effective under this section 116
if either of the following applies under the terms of the 117
disclaimer instrument: 118

       (1) The disclaimant has power to revoke the disclaimer. 119

       (2) The disclaimant may transfer, or direct to be 120
transferred, to self the entire legal and equitable ownership of 121
the property subject to the disclaimer instrument. 122

       (F)(1) Subject to division (F)(2) of this section, if the 123
interest disclaimed is created by a nontestamentary instrument, 124
the disclaimer instrument shall be delivered personally or by 125
certified mail to the trustee or other person who has legal title 126
to, or possession of, the property disclaimed. 127

       (2) If the interest disclaimed is created by a testamentary 128
instrument, by intestate succession, by a transfer on death deed 129
pursuant to section 5302.22 of the Revised Code, or by a 130
certificate of title to a motor vehicle, watercraft, or outboard 131
motor that evidences ownership of the motor vehicle, watercraft, 132
or outboard motor that is transferable on death pursuant to 133
section 2131.13 of the Revised Code, the disclaimer instrument 134
shall be filed in the probate division of the court of common 135
pleas in the county in which proceedings for the administration of 136
the decedent's estate have been commenced, and an executed copy of 137
the disclaimer instrument shall be delivered personally or by 138
certified mail to the personal representative of the decedent's 139
estate. 140

       (3) If no proceedings for the administration of the 141
decedent's estate have been commenced, the disclaimer instrument 142
shall be filed in the probate division of the court of common 143
pleas in the county in which proceedings for the administration of 144
the decedent's estate might be commenced according to law. The 145
disclaimer instrument shall be filed and indexed, and fees 146
charged, in the same manner as provided by law for an application 147
to be appointed as personal representative to administer the 148
decedent's estate. The disclaimer is effective whether or not 149
proceedings thereafter are commenced to administer the decedent's 150
estate. If proceedings thereafter are commenced for the 151
administration of the decedent's estate, they shall be filed 152
under, or consolidated with, the case number assigned to the 153
disclaimer instrument. 154

       (4) If an interest in real estate is disclaimed, an executed 155
copy of the disclaimer instrument also shall be recorded in the 156
office of the recorder of the county in which the real estate is 157
located. The disclaimer instrument shall include a description of 158
the real estate with sufficient certainty to identify it, and 159
shall contain a reference to the record of the instrument that 160
created the interest disclaimed. If title to the real estate is 161
registered under Chapters 5309. and 5310. of the Revised Code, the 162
disclaimer interest shall be entered as a memorial on the last 163
certificate of title. A spouse of a disclaimant has no dower or 164
other interest in the real estate disclaimed. 165

       (G) ~~Unless the~~If a donative instrument expressly provides 166
~~that, if there is~~for the distribution of property, part of 167
property, or interest in property if there is a disclaimer, ~~there~~ 168
~~shall not be any acceleration of remainders or other interests,~~ 169
the property, part of property, or interest disclaimed shall be 170
distributed or disposed of, and accelerated or not accelerated, in 171
accordance with the donative instrument. In the absence of express 172
provisions to the contrary in the donative instrument, the 173
property, part of property, or interest in property disclaimed, 174
and any future interest that is to take effect in possession or 175
enjoyment at or after the termination of the interest disclaimed, 176
shall descend, be distributed, or otherwise be disposed of, and 177
shall be accelerated, in the following manner: 178

       (1) If intestate or testate succession is disclaimed, as if 179
the disclaimant had predeceased the decedent; 180

       (2) If the disclaimant is one designated to take pursuant to 181
a power of appointment exercised by a testamentary instrument, as 182
if the disclaimant had predeceased the donee of the power; 183

       (3) If the donative instrument is a nontestamentary 184
instrument, as if the disclaimant had died before the effective 185
date of the nontestamentary instrument; 186

       (4) If the disclaimer is of a fiduciary right, power, 187
privilege, or immunity, as if the right, power, privilege, or 188
immunity was never in the donative instrument. 189

       (H) A disclaimer pursuant to this section is effective as of, 190
and relates back for all purposes to, the date upon which the 191
taker and the taker's interest have been finally ascertained. 192

       (I) A disclaimant who has a present and future interest in 193
property, and disclaims the disclaimant's present interest in 194
whole or in part, is considered to have disclaimed the 195
disclaimant's future interest to the same extent, unless a 196
contrary intention appears in the disclaimer instrument or the 197
donative instrument. A disclaimant is not precluded from 198
receiving, as an alternative taker, a beneficial interest in the 199
property disclaimed, unless a contrary intention appears in the 200
disclaimer instrument or in the donative instrument. 201

       (J) The disclaimant's right to disclaim under this section is 202
barred if~~, before the expiration of the period within which the~~ 203
~~disclaimant may disclaim the interest,~~ the disclaimant does any of 204
the following: 205

       (1) Assigns, conveys, encumbers, pledges, or transfers, or 206
contracts to assign, convey, encumber, pledge, or transfer, the 207
property or any interest in it; 208

       (2) Waives in writing the disclaimant's right to disclaim and 209
executes and delivers, files, or records the waiver in the manner 210
provided in this section for a disclaimer instrument; 211

       (3) Accepts the property or an interest in it; 212

       (4) Permits or suffers a sale or other disposition of the 213
property pursuant to judicial action against the disclaimant. 214

       (K) ANeither a fiduciary's application for appointment or 215
assumption of duties as a fiduciary ~~does not waive~~nor a 216
beneficiary's application for appointment as a personal 217
representative or fiduciary waives or ~~bar~~bars the disclaimant's 218
right to disclaim a right, power, privilege, or immunity as a 219
personal representative or fiduciary or the beneficiary's right to 220
disclaim property. 221

       (L) The right to disclaim under this section exists 222
irrespective of any limitation on the interest of the disclaimant 223
in the nature of a spendthrift provision or similar restriction. 224

       (M) A disclaimer instrument or written waiver of the right to 225
disclaim that has been executed and delivered, filed, or recorded 226
as required by this section is final and binding upon all persons. 227

       (N) The right to disclaim and the procedures for disclaimer 228
established by this section are in addition to, and do not exclude 229
or abridge, any other rights or procedures ~~existing~~that exist or 230
formerly existed under any other section of the Revised Code or at 231
common law to assign, convey, release, refuse to accept, renounce, 232
waive, or disclaim property. 233

       (O)(1) No person is liable for distributing or disposing of 234
property in a manner inconsistent with the terms of a valid 235
disclaimer if the distribution or disposition is otherwise proper 236
and the person has no actual knowledge of the disclaimer. 237

       (2) No person is liable for distributing or disposing of 238
property in reliance upon the terms of a disclaimer that is 239
invalid because the right of disclaimer has been waived or barred 240
if the distribution or disposition is otherwise proper and the 241
person has no actual knowledge of the facts that constitute a 242
waiver or bar to the right to disclaim. 243

       (P)(1) A disclaimant may disclaim pursuant to this section 244
any interest in property that is in existence on September 27, 245
1976, if either the interest in the property or the taker of the 246
interest in the property is not finally ascertained on that date. 247

       (2) No disclaimer executed pursuant to this section destroys 248
or diminishes an interest in property that exists on September 27, 249
1976, in any person other than the disclaimant. 250

       (Q) This section may be applied separately to different 251
interests or powers created in the disclaimant by the same 252
testamentary or nontestamentary instrument. 253

       Section 2. That existing section 5815.36 of the Revised Code 254
is hereby repealed. 255

       Section 3. The amendments to divisions (A), (B), (G), (K), 256
(N), and (Q) of section 5815.36 of the Revised Code contained in 257
Section 1 of this act are intended to clarify and be declaratory 258
of the law as it existed prior to the enactment of this act and 259
shall be construed accordingly. 260

       Section 4. The General Assembly recognizes that section 2518 261
of the Internal Revenue Code defines a qualified disclaimer, in 262
part, as a written refusal by a person to accept an interest in 263
property that is received by the transferor of the interest within 264
nine months after the later of the date on which the transfer 265
creating the interest is made and the date on which the person 266
attains twenty-one years of age. By amending division (D) of 267
section 5815.36 of the Revised Code to eliminate a reference to 268
the nine-month period, the General Assembly intends to create the 269
possibility that some disclaimers governed by the law of this 270
state will be qualified under section 2518 of the Internal Revenue 271
Code and some will not be qualified under that section. 272

Section 1. That section 5815.36 of the Revised Code be	4
amended to read as follows:	5

(1) "Disclaimant" means any person, any guardian or personal	7
representative of a person or estate of a person, or any	8
attorney-in-fact or agent of a person having a general or specific	9
authority to act granted in a written instrument, who is any of	10
the following:	11

(a) With respect to testamentary instruments and intestate	12
succession, an heir, next of kin, devisee, legatee, donee, person	13
succeeding to a disclaimed interest, surviving joint tenant,	14
surviving tenant by the entireties, surviving tenant of a tenancy	15
with a right of survivorship, beneficiary under a testamentary	16
instrument, or person designated to take pursuant to a power of	17
appointment exercised by a testamentary instrument;	18

(b) With respect to nontestamentary instruments, a grantee,	19
donee, person succeeding to a disclaimed interest, surviving joint	20
tenant, surviving tenant by the entireties, surviving tenant of a	21
tenancy with a right of survivorship, beneficiary under a	22
nontestamentary instrument, or person designated to take pursuant	23
to a power of appointment exercised by a nontestamentary	24
instrument;	25

(c) With respect to fiduciary rights, privileges, powers, and	26
immunities, a fiduciary under a testamentary or nontestamentary	27
instrument. ~~This~~Division (A)(1)(c) of this section does not	28
authorize a fiduciary who disclaims fiduciary rights, privileges,	29
powers, and immunities to ~~disclaim~~cause the rights of	30
~~beneficiaries~~any beneficiary to be disclaimed unless the	31
instrument creating the fiduciary relationship authorizes the	32
fiduciary to make such a disclaimer.	33

(d) Any person entitled to take an interest in property upon	34
the death of a person or upon the occurrence of any other event.	35

(2) "Personal representative" includes any fiduciary as	36
defined in section 2109.01 of the Revised Code and any executor,	37
trustee, guardian, or other person or entity having a fiduciary	38
relationship with regard to any interest in property passing to	39
the fiduciary, executor, trustee, guardian, or other person or	40
entity by reason of a disclaimant's death.	41

(3) "Property" means all forms of property, real and	42
personal, tangible and intangible.	43

(B)(1) A disclaimant, other than a fiduciary under an	44
instrument who is not authorized by the instrument to disclaim the	45
interest of a beneficiary, may disclaim, in whole or in part, the	46
succession to any property by executing and by delivering, filing,	47
or recording a written disclaimer instrument in the manner	48
provided in this section.	49

(2) A disclaimant who is a fiduciary under an instrument may	50
disclaim, in whole or in part, any right, power, privilege, or	51
immunity, by executing and by delivering, filing, or recording a	52
written disclaimer instrument in the manner provided in this	53
section.	54

(3) The written instrument of disclaimer shall be signed and	55
acknowledged by the disclaimant and shall contain all of the	56
following:	57

(b) A description of the property, part of property, or	59
interest disclaimed, and of any fiduciary right, power, privilege,	60
or immunity disclaimed;	61

(4) The guardian of the estate of a minor or an incompetent,	63
or the personal representative of a deceased person, whether or	64
not authorized by the instrument to disclaim, with the consent of	65
the probate division of the court of common pleas, may disclaim,	66
in whole or in part, the succession to any property, or interest	67
in property, that the ward, if an adult and competent, or the	68
deceased, if living, might have disclaimed. The guardian or	69
personal representative, or any interested person may file an	70
application with the probate division of the court of common pleas	71
that has jurisdiction of the estate, asking that the court order	72
the guardian or personal representative to execute and deliver,	73
file, or record the disclaimer on behalf of the ward or, estate,	74
or deceased person. The court shall order the guardian or personal	75
representative to execute and deliver, file, or record the	76
disclaimer if the court finds, upon hearing after notice to	77
interested parties and such other persons as the court shall	78
direct, that:	79

(a) It is in the best interests of those interested in the	80
estate of the person and of those who will take the disclaimed	81
interest;	82

(b) It would not materially, adversely affect the minor or	83
incompetent, or the beneficiaries of the estate of the decedent,	84
taking into consideration other available resources and the age,	85
probable life expectancy, physical and mental condition, and	86
present and reasonably anticipated future needs of the minor or	87
incompetent or the beneficiaries of the estate of the decedent.	88

A written instrument of disclaimer ordered by the court under	89
this division shall be executed and be delivered, filed, or	90
recorded within the time and in the manner in which the person	91
could have disclaimed if the person were living, an adult, and	92
competent.	93

(C) A partial disclaimer of property that is subject to a	94
burdensome interest created by the donative instrument is not	95
effective unless the disclaimed property constitutes a gift that	96
is separate and distinct from undisclaimed gifts.	97

(D) The disclaimant shall deliver, file, or record the	98
disclaimer, or cause the same to be done, ~~not later than nine~~	99
~~months~~prior to accepting any benefits of the disclaimed interest	100
and at any time after the latest of the following dates:	101

(1) The effective date of the donative instrument if both the	102
taker and the taker's interest in the property are finally	103
ascertained on that date;	104

(2) The date of the occurrence of the event upon which both	105
the taker and the taker's interest in the property become finally	106
ascertainable;	107

(3) The date on which the disclaimant attains ~~twenty-one~~	108
eighteen years of age or is no longer an incompetent, without	109
tendering or repaying any benefit received while the disclaimant	110
was under ~~twenty-one~~eighteen years of age or an incompetent, and	111
even if a guardian of a minor or incompetent had filed an	112
application pursuant to division (B)(4) of this section and the	113
probate division of the court of common pleas involved did not	114
consent to the guardian executing a disclaimer.	115

(E) No disclaimer instrument is effective under this section	116
if either of the following applies under the terms of the	117
disclaimer instrument:	118

(2) The disclaimant may transfer, or direct to be	120
transferred, to self the entire legal and equitable ownership of	121
the property subject to the disclaimer instrument.	122

(F)(1) Subject to division (F)(2) of this section, if the	123
interest disclaimed is created by a nontestamentary instrument,	124
the disclaimer instrument shall be delivered personally or by	125
certified mail to the trustee or other person who has legal title	126
to, or possession of, the property disclaimed.	127

(2) If the interest disclaimed is created by a testamentary	128
instrument, by intestate succession, by a transfer on death deed	129
pursuant to section 5302.22 of the Revised Code, or by a	130
certificate of title to a motor vehicle, watercraft, or outboard	131
motor that evidences ownership of the motor vehicle, watercraft,	132
or outboard motor that is transferable on death pursuant to	133
section 2131.13 of the Revised Code, the disclaimer instrument	134
shall be filed in the probate division of the court of common	135
pleas in the county in which proceedings for the administration of	136
the decedent's estate have been commenced, and an executed copy of	137
the disclaimer instrument shall be delivered personally or by	138
certified mail to the personal representative of the decedent's	139
estate.	140

(3) If no proceedings for the administration of the	141
decedent's estate have been commenced, the disclaimer instrument	142
shall be filed in the probate division of the court of common	143
pleas in the county in which proceedings for the administration of	144
the decedent's estate might be commenced according to law. The	145
disclaimer instrument shall be filed and indexed, and fees	146
charged, in the same manner as provided by law for an application	147
to be appointed as personal representative to administer the	148
decedent's estate. The disclaimer is effective whether or not	149
proceedings thereafter are commenced to administer the decedent's	150
estate. If proceedings thereafter are commenced for the	151
administration of the decedent's estate, they shall be filed	152
under, or consolidated with, the case number assigned to the	153
disclaimer instrument.	154

(4) If an interest in real estate is disclaimed, an executed	155
copy of the disclaimer instrument also shall be recorded in the	156
office of the recorder of the county in which the real estate is	157
located. The disclaimer instrument shall include a description of	158
the real estate with sufficient certainty to identify it, and	159
shall contain a reference to the record of the instrument that	160
created the interest disclaimed. If title to the real estate is	161
registered under Chapters 5309. and 5310. of the Revised Code, the	162
disclaimer interest shall be entered as a memorial on the last	163
certificate of title. A spouse of a disclaimant has no dower or	164
other interest in the real estate disclaimed.	165

(G) ~~Unless the~~If a donative instrument expressly provides	166
~~that, if there is~~for the distribution of property, part of	167
property, or interest in property if there is a disclaimer, ~~there~~	168
~~shall not be any acceleration of remainders or other interests,~~	169
the property, part of property, or interest disclaimed shall be	170
distributed or disposed of, and accelerated or not accelerated, in	171
accordance with the donative instrument. In the absence of express	172
provisions to the contrary in the donative instrument, the	173
property, part of property, or interest in property disclaimed,	174
and any future interest that is to take effect in possession or	175
enjoyment at or after the termination of the interest disclaimed,	176
shall descend, be distributed, or otherwise be disposed of, and	177
shall be accelerated, in the following manner:	178

(1) If intestate or testate succession is disclaimed, as if	179
the disclaimant had predeceased the decedent;	180

(2) If the disclaimant is one designated to take pursuant to	181
a power of appointment exercised by a testamentary instrument, as	182
if the disclaimant had predeceased the donee of the power;	183