Montana Intestate Succession

Disclaimer of Property Interest-Montana

Title 72 ESTATES, TRUSTS, AND FIDUCIARY RELATIONSHIPS

CHAPTER 2 UPC -- INTESTACY, WILLS, AND DONATIVE TRANSFERS

Part 8 General Provisions Concerning Probate and Nonprobate Transfers

Disclaimer of property interests.

(1) (a) A person or the representative of a person to whom an interest in or with respect to property or an interest in the property devolves by whatever means may disclaim it in whole or in part by delivering or filing a written disclaimer under this section.

(b) The right to disclaim exists notwithstanding:

(i) any limitation on the interest of the disclaimant in the nature of a spendthrift provision or similar restriction; or

(ii) any restriction or limitation on the right to disclaim contained in the governing instrument.

(c) For purposes of this subsection (1), the "representative of a person" includes a personal representative of a decedent; a conservator of a disabled person; a guardian of a minor or incapacitated person; a guardian ad litem of a minor, an incapacitated person, an unborn person, an unascertained person, or a person whose identity or address is unknown; and an agent acting on behalf of the person within the authority of a power of attorney. The representative of a person may rely on a general family benefit accruing to the living members of the represented person's family as a basis for making a disclaimer.

(2) The following rules govern the time when a disclaimer must be filed or delivered:

(a) If the property or interest has devolved to the disclaimant under a testamentary instrument or by the laws of intestacy, the disclaimer must be filed, if of a present interest, not later than 9 months after the death of the deceased owner or deceased donee of a power of appointment and, if of a future interest, not later than 9 months after the event determining that the taker of the property or interest is finally ascertained and the taker's interest is indefeasibly vested. The disclaimer must be filed in the court of the county in which proceedings for the administration of the estate of the deceased owner or deceased donee of the power have been commenced. A copy of the disclaimer must be delivered in person or mailed by certified mail, return receipt requested, to any personal representative or other fiduciary of the decedent or donee of the power.

(b) If a property or interest has devolved to the disclaimant under a nontestamentary instrument or contract, the disclaimer must be delivered or filed, if of a present interest, not later than 9 months after the effective date of the nontestamentary instrument or contract and, if of a future interest, not later than 9 months after the event determining that the taker of the property or interest is finally ascertained and the taker's interest is indefeasibly vested. If the person entitled to disclaim does not know of the existence of the interest, the disclaimer must be delivered or filed not later than 9 months after the person learns of the existence of the interest. The effective date of a revocable instrument or contract is the date on which the maker no longer has power to revoke it or to transfer to the maker or another the entire legal and equitable ownership of the interest. The disclaimer or a copy of the disclaimer must be delivered in person or mailed by certified mail, return receipt requested, to the person who has legal title to or possession of the interest disclaimed.

(c) A surviving joint tenant may disclaim as a separate interest any property or interest in property devolving to the surviving joint tenant by right of survivorship within 9 months after the death of the deceased joint owner, regardless of whether the surviving joint tenant contributed to the purchase of jointly held property or benefited from the jointly held property prior to the other joint tenant's death.

(d) If real property or an interest in the property is disclaimed, a copy of the disclaimer may be recorded in the office of the clerk and recorder of the county in which the property or interest disclaimed is located.

(3) The disclaimer must:

(a) describe the property or interest disclaimed;

(b) declare the disclaimer and extent of the disclaimer; and

(c) be signed by the disclaimant.

(4) The following are the effects of a disclaimer:

(a) If property or an interest in property devolves to a disclaimant under a testamentary instrument, under a power of appointment exercised by a testamentary instrument, or under the laws of intestacy and the decedent has not provided for another disposition of that interest, should it be disclaimed, or of disclaimed or failed interests in general, the disclaimed interest devolves as if the disclaimant had predeceased the decedent, but if by law or under the testamentary instrument the descendants of the disclaimant would share in the disclaimed interest by representation or otherwise were the disclaimant to predecease the decedent, then the disclaimed interest passes by representation, or passes as directed by the governing instrument, to the descendants of the disclaimant who survive the decedent. A future interest that takes effect in possession or enjoyment after the termination of the estate or interest disclaimed takes effect as if the disclaimant had predeceased the decedent. A disclaimer relates back for all purposes to the date of the death of the decedent.

(b) If property or an interest in property devolves to a disclaimant under a nontestamentary instrument or contract and the instrument or contract does not provide for another disposition of that interest, should it be disclaimed, or of disclaimed or failed interests in general, the disclaimed interest devolves as if the disclaimant had predeceased the effective date of the instrument or contract, but if by law or under the nontestamentary instrument or contract the descendants of the disclaimant would share in the disclaimed interest by representation or otherwise were the disclaimant to predecease the effective date of the instrument, then the disclaimed interest passes by representation, or passes as directed by the governing instrument, to the descendants of the disclaimant who survive the effective date of the instrument. A disclaimer relates back for all purposes to that date. A future interest that takes effect in possession or enjoyment at or after the termination of the disclaimed interest takes effect as if the disclaimant had died before the effective date of the instrument or contract that transferred the disclaimed interest.

(c) The disclaimer or the written waiver of the right to disclaim is binding upon the disclaimant or person waiving and on all persons claiming through or under either of them.

(5) The right to disclaim property or an interest in the property is barred by:

(a) an assignment, conveyance, encumbrance, pledge, or transfer of the property or interest or a contract therefor;

(b) a written waiver of the right to disclaim;

(c) an acceptance of the property or interest or benefit under it; or

(d) a sale of the property or interest under judicial sale made before the disclaimer is made.

(6) This section does not abridge the right of a person to waive, release, disclaim, or renounce property or an interest in property under any other statute.

(7) An interest in property that exists on October 1, 1993, as to which, if a present interest, the time for filing a disclaimer under this section has not expired or, if a future interest, the interest has not become indefeasibly vested or the taker finally ascertained may be disclaimed within 9 months after October 1, 1993.

History: En. 91A-2-801 by Sec. 1, Ch. 365, L. 1974; R.C.M. 1947, 91A-2-801; amd. Sec. 1, Ch. 52, L. 1981; amd. Sec. 1, Ch. 511, L. 1983; amd. Sec. 5, Ch. 494, L. 1993; Sec. 72-2-101, MCA 1991; redes. 72-2-811 by Code Commissioner, 1993; amd. Sec. 20, Ch. 592, L. 1995; amd. Sec. 4, Ch. 290, L. 1999.

Official Comments: Purpose and Scope of Revisions.

This section brings into the Code the Uniform Disclaimer of Property Interests Act, replacing the prior incorporation of the Uniform Disclaimer of Transfers by Will, Intestacy or Appointment Act. The reason for incorporating the broader Act is that the scope of Article II [Title 72, chapter 2] has now been expanded to cover dispositive provisions not contained in wills.

Explanation of Revisions.

Only three revisions of the Uniform Disclaimer of Property Interests Act are adopted at this time, though the Joint Editorial Board believes that this and the other Uniform Disclaimer Acts are in need of revision in other respects.

Subsection (a) [72-2-811(1)]. Subsection (a) [72-2-811(1)] is revised in two respects. First, the right to disclaim is extended to a decedent through his or her personal representative. The Uniform Disclaimer of Property Interests Act does not authorize disclaimers on behalf of a deceased person. Second, the sentence authorizing a disclaimer despite a limitation or restriction in the governing instrument is clarified to leave no doubt that an explicit restriction or limitation on the right to disclaim in the governing instrument is ineffective.

Subsection (d) [72-2-811(4)]. The third revision clarifies the effect of a disclaimer. The Uniform Disclaimer of Property Interests Act states that "it" shall devolve "as if the disclaimant had predeceased the decedent." Literally interpreted, the word "it" refers to "the disclaimed interest," not to the estate as a whole. (One of the changes above is to make this point unmistakable by replacing "it" with "the disclaimed interest.")

Unfortunately, even though the word "it" refers to the disclaimed interest, not to the estate as a whole, there is still a plausible interpretation of the phrase "the disclaimed interest devolves as if the disclaimant had predeceased the decedent" that does not produce the desired result. The desired result is to prevent an heir, for example, from using a disclaimer to effect a change in the division of an intestate's estate. To illustrate this point, consider the following example:

Under these facts, G's intestate estate is divided into two equal parts: A takes half and B's child, Z, takes the other half. Suppose, however, that A files a disclaimer. The desired effect of that disclaimer is to prevent A from affecting the basic division of G's intestate estate by this maneuver. If, however, the disclaimer statute merely provides that the "disclaimed interest" devolves as though the disclaimant (A) had predeceased the decedent, then A's one half interest would not pass only to X and Y, but to X, Y, and Z. To prevent this possible interpretation of that language, the "but if" phrase is added to (d)(1) [72-2-811(4)(a)] and (d)(2) [72-2-811(4)(b)]. This added phrase explicitly provides that A's disclaimed interest passes to A's descendants, if A left any descendants.

Time Allowed for Filing Disclaimer.

It should be noted that there may be a discrepancy between the time allowed for filing a disclaimer under this section (and under the freestanding Uniform Acts) and the time allowed for filing a qualified disclaimer under the Internal Revenue Code § 2518. Lawyers are cautioned to check both the state and federal disclaimer statutes before advising clients, especially with respect to disclaimers of future interests.

Compiler's Comments:

1999 Amendment: Chapter 290 in (2)(c) near beginning after "devolving to the" inserted "surviving" and inserted "within 9 months after the death of the deceased joint owner, regardless of whether the surviving joint tenant contributed to the purchase of jointly held property or benefited from the jointly held property prior to the other joint tenant's death" and at end deleted sentence that read: "A surviving joint tenant may disclaim the entire interest in any property or interest in the property that is the subject of a joint tenancy devolving to the joint tenant if the joint tenancy was created by act of a deceased joint tenant, the survivor did not join in creating the joint tenancy, and the survivor has not accepted a benefit under it." Amendment effective April 9, 1999.

1995 Amendment: Chapter 592 in first sentence of (4)(a) and (4)(b) substituted "share in the disclaimed interest by representation or otherwise" for "take the disclaimant's share by representation" and near end of both sentences, after "representation", inserted "or passes as directed by the governing instrument"; and made minor changes in style.

1993 Amendment: Chapter 494 substituted current text concerning disclaimer of property interests for former text that read:

"(1) A person or his personal representative or the representative of an incapacitated or protected person who is an heir, devisee, person succeeding to a renounced interest, donee, appointee, grantee, recipient, or beneficiary under a trust or other nontestamentary instrument or under a power of appointment exercised by a testamentary or nontestamentary instrument, surviving joint owner or surviving joint tenant, or beneficiary or owner of an insurance contract or any incident of ownership therein may renounce, in whole or in part, the right of succession to any property or interest therein, including a future interest, by filing a written renunciation under this section. The instrument shall:

(a) describe the property or interest renounced;

(b) be signed by the person renouncing; and

(c) declare the renunciation and the extent thereof.

(2) The court may direct or permit a trustee under a testamentary or nontestamentary instrument to renounce, modify, amend, or otherwise deviate from any restriction on or power of administration, management, or allocation of benefit upon finding that such restriction on the exercise of the power may defeat or impair the accomplishment of the purposes of the trust, whether by the imposition of tax, the allocation of beneficial interest inconsistent with such purposes, or by other reason. Such authority shall be exercised, after hearing and upon notice to all known persons beneficially interested in such trust, in the manner directed by the court.

(3) The instrument of renunciation must be received by the transferor of the interest, his legal representative, the personal representative of a deceased transferor, the trustee of any trust in which the interest being renounced exists, or the holder of the legal title to the property to which the interest relates. To be effective for purposes of determining inheritance and estate taxes, the instrument must be received not later than the date which is 9 months after the later of the date on which the transfer creating the interest in a person is made or the date on which the person attains 18 years of age. If the circumstances that establish the right of a person to renounce an interest arise as a result of the death of an individual, the instrument must also be filed in the court of the county where proceedings concerning the decedent's estate are pending or where they would be pending if commenced. If real property or an interest therein is renounced, a copy of the renunciation may be recorded in the office of the county clerk and recorder of the county in which the real estate is situated. No person entitled to a copy of the instrument is liable for any proper distribution or disposition made without actual notice of the renunciation, and no person making a proper distribution or disposition in reliance upon the renunciation is liable for any such distribution or disposition in the absence of actual notice that an action has been instituted contesting the validity of the renunciation.

(4) Unless the transferor of the interest has otherwise provided, the property or interest renounced devolves as though the person renouncing had predeceased the decedent or, if the appointment was exercised by a testamentary instrument, as though the person renouncing had predeceased the donee of the power. A future interest that takes effect in possession or enjoyment after the termination of the estate or interest renounced takes effect as though the person renouncing had predeceased the decedent or the donee of the power. A renunciation relates back for all purposes to the date of the death of the decedent or the donee of the power.

(5) (a) The right to renounce property or an interest therein is barred by:

(i) an assignment, conveyance, encumbrance, pledge, or transfer of property or interest, or a contract therefor;

(ii) a written waiver of the right to renounce;

(iii) an acceptance of the property or interest or benefit thereunder; or

(iv) a sale of the property or interest under judicial sale made before the renunciation is effected.

(b) The right to renounce exists notwithstanding any limitation on the interest of the person renouncing in the nature of a spendthrift provision or similar restriction.

(c) A renunciation or a written waiver of the right to renounce is binding upon the person renouncing or person waiving and all persons claiming through or under him.

(6) This section does not abridge the right of a person to waive, release, disclaim, or renounce property or an interest therein under any other statute.

(7) Within 30 days of receipt of a written instrument of renunciation by the transferor of the interest, the renouncer, his legal representative, the personal representative of the decedent, the trustee of any trust in which the interest being renounced exists, or the holder of the legal title to the property to which the interest relates, as the case may be, shall attempt to notify in writing those persons who are known or ascertainable with reasonable diligence who are recipients or potential recipients of the renounced interest of the renunciation and the interest or potential interest such recipient will receive as a result of the renunciation.

(8) Any interest in property which exists on July 1, 1983, may be renounced after October 1, 1983, as provided in this section. An interest that has arisen prior to July 1, 1983, in any person other than the person renouncing is not destroyed or diminished by any action of the person renouncing taken under this section."

Saving Clause: Section 136, Ch. 494, L. 1993, was a saving clause.

1983 Amendment: In (1), after "renounced interest" substituted "donee, appointee, grantee, recipient, or beneficiary under a . . . ownership therein" (see 1983 Session Law for complete text) for "beneficiary under a testamentary instrument, or appointee under a power of appointment exercised by a testamentary instrument"; deleted former (2), which read:

"(a) An instrument renouncing a present interest shall be filed within 9 months after the death of the decedent or the donee of the power.

(b) An instrument renouncing a future interest may be filed not later than 9 months after the event determining that the taker of the property or interest is finally ascertained and his interest is indefeasibly vested.

(c) The renunciation must be filed in the court of the county in which proceedings have been commenced for the administration of the estate of the deceased owner or deceased donee of the power or, if they have not been commenced, in which they could be commenced. A copy of the renunciation shall be delivered in person or mailed by registered or certified mail to any personal representative or other fiduciary of the decedent or donee of the power. If real property or an interest therein is renounced, a copy of the renunciation may be recorded in the office of the county clerk of the county in which the real estate is situated."; inserted (2) allowing trustee renunciation; inserted (3) relating to receipt of instrument of renunciation and date of renunciation; in (4) near beginning of first sentence substituted "transferor of the interest" for "decedent or donee of the power"; deleted former (6), which read: "An interest in property which exists on July 1, 1975, as to which, if a present interest, the time for filing a renunciation under the Uniform Probate Code has not expired, or if a future interest, the interest has not become indefeasibly vested or the taker finally ascertained, may be renounced within 9 months after July 1, 1975."; inserted (7) concerning notice of renunciation; and inserted (8) concerning renunciation of interest in property arising prior to and existing on July 1, 1983.

Title 72, Chap. 2, Par 8, §72-2-811.