Bill Text: AZ SB1232 | 2013 | Fifty-first Legislature 1st Regular | Chaptered
Bill Title: Trusts and estates
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2013-04-16 - Governor Signed [SB1232 Detail]
Download: Arizona-2013-SB1232-Chaptered.html
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Senate Engrossed |
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State of Arizona Senate Fifty-first Legislature First Regular Session 2013
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CHAPTER 112
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SENATE BILL 1232 |
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AN ACT
Amending sections 14-2902, 14-2905, 14-3971, 14-10002, 14-10111, 14-10504, 14-10505, 14-10506, 14-10814, 14-10818 and 33-1126, Arizona Revised Statutes; relating to trusts and estates.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 14-2902, Arizona Revised Statutes, is amended to read:
14-2902. Nonvested property interest or power of appointment; creation
A. Except as provided in subsections B and C of this section and section 14‑2905, subsection A C, the time of creation of a nonvested property interest or a power of appointment is determined under general principles of property law.
B. If there is a person who alone can exercise a power created by a governing instrument to become the unqualified beneficial owner of a nonvested property interest or a property interest subject to a power of appointment described in section 14‑2901, subsection B or C, the nonvested property interest or power of appointment is created when that person's power to become the unqualified beneficial owner terminates. A joint power with respect to community property or to marital property held by a married couple is a power exercisable by one person alone.
C. A nonvested property interest or a power of appointment arising from a transfer of property to a previously funded trust or any other existing property arrangement is created when the nonvested property interest or power of appointment in the original contribution was created.
Sec. 2. Section 14-2905, Arizona Revised Statutes, is amended to read:
14-2905. Nonvested property interest or power of appointment; creation; effective date; judicial reformation
A. Except as otherwise provided, this article applies to a nonvested property interest or a power of appointment that is created on or after December 31, 1994.
B. If a nonvested property interest or a power of appointment is determined in a judicial proceeding to violate this state's rule against perpetuities as that rule existed when the nonvested property interest or power of appointment was created, a court on the petition of an interested person may reform the disposition in the manner that most closely approximates the transferor's manifested plan of distribution and that is within the limits of the requirements of section 14‑2901.
C. For the purposes of this article, if the person who exercises a power of appointment so provides in the exercise, a nonvested property interest or a power of appointment created by the exercise of a power of appointment is created when the power is irrevocably exercised or when a revocable exercise becomes irrevocable.
Sec. 3. Section 14-3971, Arizona Revised Statutes, is amended to read:
14-3971. Collection of personal property by affidavit; ownership of vehicles; affidavit of succession to real property
A. At any time after the death of a decedent, any employer owing wages, salary or other compensation for personal services of the decedent shall pay to the surviving spouse of the decedent the amount owing, not in excess of five thousand dollars, on being presented an affidavit made by or on behalf of the spouse stating that the affiant is the surviving spouse of the decedent, or is authorized to act on behalf of the spouse, and that no application or petition for the appointment of a personal representative is pending or has been granted in this state or, if granted, the personal representative has been discharged or more than one year has elapsed since a closing statement has been filed.
B. Thirty days after the death of a decedent, any person indebted to the decedent or having possession of tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action belonging to the decedent shall make payment of the indebtedness or deliver the tangible personal property or an instrument evidencing a debt, obligation, stock or chose in action to a person claiming to be the successor of the decedent upon being presented an affidavit made by or on behalf of the successor and stating that all of the following are true:
1. Thirty days have elapsed since the death of the decedent.
2. Either:
(a) An application or petition for the appointment of a personal representative is not pending and a personal representative has not been appointed in any jurisdiction and the value of all personal property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed fifty seventy-five thousand dollars as valued as of the date of death.
(b) The personal representative has been discharged or more than one year has elapsed since a closing statement has been filed and the value of all personal property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed fifty seventy-five thousand dollars as valued as of the date of the affidavit.
3. The claiming successor is entitled to payment or delivery of the property.
C. A transfer agent of any security shall change the registered ownership on the books of a corporation from the decedent to the successor or successors on presentation of an affidavit pursuant to subsection B of this section.
D. The motor vehicle division shall transfer title of a motor vehicle from the decedent to the successor or successors on presentation of an affidavit as provided in subsection B of this section and on payment of the necessary fees.
E. No sooner than six months after the death of a decedent, a person or persons claiming as successor or successors to the decedent's interest in real property, including any debt secured by a lien on real property, may file in the court in the county in which the decedent was domiciled at the time of death, or if the decedent was not domiciled in this state then in any county in which real property of the decedent is located, an affidavit describing the real property and the interest of the decedent in that property and stating that all of the following are true and material and acknowledging that any false statement in the affidavit may subject the person or persons to penalties relating to perjury and subornation of perjury:
1. Either:
(a) An application or petition for the appointment of a personal representative is not pending and a personal representative has not been appointed in any jurisdiction and the value of all real property in the decedent's estate located in this state, less liens and encumbrances against the real property, does not exceed seventy-five one hundred thousand dollars as valued at the date of death. The value of the decedent's interest in that real property shall be determined from the full cash value of the property as shown on the assessment rolls for the year in which the decedent died, except that in the case of a debt secured by a lien on real property the value shall be determined by the unpaid principal balance due on the debt as of the date of death.
(b) The personal representative has been discharged or more than one year has elapsed since a closing statement has been filed and the value of all real property in the decedent's estate, wherever located, less liens and encumbrances, does not exceed seventy-five one hundred thousand dollars as valued as of the date of the affidavit. The value of the decedent's interest in that real property is determined from the full cash value of the property as shown on the assessment rolls for the year in which the affidavit is given, except that if a debt is secured by a lien on real property, the value is determined by the unpaid principal balance due on the debt as of the date of the affidavit.
2. Six months have elapsed since the death of the decedent as shown in a certified copy of the decedent's death certificate attached to the affidavit.
3. Funeral expenses, expenses of last illness, and all unsecured debts of the decedent have been paid.
4. The person or persons signing the affidavit are entitled to the real property by reason of the allowance in lieu of homestead, exempt property or family allowance, by intestate succession as the sole heir or heirs, or by devise under a valid last will of the decedent, the original of which is attached to the affidavit or has been probated.
5. No other person has a right to the interest of the decedent in the described property.
6. No federal estate tax is due on the decedent's estate.
F. The normal filing fee shall be charged for the filing of an affidavit under subsection E of this section unless waived by the court as provided by section 12‑301 or 12‑302. On receipt of the affidavit and after determining that the affidavit is complete, the registrar shall cause to be issued issue a certified copy of the affidavit without attachments, and the copy shall be recorded in the office of the recorder in the county where the real property is located.
G. This section does not limit the rights of heirs and devisees under section 14‑3901.
Sec. 4. Section 14-10002, Arizona Revised Statutes, is amended to read:
14-10002. Definitions
In this chapter, unless the context otherwise requires:
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, a trustee, an agent acting under a power of attorney or any other person who is authorized to act as a fiduciary with respect to the property of another person.
4. 5. "Jointly held property" means property held in the name of two or more persons 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.
Sec. 5. Section 14-10111, Arizona Revised Statutes, is amended to read:
14-10111. Nonjudicial settlement agreements; definition
A. Except as otherwise provided in subsection B of this section, and except for modification or termination of a trust as otherwise permitted pursuant to the trust instrument, interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust.
B. A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the court under this chapter or other applicable law.
C. Matters that may be resolved by a nonjudicial settlement agreement include:
1. The interpretation or construction of the terms of the trust.
2. The approval of a trustee's report or accounting.
3. Direction to a trustee to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power.
4. The resignation or appointment of a trustee and the determination of a trustee's compensation.
5. The transfer of a trust's principal place of administration.
6. The liability of a trustee for an action relating to the trust.
D. Before or after the parties enter into a nonjudicial settlement agreement, any interested person may request the court to approve a nonjudicial settlement agreement to determine whether the representation as provided in article 3 of this chapter was adequate and to determine whether the agreement contains terms and conditions the court could have properly approved.
E. Unless the interested person, pursuant to subsection D of this section, asks the court to rule without regard to this subsection, the court may either approve the agreement or decline to approve the agreement, but may not disapprove or deny the effectiveness of the agreement. If the court does not approve the agreement pursuant to this subsection, the failure to approve is not any prejudice against the effectiveness of the agreement and is not a final judgment or judicial precedent with respect to the agreement or subsequent agreements pursuant to the section.
E. F. For the purposes of this section, "interested person" has the same meaning prescribed in section 14‑1201.
Sec. 6. Section 14-10504, Arizona Revised Statutes, is amended to read:
14-10504. Discretionary trusts; effect of standard; definition
A. Except as provided in subsection B of this section, whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee's discretion, even if either:
1. The discretion is expressed in the form of a standard of distribution.
2. The trustee has not complied with the applicable standard of distribution or has abused the discretion regarding distributions.
B. To the extent a trustee has not complied with the applicable standard of distribution or has abused the discretion regarding distributions:
1. Except as provided in section 14‑10503, a distribution may be ordered by the court to satisfy a judgment or court order against the beneficiary for support or maintenance of the beneficiary's child.
2. The court shall direct the trustee to pay to the child an amount as is equitable under the circumstances but not more than the amount the trustee would have been required to distribute to or for the benefit of the beneficiary had the trustee complied with the standard or not abused the discretion.
C. This section does not limit the right of a beneficiary to maintain a judicial proceeding against a trustee for an abuse of discretion or failure to comply with a standard for distribution, provided that this right may not be exercised by a creditor of the beneficiary or to the extent that any creditor of the beneficiary takes through the name or rights of the beneficiary.
D. Whether or not a trust contains a spendthrift provision:
1. A creditor of a trust beneficiary may not compel a distribution from insurance proceeds payable to the trustee as beneficiary to the extent state law exempts such the insurance proceeds from creditors' claims if it had been paid directly to the trust beneficiary.
2. To the extent that under Arizona law life insurance proceeds, policy cash surrender values or other distributions or payments are exempt from attachment or garnishment by, execution on or otherwise the reach of creditors, if the death benefit is payable to an individual beneficiary, the life insurance proceeds, policy cash surrender values or other distributions or payments are also exempt from attachment or garnishment by, execution on or otherwise the reach of creditors if payable to a trust of which a beneficiary is that individual.
E. A creditor of a beneficiary, whether or not the beneficiary is also a trustee or cotrustee, may not reach the beneficiary's beneficial interest or otherwise compel a distribution if either the trustee's discretion to make distributions for the trustee's or beneficiary's own benefit is purely discretionary or is limited by an ascertainable standard, including a standard relating to the beneficiary's health, education, support or maintenance or similar language within the meaning of section 2041(b)(1)(a) of the internal revenue code.
F. For the purposes of this section, "child" includes any person for whom an order or judgment for child support has been entered in this or another state.
Sec. 7. Section 14-10505, Arizona Revised Statutes, is amended to read:
14-10505. Creditor's claim against settlor
A. Whether or not the terms of a trust contain a spendthrift provision, the following rules apply:
1. During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors. If a trust has more than one settlor or contributor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. This paragraph does not abrogate otherwise applicable laws relating to community property.
2. Subject to the requirements of this section, with respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. This paragraph does not apply to any trust from which any distribution to the settlor can be made pursuant to the exercise of a power of appointment held by a third party or abrogate otherwise applicable laws relating to community property. A creditor of a settlor:
(a) Shall not reach any trust property based on a trustee's, trust protector's or third party's power, whether or not discretionary, to pay or reimburse the settlor for any income tax on trust income or trust principal that is payable by the settlor under the law imposing the tax or to pay the tax directly to any taxing authority.
(b) Is not entitled to any payment or reimbursement that is to be made directly to any taxing authority.
(c) Shall not reach or compel distributions to or for the benefit of the beneficiary of a special needs trust.
3. After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor's death is subject to claims of the settlor's creditors, costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal of remains and statutory allowances to a surviving spouse and children to the extent the settlor's probate estate is inadequate to satisfy those claims, costs, expenses and allowances, except to the extent that state or federal law exempts any property of the trust from these claims, costs, expenses or allowances. If a trust has more than one settlor or contributor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. This paragraph does not abrogate otherwise applicable laws relating to community property.
B. For the purposes of this section:
1. During the period the power may be exercised, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power.
2. On the lapse, release or waiver of a power of withdrawal, the holder is not, by reason of any such lapse, release or waiver power of withdrawal, treated as the settlor of the trust.
C. For the purposes of this section, a trust settled or established by a corporation, professional corporation, partnership, limited liability company, governmental entity, trust, foundation or other entity is not deemed to be settled or established by its directors, officers, shareholders, partners, members, managers, employees, beneficiaries or agents.
D. For the purposes of this section, amounts contributed to a trust by a corporation, professional corporation, partnership, limited liability company, governmental entity, trust, foundation or other entity are not deemed to have been contributed by its directors, officers, shareholders, partners, employees, beneficiaries or agents. Powers, duties or responsibilities granted to or reserved by the settlor pursuant to the trust and any actions or omissions taken pursuant to the trust are deemed to be the powers, responsibilities, duties, actions or omissions of the settlor and not those of its directors, officers, shareholders, partners, members, managers, employees, beneficiaries or agents.
E. For the purposes of this section, amounts and property contributed to the following trusts are not deemed to have been contributed by the settlor, and a person who would otherwise be treated as a settlor or a deemed settlor of the following trusts shall not be treated as a settlor:
1. An irrevocable inter vivos marital trust that is treated as qualified terminable interest property under section 2523(f) of the internal revenue code if the settlor is a beneficiary of the trust after the death of the settlor's spouse.
2. An irrevocable inter vivos marital trust that is treated as a general power of appointment trust under section 2523(e) of the internal revenue code if the settlor is a beneficiary of the trust after the death of the settlor's spouse.
3. An irrevocable inter vivos trust for the settlor's spouse if the settlor is a beneficiary of the trust after the death of the settlor's spouse.
4. An irrevocable trust for the benefit of a person, the settlor of which is the person's spouse, regardless of whether or when the person was the settlor of an irrevocable trust for the benefit of that spouse.
5. An irrevocable trust for the benefit of a person to the extent that the property of the trust was subject to a general power of appointment in another person.
F. For the purposes of subsection E, a person is a beneficiary whether so named under the initial trust instrument or through the exercise by that person's spouse or by another person of a limited or general power of appointment.
G. Subsections C and D do not apply to:
1. A trust that has no valid business purpose and that has as its principal purpose the evasion of the claims of the creditors of the persons or entities listed in those subsections.
2. A trust that would be treated as a grantor trust pursuant to sections 671 through 679 of the internal revenue code. This paragraph does not apply to a qualified subchapter S trust that is treated as a grantor trust solely by application of section 1361(d) of the internal revenue code.
Sec. 8. Section 14-10506, Arizona Revised Statutes, is amended to read:
14-10506. Overdue distribution; definition
A. Whether or not a trust contains a spendthrift provision, a creditor or assignee of a beneficiary may reach a mandatory distribution of income or principal, including a distribution on termination of the trust, if the trustee has not made the distribution to the beneficiary within a reasonable time period after the mandated distribution date unless the terms of the trust expressly authorize the trustee to delay the distribution to protect the beneficiary's interest in the distribution.
B. For the purposes of this section, "mandatory distribution" means a distribution of income or principal that the trustee is required to make to a beneficiary under the terms of the trust, including a distribution on termination of the trust. Mandatory distribution does not include a distribution that is subject to the exercise of the trustee's discretion even if:
1. The discretion is expressed in the form of a standard of distribution.
2. The terms of the trust authorizing a distribution couple language of discretion with language of direction.
Sec. 9. Section 14-10814, Arizona Revised Statutes, is amended to read:
14-10814. Discretionary powers; tax savings
A. Notwithstanding the breadth of discretion granted to a trustee in the terms of the trust, including the use of terms such as absolute, sole or uncontrolled, the trustee shall exercise a discretionary power in good faith as to only beneficiaries of the trust and creditors of the trust and no other persons, including creditors of the beneficiaries, except only to the extent that creditors of beneficiaries are expressly entitled to attachment pursuant to section 14‑10504, subsection B and in accordance with the terms and purposes of the trust and the interests of the beneficiaries.
B. Subject to subsection D of this section, and unless the terms of the trust expressly indicate that a rule in this subsection does not apply:
1. A person other than a settlor who is a beneficiary and trustee of a trust that confers on the trustee a power to make discretionary distributions to or for the trustee's personal benefit may exercise the power only in accordance with an ascertainable standard relating to the trustee's individual health, education, support or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the internal revenue code. This paragraph does not expand the power or duty of a trustee to make distributions and does not apply to a power held in an individual capacity.
2. A trustee may not exercise a power to make discretionary distributions to satisfy a legal obligation of support that the trustee personally owes another person.
3. Except in the case of a special needs trust, a settlor who is a trustee of a trust that confers on the trustee a power to make discretionary distributions to or for a beneficiary may exercise the power only in accordance with an ascertainable standard relating to the beneficiary's health, education, support or maintenance within the meaning of section 2041(b)(1)(A) or 2514(c)(1) of the internal revenue code. This paragraph does not expand the power or duty of a trustee to make distributions and does not apply to a power held in an individual capacity.
C. A power whose exercise is limited or prohibited by subsection B of this section may be exercised by a majority of the remaining trustees whose exercise of the power is not so limited or prohibited. If the power of all trustees is so limited or prohibited, the court may appoint a special fiduciary with authority to exercise the power.
D. Subsection B of this section does not apply to:
1. A power held by the settlor's spouse who is the trustee of a trust for which a marital deduction, as defined in section 2056(b)(5) or 2523(e) of the internal revenue code, was previously allowed.
2. Any trust during any period that the trust may be revoked or amended by its settlor.
3. A trust if contributions to the trust qualify for the annual exclusion under section 2503(c) of the internal revenue code.
Sec. 10. Section 14-10818, Arizona Revised Statutes, is amended to read:
14-10818. Trust protector
A. A trust instrument may provide for the appointment of a trust protector. For the purposes of this section, a person designated in the instrument with a status or title, other than that of a beneficiary, with powers similar to those specified in subsection B of this section, or designated in the instrument as a trust protector, is a trust protector, except to the extent otherwise provided in the trust instrument.
B. A trust protector appointed by the trust instrument has the powers, delegations and functions conferred on the trust protector by the trust instrument. These powers, delegations and functions may include the following, which do not limit what powers, delegations and functions may be granted to the trust protector:
1. Remove and appoint a trustee.
2. Modify or amend the trust instrument for any valid purpose or reason, including, without limitation, to achieve favorable tax status or to respond to changes in the internal revenue code or state law, or the rulings and regulations under that code or law.
3. Increase, decrease, modify or restrict the interests of any beneficiary of the trust.
4. Modify the terms of a power of appointment granted by the trust.
5. Change the applicable law governing the trust.
C. Except to the extent otherwise specifically provided in the trust instrument, a modification authorized under subsection B of this section may not:
1. Grant a beneficial interest to an individual or a class of individuals unless the individual or class of individuals is specifically provided for under the trust instrument.
2. Modify the beneficial interest of a governmental unit in a special needs trust.
D. Any provision of this title to the contrary, but except to the extent otherwise provided by the trust instrument, a trust protector is not a trustee or fiduciary and is not liable or accountable as a trustee or fiduciary because of an act or omission of the trust protector when performing or failing to perform the duties of a trust protector under the trust instrument. This subsection does not apply to trusts that become irrevocable before January 1, 2009 if the trust instrument allows the settlor to remove and replace the trust protector.
E. The exercise of the power pursuant to subsection B of this section is the exercise of a special power of appointment.
Sec. 11. Section 33-1126, Arizona Revised Statutes, is amended to read:
33-1126. Money benefits or proceeds; exception
A. The following property of a debtor is exempt from execution, attachment or sale on any process issued from any court:
1. All money received by or payable to a surviving spouse or child on the life of a deceased spouse, parent or legal guardian, not exceeding twenty thousand dollars.
2. The earnings of the minor child of a debtor or the proceeds of these earnings by reason of any liability of the debtor not contracted for the special benefit of the minor child.
3. All monies received by or payable to a person entitled to receive child support or spousal maintenance pursuant to a court order.
4. All money, proceeds or benefits of any kind to be paid in a lump sum or to be rendered on a periodic or installment basis to the insured or any beneficiary under any policy of health, accident or disability insurance or any similar plan or program of benefits in use by any employer, except for premiums payable on such the policy or debt of the insured secured by a pledge, and except for collection of any debt or obligation for which the insured or beneficiary has been paid under the plan or policy and except for payment of amounts ordered for support of a person from proceeds and benefits furnished in lieu of earnings that would have been subject to that order and subject to any exemption applicable to earnings so replaced.
5. All money arising from any claim for the destruction of, or damage to, exempt property and all proceeds or benefits of any kind arising from fire or other insurance on any property exempt under this article.
6. The cash surrender value of life insurance policies where for a continuous unexpired period of two years the policies have been owned by a debtor and have named as beneficiary the debtor's surviving spouse, child, parent, brother or sister, or any other dependent family member, in the proportion that the policy names any such beneficiary, except that, subject to the statute of limitations, the amount of any premium that is recoverable or avoidable by a creditor pursuant to title 44, chapter 8, article 1, with interest thereon, is not exempt. The exemption provided by this paragraph does not apply to a claim for the payment of a debt of the insured or beneficiary that is secured by a pledge or assignment of the cash value of the insurance policy or the proceeds of the policy. For the purposes of this paragraph, "dependent" means a family member who is dependent on the insured debtor for not less than half support.
7. An annuity contract where for a continuous unexpired period of two years that contract has been owned by a debtor and has named as beneficiary the debtor, the debtor's surviving spouse, child, parent, brother or sister, or any other dependent family member, except that, subject to the statute of limitations, the amount of any premium, payment or deposit with respect to that contract is recoverable or avoidable by a creditor pursuant to title 44, chapter 8, article 1 is not exempt. The exemption provided by this paragraph does not apply to a claim for a payment of a debt of the annuitant or beneficiary that is secured by a pledge or assignment of the contract or its proceeds. For the purposes of this paragraph, "dependent" means a family member who is dependent on the debtor for not less than half support.
8. Any claim for damages recoverable by any person by reason of any levy on or sale under execution of that person's exempt personal property or by reason of the wrongful taking or detention of that property by any person, and the judgment recovered for damages.
9. A total of one hundred fifty dollars held in a single account in any one financial institution as defined by section 6‑101. The property declared exempt by this paragraph is not exempt from normal service charges assessed against the account by the financial institution at which the account is carried.
10. An interest in a college savings plan under section 529 of the internal revenue code of 1986, either as the owner or as the beneficiary. This does not include money contributed to the plan within two years before a debtor files for bankruptcy.
B. Any money or other assets payable to a participant in or beneficiary of, or any interest of any participant or beneficiary in, a retirement plan under section 401(a), 403(a), 403(b), 408, 408A or 409 or a deferred compensation plan under section 457 of the United States internal revenue code of 1986, as amended, whether the beneficiary's interest arises by inheritance, designation, appointment or otherwise, is exempt from all claims of creditors of the beneficiary or participant. This subsection does not apply to any of the following:
1. An alternate payee under a qualified domestic relations order, as defined in section 414(p) of the United States internal revenue code of 1986, as amended. The interest of any and all alternate payees is exempt from any and all claims of any creditor of the alternate payee.
2. Amounts contributed within one hundred twenty days before a debtor files for bankruptcy.
3. The assets of bankruptcy proceedings filed before July 1, 1987.
C. Any person eighteen years of age or over, married or single, who resides within this state and who does not exercise the homestead exemption under article 1 of this chapter may claim as a personal property homestead exempt from all process prepaid rent, including security deposits as provided in section 33‑1321, subsection A, for the claimant's residence, not exceeding the lesser of one thousand dollars or one and one‑half months' rent.
D. This section does not exempt property from orders that are the result of a judgment for arrearages of child support or for a child support debt.
APPROVED BY THE GOVERNOR APRIL 16, 2013.
FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 17, 2013.
