Full question:
My husband is the personal representative for his father's estate. Two accounts, one a bond fund and the other an IRA were transferred upon death to my husband. These funds are all going to be distributed to his siblings as my husband inherited other property. Our question is this: do TOD rules allow the funds be transferred to the siblings so that they may redeem them, or does my husband have to redeem them and then distribute to the siblings? It is a disadvantage to us in terms of taxes and applying for financial aid for college. We are not the recipients of any of this income so prefer a clean transfer to the siblings if this is allowed.
- Category: Wills and Estates
- Subcategory: Disclaimer of Property Interest
- Date:
- State: Maine
Answer:
If the property has already been transferred to the husband, he is now the owner and the transfer on death rules would not apply until the husband's death. Generally, a sole property owner has the right to transfer the property to another unless prevented by contractual restrictions. I suggest calling the companies involved to inquire about any such restrictions.
Please see the following Maine Statute:
18-A M.R.S.A. § 2-801. Renunciation of property interests
(a) A person, or a person with legal authority to represent an
incapacitated or protected person or the estate of a deceased person, to
whom an interest in or with respect to property or an interest therein or
a power of appointment over such property devolves by whatever means may
renounce it in whole or in part by delivering a written renunciation
under this section. The right to renounce exists notwithstanding any
limitation on the interest of the person renouncing in the nature of a
spendthrift provision of similar restriction.
(b) A renunciation under this section must be an irrevocable and
unqualified refusal by a person to accept an interest in property, and
must comply with the following requirements:
(1) If the property, interest or power has devolved to the person
renouncing under a testamentary instrument or by the laws of intestacy,
the renunciation must be received by the personal representative, or
other fiduciary, of the decedent or deceased donee of a power of
appointment, or by the holder of the legal title to the property to which
the interest relates, (i) in the case of a present interest, not later
than 9 months after the death of the deceased owner or deceased donee of
the power, or (ii) in the case of a future interest, not later than 9
months after the event determining that the taker of the property,
interest or power has become finally ascertained and his interest is
indefeasibly vested. A copy of the renunciation may be filed in the
Registry of Probate of the court in which proceedings for the
administration of the deceased owner or deceased donee of the power have
been commenced, or if no administration has been commenced, in the court
where such proceedings could be commenced.
(2) If the property, interest or power has devolved to the person
renouncing under a nontestamentary instrument or contract, the
renunciation must be received by the transferor, his legal
representative, or the holder of the legal title to the property to which
the interest relates (i) in the case of a present interest, not later
than 9 months after the effective date of the nontestamentary instrument
or contract, or (ii) in the case of a future interest, not later than 9
months after the event determining that the taker of the property,
interest or power has become finally ascertained and his interest is
indefeasibly vested. If the person entitled to renounce does not have
actual knowledge of the existence of his interest, the time limits for
receipt of the renunciation shall be extended to not later than 9 months
after he has knowledge of the existence of his 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 himself or another the
entire legal and equitable ownership of the interest.
(c) A surviving joint tenant may renounce as a separate interest any
property or interest therein devolving to him by right of survivorship. A
surviving joint tenant may renounce the entire interest in any property
or interest therein that is the subject of a joint tenancy devolving to
him, if the joint tenancy was created by act of a deceased joint tenant
and the survivor did not join in creating the joint tenancy.
(d) If real property or an interest therein or a power thereover is
renounced, a copy of the renunciation may be recorded in the Registry of
Deeds of the county in which the property is located, and the recording
or lack of recording shall have the same effect for purposes of the
recording act as the recording or lack of recording of other instruments
under Title 33, section 201.
(e) A renunciation under this section shall describe the property,
interest or power renounced, declare the renunciation and extent
thereof, be signed by the person renouncing, and if within the provisions
of subsection (b), paragraph (2), declare the date the person renouncing
first had actual knowledge of the existence of his interest whenever that
date is material under subsection (b), paragraph (2).
(f) The devolution of any property or interest renounced under this
section is governed by the following provisions of this subsection:
(1) If the property or interest devolved to the person renouncing under
a testamentary instrument or under the laws of intestacy and the deceased
owner or donee of a power of appointment has not provided for another
disposition, it devolves as if the person renouncing had predeceased the
decedent or, if the person renouncing was designated to take under a
power of appointment exercised by a testamentary instrument, it devolves
as if the person renouncing had predeceased the donee of the power. Any
future interest that takes effect in possession or enjoyment after the
termination of the estate or interest renounced, takes effect as if the
person renouncing had died before the event determining that the taker of
the property or interest had become finally ascertained and his interest
is indefeasibly vested. A renunciation relates back for all purposes to
the date of death of the decedent, or of the donee of the power, or the
determinative event, as the case may be.
(2) If the property or interest devolved to the person renouncing under
a nontestamentary instrument or contract and the instrument or contract
does not provide for another disposition, it devolves as if the person
renouncing had died before the effective date of the instrument or
contract. Any future interest that takes effect in possession or
enjoyment at or after the termination of the renounced estate or
interest, takes effect as if the person renouncing had died before the
event determining the taker of the property or interest had become
finally ascertained and his interest indefeasibly vested. A renunciation
relates back for all purposes to the effective date of the instrument or
the date of the determinative event, as the case may be.
(3) The renunciation or the written waiver of the right to disclaim is
binding upon the person renouncing or waiving and upon all persons
claiming through or under him.
(g) The right to renounce property or an interest therein or a power of
appointment is barred by (1) an assignment, conveyance, encumbrance,
pledge or transfer of the property or interest, or a contract therefor,
(2) a written waiver of the right to renounce, (3) an acceptance of the
property or interest or a benefit thereunder, or (4) a sale of the
property or interest under judicial sale made before the renunciation is
effected.
(h) This section does not abridge the right of a person to waive,
release, disclaim or renounce property or an interest therein or a power
of appointment under any other statute.
(i) An interest in property that exists on the effective date of this
section as to which the time for renouncing has not expired under this
section, may be renounced by compliance with this section.
(j) Any renunciation which is effective as a "qualified disclaimer"
under section 2518(b) of the Internal Revenue Code is effective as a
renunciation under this section, notwithstanding any provisions of this
section to the contrary.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
