Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 432 First Substitute (2023GS)

Sponsor

Rep. Brammer, B.

Final action

Governor Signed 3/20/2023

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• addresses when certain nonvested property interests or powers of appointment are created;
• permits a court in an action related to the administration of an estate to award costs and expenses, including reasonable attorney fees, to any party to be paid by another party or from the estate that is the subject of the controversy;
• addresses when a creditor of a settlor may not satisfy the creditor's claim from an irrevocable trust; and
• make technical and conforming changes.

Every vote on this bill

Bill text

PROBATE MODIFICATIONS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Brady Brammer
Senate Sponsor: 
Daniel McCay
LONG TITLE
General Description:
This bill addresses probate provisions.
Highlighted Provisions:
This bill:
▸ addresses when certain nonvested property interests or powers of appointment are
created;
▸ permits a court in an action related to the administration of an estate to award costs
and expenses, including reasonable attorney fees, to any party to be paid by another
party or from the estate that is the subject of the controversy;
▸ addresses when a creditor of a settlor may not satisfy the creditor's claim from an
irrevocable trust; and
▸ make technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
75-2-1204
, as last amended by Laws of Utah 2013, Chapter 364
75-3-719
, as last amended by Laws of Utah 2012, Chapter 274
75-7-505
, as last amended by Laws of Utah 2017, Chapters 125, 204
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
75-2-1204
 is amended to read:
75-2-1204.
When nonvested property interest or power of appointment created.
(1) Except as [
provided in Subsections (2) and (3) and in
] 
otherwise provided in this
section or
 Section 
75-2-1207
, the time of creation of a nonvested property interest or a power
of appointment is determined under general principles of property law.
(2) For purposes of this part, if there is a person who alone can exercise a power
created by a governing instrument to become the unqualified beneficial owner of:
(a) a nonvested property interest; or
(b) a property interest subject to a power of appointment described in Section
75-2-1203
, the nonvested property interest or power of appointment is created when the power
to become the unqualified beneficial owner terminates.
(3) For purposes of this title, a nonvested property interest or a power of appointment
arising from a transfer of property to a previously funded trust or other existing property
arrangement is created when the nonvested property interest or power of appointment in the
original contribution was created.
(4) A person who exercises an initial power of appointment may provide in the
exercise of that power of appointment:
(a) for a nonvested property interest that is considered:
(i) created when the initial power is irrevocably exercised or when a revocable exercise
becomes irrevocable; and
(ii) not created at the time of the creation of the initial power of appointment that is
exercised; and
(b) for a further power of appointment created by the exercise of the initial power of
appointment that is considered:
(i) created when the initial power is irrevocably exercised or when a revocable exercise
becomes irrevocable; and
(ii) not created at the time of the creation of the initial power of appointment that is
exercised.
Section 2. Section 
75-3-719
 is amended to read:
75-3-719.
Costs and expenses in estate litigation.
(1) (a) In a judicial proceeding involving the administration of an estate, the court may,
as justice and equity may require, award costs and expenses, including reasonable attorney fees,
to any party to be paid by another party or from the estate that is the subject of the controversy.
(b) This Subsection (1) does not apply to the Office of the Attorney General when the
Office of the Attorney General is a party to a judicial proceeding involving the administration
of an estate to protect a public or charitable interest.
(2)
 If any personal representative or person nominated as personal representative
defends or prosecutes any proceeding in good faith, whether successful or not, the personal
representative is entitled to receive from the estate [
all
] 
the
 necessary expenses and
disbursements, including reasonable attorney fees incurred. This [
provision
] 
Subsection (2)
expressly applies in a will contest to any person nominated as a personal representative in a
testamentary instrument submitted in good faith.
Section 3. Section 
75-7-505
 is amended to read:
75-7-505.
Creditor's claim against settlor.
[
Whether or not
] 
Regardless of whether
 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 the
claims of the settlor's creditors. If a 
revocable
 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.
(2) 
(a)
 With respect to an irrevocable trust other than an irrevocable trust that meets the
requirements of Section 
25-6-502
, a creditor or assignee of the settlor may reach the maximum
amount that can be distributed to or for the settlor's benefit.
(b)
 [
If the trust has
] 
With respect to an irrevocable trust that has
 more than one settlor,
other than an irrevocable trust that meets the requirements of Section 
25-6-502
,
 the amount
[
the
] 
a
 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.
(c) Notwithstanding Subsections (2)(a) and (b), a creditor of a settlor may not satisfy
the creditor's claim from an irrevocable trust solely because the trustee may make a
discretionary distribution reimbursing the settlor for income tax liability of the settlor
attributable to the income of the irrevocable trust, when the distribution is:
(i) subject to the discretion of a trustee who is not the settlor;
(ii) subject to the consent of an advisor who is not the settlor; or
(iii) at the direction of an advisor who is not the settlor.
(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, but
not property received by the trust as a result of the death of the settlor which is otherwise
exempt from the claims of the settlor's creditors, 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.