House File 661 - Enrolled




                              HOUSE FILE       
                              BY  COMMITTEE ON WAYS AND
                                  MEANS

                              (SUCCESSOR TO HF 367)
                              (SUCCESSOR TO HSB 41)
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                                   A BILL FOR
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                                         House File 661

                             AN ACT
 RELATING TO PROBATE AND ESTATE=RELATED LAWS, INCLUDING THE
    DEDUCTION OF ADMINISTRATIVE EXPENSES ON THE IOWA FIDUCIARY
    INCOME TAX RETURN, THE IOWA INHERITANCE TAX, FIDUCIARIES'
    RIGHT TO PROPERTY AND INFORMATION, AND THE SURVIVING
    SPOUSE'S ELECTIVE SHARE, AND INCLUDING RETROACTIVE AND OTHER
    APPLICABILITY PROVISIONS.

 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
                           DIVISION I
                      FIDUCIARY INCOME TAX
    Section 1.  Section 422.7, Code 2015, is amended by adding
 the following new subsection:
    NEW SUBSECTION.  57.  On the Iowa fiduciary income tax
 return, subtract the amount of administrative expenses that
 were not taken or allowed as a deduction in calculating net
 income for federal fiduciary income tax purposes.
                           DIVISION II
                         INHERITANCE TAX
    Sec. 2.  Section 450.9, Code 2015, is amended to read as
 follows:
    450.9  Individual exemptions.
    In computing the tax on the net estate, the entire
 amount of property, interest in property, and income
 passing to the surviving spouse, and parents, grandparents,
 great=grandparents, and other lineal ascendants, children
 including legally adopted children and biological children
 entitled to inherit under the laws of this state, stepchildren,
 and grandchildren, great=grandchildren, and other lineal
 descendants, and stepchildren and their lineal descendants are
 exempt from tax.  "Lineal descendants" includes descendants by
 adoption.
                          DIVISION III
                   FIDUCIARY WRITTEN REQUESTS
    Sec. 3.  Section 633.78, Code 2015, is amended by striking
 the section and inserting in lieu thereof the following:
    633.78  Fiduciary written request and third=party protection.
    1.  A fiduciary under this chapter may present a written
 request to any person for the purpose of obtaining property
 owned by a decedent or by a ward of a conservatorship for
 which the fiduciary has been appointed, or property to which
 a decedent or ward is entitled, or for information about such
 property needed to perform the fiduciary's duties. The request
 must contain statements confirming all of the following:
    a.  The fiduciary's authority has not been revoked, modified,
 or amended in any manner which would cause the representations
 in the request to be incorrect.
    b.  The request has been signed by all fiduciaries acting on
 behalf of the decedent or ward.
    c.  The request has been sworn and subscribed to under
 penalty of perjury before a notary public as provided in
 chapter 9B.
    d.  A photocopy of the fiduciary's letters of appointment is
 being provided with the request.
    2.  A person to whom a request is presented under this
 section may require that the fiduciary presenting the request
 provide proof of the fiduciary's identity.
    3.  A person who in good faith provides the property or
 information a fiduciary requests under this section, after
 taking reasonable steps to verify the identity of the fiduciary
 and who has no knowledge that the representations contained in
 the request are incorrect, shall not be liable to any person
 for so acting and may assume without inquiry the existence of
 the facts contained in the request. The period of time to
 verify the fiduciary's authority shall not exceed ten business
 days from the date the person received the request. Any right
 or title acquired from the fiduciary in consideration of the
 provision of property or information under this section is not
 invalid in consequence of a misapplication by the fiduciary. A
 transaction, and a lien created by a transaction, entered into
 by the fiduciary and a person acting in reliance upon a request
 under this section is enforceable against the assets for which
 the fiduciary has responsibility.
    4.  If a person refuses to provide the requested property
 or information within ten business days after receiving a
 request under this section, the fiduciary may bring an action
 to recover the property or information or compel its delivery
 against the person to whom the fiduciary presented the written
 request. An action brought under this section must be brought
 within one year after the date of the act or failure to act.
 If the court finds that the person acted unreasonably in
 failing to deliver the property or information as requested
 in the written request, the court may award any or all of the
 following to the fiduciary:
    a.  Damages sustained by the decedent's or ward's estate.
    b.  Costs of the action.
    c.  A penalty in an amount determined by the court, but
 not less than five hundred dollars or more than ten thousand
 dollars.
    d.  Reasonable attorney fees, as determined by the court,
 based on the value of the time reasonably expended by the
 attorney and not by the amount of the recovery on behalf of the
 fiduciary.
    5.  This section does not limit or change the right of
 beneficiaries, heirs, or creditors to estate property to which
 they are otherwise entitled.
                           DIVISION IV
               ELECTIVE SHARE OF SURVIVING SPOUSE
    Sec. 4.  Section 633.238, Code 2015, is amended to read as
 follows:
    633.238  Elective share of surviving spouse.
    1.  The elective share of the surviving spouse shall be
 limited to all of the following:
    a.  One=third in value of all the legal or equitable estates
 in real property possessed by the decedent at any time during
 the marriage which have not been sold on execution or other
 judicial sale, and to which the surviving spouse has made no
 express written relinquishment of right, including but not
 limited to any relinquishments of rights described in paragraph
 "d".
    b.  All personal property that, at the time of death, was in
 the hands of the decedent as the head of a family, exempt from
 execution.
    c.  One=third of all personal property of the decedent that
 is not necessary for the payment of debts and charges.
    d.  (1)  One=third in value of the property held in trust
 not necessary for the payment of debts and charges over which
 the decedent was a grantor settlor and retained at the time of
 death the power to alter, amend, or revoke the trust, or over
 which the decedent waived or rescinded any such power within
 one year of the date of death, and to which the surviving
 spouse has not made any express written relinquishment in
 compliance with subparagraph (2).
    (2)  The elective share of the surviving spouse shall not
 include the value of the property held in a trust described in
 subparagraph (1), if both of the following are true:
    (a)  The decedent created the trust after the date of
 decedent's marriage to the surviving spouse.
    (b)  Every transfer of property into the trust, except
 for tangible personal property, included a written statement
 which complied with this subparagraph division. The written
 statement shall be in boldface type of a minimum size of ten
 points, signed and dated by the surviving spouse with a valid
 notarial acknowledgment, and in substantially the following
 form:
    By signing below, I acknowledge that I am giving up all
 rights to enjoyment of the property described above, regardless
 of whether or not I survive my spouse and regardless of any
 rights Iowa law otherwise gives to me with respect to such
 property. I am specifically waiving my elective share in the
 property described in this waiver.
    This waiver shall apply regardless of any changes made to the
 trust in the future, including any change to the beneficiaries
 of the trust.
    2.  When a settlor of a revocable trust transfers real
 property to the trustee of the revocable trust and the
 settlor's spouse signs a conveyance of the real property to
 such trustee which includes a general waiver of rights of
 dower, homestead, and distributive share, the spouse is only
 relinquishing the right to that real property and its value
 under subsection 1, paragraph "a", for the purpose of conveying
 marketable title to a subsequent purchaser from the trustee
 and is not relinquishing the right to the value of the real
 estate under subsection 1, paragraph "d", unless the spouse
 specifically states in writing an intent to relinquish the
 right to the value of the real estate under subsection 1,
 paragraph "d". The relinquishment of right under subsection
 1, paragraph "a" shall not prevent the surviving spouse from
 electing one=third in value of such real property under
 subsection 1, paragraph "d".
    2.  3.  The elective share described in this section shall
 be in lieu of any property the spouse would otherwise receive
 under the last will and testament of the decedent, through
 intestacy, or under the terms of a revocable trust.
                           DIVISION V
           EFFECTIVE DATE AND APPLICABILITY PROVISIONS
    Sec. 5.  EFFECTIVE DATE.  The section of this Act amending
 section 450.9 takes effect July 1, 2016.
    Sec. 6.  APPLICABILITY.  The section of this Act amending
 section 450.9 applies to estates of decedents dying on or after
 July 1, 2016.
    Sec. 7.  RETROACTIVE APPLICABILITY.
    1.  The section of this Act amending section 422.7 applies to
 Iowa fiduciary income tax returns filed for tax years ending
 on or after July 1, 2015, and applies retroactively to July 1,
 2015, if approved by the governor on or after July 1, 2015.
    2.  The section of this Act amending section 633.78 applies
 to written requests presented by a fiduciary on or after July
 1, 2015, and applies retroactively to July 1, 2015, if approved
 by the governor on or after July 1, 2015.
    3.  The section of this Act amending section 633.238 applies
 to estates of decedents dying on or after July 1, 2015, and
 applies retroactively to July 1, 2015, if approved by the
 governor on or after July 1, 2015.


                                                             
                               KRAIG PAULSEN
                               Speaker of the House


                                                             
                               PAM JOCHUM
                               President of the Senate
    I hereby certify that this bill originated in the House and
 is known as House File 661, Eighty=sixth General Assembly.


                                                             
                               CARMINE BOAL
                               Chief Clerk of the House
 Approved                , 2015


                                                             
                               TERRY E. BRANSTAD
                               Governor

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