N.Y. Estates, Powers & Trusts Law § 2-1.11: Renunciation of property interests

§ 2-1.11 Renunciation of property interests

(a) A renunciation made in compliance with the provisions of this

section shall not necessarily constitute a qualified disclaimer within

the meaning of section 2518 of the Internal Revenue Code of 1986, as

amended, or for the purposes of the taxes imposed by article twenty-six

of the tax law.

(b) For purposes of this section:

(1) The term "disposition" shall include a disposition created under a

will or trust agreement including, without limitation, the granting of a

power of appointment, a disposition created by the exercise or

nonexercise of a power of appointment, a distributive share under 4-1.1,

a transfer created by a trust account as defined in 7-5.1, a transfer

created by a life insurance or annuity contract, a transfer resulting

from the creation of a joint tenancy or tenancy by the entirety,

succession to an interest occurring by operation of law on the death of

a joint tenant or tenant by the entirety, a transfer under an employee

benefit plan (including, without limitation, any pension, retirement,

death benefit, stock bonus or profit-sharing plan, system or trust), a

transfer of a security to a beneficiary pursuant to part 4 of article 13

of this chapter, any other disposition or transfer created by any

testamentary or nontestamentary instrument, or by operation of law, and

any of the foregoing created or increased by reason of a renunciation

made by another person.

(2) The effective date of the disposition for purposes of this section

shall be:

A. If the disposition is created by will, the exercise or nonexercise

of a testamentary power of appointment, a distribution pursuant to

4-1.1, the deposit of money in a trust account as defined in 7-5.1, the

registration of a security in beneficiary form pursuant to part 4 of

article 13 of this chapter, a life insurance or annuity contract, the

death of a joint tenant or tenant by the entirety, or an employee

benefit plan, the date of death of the deceased testator, holder of the

power of appointment, intestate, creator of the trust account,

registered owner of the security, insured, annuitant, other joint tenant

or tenant by the entirety, or employee, as the case may be;

B. If the disposition is created by trust agreement, the exercise of a

presently exercisable power of appointment, the creation of a joint

tenancy or tenancy by the entirety, or the renunciation of a disposition

created by another, the date as of which the transfer in trust is

irrevocable and is a completed gift for federal gift tax purposes

(regardless of whether a gift tax is imposed on the completed gift), the

date of the exercise of the power of appointment, the creation of a

joint tenancy or tenancy by the entirety, or renunciation, as the case

may be; and

C. If the disposition is created by any other testamentary or

nontestamentary instrument, or by operation of law, the date of the

event by which the beneficiary is finally ascertained.

Notwithstanding the foregoing, the effective date of a disposition which

is of a future estate shall be the date on which it becomes an estate in

possession.

(c) (1) Any beneficiary of a disposition may renounce all or part of

such beneficiary's interest; provided, however, that a surviving joint

tenant or tenant by the entirety may renounce the interest to which such

tenant succeeds, by operation of law upon the death of another joint

tenant or tenant by the entirety, to the extent such interest could be

the subject of a qualified disclaimer under section 2518 of the United

States Internal Revenue Code of 1986, as amended.

(2) Such renunciation shall be in writing, signed and acknowledged by

the person renouncing, and shall be filed in the office of the clerk of

the court having jurisdiction over the will or trust agreement governing

the property of which the disposition would otherwise be made or the

court which issued letters of administration, or if there is no probate

or administration, then in a surrogate's court provided by law as the

place of probate or administration of the decedent's estate, within nine

months after the effective date of the disposition. Such renunciation

shall be accompanied by an affidavit of the renouncing party that such

party has not received and is not to receive any consideration in money

or money's worth for such renunciation from a person or persons whose

interest is to be accelerated, unless payment of such consideration has

been authorized by the court. Notice of such renunciation, which shall

include a copy of the renunciation, shall be served personally or in

such manner as the court may direct upon the fiduciary directed by the

will or trust agreement to make the disposition or upon the

administrator or such other person who was directed to make the

disposition or upon any other person having custody or possession of or

legal title to the property, an interest in which is being renounced,

and by mail or in such manner as the court may direct upon all persons

whose interest may be created or increased by reason of such

renunciation. The time to file and serve such renunciation may be

extended, in the discretion of the court, on a petition showing

reasonable cause and on notice to such persons and in such manner as the

court may direct. The time limited in this section for filing and

serving such renunciation is exclusive, and shall not be suspended or

otherwise affected by any other provision of law; such renunciation

shall be effective as of the date of such filing, notwithstanding that

notice thereof may thereafter be required by the court.

(d) A renunciation may be made by:

(1) The guardian of the property of an infant, when so authorized by

the court having jurisdiction of the estate of the infant.

(2) The committee of an incompetent when so authorized by the court

that appointed the committee.

(3) The conservator of a conservatee, when so authorized by the court

that appointed the conservator.

(4) A guardian appointed under article eighty-one of the mental

hygiene law, when so authorized by the court that appointed the

guardian.

(5) The personal representative of a decedent, provided, however, that

the personal representative may seek authorization from the court having

jurisdiction of the estate of the decedent.

(6) An attorney-in-fact, when so authorized under a duly executed

power of attorney, provided, however, that any renunciation by an

attorney-in-fact of a person under disability shall not be effective

unless it is further authorized by the court with which the renunciation

must be filed under subparagraph two of paragraph (c) of this section,

and provided, further, that a renunciation by an attorney-in-fact of a

person not under disability may be made without court authorization,

unless the property which would have passed under said renunciation is,

by reason of said renunciation, disposed of in favor of such

attorney-in-fact or the spouse or issue of such attorney-in-fact, in

which case such renunciation shall not be effective unless either (A)

the instrument appointing such attorney-in-fact expressly authorizes a

renunciation in favor of such attorney-in-fact or the spouse or issue of

such attorney-in-fact, or (B) such renunciation has been authorized by

the court with which the renunciation must be filed under subparagraph

two of paragraph (c) of this section.

(e) Unless the creator of the disposition has otherwise provided, the

filing of a renunciation, as provided in this section, has the same

effect with respect to the renounced interest as though the renouncing

person had predeceased the creator or the decedent or, if the renounced

interest is a future estate, as though the renouncing person had died at

the time of filing or just prior to its becoming an estate in

possession, whichever is earlier in time, and shall have the effect of

accelerating the possession and enjoyment of subsequent interests, but

shall have no effect upon the vesting of a future estate which by the

terms of the disposition is limited upon a preceding estate other than

the renounced interest. If, pursuant to the preceding sentence, there

would occur a per stirpes disposition of the renounced interest or a

disposition or distribution of the renounced interest by representation,

then solely for purposes of applying 1-2.14 or 1-2.16, as the case may

be, the renouncing person shall be treated as having died on the same

date as, but immediately after, the creator or decedent or, if the

renounced interest is a future estate, as having died on the same date

as, but immediately after, its becoming an estate in possession or, if

the time of filing is earlier in time, on the same date as, but

immediately after, such filing. Such renunciation is retroactive to the

creation of the disposition. A person who has a present and a future

interest in property and renounces the present interest in whole or in

part shall be deemed to have renounced the future interest to the same

extent.

(f) A beneficiary may accept one disposition and renounce another, may

renounce a disposition in whole or in part, or with reference to

specific amounts, parts, fractional shares or assets thereof.

Notwithstanding the provisions of paragraph (e) of this section, a

renunciation by a surviving spouse of a decedent of a disposition

created by said decedent shall not be deemed to be a renunciation by

such spouse of all or any part of any other disposition to or in favor

of such spouse, regardless of whether the property which would have

passed under said renounced disposition is by reason of said

renunciation disposed of to or in favor of such spouse. Unless a

renouncing person has provided otherwise in his renunciation, the effect

of a renunciation of a fractional part of a disposition is to renounce

such fraction of all property to which the renouncing person is entitled

under the disposition.

(g) A renunciation may not be made under this section with respect to

any property which a renouncing person has accepted, except that an

acceptance does not preclude a person from renouncing all or part of any

property to which such person becomes entitled when another person

renounces after such acceptance. For purposes of this paragraph, a

person accepts an interest in property if such person voluntarily

transfers or encumbers, or contracts to transfer or encumber all or part

of such interest, or accepts delivery or payment of, or exercises

control as beneficial owner over all or part thereof, or executes a

written waiver of the right to renounce, or otherwise indicates

acceptance of all or part of such interest. A written waiver of the

right to renounce shall be binding on the person waiving and all parties

claiming by, through or under such person.

(h) A renunciation filed under this section is irrevocable.

(i) This section shall not abridge the right of any beneficiary or any

other person to assign, convey, release or renounce any property or

interest therein arising under any other section of this chapter or

other statute or under common law.

(j) Except as specifically provided in the trust instrument, the will,

any other instrument creating the disposition, or in this section, this

section shall apply to each disposition the effective date of which (as

defined in this section) is on or after the effective date of this

section, except that with respect to the renunciation of a future

interest this section shall apply as well to dispositions created or

increased prior to the effective date of this section.