72-2-222. Augmented estate.
72-2-222. Augmented estate. (1) (a) As used in this section, the following definitions apply:
(i) "Decedent's nonprobate transfers to others" means the decedent's nonprobate transfers to persons, other than the decedent's spouse, surviving spouse, the decedent, or the decedent's creditors, estate, or estate creditors, that are included in the augmented estate under subsection (2)(b).
(ii) "Fractional interest in property held in joint tenancy with the right of survivorship", whether the fractional interest is unilaterally severable or not, means the fraction, the numerator of which is one and the denominator of which, if the decedent was a joint tenant, is one plus the number of joint tenants who survive the decedent and which, if the decedent was not a joint tenant, is the number of joint tenants.
(iii) "Marriage", as it relates to a transfer by the decedent during marriage, means any marriage of the decedent to the decedent's surviving spouse.
(iv) "Nonadverse party" means a person who does not have a substantial beneficial interest in the trust or other property arrangement that would be adversely affected by the exercise or nonexercise of the power that person possesses respecting the trust or other property arrangement. A person having a general power of appointment over property is considered to have a beneficial interest in the property.
(v) "Power" or "power of appointment" includes a power to designate the beneficiary of a beneficiary designation.
(vi) "Presently exercisable general power of appointment" means a power of appointment under which, at the time in question, the decedent, whether or not the decedent then had the capacity to exercise the power, held a power to create a present or future interest in the decedent, the decedent's creditors, the decedent's estate, or the creditors of the decedent's estate and includes a power to revoke or invade the principal of a trust or other property arrangement.
(vii) "Probate estate" means property, whether real or personal, movable or immovable, wherever situated, that would pass by intestate succession if the decedent died without a valid will.
(viii) "Property" includes values subject to a beneficiary designation.
(ix) "Right to income" includes a right to payments under a commercial or private annuity, an annuity trust, a unitrust, or a similar arrangement.
(x) "Transfer", as it relates to a transfer by or of the decedent, includes:
(A) an exercise or release of a presently exercisable general power of appointment held by the decedent;
(B) a lapse at death of a presently exercisable general power of appointment held by the decedent; and
(C) an exercise, release, or lapse of a general power of appointment that the decedent created in the decedent and of a power described in subsection (2)(b)(ii)(B) that the decedent conferred on a nonadverse party.
(b) (i) As used in subsection (2)(b)(iii)(A), "termination":
(A) with respect to a right or interest in property, means that the right or interest terminated by the terms of the governing instrument or that the decedent transferred or relinquished the right or interest; and
(B) with respect to a power over property, means that the power terminated by exercise, release, lapse, or default or otherwise.
(ii) With respect to a power described in subsection (2)(b)(i)(A), "termination" means that the power terminated by exercise or release, but not by lapse or by default or otherwise.
(2) The augmented estate consists of the sum of:
(a) the value of the decedent's probate estate, reduced by funeral and administration expenses, homestead allowance, family allowances, exempt property, and enforceable claims;
(b) the value of the decedent's nonprobate transfers to others, which are composed of all property, whether real or personal, movable or immovable, wherever situated, not included in the decedent's probate estate, of any of the following types:
(i) property of any of the following types that passed outside probate at the decedent's death:
(A) property over which the decedent alone, immediately before death, held a presently exercisable general power of appointment; the amount included is the value of the property subject to the power, to the extent that the property was passed at the decedent's death, by exercise, release, lapse, or default or otherwise, to or for the benefit of any person other than the decedent's estate or surviving spouse;
(B) the decedent's fractional interest in property held by the decedent in joint tenancy with the right of survivorship; the amount included is the value of the decedent's fractional interest, to the extent that the fractional interest was passed by right of survivorship at the decedent's death to a surviving joint tenant other than the decedent's surviving spouse; or
(C) the decedent's ownership interest in property or accounts held in POD, TOD, or co-ownership registration with the right of survivorship; the amount included is the value of the decedent's ownership interest, to the extent that the decedent's ownership interest passed at the decedent's death to or for the benefit of any person other than the decedent's estate or surviving spouse;
(ii) property transferred in any of the following forms by the decedent during marriage:
(A) any irrevocable transfer in which the decedent retained the right to the possession or enjoyment of, or to the income from, the property if and to the extent that the decedent's right terminated at or continued beyond the decedent's death; the amount included is the value of the fraction of the property to which the decedent's right related, to the extent that the fraction of the property was passed outside probate to or for the benefit of any person other than the decedent's estate or surviving spouse; or
(B) any transfer in which the decedent created a power over the income or principal of the transferred property, exercisable by the decedent alone or in conjunction with any other person, or exercisable by a nonadverse party, for the benefit of the decedent, the decedent's creditors, the decedent's estate, or the creditors of the decedent's estate; the amount included is the value of the property subject to the power, to the extent that the power was exercisable at the decedent's death to or for the benefit of any person other than the decedent's surviving spouse or to the extent that the property subject to the power passed at the decedent's death, by exercise, release, lapse, or default or otherwise, to or for the benefit of any person other than the decedent's estate or surviving spouse; and
(iii) property that passed during marriage and during the 2-year period preceding the decedent's death as a result of a transfer by the decedent if the transfer was of any of the following types:
(A) any property that passed as a result of the termination of a right or interest in, or power over, property that would have been included in the augmented estate under subsection (2)(b)(i)(A), (2)(b)(i)(B), (2)(b)(i)(C), or (2)(b)(ii) if the right, interest, or power had not terminated until the decedent's death; the amount included is the value of the property that would have been included under these subsections, except that that property is valued at the time that the right, interest, or power terminated, and is included only to the extent that the property passed upon termination to or for the benefit of any person other than the decedent or the decedent's estate, spouse, or surviving spouse; or
(B) any transfer of property, to the extent not otherwise included in the augmented estate, made to or for the benefit of a person other than the decedent's surviving spouse; the amount included is the value of the transferred property to the extent that the aggregate transfers to any one donee in either of the 2 years exceeded the amount excluded from federal taxable gifts pursuant to section 2503(b) of the Internal Revenue Code in effect in the year of transfer;
(c) the value of the decedent's nonprobate transfers to the decedent's surviving spouse, which are composed of all property that passed outside probate at the decedent's death from the decedent to the surviving spouse by reason of the decedent's death, including:
(i) the decedent's fractional interest in property held as a joint tenant with the right of survivorship, to the extent that the decedent's fractional interest passed to the surviving spouse as surviving joint tenant;
(ii) the decedent's ownership interest in property or accounts held in co-ownership registration with the right of survivorship, to the extent the decedent's ownership interest passed to the surviving spouse as surviving co-owner;
(iii) proceeds of insurance, including accidental death benefits, on the life of the decedent if the decedent owned the insurance policy immediately before death or if and to the extent that the decedent alone and immediately before death held a presently exercisable general power of appointment over the policy or its proceeds; the amount included is the value of the proceeds, to the extent that they were payable at the decedent's death; and
(iv) all other property that would have been included in the augmented estate under subsection (2)(b)(i) or (2)(b)(ii) had it passed to or for the benefit of a person other than the decedent's spouse, surviving spouse, the decedent, or the decedent's creditors, estate, or estate creditors, but excluding property passing to the surviving spouse under the federal social security system; and
(d) except to the extent included in the augmented estate under subsection (2)(a) or (2)(c), the value of:
(i) property that was owned by the decedent's surviving spouse at the decedent's death, including:
(A) the surviving spouse's fractional interest in property held in joint tenancy with the right of survivorship;
(B) the surviving spouse's ownership interest in property or accounts held in co-ownership registration with the right of survivorship; and
(C) property that passed to the surviving spouse by reason of the decedent's death, but not including the spouse's right to homestead allowance, family allowance, exempt property, or payments under the federal social security system; and
(ii) property that would have been included in the surviving spouse's nonprobate transfers to others, other than the spouse's fractional and ownership interests included in subsections (2)(d)(i)(A) and (2)(d)(i)(B), had the spouse been the decedent. Property included under this subsection (2)(d)(ii) is valued at the decedent's death, taking into account the fact that the decedent predeceased the spouse, except that, for purposes of subsections (2)(d)(i)(A) and (2)(d)(i)(B), the values of the spouse's fractional and ownership interests are determined immediately before the decedent's death if the decedent was then a joint tenant or a co-owner of the property or accounts. The value of property included under this subsection (2)(d)(ii) is reduced in each category by enforceable claims against the included property and is reduced by enforceable claims against the surviving spouse.
(3) The value of any property is excluded from the decedent's nonprobate transfers to others:
(a) to the extent the decedent received adequate and full consideration in money or money's worth for a transfer of the property;
(b) if the property was transferred with the written joinder of, or if the transfer was consented to in writing by, the surviving spouse; or
(c) if the property is life insurance, accident insurance, pension, profit-sharing, retirement, and other benefit plans payable to persons other than the decedent's surviving spouse or the decedent's estate.
(4) The value of property includes the commuted value of any present or future interest and the commuted value of amounts payable under any trust, life insurance settlement option, annuity contract, public or private pension, disability compensation, death benefit or retirement plan, or any similar arrangement, exclusive of the federal social security system. The commuted value of life and term interests in income, annuity, or unitrust amount must be determined in accordance with U.S. treasury regulations for internal revenue purposes in effect at the time of the decedent's death.
(5) In case of overlapping application to the same property of the provisions of subsection (2), the property is included in the augmented estate under the provision yielding the highest value, but under any one, but only one, of the overlapping provisions if they all yield the same value.
History: En. 91A-2-202 by Sec. 1, Ch. 365, L. 1974; R.C.M. 1947, 91A-2-202; amd. Sec. 6, Ch. 52, L. 1981; amd. Sec. 53, Ch. 494, L. 1993; Sec. 72-2-705, MCA 1991; redes. 72-2-222 by Code Commissioner, 1993; amd. Sec. 5, Ch. 592, L. 1995; amd. Sec. 3, Ch. 290, L. 1999.