Chapter 305
Oregon Laws 2011
AN ACT
SB 385
Relating to
the elective share of a surviving spouse; creating new provisions; amending ORS
114.630, 114.635, 114.660, 114.665, 114.675 and 114.700; and declaring an
emergency.
Be It Enacted by the People of the State of Oregon:
AUGMENTED
ESTATE GENERALLY
SECTION 1. ORS 114.635 is amended to
read:
114.635. [(1) The augmented estate does not include any value attributable to
future enhanced earning capacity of either spouse.]
[(2)
The augmented estate does not include any property that was irrevocably
transferred before or after the death of the decedent spouse with the written
joinder or written consent of the surviving spouse.]
[(3)
The augmented estate does not include any property that is community property
under ORS 112.705 to 112.775 or under the laws of the jurisdiction where the
property is located.]
The augmented estate does not
include:
(1) Any value attributable to future
enhanced earning capacity of either spouse;
(2) Any property that is irrevocably
transferred before the death of the decedent spouse;
(3) Any property that is transferred
on or after the date of the death of the decedent spouse with the written
joinder or written consent of the surviving spouse;
(4) Any property that is community
property under ORS 112.705 to 112.775 or under the laws of the jurisdiction
where the property is located; or
(5) Any property that is held by
either spouse solely in a fiduciary capacity.
DECEDENT’S
NONPROBATE ESTATE
SECTION 2. ORS 114.660 is amended to
read:
114.660. For purposes of ORS 114.600
to 114.725, a decedent’s nonprobate estate consists of the property described
in ORS 114.665 that is not included in the decedent’s probate estate and that
does not constitute a [probate]
transfer to the decedent’s surviving spouse. The value of the decedent’s
nonprobate estate is reduced by all debts and liabilities of the decedent that
are not paid in probate, and by all costs of administering the decedent’s
nonprobate estate that are incurred for the purpose of settling claims against
the nonprobate estate and distributing the nonprobate estate property to the
persons entitled to that property.
SECTION 3. ORS 114.665 is amended to
read:
114.665. (1) A decedent’s nonprobate
estate includes the decedent’s fractional interest in property held by the
decedent in any form of survivorship tenancy immediately before the death of
the decedent. The amount included in the decedent’s nonprobate estate under the
provisions of this subsection is the value of the decedent’s fractional
interest, to the extent the fractional interest passes by right of survivorship
at the decedent’s death to a surviving tenant other than the decedent’s
surviving spouse.
(2) A decedent’s nonprobate estate
includes the decedent’s ownership interest in property or accounts held
immediately before death under a payable on death designation or deed, under a
transfer on death registration or in co-ownership registration with a right of
survivorship. The amount included in the decedent’s nonprobate estate under the
provisions of this subsection is the value of the decedent’s ownership
interest, to the extent the decedent’s ownership interest passed at the
decedent’s death to any person other than the decedent’s estate or surviving
spouse or for the benefit of any person other than the decedent’s estate or
surviving spouse.
(3) A decedent’s nonprobate estate
includes any property owned by the decedent immediately before death for which
the decedent had the power to designate a beneficiary, but only to the
extent that the decedent could have designated the decedent, or the spouse of
the decedent, as the beneficiary.
(4) A decedent’s nonprobate estate
includes any property that immediately before death the decedent could have
acquired by the exercise of a revocation, without regard to whether the
revocation was required to be made by the decedent alone or in conjunction with
other persons.
(5) A decedent’s nonprobate estate
does not include the present value of any life insurance policy payable on the
death of the decedent.
SECTION 4. ORS 114.630 is amended to
read:
114.630. (1) Except as otherwise
provided in ORS 114.600 to 114.725, the augmented estate consists of all of the
following property, whether real or personal, movable or immovable, or tangible
or intangible, wherever situated:
(a) The decedent’s probate estate as
described in ORS 114.650.
(b) The decedent’s nonprobate estate
as described in ORS 114.660 and 114.665.
(c) The surviving spouse’s estate, as
described in ORS 114.675.
[(d)
The decedent’s probate transfers to the surviving spouse, as described in ORS
114.685.]
[(e)
The decedent’s nonprobate transfers to the surviving spouse, as described in
ORS 114.690.]
(2) The value attributable to any
property included in the augmented estate under ORS 114.600 to 114.725 must be
reduced by the amount of all enforceable claims against the property and all
encumbrances on the property. Any exemption or deduction that is allowed for
the purpose of determining estate or inheritance taxes on the augmented estate
and that is attributable to the marriage of the decedent and the surviving
spouse inures to the benefit of the surviving spouse as provided in ORS 116.343
(2).
(3) The value attributable to any
property included in the augmented estate includes the present value of any
present or future interest and the present value of amounts payable under any
trust, life insurance settlement option, annuity contract, public or private
pension, disability compensation, death benefit or retirement plan, or any
similar arrangement, exclusive of the federal Social Security Act.
(4) The value attributable to property
included in the augmented estate is equal to the value that would be used for
purposes of federal estate and gift tax laws if the property had passed without
consideration to an unrelated person on the date that the value of the property
is determined for the purposes of ORS 114.600 to 114.725.
(5) In no event may the value of
property be included in the augmented estate more than once.
SURVIVING
SPOUSE’S ESTATE
SECTION 5. ORS 114.675 is amended to
read:
114.675. (1) For purposes of ORS
114.600 to 114.725, a surviving spouse’s estate is:
[(a)
All property of the spouse other than decedent’s probate transfers to the
surviving spouse under ORS 114.685, as determined on the date of the decedent’s
death.]
[(b)]
(a) The decedent’s probate transfers to the spouse, as described in ORS
114.685.
(b) The decedent’s nonprobate
transfers to the spouse, as described in ORS 114.690.
(c) All other property of the spouse,
as determined on the date of the decedent’s death.
[(c)]
(d) Any property that would have been included under paragraph (a) [or], (b) or (c) of this
subsection except for the exercise of a disclaimer by the spouse after the
death of the decedent.
(2)(a) For the purpose of establishing
the value of the surviving spouse’s estate under this section, the estate
includes 100 percent of the corpus of any trust or portion of a trust from
which all income must be distributed to or for the benefit of the surviving
spouse during the life of the surviving spouse, and for which the surviving
spouse has a general power of appointment that the surviving spouse, acting
alone, may exercise, during the surviving spouse’s lifetime or at death of the
surviving spouse, to or for the benefit of the surviving spouse or the
surviving spouse’s estate.
(b) For the purpose of establishing
the value of the surviving spouse’s estate under this section, the estate
includes 100 percent of the corpus of a trust or portion of a trust created
by the decedent spouse, if all income from the trust or portion of a trust
must be distributed to or for the benefit of the surviving spouse during the
life of the surviving spouse and the trust principal may be accessed only by
the trustee or the spouse and only for the purpose of providing for the health,
education, support or maintenance of the spouse.
(c) For the purpose of establishing
the value of the surviving spouse’s estate under this section, the estate
includes 50 percent of the corpus of a trust or portion of a trust created
by the decedent spouse if all income from the trust or portion of a trust
must be distributed to or for the benefit of the surviving spouse during the
life of the surviving spouse and neither the trustee nor the spouse has the
power to distribute trust principal to or for the benefit of the surviving
spouse or any other person during the spouse’s lifetime.
(d) For the purposes of this section,
all amounts distributed to a surviving spouse from a unitrust that meets the
requirements of ORS 129.225 (4) shall be considered income.
(e) The value of the surviving
spouse’s beneficial interest in a trust other than a trust described in
paragraphs (a) to (d) of this subsection shall be determined under the
provisions of ORS 114.630 (3) and (4).
PAYMENT OF
ELECTIVE SHARE
SECTION 6. ORS 114.700 is amended to
read:
114.700. (1) [The following amounts are] The surviving spouse’s estate, as
described in ORS 114.675, shall be applied first to satisfy the dollar
amount of the elective share and to reduce or eliminate any contributions due
from the decedent’s probate estate and recipients of the decedent’s nonprobate
transfers to others.[:]
[(a)
The surviving spouse’s estate as described in ORS 114.675.]
[(b)
The amount of all of the decedent’s probate transfers to the surviving spouse
described in ORS 114.685.]
[(c)
The amount of all of the decedent’s nonprobate transfers to the surviving
spouse described in ORS 114.690.]
(2) If after application of the [amounts specified in] surviving
spouse’s estate under subsection (1) of this section the elective share
amount is not fully satisfied, the following amounts shall be applied to the
extent necessary to satisfy the balance of the elective share amount:
(a) Amounts included in the decedent’s
probate estate.
(b) Amounts included in the decedent’s
nonprobate estate under ORS 114.600 to 114.725.
(3) Unless otherwise provided by a
will, trust or other instrument executed by the decedent spouse:
(a)
Amounts applied against the unsatisfied balance of an elective share amount
under subsection (2) of this section shall be collected from both the probate
and nonprobate estates of the decedent in a manner that ensures that the
probate and nonprobate estates bear proportionate liability for the amounts
necessary to pay the elective share amount.
[(4)]
(b) Amounts applied against the unsatisfied balance of an elective share
amount under subsection (2) of this section out of the probate estate of the
decedent must be apportioned among all recipients of the decedent’s probate
estate in a manner that ensures that each recipient bears liability for a
portion of the payment that is proportionate to the recipient’s interest in the
decedent’s probate estate.
(c) Amounts applied against the
unsatisfied balance of an elective share amount under subsection (2) of this
section out of the nonprobate estate of the decedent must be apportioned among
all recipients of the decedent’s nonprobate estate in a manner that ensures
that each recipient bears liability for a portion of the payment that is
proportionate to the recipient’s interest in the decedent’s nonprobate estate.
[(5)]
(4) All apportionments [required]
under this section between the probate and nonprobate estates of the decedent
and among the recipients of those estates shall be based on the assets of each
estate that are subject to distribution by the court under the provisions of
ORS 114.600 to 114.725.
[(6)]
(5) In any proceeding described in ORS 114.610, the court may allocate
the cost of storing and maintaining property included in the augmented estate
pending distribution of the property.
APPLICABILITY
SECTION 7. The amendments to ORS
114.630, 114.635, 114.660, 114.665, 114.675 and 114.700 by sections 1 to 6 of
this 2011 Act apply to the surviving spouses of all decedents who die on or
after the effective date of this 2011 Act.
CAPTIONS
SECTION 8. The unit captions used
in this 2011 Act are provided only for the convenience of the reader and do not
become part of the statutory law of this state or express any legislative
intent in the enactment of this 2011 Act.
EMERGENCY
CLAUSE
SECTION 9. This 2011 Act being
necessary for the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2011 Act takes effect on
its passage.
Approved by
the Governor June 9, 2011
Filed in the
office of Secretary of State June 9, 2011
Effective date
June 9, 2011
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