Full Text of HB4702 100th General Assembly
HB4702eng 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning civil law.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Article 1. General provisions. | 5 | | Section 101. Short title. This Act may be cited as the | 6 | | Uniform Powers of Appointment Act. | 7 | | Section 102. Definitions. In this Act:
| 8 | | (1) "Appointee" means a person to which a powerholder makes | 9 | | an appointment of appointive property.
| 10 | | (2) "Appointive property" means the property or property | 11 | | interest subject to a power of appointment.
| 12 | | (3) "Blanket-exercise clause" means a clause in an | 13 | | instrument which exercises a power of appointment and is not a | 14 | | specific-exercise clause. The term includes a clause that:
| 15 | | (A) expressly uses the words "any power" in exercising | 16 | | any power of appointment the powerholder has;
| 17 | | (B) expressly uses the words "any property" in | 18 | | appointing any property over which the powerholder has a | 19 | | power of appointment; or
| 20 | | (C) disposes of all property subject to disposition by | 21 | | the powerholder.
| 22 | | (4) "Donor" means a person that creates a power of |
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| 1 | | appointment.
| 2 | | (5) "Exclusionary power of appointment" means a power of | 3 | | appointment exercisable in favor of any one or more of the | 4 | | permissible appointees to the exclusion of the other | 5 | | permissible appointees.
| 6 | | (6) "General power of appointment" means a power of | 7 | | appointment exercisable in favor of a powerholder, the | 8 | | powerholder's estate, a creditor of the powerholder, or a | 9 | | creditor of the powerholder's estate.
| 10 | | (7) "Gift-in-default clause" means a clause identifying a | 11 | | taker in default of appointment.
| 12 | | (8) "Impermissible appointee" means a person that is not a | 13 | | permissible appointee.
| 14 | | (9) "Instrument" means a writing.
| 15 | | (10) "Nongeneral power of appointment" means a power of | 16 | | appointment that is not a general power of appointment.
| 17 | | (11) "Permissible appointee" means a person in whose favor | 18 | | a powerholder may exercise a power of appointment.
| 19 | | (12) "Person" means an individual, estate, business or | 20 | | nonprofit entity, public corporation, government or | 21 | | governmental subdivision, agency, or instrumentality, or other | 22 | | legal entity.
| 23 | | (13) "Power of appointment" means a power that enables a | 24 | | powerholder acting in a nonfiduciary capacity to designate a | 25 | | recipient of an ownership interest in or another power of | 26 | | appointment over the appointive property. The term does not |
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| 1 | | include a power of attorney.
| 2 | | (14) "Powerholder" means a person in which a donor creates | 3 | | a power of appointment.
| 4 | | (15) "Presently exercisable power of appointment" means a | 5 | | power of appointment exercisable by the powerholder at the | 6 | | relevant time. The term: | 7 | | (A) includes a power of appointment exercisable only | 8 | | after the occurrence of a specified event, the satisfaction | 9 | | of an ascertainable standard, or the passage of a specified | 10 | | time only after:
| 11 | | (i) the occurrence of the specified event;
| 12 | | (ii) the satisfaction of the ascertainable | 13 | | standard; or
| 14 | | (iii) the passage of the specified time; and
| 15 | | (B) does not include a power exercisable only at the | 16 | | powerholder's death. | 17 | | (16) "Record" means information that is inscribed on a | 18 | | tangible medium or that is stored in an electronic or other | 19 | | medium and is retrievable in perceivable form. | 20 | | (17) "Specific-exercise clause" means a clause in an | 21 | | instrument which specifically refers to and exercises a | 22 | | particular power of appointment.
| 23 | | (18) "Taker in default of appointment" means a person that | 24 | | takes part or all of the appointive property to the extent the | 25 | | powerholder does not effectively exercise the power of | 26 | | appointment.
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| 1 | | (19) "Terms of the instrument" means the manifestation of | 2 | | the intent of the maker of the instrument regarding the | 3 | | instrument's provisions as expressed in the instrument or as | 4 | | may be established by other evidence that would be admissible | 5 | | in a legal proceeding. | 6 | | Section 103. Governing law. Unless the terms of the | 7 | | instrument creating a power of appointment manifest a contrary | 8 | | intent: | 9 | | (1) the creation, revocation, or amendment of the power is | 10 | | governed by the law of the donor's domicile at the relevant | 11 | | time; and
| 12 | | (2) the exercise, release, or disclaimer of the power, or | 13 | | the revocation or amendment of the exercise, release, or | 14 | | disclaimer of the power, is governed by the law of the | 15 | | powerholder's domicile at the relevant time.
| 16 | | Section 104. Common law and principles of equity. The | 17 | | common law and principles of equity supplement this Act, except | 18 | | to the extent modified by this Act or law of this State other | 19 | | than this Act.
| 20 | | Article 2. Creation, revocation, and amendment of power of | 21 | | appointment. | 22 | | Section 201. Creation of power of appointment. |
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| 1 | | (a) A power of appointment is created only if:
| 2 | | (1) the instrument creating the power:
| 3 | | (A) is valid under applicable law; and
| 4 | | (B) except as otherwise provided in subsection | 5 | | (b), transfers the appointive property; and
| 6 | | (2) the terms of the instrument creating the power | 7 | | manifest the donor's intent to create, in a powerholder, a | 8 | | power of appointment over the appointive property | 9 | | exercisable in favor of a permissible appointee.
| 10 | | (b) Subdivision (a)(1)(B) of this Section does not apply to | 11 | | the creation of a power of appointment by the exercise of a | 12 | | power of appointment.
| 13 | | (c) A power of appointment may not be created in a deceased | 14 | | individual.
| 15 | | (d) Subject to an applicable rule against perpetuities, a | 16 | | power of appointment may be created in an unborn or | 17 | | unascertained powerholder.
| 18 | | Section 202. Nontransferability. A powerholder may not | 19 | | transfer a power of appointment. If the powerholder dies | 20 | | without exercising or releasing the power, the power lapses. | 21 | | Section 203. Presumption of unlimited authority. Subject | 22 | | to Section 205, and unless the terms of the instrument creating | 23 | | a power of appointment manifest a contrary intent, the power | 24 | | is:
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| 1 | | (1) presently exercisable;
| 2 | | (2) exclusionary; and
| 3 | | (3) except as otherwise provided in Section 204, | 4 | | general.
| 5 | | Section 204. Exception to presumption of unlimited | 6 | | authority. Unless the terms of the instrument creating a power | 7 | | of appointment manifest a contrary intent, the power is | 8 | | nongeneral if:
| 9 | | (1) the power is exercisable only at the powerholder's | 10 | | death; and
| 11 | | (2) the permissible appointees of the power are a | 12 | | defined and limited class that does not include the | 13 | | powerholder's estate, the powerholder's creditors, or the | 14 | | creditors of the powerholder's estate.
| 15 | | Section 205. Rules of classification. | 16 | | (a) In this Section, "adverse party" means a person with a | 17 | | substantial beneficial interest in property which would be | 18 | | affected adversely by a powerholder's exercise or nonexercise | 19 | | of a power of appointment in favor of the powerholder, the | 20 | | powerholder's estate, a creditor of the powerholder, or a | 21 | | creditor of the powerholder's estate.
| 22 | | (b) If a powerholder may exercise a power of appointment | 23 | | only with the consent or joinder of an adverse party, the power | 24 | | is nongeneral.
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| 1 | | (c) If the permissible appointees of a power of appointment | 2 | | are not defined and limited, the power is exclusionary.
| 3 | | Section 206. Power to revoke or amend. A donor may revoke | 4 | | or amend a power of appointment only to the extent that:
| 5 | | (1) the instrument creating the power is revocable by | 6 | | the donor; or | 7 | | (2) the donor reserves a power of revocation or | 8 | | amendment in the instrument creating the power of | 9 | | appointment.
| 10 | | Article 3. Exercise of power of appointment. | 11 | | Section 301. Requisites for exercise of power of | 12 | | appointment.
A power of appointment is exercised only:
| 13 | | (1) if the instrument exercising the power is valid | 14 | | under applicable law;
| 15 | | (2) if the terms of the instrument exercising the | 16 | | power:
| 17 | | (A) manifest the powerholder's intent to exercise | 18 | | the power; and
| 19 | | (B) subject to Section 304, satisfy the | 20 | | requirements of exercise, if any, imposed by the donor; | 21 | | and
| 22 | | (3) to the extent the appointment is a permissible | 23 | | exercise of the power.
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| 1 | | Section 302. Intent to exercise: determining intent from | 2 | | residuary clause. | 3 | | (a) In this Section:
| 4 | | (1) "Residuary clause" does not include a residuary | 5 | | clause containing a blanket-exercise clause or a | 6 | | specific-exercise clause.
| 7 | | (2) "Will" includes a codicil and a testamentary | 8 | | instrument that revises another will.
| 9 | | (b) A residuary clause in a powerholder's will, or a | 10 | | comparable clause in the powerholder's revocable trust, | 11 | | manifests the powerholder's intent to exercise a power of | 12 | | appointment only if:
| 13 | | (1) the terms of the instrument containing the | 14 | | residuary clause do not manifest a contrary intent;
| 15 | | (2) the power is a general power exercisable in favor | 16 | | of the powerholder's estate;
| 17 | | (3) there is no gift-in-default clause or it is | 18 | | ineffective; and
| 19 | | (4) the powerholder did not release the power.
| 20 | | Section 303. Intent to exercise: after-acquired power. | 21 | | Unless the terms of the instrument exercising a power of | 22 | | appointment manifest a contrary intent:
| 23 | | (1) except as otherwise provided in paragraph (2), a | 24 | | blanket-exercise clause extends to a power acquired by the |
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| 1 | | powerholder after executing the instrument containing the | 2 | | clause; and
| 3 | | (2) if the powerholder is also the donor of the power, | 4 | | the clause does not extend to the power unless there is no | 5 | | gift-in-default clause or it is ineffective.
| 6 | | Section 304. Substantial compliance with donor-imposed | 7 | | formal requirement. A powerholder's substantial compliance | 8 | | with a formal requirement of an appointment imposed by the | 9 | | donor, including a requirement that the instrument exercising | 10 | | the power of appointment make reference or specific reference | 11 | | to the power, is sufficient if:
| 12 | | (1) the powerholder knows of and intends to exercise | 13 | | the power; and
| 14 | | (2) the powerholder's manner of attempted exercise of | 15 | | the power does not impair a material purpose of the donor | 16 | | in imposing the requirement.
| 17 | | Section 305. Permissible appointment. | 18 | | (a) A powerholder of a general power of appointment that | 19 | | permits appointment to the powerholder or the powerholder's | 20 | | estate may make any appointment, including an appointment in | 21 | | trust or creating a new power of appointment, that the | 22 | | powerholder could make in disposing of the powerholder's own | 23 | | property.
| 24 | | (b) A powerholder of a general power of appointment that |
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| 1 | | permits appointment only to the creditors of the powerholder or | 2 | | of the powerholder's estate is restricted to appointing to | 3 | | those creditors.
| 4 | | (c) Unless the terms of the instrument creating a power of | 5 | | appointment manifest a contrary intent, the powerholder of a | 6 | | nongeneral power may:
| 7 | | (1) make an appointment in any form, with any | 8 | | conditions and limitations, including an appointment in | 9 | | trust to any trustee, in favor of a permissible appointee;
| 10 | | (2) create a general or nongeneral power in a | 11 | | permissible appointee that may be exercisable in favor of | 12 | | persons other than permissible appointees of the original | 13 | | nongeneral power; or | 14 | | (3) create a nongeneral power in any person to appoint | 15 | | to one or more of the permissible appointees of the | 16 | | original nongeneral power.
| 17 | | Section 306. Appointment to deceased appointee. Subject to | 18 | | Section 4-11 of the Probate Act of 1975, an appointment to a | 19 | | deceased appointee is ineffective. | 20 | | Section 307. Impermissible appointment. | 21 | | (a) Except as otherwise provided in Section 306, an | 22 | | exercise of a power of appointment in favor of an impermissible | 23 | | appointee is ineffective.
| 24 | | (b) An exercise of a power of appointment in favor of a |
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| 1 | | permissible appointee is ineffective to the extent the | 2 | | appointment is a fraud on the power.
| 3 | | Section 308. Selective allocation doctrine. If a | 4 | | powerholder exercises a power of appointment in a disposition | 5 | | that also disposes of property the powerholder owns, the owned | 6 | | property and the appointive property must be allocated in the | 7 | | permissible manner that best carries out the powerholder's | 8 | | intent. | 9 | | Section 309. Capture doctrine: disposition of | 10 | | ineffectively appointed property under general power. To the | 11 | | extent a powerholder of a general power of appointment, other | 12 | | than a power to revoke, amend, or withdraw property from a | 13 | | trust, makes an ineffective appointment:
| 14 | | (1) the gift-in-default clause controls the | 15 | | disposition of the ineffectively appointed property; or
| 16 | | (2) if there is no gift-in-default clause or to the | 17 | | extent the clause is ineffective, the ineffectively | 18 | | appointed property:
| 19 | | (A) passes to:
| 20 | | (i) the powerholder if the powerholder is a | 21 | | permissible appointee and living; or
| 22 | | (ii) if the powerholder is an impermissible | 23 | | appointee or not living, the powerholder's estate | 24 | | if the estate is a permissible appointee; or
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| 1 | | (B) if there is no taker under subparagraph (A), | 2 | | passes under a reversionary interest to the donor or | 3 | | the donor's transferee or successor in interest.
| 4 | | Section 310. Disposition of unappointed property under | 5 | | released or unexercised general power.
To the extent a | 6 | | powerholder releases or fails to exercise a general power of | 7 | | appointment other than a power to revoke, amend, or withdraw | 8 | | property from a trust:
| 9 | | (1) the gift-in-default clause controls the | 10 | | disposition of the unappointed property; or | 11 | | (2) if there is no gift-in-default clause or to the | 12 | | extent the clause is ineffective:
| 13 | | (A) except as otherwise provided in subparagraph | 14 | | (B), the unappointed property passes to:
| 15 | | (i) the powerholder if the powerholder is a | 16 | | permissible appointee and living; or
| 17 | | (ii) if the powerholder is an impermissible | 18 | | appointee or not living, the powerholder's estate | 19 | | if the estate is a permissible appointee; or
| 20 | | (B) to the extent the powerholder released the | 21 | | power, or if there is no taker under subparagraph (A), | 22 | | the unappointed property passes under a reversionary | 23 | | interest to the donor or the donor's transferee or | 24 | | successor in interest.
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| 1 | | Section 311. Disposition of unappointed property under | 2 | | released or unexercised nongeneral power. To the extent a | 3 | | powerholder releases, ineffectively exercises, or fails to | 4 | | exercise a nongeneral power of appointment:
| 5 | | (1) the gift-in-default clause controls the disposition of | 6 | | the unappointed property; or
| 7 | | (2) if there is no gift-in-default clause or to the extent | 8 | | the clause is ineffective, the unappointed property:
| 9 | | (A) passes to the permissible appointees if:
| 10 | | (i) the permissible appointees are defined and | 11 | | limited; and
| 12 | | (ii) the terms of the instrument creating the power | 13 | | do not manifest a contrary intent; or
| 14 | | (B) if there is no taker under subparagraph (A), passes | 15 | | under a reversionary interest to the donor or the donor's | 16 | | transferee or successor in interest.
| 17 | | Section 312. Disposition of unappointed property if | 18 | | partial appointment to taker in default. Unless the terms of | 19 | | the instrument creating or exercising a power of appointment | 20 | | manifest a contrary intent, if the powerholder makes a valid | 21 | | partial appointment to a taker in default of appointment, the | 22 | | taker in default of appointment may share fully in unappointed | 23 | | property. | 24 | | Section 313. Appointment to taker in default. If a |
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| 1 | | powerholder of a general power makes an appointment to a taker | 2 | | in default of appointment and the appointee would have taken | 3 | | the property under a gift-in-default clause had the property | 4 | | not been appointed, the power of appointment is deemed not to | 5 | | have been exercised, and the appointee takes under the | 6 | | gift-in-default clause. | 7 | | Section 314. Powerholder's authority to revoke or amend | 8 | | exercise. A powerholder may revoke or amend an exercise of a | 9 | | power of appointment only to the extent that:
| 10 | | (1) the powerholder reserves a power of revocation or | 11 | | amendment in the instrument exercising the power of | 12 | | appointment and, if the power is nongeneral, the terms of | 13 | | the instrument creating the power of appointment do not | 14 | | prohibit the reservation; or
| 15 | | (2) the terms of the instrument creating the power of | 16 | | appointment provide that the exercise is revocable or | 17 | | amendable.
| 18 | | Section 315. Disposition of trust property subject to | 19 | | power. In disposing of trust property subject to a power of | 20 | | appointment exercisable by an instrument other than a will, a | 21 | | trustee acting in good faith shall have no liability to any | 22 | | appointee or taker in default of appointment for relying upon | 23 | | an instrument believed to be genuine purporting to exercise a | 24 | | power of appointment or for assuming that there is no |
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| 1 | | instrument exercising the power of appointment in the absence | 2 | | of actual knowledge thereof within 3 months of the last date on | 3 | | which the power of appointment may be exercised. | 4 | | Article 4. Disclaimer or release; contract to appoint or not to | 5 | | appoint. | 6 | | Section 401. Disclaimer. As provided by Section 2-7 of the | 7 | | Probate Act of 1975:
| 8 | | (1) A powerholder may disclaim all or part of a power | 9 | | of appointment.
| 10 | | (2) A permissible appointee, appointee, or taker in | 11 | | default of appointment may disclaim all or part of an | 12 | | interest in appointive property.
| 13 | | Section 402. Authority to release. A powerholder may | 14 | | release a power of appointment, in whole or in part, except to | 15 | | the extent the terms of the instrument creating the power | 16 | | prevent the release. | 17 | | Section 403. Method of release. A powerholder of a | 18 | | releasable power of appointment may release the power in whole | 19 | | or in part:
| 20 | | (1) by substantial compliance with a method provided in | 21 | | the terms of the instrument creating the power; or
| 22 | | (2) if the terms of the instrument creating the power |
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| 1 | | do not provide a method or the method provided in the terms | 2 | | of the instrument is not expressly made exclusive, by an | 3 | | instrument manifesting the powerholder's intent by clear | 4 | | and convincing evidence.
| 5 | | Section 404. Revocation or amendment of release. A | 6 | | powerholder may revoke or amend a release of a power of | 7 | | appointment only to the extent that:
| 8 | | (1) the instrument of release is revocable by the | 9 | | powerholder; or
| 10 | | (2) the powerholder reserves a power of revocation or | 11 | | amendment in the instrument of release.
| 12 | | Section 405. Power to contract: presently exercisable | 13 | | power of appointment. A powerholder of a presently exercisable | 14 | | power of appointment may contract:
| 15 | | (1) not to exercise the power; or
| 16 | | (2) to exercise the power if the contract when made | 17 | | does not confer a benefit on an impermissible appointee.
| 18 | | Section 406. Power to contract: power of appointment not | 19 | | presently exercisable. A powerholder of a power of appointment | 20 | | that is not presently exercisable may contract to exercise or | 21 | | not to exercise the power only if the powerholder: | 22 | | (1) is also the donor of the power; and
| 23 | | (2) has reserved the power in a revocable trust.
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| 1 | | Section 407. Remedy for breach of contract to appoint or | 2 | | not to appoint. The remedy for a powerholder's breach of a | 3 | | contract to appoint or not to appoint is limited to damages | 4 | | payable out of the appointive property or, if appropriate, | 5 | | specific performance of the contract. | 6 | | Article 5. Rights of powerholder's creditors in appointive | 7 | | property. | 8 | | Section 501. Creditor claim: general power created by | 9 | | powerholder. | 10 | | (a) In this Section, "power of appointment created by the | 11 | | powerholder" includes a power of appointment created in a | 12 | | transfer by another person to the extent the powerholder | 13 | | contributed value to the transfer.
| 14 | | (b) Appointive property subject to a general power of | 15 | | appointment created by the powerholder is subject to a claim of | 16 | | a creditor of the powerholder or of the powerholder's estate to | 17 | | the extent provided in the Uniform Fraudulent Transfer Act.
| 18 | | (c) Subject to subsection (b), appointive property subject | 19 | | to a general power of appointment created by the powerholder is | 20 | | not subject to a claim of a creditor of the powerholder or the | 21 | | powerholder's estate to the extent the powerholder irrevocably | 22 | | appointed the property in favor of a person other than the | 23 | | powerholder or the powerholder's estate.
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| 1 | | (d) Subject to subsections (b) and (c), and notwithstanding | 2 | | the presence of a spendthrift provision or whether the claim | 3 | | arose before or after the creation of the power of appointment, | 4 | | appointive property subject to a general power of appointment | 5 | | created by the powerholder is subject to a claim of a creditor | 6 | | of:
| 7 | | (1) the powerholder, to the same extent as if the | 8 | | powerholder owned the appointive property, if the power is | 9 | | presently exercisable; and
| 10 | | (2) the powerholder's estate, to the extent the estate | 11 | | is insufficient to satisfy the claim and subject to the | 12 | | right of a decedent to direct the source from which | 13 | | liabilities are paid, if the power is exercisable at the | 14 | | powerholder's death.
| 15 | | Section 502. Creditor claim: general power not created by | 16 | | powerholder. | 17 | | (a) Except as otherwise provided in subsection (b), | 18 | | appointive property subject to a general power of appointment | 19 | | created by a person other than the powerholder is subject to a | 20 | | claim of a creditor of:
| 21 | | (1) the powerholder, to the extent the powerholder's | 22 | | property is insufficient, if the power is presently | 23 | | exercisable; and
| 24 | | (2) the powerholder's estate if the power is exercised | 25 | | at the powerholder's death, to the extent the estate is |
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| 1 | | insufficient, subject to the right of the deceased | 2 | | powerholder to direct the source from which liabilities are | 3 | | paid.
| 4 | | (b) Subject to subsection (c) of Section 504, a power of | 5 | | appointment created by a person other than the powerholder | 6 | | which is subject to an ascertainable standard relating to an | 7 | | individual's health, education, support, or maintenance within | 8 | | the meaning of 26 U.S.C. 2041(b)(1)(A) or 26 U.S.C. 2514(c)(1), | 9 | | as amended, is treated for purposes of this Article as a | 10 | | nongeneral power.
| 11 | | Section 503. Power to withdraw. | 12 | | (a) For purposes of this Article, and except as otherwise | 13 | | provided in subsection (b), a power to withdraw property from a | 14 | | trust is treated, during the time the power may be exercised, | 15 | | as a presently exercisable general power of appointment to the | 16 | | extent of the property subject to the power to withdraw.
| 17 | | (b) A power to withdraw property from a trust ceases to be | 18 | | treated as a presently exercisable general power of appointment | 19 | | upon its lapse, release, or waiver.
| 20 | | Section 504. Creditor claim: nongeneral power. | 21 | | (a) Except as otherwise provided in subsections (b) and | 22 | | (c), appointive property subject to a nongeneral power of | 23 | | appointment is exempt from a claim of a creditor of the | 24 | | powerholder or the powerholder's estate.
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| 1 | | (b) Appointive property subject to a nongeneral power of | 2 | | appointment is subject to a claim of a creditor of the | 3 | | powerholder or the powerholder's estate to the extent that the | 4 | | powerholder owned the property and, reserving the nongeneral | 5 | | power, transferred the property in violation of the Uniform | 6 | | Fraudulent Transfer Act.
| 7 | | (c) If the initial gift in default of appointment is to the | 8 | | powerholder or the powerholder's estate, a nongeneral power of | 9 | | appointment is treated for purposes of this Section as a | 10 | | general power.
| 11 | | Article 6. Miscellaneous provisions. | 12 | | Section 601. Uniformity of application and construction. | 13 | | In applying and construing this uniform Act, consideration must | 14 | | be given to the need to promote uniformity of the law with | 15 | | respect to its subject matter among states that enact it. | 16 | | Section 602. (Blank). | 17 | | Section 603. Application to existing relationships. | 18 | | (a) Except as otherwise provided in this Act, on and after | 19 | | the effective date of this Act:
| 20 | | (1) this Act applies to a power of appointment created | 21 | | before, on, or after its effective date;
| 22 | | (2) this Act applies to a judicial proceeding |
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| 1 | | concerning a power of appointment commenced on or after its | 2 | | effective date;
| 3 | | (3) this Act applies to a judicial proceeding | 4 | | concerning a power of appointment commenced before its | 5 | | effective date unless the court finds that application of a | 6 | | particular provision of this Act would substantially | 7 | | interfere with the effective conduct of the judicial | 8 | | proceeding or prejudice a right of a party, in which case | 9 | | the particular provision of this Act does not apply and the | 10 | | superseded law applies;
| 11 | | (4) a rule of construction or presumption provided in | 12 | | this Act applies to an instrument executed before the | 13 | | effective date of the Act unless there is a clear | 14 | | indication of a contrary intent in the terms of the | 15 | | instrument; and
| 16 | | (5) an act done before the effective date of this Act | 17 | | is not affected by this Act.
| 18 | | (b) If a right is acquired, extinguished, or barred on the | 19 | | expiration of a prescribed period that commenced under law of | 20 | | this State other than this Act before the effective date of | 21 | | this Act, the law continues to apply to the right.
| 22 | | (c) No trustee is liable to any person in whose favor a | 23 | | power of appointment may have been exercised for any | 24 | | distribution of property made to persons entitled to take in | 25 | | default of the effective exercise of the power of appointment | 26 | | to the extent that the distribution shall have been completed |
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| 1 | | prior to the effective date of this Act.
| 2 | | Section 604. The Probate Act of 1975 is amended by changing | 3 | | Section 2-7 as follows:
| 4 | | (755 ILCS 5/2-7) (from Ch. 110 1/2, par. 2-7)
| 5 | | Sec. 2-7. Disclaimer. (a) Right to Disclaim Interest in | 6 | | Property. A person
to whom any property or interest therein | 7 | | passes, by whatever means,
may disclaim the property or | 8 | | interest in whole or in part by delivering
or filing a written | 9 | | disclaimer as hereinafter provided. A disclaimer may
be of a | 10 | | fractional share or undivided interest, a specifically | 11 | | identifiable
asset, portion or amount, any limited interest or | 12 | | estate or any property
or interest derived through right of | 13 | | survivorship. A powerholder, as that term is defined in Section | 14 | | 102 of the Uniform Powers of Appointment Act, power (as defined
| 15 | | in "An Act Concerning Termination of Powers", approved May 25, | 16 | | 1943, as
amended) with respect to property shall be deemed to
| 17 | | be a holder of an interest in such property.
| 18 | | The representative of a decedent or ward may disclaim on | 19 | | behalf of the
decedent or ward with leave of court. The court | 20 | | may approve the disclaimer
by a representative of a decedent if | 21 | | it finds that the disclaimer benefits
the estate as a whole and | 22 | | those interested in the estate generally even
if the disclaimer | 23 | | alters the distribution of the property, part or interest
| 24 | | disclaimed. The court may approve the disclaimer by a |
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| 1 | | representative of
a ward if it finds that it benefits those | 2 | | interested in the estate generally
and is not materially | 3 | | detrimental to the interests of the ward. A disclaimer
by a | 4 | | representative of a decedent or ward may be made without leave | 5 | | of court
if a will or other instrument signed by the decedent | 6 | | or ward designating
the representative specifically authorizes | 7 | | the representative to disclaim
without court approval.
| 8 | | The right to disclaim granted by this Section exists | 9 | | irrespective of any
limitation on the interest of the | 10 | | disclaimant in the nature of a spendthrift
provision or similar | 11 | | restriction.
| 12 | | (b) Form of Disclaimer. The disclaimer shall (1) describe | 13 | | the property
or part or interest disclaimed, (2) be signed by | 14 | | the disclaimant or his
representative and (3) declare the | 15 | | disclaimer and the extent thereof.
| 16 | | (c) Delivery of Disclaimer. The disclaimer shall be | 17 | | delivered to the
transferor or donor or his representative, or | 18 | | to the trustee or other person
who has legal title to the | 19 | | property, part or interest disclaimed, or, if
none of the | 20 | | foregoing is readily determinable, shall be either delivered
to | 21 | | a person having possession of the property, part or interest or | 22 | | who is
entitled thereto by reason of the disclaimer, or filed | 23 | | or recorded as hereinafter
provided. In the case of an interest | 24 | | passing by reason of the death of
any person, an executed | 25 | | counterpart of the disclaimer may be filed with
the clerk of | 26 | | the circuit court in the county in which the estate of the
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| 1 | | decedent is administered, or, if administration has not been | 2 | | commenced,
in which it could be commenced. If an interest in | 3 | | real property is disclaimed,
an executed counterpart of the | 4 | | disclaimer may be recorded in the office
of the recorder in the | 5 | | county in which the real estate lies,
or, if the title to the | 6 | | real estate is registered under "An Act concerning
land | 7 | | titles", approved May 1, 1897, as amended, may
be filed in the | 8 | | office of the registrar of titles of such county.
| 9 | | (d) Effect of Disclaimer. Unless expressly provided | 10 | | otherwise in an instrument
transferring the property or | 11 | | creating the interest disclaimed, the property,
part or | 12 | | interest disclaimed shall descend or be distributed (1) if a | 13 | | present
interest (a) in the case of a transfer by reason of the | 14 | | death of any person,
as if the disclaimant had predeceased the | 15 | | decedent; (b) in the case of a
transfer by revocable instrument | 16 | | or contract, as if the disclaimant had predeceased
the date the | 17 | | maker no longer has the power to transfer to himself or another
| 18 | | the entire legal and equitable ownership of the property or | 19 | | interest; or
(c) in the case of any other inter vivos transfer, | 20 | | as if the disclaimant
had predeceased the date of the transfer; | 21 | | and (2) if a future interest,
as if the disclaimant had | 22 | | predeceased the event that which determines that the
taker of | 23 | | the property or interest has become finally ascertained and his
| 24 | | interest has become indefeasibly fixed both in quality and | 25 | | quantity; and
in each case the disclaimer shall relate back to | 26 | | such date for all purposes.
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| 1 | | A disclaimer of property or an interest in property shall | 2 | | not preclude
any disclaimant from receiving the same property | 3 | | in another capacity or
from receiving other interests in the | 4 | | property to which the disclaimer relates.
| 5 | | Unless expressly provided otherwise in an instrument | 6 | | transferring the property
or creating the interest disclaimed, | 7 | | a future interest limited to take effect
at or after the | 8 | | termination of the estate or interest disclaimed shall | 9 | | accelerate
and take effect in possession and enjoyment to the | 10 | | same extent as if the
disclaimant had died before the date to | 11 | | which the disclaimer relates back.
| 12 | | A disclaimer made pursuant to this Section shall be | 13 | | irrevocable and shall
be binding upon the disclaimant and all | 14 | | persons claiming by, through or
under the disclaimant.
| 15 | | (e) Waiver and Bar. The right to disclaim property or a | 16 | | part thereof or
an interest therein shall be barred by (1) a | 17 | | judicial sale of the property,
part or interest before the | 18 | | disclaimer is effected; (2) an assignment, conveyance,
| 19 | | encumbrance, pledge, sale or other transfer of the property, | 20 | | part or interest,
or a contract therefor, by the disclaimant or | 21 | | his representative; (3) a
written waiver of the right to | 22 | | disclaim; or (4) an acceptance of the property,
part or | 23 | | interest by the disclaimant or his representative. Any person | 24 | | may
presume, in the absence of actual knowledge to the | 25 | | contrary, that a disclaimer
delivered or filed as provided in | 26 | | this Section is a valid disclaimer that which
is not barred by |
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| 1 | | the preceding provisions of this paragraph.
| 2 | | A written waiver of the right to disclaim may be made by | 3 | | any person or
his representative and an executed counterpart of | 4 | | a waiver of the right
to disclaim may be recorded or filed, all | 5 | | in the same manner as provided
in this Section with respect to | 6 | | a disclaimer.
| 7 | | In every case, acceptance must be affirmatively proved in | 8 | | order to constitute
a bar to a disclaimer. An acceptance of | 9 | | property or an interest in property
shall include the taking of | 10 | | possession, the acceptance of delivery or the
receipt of | 11 | | benefits of the property or interest; except that (1) in the
| 12 | | case of an interest in joint tenancy with right of survivorship | 13 | | such acceptance
shall extend only to the fractional share of | 14 | | such property or interest determined
by dividing the number one | 15 | | by the number of joint tenants, and (2) in the
case of a ward, | 16 | | such acceptance shall extend only to property actually received
| 17 | | by or on behalf of the ward or his representative during his | 18 | | minority or
incapacity. The mere lapse of time or creation of | 19 | | an interest, in joint
tenancy with right of survivorship or | 20 | | otherwise, with or without knowledge
of the interest on the | 21 | | part of the disclaimant, shall not constitute acceptance
for | 22 | | purposes of this Section.
| 23 | | This Section does not abridge the right of any person to | 24 | | assign, convey,
release, renounce or disclaim any property or | 25 | | interest therein arising
under any other statute or that which | 26 | | arose under prior law.
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| 1 | | Any interest in real or personal property that which exists | 2 | | on or after the
effective date of this Section may be | 3 | | disclaimed after that date in the
manner provided herein, but | 4 | | no interest that which has arisen prior to that date
in any | 5 | | person other than the disclaimant shall be destroyed or | 6 | | diminished
by any action of the disclaimant taken pursuant to | 7 | | this Section.
| 8 | | (Source: P.A. 83-1362.)
| 9 | | (755 ILCS 5/4-2 rep.) | 10 | | Section 604.1. The Probate Act of 1975 is amended by | 11 | | repealing Section 4-2. | 12 | | (765 ILCS 320/Act rep.) | 13 | | Section 604.2. The Power of Appointment Exercise Act is | 14 | | repealed. | 15 | | (765 ILCS 325/Act rep.) | 16 | | Section 604.3. The Termination of Powers Act is repealed. |
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