Bill Text: HI SB1342 | 2019 | Regular Session | Amended
Bill Title: Relating To The Probate Code.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2019-06-25 - Act 105, 06/21/2019 (Gov. Msg. No. 1207). [SB1342 Detail]
Download: Hawaii-2019-SB1342-Amended.html
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THE SENATE |
S.B. NO. |
1342 |
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THIRTIETH LEGISLATURE, 2019 |
H.D. 1 |
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STATE OF HAWAII |
C.D. 1 |
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A BILL FOR AN ACT
RELATING TO THE PROBATE CODE.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 560, Hawaii Revised Statutes, is amended by adding two new sections to article III to be appropriately designated and to read as follows:
"§560:3-A Restrictions
on donative transfers. (a) Except as provided by section 560:3-B, no provision
of any instrument shall
be valid to make any donative transfer to any of the following:
(1) The person who
drafted the instrument;
(2) Any partner or shareholder of any law
partnership or law corporation in which the person described in paragraph (1)
has an ownership interest, and any employee of that law partnership or law
corporation;
(3) Any person who has a fiduciary
relationship with the transferor, including but not limited to a conservator or
trustee, who transcribes the instrument or causes it to be transcribed;
(4) A care
custodian of an incapacitated person who is the transferor; or
(5) A person who is related by blood or marriage
to, is a civil union partner of, is a cohabitant with, is a reciprocal
beneficiary of, or is an employee of, a person who is described in paragraph (1),
(3), or (4).
(b) For the purposes of this section, a person
who is related by blood or marriage to a person includes the following:
(1) The person's
spouse or predeceased spouse;
(2) Relatives
within the third degree of the person and of the person's spouse; and
(3) The spouse of
any person described in paragraph (2).
(c)
For the purposes of this section:
"Care custodian" means
a person who provides a broad range of paid or unpaid assistance for an
incapacitated person.
"Incapacitated person"
means the same as defined in section 560:5-102.
§560:3-B Restricted donative transfers; permitted
when.
(a)
Section 560:3-A shall not apply when:
(1) The transferor is related by blood or
marriage to, is a cohabitant with, is the registered civil union partner, or is
a reciprocal beneficiary of the transferee or the person who drafted the
instrument; provided that this paragraph shall retroactively apply to an
instrument that becomes irrevocable on or after December 31, 2018;
(2) The
instrument has been reviewed by an independent attorney who:
(A) Counsels
the transferor about the nature and consequences of the intended transfer;
(B) Attempts
to determine if the intended consequence is the result of fraud, menace,
duress, or undue influence; and
(C) Signs
and delivers to the transferor an original certificate in substantially the
following form, with a copy delivered to the person who drafted the instrument:
CERTIFICATE OF INDEPENDENT REVIEW
I, __________ (attorney's name) __________ , have
reviewed __________ (name of instrument) __________ and counseled my client,
__________ (name of client) __________ , on the nature and consequences of the
transfer, or transfers, of property to __________ (name of potentially
disqualified person) __________ contained in the instrument. I am so disassociated from the interest of
the transferee as to be in a position to advise my client independently,
impartially, and confidentially as to the consequences of the transfer. On the basis of this counsel, I conclude that
the transfer, or transfers, in the instrument that otherwise might be invalid
under section 560:3-A of the Probate Code are valid because the transfer, or
transfers, are not the product of fraud, menace, duress, or undue influence.
____________________
_______
(Name of Attorney)
(Date);
Any attorney whose written
engagement signed by the client is expressly limited solely to the preparation
of a certificate under this subparagraph, including the prior counseling, shall
not be considered to otherwise represent the client;
(3) After full disclosure of the relationships
of the persons involved, the instrument is approved pursuant to an order by a
court with competent jurisdiction;
(4) A
court with competent jurisdiction determines, upon clear and convincing
evidence, but not based solely upon the testimony of any person described in section
560:3-A(a), that the transfer was not the product of fraud, menace, duress, or
undue influence; provided that if the court finds that the transfer was the
product of fraud, menace, duress, or undue influence, the disqualified person
shall bear all costs of the proceeding, including reasonable attorneys' fees;
provided further that this paragraph shall only apply to:
(A) Any
instrument described by section 560:3-A(a) other than one making a transfer to
a person described in section 560:3-A(a)(1);
(B) Any
instrument executed on or before December 31, 2018, by a person who was a
resident of this State at the time the instrument was executed; or
(C) Any
instrument executed by a resident of Hawaii who was not a resident at the time
the instrument was executed;
(5) The transferee is a federal, state, or
local public entity, an entity that qualifies for an exemption from taxation
under section 501(c)(3) or 501(c)(19) of the Internal Revenue Code of 1986, as
amended, or a trust holding an interest for this entity, but only to the extent
of the interest of the entity, or the trustee of this trust; provided that this
paragraph shall retroactively apply to an instrument that becomes irrevocable
on or after December 31, 2018;
(6) The
transfer does not exceed the sum of twenty thousand dollars; provided that this
paragraph shall not apply if the total value of the property in the estate of
the transferor does not exceed the amount prescribed in Section 560:3-1205; or
(7) The
transfer is made by an instrument executed by a nonresident of Hawaii who was
not a resident at the time the instrument was executed, and that was not signed
within Hawaii.
(b)
For the purposes of this section, a person who is related by blood or
marriage shall include persons within the fifth degree or heirs of the
transferor.
(c) For the purposes of this section, "cohabitant" means a
person living in the same household as the transferor for more than eighteen
months."
SECTION 2. (a) The chief justice of the Hawaii supreme court, or the chief justice's designee, shall study and analyze the national landscape of donative transfer statutes.
(b) Before the convening of the regular session of 2020, the chief justice of the Hawaii supreme court, or the chief justice's designee, shall propose any suggested revisions to this Act based on the study and analysis conducted pursuant to subsection (a).
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval; provided that section 1 shall take effect on July 1, 2020.
Report Title:
Probate Code; Donative Transfers; Restrictions; Chief Justice
Description:
Establishes restrictions on donative transfers to protect transferors from coercive, exploitative, or otherwise improper transfers benefitting persons involved with drafting the transfer instrument or persons who have significant influence over the transferor. Requires the Chief Justice to study and analyze the national landscape of donative transfer statutes and suggest revisions to Hawaii's donative transfer law. (CD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
