Tuesday, March 31, 2015

SECTION 2-1102. Uniform Probate Code DEFINITIONS

SECTION 2-1102. DEFINITIONS. In this [part]:
(1) “Disclaimant” means the person to whom a disclaimed interest or power would have passed had the disclaimer not been made.
(2) “Disclaimed interest” means the interest that would have passed to the disclaimant had the disclaimer not been made.
(3) “Disclaimer” means the refusal to accept an interest in or power over property.
(4) “Fiduciary” means a personal representative, trustee, agent acting under a power of attorney, or other person authorized to act as a fiduciary with respect to the property of another person.
(5) “Jointly held property” means property held in the name of two or more persons
295
under an arrangement in which all holders have concurrent interests and under which the last surviving holder is entitled to the whole of the property.
(6) “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation, or any other legal or commercial entity.
(7) “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. The term includes an Indian tribe or band, or Alaskan native village, recognized by federal law or formally acknowledged by a state.
(8) “Trust” means:
(A) an express trust, charitable or noncharitable, with additions thereto, whenever

and however created; and
(B) a trust created pursuant to a statute, judgment, or decree which requires the

trust to be administered in the manner of an express trust.
Comment
The definition of “disclaimant” (paragraph (1)) limits the term to the person who would have received the disclaimed property or power if the disclaimer had not been made. The disclaimant is not necessarily the person making the disclaimer, who may be a guardian, custodian, or other fiduciary acting for the disclaimant or the personal representative of the disclaimant’s estate.
The term “disclaimed interest” (paragraph (2)) refers to the subject matter of a disclaimer of an interest in property and provides a compact term the use of which simplifies the drafting of Section 2-1106.
The definition of “disclaimer” (paragraph (3)) expands previous definitions. Prior Uniform Acts provided for a disclaimer of “the right of succession to any property or interest therein” and former Section 2-801 referred to “an interest in or with respect to property or an interest therein.” These previously authorized types of disclaimers are continued by the present language referring to “an interest in...property.” The language referring to “power over property” broadens the permissible scope of disclaimers to include any power over property that gives the
296

power-holder a right to control property, whether it be cast in the form of a power of appointment or a fiduciary’s management power over property or discretionary power of distribution over income or corpus.
Under the Act, a “fiduciary” (defined in paragraph (4)) is given the power to disclaim except where specifically prohibited by state law or by the document creating the fiduciary relationship. See Section 2-1105(b).
The term “jointly held property” (paragraph (5)) includes not only a traditional joint tenancy but also other property that is “held,” but may not be “owned,” by two or more persons with a right of survivorship. One form of such property is a joint bank account between parties who are not married to each other which, under the laws of many states, is owned by the parties in proportion to their deposits. (See Section 6-211(b).) This “holding” concept, as opposed to “owning,” may also be true with joint brokerage accounts under the law of some states. See Treas. Regs. § 25.2518-2(c)(4).
The terms “person” (paragraph (6)), “state” (paragraph (7)), and “trust” (paragraph (8)), are also defined in Section 1-201 of this Code, but the more modern version of these definitions is included here for ease of reference. For purposes of this part, the definitions in this section control.
The term “trust” (paragraph (8)) means an express trust, whether private or charitable, including a trust created by statute, court judgment or decree which is to be administered in the manner of an express trust. Excluded from the Act’s coverage are resulting and constructive trusts, which are not express trusts but remedial devices imposed by law. The Act is directed primarily at express trusts which arise in an estate planning or other donative context, but the definition of “trust” is not so limited. A trust created pursuant to a divorce action would be included, even though such a trust is not donative but is created pursuant to a bargained for exchange. The extent to which even more commercially-oriented trusts are subject to the Act will vary depending on the type of trust and the laws, other than this Act, under which the trust is created. Commercial trusts come in various forms, including trusts created pursuant to a state business trust act and trusts created to administer specified funds, such as to pay a pension or to manage pooled investments. See John H. Langbein, The Secret Life of the Trust: The Trust as an Instrument of Commerce, 107 Yale L.J. 165 (1997). 

No comments: