2-1.11 - Renunciation of property interests

* § 2-1.11 Renunciation of property interests    (a) For purposes of this section:    (1) The term "disposition" shall include a disposition created under a  will or trust agreement including, without limitation, the granting of a  power   of  appointment,  a  disposition  created  by  the  exercise  or  nonexercise of a power of appointment, a distributive share under 4-1.1,  a transfer created by a trust account as defined in  7-5.1,  a  transfer  created by a life insurance or annuity contract, a transfer created by a  joint  tenancy  or tenancy by the entirety, a transfer under an employee  benefit plan (including, without limitation,  any  pension,  retirement,  death  benefit,  stock bonus or profit-sharing plan, system or trust), a  transfer of a security to a beneficiary pursuant to part 4 of article 13  of this chapter, any  other  disposition  or  transfer  created  by  any  testamentary  or nontestamentary instrument, or by operation of law, and  any of the foregoing created or increased by reason  of  a  renunciation  made by another person.    (2) The effective date of the disposition for purposes of this section  shall be:    A.  If the disposition is created by will, the exercise or nonexercise  of a testamentary power  of  appointment,  a  distribution  pursuant  to  4-1.1,  the  deposit  of money in a trust account as defined in 7-5.1, a  life insurance or annuity contract, a joint tenancy or  tenancy  by  the  entirety, or an employee benefit plan, the date of death of the deceased  testator,  holder of the power of appointment, intestate, creator of the  trust account, insured, annuitant, other joint tenant or tenant  by  the  entirety, or employee, as the case may be;    B. If the disposition is created by trust agreement, the exercise of a  presently  exercisable  power  of  appointment, or the renunciation of a  disposition created  by  another,  the  date  of  the  trust  agreement,  exercise  of  the power of appointment, or renunciation, as the case may  be; and    C. If  the  disposition  is  created  by  any  other  testamentary  or  nontestamentary  instrument,  or  by  operation  of law, the date of the  event by which the beneficiary is finally ascertained.  Notwithstanding the foregoing, the effective date of a disposition which  is of a future estate shall be the date on which it becomes an estate in  possession.    (b) (1) Any beneficiary of a disposition may renounce all or  part  of  his interest; provided, however, that a surviving joint tenant or tenant  by  the  entirety  may not renounce that portion of an interest in joint  property or property held by the entirety which is allocable to  amounts  contributed by him to the interest in such property.    (2)  Such renunciation shall be in writing, signed and acknowledged by  the person renouncing, and shall be filed in the office of the clerk  of  the court having jurisdiction over the will or trust agreement governing  the  property  of  which  the disposition would otherwise be made or the  court which issued letters of administration, or if there is no  probate  or  administration,  then  in a surrogate's court provided by law as the  place of probate or administration of the decedent's estate, within nine  months after the effective date of the  disposition.  Such  renunciation  shall be accompanied by an affidavit of the renouncing party that he has  not received and is not to receive any consideration in money or money's  worth  for  such renunciation from a person or persons whose interest is  to be  accelerated,  unless  payment  of  such  consideration  has  been  authorized  by  the  court.  Notice  of  such  renunciation, which shall  include a copy of the renunciation, shall be  served  personally  or  in  such  manner  as the court may direct upon the fiduciary directed by the  will  or  trust  agreement  to  make  the  disposition   or   upon   theadministrator  or  such  other  person  who  was  directed  to  make the  disposition or upon any other person having custody or possession of  or  legal  title  to  the property, an interest in which is being renounced,  and  by  mail or in such manner as the court may direct upon all persons  whose  interest  may  be  created  or  increased  by  reason   of   such  renunciation.  The  time  to  file  and  serve  such renunciation may be  extended, in  the  discretion  of  the  court,  on  a  petition  showing  reasonable cause and on notice to such persons and in such manner as the  court  may  direct.  The  time  limited  in  this section for filing and  serving such renunciation is exclusive, and shall not  be  suspended  or  otherwise  affected  by  any  other  provision of law; such renunciation  shall be effective as of the date of such filing,  notwithstanding  that  notice thereof may thereafter be required by the court.    (c) A renunciation may be made by:    (1)  The  guardian of the property of an infant, when so authorized by  the court having jurisdiction of the estate of the infant.    (2) The committee of an incompetent when so authorized  by  the  court  that appointed the committee.    (3)  The conservator of a conservatee, when so authorized by the court  that appointed the conservator.    (4) A guardian  appointed  under  article  eighty-one  of  the  mental  hygiene  law,  when  so  authorized  by  the  court  that  appointed the  guardian.    (5) The personal representative of a decedent, when so  authorized  by  the court having jurisdiction of the estate of the decedent.    (6)  An  attorney-in-fact,  when  so  authorized under a duly executed  power of attorney,  provided,  however,  that  any  renunciation  by  an  attorney-in-fact  of  a  person  under disability shall not be effective  unless it is further authorized by the court with which the renunciation  must be filed under subparagraph two of paragraph (b) of  this  section,  and  provided,  further, that a renunciation by an attorney-in-fact of a  person not under disability may be  made  without  court  authorization,  unless  the property which would have passed under said renunciation is,  by  reason  of  said  renunciation,  disposed  of  in  favor   of   such  attorney-in-fact  or  the  spouse  or issue of such attorney-in-fact, in  which case such renunciation shall not be effective  unless  either  (A)  the  instrument  appointing such attorney-in-fact expressly authorizes a  renunciation in favor of such attorney-in-fact or the spouse or issue of  such attorney-in-fact, or (B) such renunciation has been  authorized  by  the  court  with which the renunciation must be filed under subparagraph  two of paragraph (b).    (d) Unless the creator of the disposition has otherwise provided,  the  filing  of  a  renunciation,  as  provided in this section, has the same  effect with respect to the renounced interest as though  the  renouncing  person  had predeceased the creator or the decedent or, if the renounced  interest is a future estate, as though the renouncing person had died at  the time  of  filing  or  just  prior  to  its  becoming  an  estate  in  possession,  whichever  is earlier in time, and shall have the effect of  accelerating the possession and enjoyment of subsequent  interests,  but  shall  have  no  effect upon the vesting of a future estate which by the  terms of the disposition is limited upon a preceding estate  other  than  the  renounced  interest.  If, pursuant to the preceding sentence, there  would occur a per stirpes disposition of the  renounced  interest  or  a  disposition or distribution of the renounced interest by representation,  then  solely  for purposes of applying 1-2.14 or 1-2.16, as the case may  be, the renouncing person shall be treated as having died  on  the  same  date  as,  but  immediately  after,  the  creator or decedent or, if the  renounced interest is a future estate, as having died on the  same  dateas,  but  immediately after, its becoming an estate in possession or, if  the time of filing is  earlier  in  time,  on  the  same  date  as,  but  immediately  after, such filing. Such renunciation is retroactive to the  creation  of  the  disposition.  A person who has a present and a future  interest in property and renounces the present interest in whole  or  in  part  shall  be deemed to have renounced the future interest to the same  extent.    (e) A beneficiary may accept one disposition and renounce another, may  renounce a disposition in  whole  or  in  part,  or  with  reference  to  specific   amounts,   parts,   fractional   shares  or  assets  thereof.  Notwithstanding the provisions of  paragraph  (d)  of  this  section,  a  renunciation  by  a  surviving  spouse  of  a  decedent of a disposition  created by said decedent shall not be deemed to  be  a  renunciation  by  such  spouse  of all or any part of any other disposition to or in favor  of such spouse, regardless of whether  the  property  which  would  have  passed   under   said   renounced  disposition  is  by  reason  of  said  renunciation disposed of to  or  in  favor  of  such  spouse.  Unless  a  renouncing person has provided otherwise in his renunciation, the effect  of  a  renunciation of a fractional part of a disposition is to renounce  such fraction of all property to which the renouncing person is entitled  under the disposition.    (f) A renunciation may not be made under this section with respect  to  any  property  which  a  renouncing  person has accepted, except that an  acceptance does not preclude a person from renouncing all or part of any  property to which he becomes  entitled  when  another  person  renounces  after  such acceptance. For purposes of this paragraph, a person accepts  an interest in property if he voluntarily  transfers  or  encumbers,  or  contracts  to  transfer  or  encumber  all  or part of such interest, or  accepts delivery or payment of, or exercises control as beneficial owner  over all or part thereof, or executes a written waiver of the  right  to  renounce,  or  otherwise  indicates  acceptance  of  all or part of such  interest. A written waiver of the right to renounce shall be binding  on  the person waiving and all parties claiming by, through or under him.    (g) A renunciation filed under this section is irrevocable.    (h) This section shall not abridge the right of any beneficiary or any  other  person  to  assign,  convey,  release or renounce any property or  interest therein arising under any other  section  of  this  chapter  or  other statute or under common law.    (i) Except as specifically provided in the trust instrument, the will,  any  other instrument creating the disposition, or in this section, this  section shall apply to each disposition the effective date of which  (as  defined  in  this  section)  is  on  or after the effective date of this  section, except that with  respect  to  the  renunciation  of  a  future  interest  this  section  shall  apply as well to dispositions created or  increased prior to the effective date of this section.    (j) In determining whether or not a valid disclaimer has been made for  the  purposes  of  the  taxes  imposed  by   articles   twenty-six   and  twenty-six-A  of  the  tax  law,  the  provisions  of  such law shall be  applicable to such determination, notwithstanding any provisions to  the  contrary contained in this section or any other section of this chapter.    * NB Effective until January 1, 2011    * § 2-1.11 Renunciation of property interests    (a)  A  renunciation  made  in  compliance with the provisions of this  section shall not necessarily constitute a qualified  disclaimer  within  the  meaning  of  section  2518 of the Internal Revenue Code of 1986, as  amended, or for the purposes of the taxes imposed by article  twenty-six  of the tax law.    (b) For purposes of this section:(1) The term "disposition" shall include a disposition created under a  will or trust agreement including, without limitation, the granting of a  power   of  appointment,  a  disposition  created  by  the  exercise  or  nonexercise of a power of appointment, a distributive share under 4-1.1,  a  transfer  created  by a trust account as defined in 7-5.1, a transfer  created by a life insurance or annuity contract,  a  transfer  resulting  from  the  creation  of  a  joint  tenancy or tenancy by the entirety, a  transfer created by the death  of  a  joint  tenant  or  tenant  by  the  entirety,  a transfer under an employee benefit plan (including, without  limitation, any pension,  retirement,  death  benefit,  stock  bonus  or  profit-sharing  plan,  system  or  trust), a transfer of a security to a  beneficiary pursuant to part 4 of article 13 of this chapter, any  other  disposition  or  transfer created by any testamentary or nontestamentary  instrument, or by operation of law, and any of the foregoing created  or  increased by reason of a renunciation made by another person.    (2) The effective date of the disposition for purposes of this section  shall be:    A.  If the disposition is created by will, the exercise or nonexercise  of a testamentary power  of  appointment,  a  distribution  pursuant  to  4-1.1,  the deposit of money in a trust account as defined in 7-5.1, the  registration of a security in beneficiary form pursuant  to  part  4  of  article  13  of  this chapter, a life insurance or annuity contract, the  death of a joint tenant or  tenant  by  the  entirety,  or  an  employee  benefit  plan, the date of death of the deceased testator, holder of the  power  of  appointment,  intestate,  creator  of  the   trust   account,  registered owner of the security, insured, annuitant, other joint tenant  or tenant by the entirety, or employee, as the case may be;    B. If the disposition is created by trust agreement, the exercise of a  presently  exercisable  power  of  appointment,  the creation of a joint  tenancy or tenancy by the entirety, or the renunciation of a disposition  created by another, the date as  of  which  the  transfer  in  trust  is  irrevocable  and  is  a  completed  gift  for  federal gift tax purposes  (regardless of whether a gift tax is imposed on the completed gift), the  date of the exercise of the power of  appointment,  the  creation  of  a  joint  tenancy  or tenancy by the entirety, or renunciation, as the case  may be; and    C. If  the  disposition  is  created  by  any  other  testamentary  or  nontestamentary  instrument,  or  by  operation  of law, the date of the  event by which the beneficiary is finally ascertained.  Notwithstanding the foregoing, the effective date of a disposition which  is of a future estate shall be the date on which it becomes an estate in  possession.    (c) (1) Any beneficiary of a disposition may renounce all or  part  of  such  beneficiary's  interest; provided, however, that a surviving joint  tenant or tenant by the entirety may renounce the interest to which such  tenant succeeds, by operation of law upon the  death  of  another  joint  tenant  or  tenant by the entirety, to the extent such interest could be  the subject of a qualified disclaimer under section 2518 of  the  United  States Internal Revenue Code of 1986, as amended.    (2)  Such renunciation shall be in writing, signed and acknowledged by  the person renouncing, and shall be filed in the office of the clerk  of  the court having jurisdiction over the will or trust agreement governing  the  property  of  which  the disposition would otherwise be made or the  court which issued letters of administration, or if there is no  probate  or  administration,  then  in a surrogate's court provided by law as the  place of probate or administration of the decedent's estate, within nine  months after the effective date of the  disposition.  Such  renunciation  shall  be  accompanied by an affidavit of the renouncing party that suchparty has not received and is not to receive any consideration in  money  or  money's  worth  for such renunciation from a person or persons whose  interest is to be accelerated, unless payment of such consideration  has  been  authorized  by the court. Notice of such renunciation, which shall  include a copy of the renunciation, shall be  served  personally  or  in  such  manner  as the court may direct upon the fiduciary directed by the  will  or  trust  agreement  to  make  the  disposition   or   upon   the  administrator  or  such  other  person  who  was  directed  to  make the  disposition or upon any other person having custody or possession of  or  legal  title  to  the property, an interest in which is being renounced,  and by mail or in such manner as the court may direct upon  all  persons  whose   interest   may  be  created  or  increased  by  reason  of  such  renunciation. The time to  file  and  serve  such  renunciation  may  be  extended,  in  the  discretion  of  the  court,  on  a  petition showing  reasonable cause and on notice to such persons and in such manner as the  court may direct. The time  limited  in  this  section  for  filing  and  serving  such  renunciation  is exclusive, and shall not be suspended or  otherwise affected by any other  provision  of  law;  such  renunciation  shall  be  effective as of the date of such filing, notwithstanding that  notice thereof may thereafter be required by the court.    (d) A renunciation may be made by:    (1) The guardian of the property of an infant, when so  authorized  by  the court having jurisdiction of the estate of the infant.    (2)  The  committee  of an incompetent when so authorized by the court  that appointed the committee.    (3) The conservator of a conservatee, when so authorized by the  court  that appointed the conservator.    (4)  A  guardian  appointed  under  article  eighty-one  of the mental  hygiene law,  when  so  authorized  by  the  court  that  appointed  the  guardian.    (5)  The  personal representative of a decedent, when so authorized by  the court having jurisdiction of the estate of the decedent.    (6) An attorney-in-fact, when so  authorized  under  a  duly  executed  power  of  attorney,  provided,  however,  that  any  renunciation by an  attorney-in-fact of a person under disability  shall  not  be  effective  unless it is further authorized by the court with which the renunciation  must  be  filed under subparagraph two of paragraph (c) of this section,  and provided, further, that a renunciation by an attorney-in-fact  of  a  person  not  under  disability  may be made without court authorization,  unless the property which would have passed under said renunciation  is,  by   reason   of  said  renunciation,  disposed  of  in  favor  of  such  attorney-in-fact or the spouse or issue  of  such  attorney-in-fact,  in  which  case  such  renunciation shall not be effective unless either (A)  the instrument appointing such attorney-in-fact expressly  authorizes  a  renunciation in favor of such attorney-in-fact or the spouse or issue of  such  attorney-in-fact,  or (B) such renunciation has been authorized by  the court with which the renunciation must be filed  under  subparagraph  two of paragraph (c) of this section.    (e)  Unless the creator of the disposition has otherwise provided, the  filing of a renunciation, as provided in  this  section,  has  the  same  effect  with  respect to the renounced interest as though the renouncing  person had predeceased the creator or the decedent or, if the  renounced  interest is a future estate, as though the renouncing person had died at  the  time  of  filing  or  just  prior  to  its  becoming  an  estate in  possession, whichever is earlier in time, and shall have the  effect  of  accelerating  the  possession and enjoyment of subsequent interests, but  shall have no effect upon the vesting of a future estate  which  by  the  terms  of  the disposition is limited upon a preceding estate other thanthe renounced interest. If, pursuant to the  preceding  sentence,  there  would  occur  a  per  stirpes disposition of the renounced interest or a  disposition or distribution of the renounced interest by representation,  then  solely  for purposes of applying 1-2.14 or 1-2.16, as the case may  be, the renouncing person shall be treated as having died  on  the  same  date  as,  but  immediately  after,  the  creator or decedent or, if the  renounced interest is a future estate, as having died on the  same  date  as,  but  immediately after, its becoming an estate in possession or, if  the time of filing is  earlier  in  time,  on  the  same  date  as,  but  immediately  after, such filing. Such renunciation is retroactive to the  creation of the disposition. A person who has a  present  and  a  future  interest  in  property and renounces the present interest in whole or in  part shall be deemed to have renounced the future interest to  the  same  extent.    (f) A beneficiary may accept one disposition and renounce another, may  renounce  a  disposition  in  whole  or  in  part,  or with reference to  specific  amounts,  parts,  fractional   shares   or   assets   thereof.  Notwithstanding  the  provisions  of  paragraph  (e)  of this section, a  renunciation by a surviving  spouse  of  a  decedent  of  a  disposition  created  by  said  decedent  shall not be deemed to be a renunciation by  such spouse of all or any part of any other disposition to or  in  favor  of  such  spouse,  regardless  of  whether the property which would have  passed  under  said  renounced  disposition  is  by   reason   of   said  renunciation  disposed  of  to  or  in  favor  of  such spouse. Unless a  renouncing person has provided otherwise in his renunciation, the effect  of a renunciation of a fractional part of a disposition is  to  renounce  such fraction of all property to which the renouncing person is entitled  under the disposition.    (g)  A renunciation may not be made under this section with respect to  any property which a renouncing person  has  accepted,  except  that  an  acceptance does not preclude a person from renouncing all or part of any  property  to  which  such  person  becomes  entitled when another person  renounces after such acceptance.  For  purposes  of  this  paragraph,  a  person  accepts  an  interest  in  property  if  such person voluntarily  transfers or encumbers, or contracts to transfer or encumber all or part  of such interest, or  accepts  delivery  or  payment  of,  or  exercises  control  as  beneficial  owner  over  all or part thereof, or executes a  written  waiver  of  the  right  to  renounce,  or  otherwise  indicates  acceptance  of  all  or  part  of such interest. A written waiver of the  right to renounce shall be binding on the person waiving and all parties  claiming by, through or under such person.    (h) A renunciation filed under this section is irrevocable.    (i) This section shall not abridge the right of any beneficiary or any  other person to assign, convey, release  or  renounce  any  property  or  interest  therein  arising  under  any  other section of this chapter or  other statute or under common law.    (j) Except as specifically provided in the trust instrument, the will,  any other instrument creating the disposition, or in this section,  this  section  shall apply to each disposition the effective date of which (as  defined in this section) is on or  after  the  effective  date  of  this  section,  except  that  with  respect  to  the  renunciation of a future  interest this section shall apply as well  to  dispositions  created  or  increased prior to the effective date of this section.    * NB Effective January 1, 2011