Utah 2023 Regular Session

Utah House Bill HB0432 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled Copy H.B. 432
	1	+	1st Sub. H.B. 432
	2	+	LEGISLATIVE GENERAL COUNSEL
	3	+	6 Approved for Filing: P. Owen 6
	4	+	6 02-15-23 1:57 PM 6
	5	+	H.B. 432
	6	+	1st Sub. (Buff)
	7	+	Representative Brady Brammer proposes the following substitute bill:
2	8		1 PROBATE MODIFICATIONS
3	9		2 2023 GENERAL SESSION
4	10		3 STATE OF UTAH
5	11		4 Chief Sponsor: Brady Brammer
6		-	5 Senate Sponsor: ~~Daniel McCay~~
	12	+	5 Senate Sponsor: ____________
7	13		6
8	14		7LONG TITLE
9	15		8General Description:
10	16		9 This bill addresses probate provisions.
11	17		10Highlighted Provisions:
12	18		11 This bill:
13	19		12 <addresses when certain nonvested property interests or powers of appointment are
14	20		13created;
15	21		14 <permits a court in an action related to the administration of an estate to award costs
16	22		15and expenses, including reasonable attorney fees, to any party to be paid by another
17	23		16party or from the estate that is the subject of the controversy;
18	24		17 <addresses when a creditor of a settlor may not satisfy the creditor's claim from an
19	25		18irrevocable trust; and
20	26		19 <make technical and conforming changes.
21	27		20Money Appropriated in this Bill:
22	28		21 None
23	29		22Other Special Clauses:
24	30		23 None
25	31		24Utah Code Sections Affected:
26	32		25AMENDS:
	33	+	HB0432S01 1st Sub. (Buff) H.B. 432 02-15-23 1:57 PM
	34	+	- 2 -
27	35		26 75-2-1204, as last amended by Laws of Utah 2013, Chapter 364
28	36		27 75-3-719, as last amended by Laws of Utah 2012, Chapter 274
29	37		28 75-7-505, as last amended by Laws of Utah 2017, Chapters 125, 204
30		-	29 H.B. 432 Enrolled Copy
31		-	- 2 -
	38	+	29
32	39		30Be it enacted by the Legislature of the state of Utah:
33	40		31 Section 1. Section 75-2-1204 is amended to read:
34	41		32 75-2-1204. When nonvested property interest or power of appointment created.
35	42		33 (1) Except as [provided in Subsections (2) and (3) and in] otherwise provided in this
36	43		34section or Section 75-2-1207, the time of creation of a nonvested property interest or a power
37	44		35of appointment is determined under general principles of property law.
38	45		36 (2) For purposes of this part, if there is a person who alone can exercise a power
39	46		37created by a governing instrument to become the unqualified beneficial owner of:
40	47		38 (a) a nonvested property interest; or
41	48		39 (b) a property interest subject to a power of appointment described in Section
42	49		4075-2-1203, the nonvested property interest or power of appointment is created when the power
43	50		41to become the unqualified beneficial owner terminates.
44	51		42 (3) For purposes of this title, a nonvested property interest or a power of appointment
45	52		43arising from a transfer of property to a previously funded trust or other existing property
46	53		44arrangement is created when the nonvested property interest or power of appointment in the
47	54		45original contribution was created.
48	55		46 (4) A person who exercises an initial power of appointment may provide in the
49	56		47exercise of that power of appointment:
50	57		48 (a) for a nonvested property interest that is considered:
51	58		49 (i) created when the initial power is irrevocably exercised or when a revocable exercise
52	59		50becomes irrevocable; and
53	60		51 (ii) not created at the time of the creation of the initial power of appointment that is
54	61		52exercised; and
55	62		53 (b) for a further power of appointment created by the exercise of the initial power of
56	63		54appointment that is considered:
57	64		55 (i) created when the initial power is irrevocably exercised or when a revocable exercise
58		-	56becomes irrevocable; and
59		-	57 (ii) not created at the time of the creation of the initial power of appointment that is Enrolled Copy H.B. 432
	65	+	56becomes irrevocable; and 02-15-23 1:57 PM 1st Sub. (Buff) H.B. 432
60	66		- 3 -
	67	+	57 (ii) not created at the time of the creation of the initial power of appointment that is
61	68		58exercised.
62	69		59 Section 2. Section 75-3-719 is amended to read:
63	70		60 75-3-719. Costs and expenses in estate litigation.
64	71		61 (1) (a) In a judicial proceeding involving the administration of an estate, the court may,
65	72		62as justice and equity may require, award costs and expenses, including reasonable attorney fees,
66	73		63to any party to be paid by another party or from the estate that is the subject of the controversy.
67	74		64 (b) This Subsection (1) does not apply to the Office of the Attorney General when the
68	75		65Office of the Attorney General is a party to a judicial proceeding involving the administration
69	76		66of an estate to protect a public or charitable interest.
70	77		67 (2) If any personal representative or person nominated as personal representative
71	78		68defends or prosecutes any proceeding in good faith, whether successful or not, the personal
72	79		69representative is entitled to receive from the estate [all] the necessary expenses and
73	80		70disbursements, including reasonable attorney fees incurred. This [provision] Subsection (2)
74	81		71expressly applies in a will contest to any person nominated as a personal representative in a
75	82		72testamentary instrument submitted in good faith.
76	83		73 Section 3. Section 75-7-505 is amended to read:
77	84		74 75-7-505. Creditor's claim against settlor.
78	85		75 [Whether or not] Regardless of whether the terms of a trust contain a spendthrift
79	86		76provision, the following rules apply:
80	87		77 (1) During the lifetime of the settlor, the property of a revocable trust is subject to the
81	88		78claims of the settlor's creditors. If a revocable trust has more than one settlor, the amount the
82	89		79creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the
83	90		80portion of the trust attributable to that settlor's contribution.
84	91		81 (2) (a) With respect to an irrevocable trust other than an irrevocable trust that meets the
85	92		82requirements of Section 25-6-502, a creditor or assignee of the settlor may reach the maximum
86	93		83amount that can be distributed to or for the settlor's benefit.
87	94		84 (b) [If the trust has] With respect to an irrevocable trust that has more than one settlor,
88		-	85other than an irrevocable trust that meets the requirements of Section 25-6-502, the amount H.B. 432 Enrolled Copy
	95	+	85other than an irrevocable trust that meets the requirements of Section 25-6-502, the amount
	96	+	86[the] a creditor or assignee of a particular settlor may reach may not exceed the settlor's interest
	97	+	87in the portion of the trust attributable to that settlor's contribution. 1st Sub. (Buff) H.B. 432 02-15-23 1:57 PM
89	98		- 4 -
90		-	86[the] a creditor or assignee of a particular settlor may reach may not exceed the settlor's interest
91		-	87in the portion of the trust attributable to that settlor's contribution.
92	99		88 (c) Notwithstanding Subsections (2)(a) and (b), a creditor of a settlor may not satisfy
93	100		89the creditor's claim from an irrevocable trust solely because the trustee may make a
94	101		90discretionary distribution reimbursing the settlor for income tax liability of the settlor
95	102		91attributable to the income of the irrevocable trust, when the distribution is:
96	103		92 (i) subject to the discretion of a trustee who is not the settlor;
97	104		93 (ii) subject to the consent of an advisor who is not the settlor; or
98	105		94 (iii) at the direction of an advisor who is not the settlor.
99	106		95 (3) After the death of a settlor, and subject to the settlor's right to direct the source from
100	107		96which liabilities will be paid, the property of a trust that was revocable at the settlor's death, but
101	108		97not property received by the trust as a result of the death of the settlor which is otherwise
102	109		98exempt from the claims of the settlor's creditors, is subject to claims of the settlor's creditors,
103	110		99costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal
104	111		100of remains, and statutory allowances to a surviving spouse and children to the extent the
105	112		101settlor's probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.