§ 2-1.11 — Renunciation of property interests

New York § 2-1.11

• Jurisdiction: New York
• Law EPT: Estates, Powers & Trusts
• Part 1: Substantive Rules Governing Dispositions
• Art. 2: Rules Governing Dispositions Subject to This Law

Text

§ 2-1.11 Renunciation of property interests\n (a) A renunciation made in compliance with the provisions of this\nsection shall not necessarily constitute a qualified disclaimer within\nthe meaning of section 2518 of the Internal Revenue Code of 1986, as\namended, or for the purposes of the taxes imposed by article twenty-six\nof the tax law.\n (b) For purposes of this section:\n (1) The term "disposition" shall include a disposition created under a\nwill or trust agreement including, without limitation, the granting of a\npower of appointment, a disposition created by the exercise or\nnonexercise of a power of appointment, a distributive share under 4-1.1,\na transfer created by a trust account as defined in 7-5.1, a transfer\ncreated by a life insurance or annuity contract, a transfer resulting\nfrom the creation of a joint tenancy or tenancy by the entirety,\nsuccession to an interest occurring by operation of law on the death of\na joint tenant or tenant by the entirety, a transfer under an employee\nbenefit plan (including, without limitation, any pension, retirement,\ndeath benefit, stock bonus or profit-sharing plan, system or trust), a\ntransfer of a security to a beneficiary pursuant to part 4 of article 13\nof this chapter, any other disposition or transfer created by any\ntestamentary or nontestamentary instrument, or by operation of law, and\nany of the foregoing created or increased by reason of a renunciation\nmade by another person.\n (2) The effective date of the disposition for purposes of this section\nshall be:\n A. If the disposition is created by will, the exercise or nonexercise\nof a testamentary power of appointment, a distribution pursuant to\n4-1.1, the deposit of money in a trust account as defined in 7-5.1, the\nregistration of a security in beneficiary form pursuant to part 4 of\narticle 13 of this chapter, a life insurance or annuity contract, the\ndeath of a joint tenant or tenant by the entirety, or an employee\nbenefit plan, the date of death of the deceased testator, holder of the\npower of appointment, intestate, creator of the trust account,\nregistered owner of the security, insured, annuitant, other joint tenant\nor tenant by the entirety, or employee, as the case may be;\n B. If the disposition is created by trust agreement, the exercise of a\npresently exercisable power of appointment, the creation of a joint\ntenancy or tenancy by the entirety, or the renunciation of a disposition\ncreated by another, the date as of which the transfer in trust is\nirrevocable and is a completed gift for federal gift tax purposes\n(regardless of whether a gift tax is imposed on the completed gift), the\ndate of the exercise of the power of appointment, the creation of a\njoint tenancy or tenancy by the entirety, or renunciation, as the case\nmay be; and\n C. If the disposition is created by any other testamentary or\nnontestamentary instrument, or by operation of law, the date of the\nevent by which the beneficiary is finally ascertained.\nNotwithstanding the foregoing, the effective date of a disposition which\nis of a future estate shall be the date on which it becomes an estate in\npossession.\n (c) (1) Any beneficiary of a disposition may renounce all or part of\nsuch beneficiary's interest; provided, however, that a surviving joint\ntenant or tenant by the entirety may renounce the interest to which such\ntenant succeeds, by operation of law upon the death of another joint\ntenant or tenant by the entirety, to the extent such interest could be\nthe subject of a qualified disclaimer under section 2518 of the United\nStates Internal Revenue Code of 1986, as amended.\n (2) Such renunciation shall be in writing, signed and acknowledged by\nthe person renouncing, and shall be filed in the office of the clerk of\nthe court having jurisdiction over the will or trust agreement governing\nthe property of which the disposition would otherwise be made or the\ncourt which issued letters of administration, or if there is no probate\nor administration, then in a surrogate's court provided by law as the\nplace of probate or administration of the decedent's estate, within nine\nmonths after the effective date of the disposition. Such renunciation\nshall be accompanied by an affidavit of the renouncing party that such\nparty has not received and is not to receive any consideration in money\nor money's worth for such renunciation from a person or persons whose\ninterest is to be accelerated, unless payment of such consideration has\nbeen authorized by the court. Notice of such renunciation, which shall\ninclude a copy of the renunciation, shall be served personally or in\nsuch manner as the court may direct upon the fiduciary directed by the\nwill or trust agreement to make the disposition or upon the\nadministrator or such other person who was directed to make the\ndisposition or upon any other person having custody or possession of or\nlegal title to the property, an interest in which is being renounced,\nand by mail or in such manner as the court may direct upon all persons\nwhose interest may be created or increased by reason of such\nrenunciation. The time to file and serve such renunciation may be\nextended, in the discretion of the court, on a petition showing\nreasonable cause and on notice to such persons and in such manner as the\ncourt may direct. The time limited in this section for filing and\nserving such renunciation is exclusive, and shall not be suspended or\notherwise affected by any other provision of law; such renunciation\nshall be effective as of the date of such filing, notwithstanding that\nnotice thereof may thereafter be required by the court.\n (d) A renunciation may be made by:\n (1) The guardian of the property of an infant, when so authorized by\nthe court having jurisdiction of the estate of the infant.\n (2) The committee of an incompetent when so authorized by the court\nthat appointed the committee.\n (3) The conservator of a conservatee, when so authorized by the court\nthat appointed the conservator.\n (4) A guardian appointed under article eighty-one of the mental\nhygiene law, when so authorized by the court that appointed the\nguardian.\n (5) The personal representative of a decedent, provided, however, that\nthe personal representative may seek authorization from the court having\njurisdiction of the estate of the decedent.\n (6) An attorney-in-fact, when so authorized under a duly executed\npower of attorney, provided, however, that any renunciation by an\nattorney-in-fact of a person under disability shall not be effective\nunless it is further authorized by the court with which the renunciation\nmust be filed under subparagraph two of paragraph (c) of this section,\nand provided, further, that a renunciation by an attorney-in-fact of a\nperson not under disability may be made without court authorization,\nunless the property which would have passed under said renunciation is,\nby reason of said renunciation, disposed of in favor of such\nattorney-in-fact or the spouse or issue of such attorney-in-fact, in\nwhich case such renunciation shall not be effective unless either (A)\nthe instrument appointing such attorney-in-fact expressly authorizes a\nrenunciation in favor of such attorney-in-fact or the spouse or issue of\nsuch attorney-in-fact, or (B) such renunciation has been authorized by\nthe court with which the renunciation must be filed under subparagraph\ntwo of paragraph (c) of this section.\n (e) Unless the creator of the disposition has otherwise provided, the\nfiling of a renunciation, as provided in this section, has the same\neffect with respect to the renounced interest as though the renouncing\nperson had predeceased the creator or the decedent or, if the renounced\ninterest is a future estate, as though the renouncing person had died at\nthe time of filing or just prior to its becoming an estate in\npossession, whichever is earlier in time, and shall have the effect of\naccelerating the possession and enjoyment of subsequent interests, but\nshall have no effect upon the vesting of a future estate which by the\nterms of the disposition is limited upon a preceding estate other than\nthe renounced interest. If, pursuant to the preceding sentence, there\nwould occur a per stirpes disposition of the renounced interest or a\ndisposition or distribution of the renounced interest by representation,\nthen solely for purposes of applying 1-2.14 or 1-2.16, as the case may\nbe, the renouncing person shall be treated as having died on the same\ndate as, but immediately after, the creator or decedent or, if the\nrenounced interest is a future estate, as having died on the same date\nas, but immediately after, its becoming an estate in possession or, if\nthe time of filing is earlier in time, on the same date as, but\nimmediately after, such filing. Such renunciation is retroactive to the\ncreation of the disposition. A person who has a present and a future\ninterest in property and renounces the present interest in whole or in\npart shall be deemed to have renounced the future interest to the same\nextent.\n (f) A beneficiary may accept one disposition and renounce another, may\nrenounce a disposition in whole or in part, or with reference to\nspecific amounts, parts, fractional shares or assets thereof.\nNotwithstanding the provisions of paragraph (e) of this section, a\nrenunciation by a surviving spouse of a decedent of a disposition\ncreated by said decedent shall not be deemed to be a renunciation by\nsuch spouse of all or any part of any other disposition to or in favor\nof such spouse, regardless of whether the property which would have\npassed under said renounced disposition is by reason of said\nrenunciation disposed of to or in favor of such spouse. Unless a\nrenouncing person has provided otherwise in his renunciation, the effect\nof a renunciation of a fractional part of a disposition is to renounce\nsuch fraction of all property to which the renouncing person is entitled\nunder the disposition.\n (g) A renunciation may not be made under this section with respect to\nany property which a renouncing person has accepted, except that an\nacceptance does not preclude a person from renouncing all or part of any\nproperty to which such person becomes entitled when another person\nrenounces after such acceptance. For purposes of this paragraph, a\nperson accepts an interest in property if such person voluntarily\ntransfers or encumbers, or contracts to transfer or encumber all or part\nof such interest, or accepts delivery or payment of, or exercises\ncontrol as beneficial owner over all or part thereof, or executes a\nwritten waiver of the right to renounce, or otherwise indicates\nacceptance of all or part of such interest. A written waiver of the\nright to renounce shall be binding on the person waiving and all parties\nclaiming by, through or under such person.\n (h) A renunciation filed under this section is irrevocable.\n (i) This section shall not abridge the right of any beneficiary or any\nother person to assign, convey, release or renounce any property or\ninterest therein arising under any other section of this chapter or\nother statute or under common law.\n (j) Except as specifically provided in the trust instrument, the will,\nany other instrument creating the disposition, or in this section, this\nsection shall apply to each disposition the effective date of which (as\ndefined in this section) is on or after the effective date of this\nsection, except that with respect to the renunciation of a future\ninterest this section shall apply as well to dispositions created or\nincreased prior to the effective date of this section.\n