30.1-05-02. (2-201, 2-204 through 2-208) Augmented estate

30.1-05-02. (2-201, 2-204 through 2-208) Augmented estate

1. a. In this section:

(1) "Decedent's nonprobate transfers to others" means the decedent's

nonprobate transfers to persons, other than the decedent's spouse,

surviving spouse, the decedent, or the decedent's creditors, estate, or estate

creditors, that are included in the augmented estate under subdivision b of

subsection 2.

(2) "Fractional interest in property held in joint tenancy with the right of

survivorship", whether the fractional interest is unilaterally severable or not,

means the fraction, the numerator of which is one and the denominator of

which, if the decedent was a joint tenant, is one plus the number of joint

tenants who survive the decedent and which, if the decedent was not a joint

tenant, is the number of joint tenants.

(3) "Marriage", as it relates to a transfer by the decedent during marriage,

means any marriage of the decedent to the decedent's surviving spouse.

(4) "Nonadverse party" means a person who does not have a substantial

beneficial interest in the trust or other property arrangement that would be

adversely affected by the exercise or nonexercise of the power that the

person possesses respecting the trust or other property arrangement. A

person having a general power of appointment over property is deemed to

have a beneficial interest in the property.

(5) "Power" or "power of appointment" includes a power to designate the

beneficiary of a beneficiary designation.

(6) "Presently exercisable general power of appointment" means a power of

appointment under which, at the time in question, the decedent, whether or

not the decedent then had the capacity to exercise the power, held a power

to create a present or future interest in the decedent, the decedent's

creditors, the decedent's estate, or the creditors of the decedent's estate,

and includes a power to revoke or invade the principle of a trust or other

property arrangement.

(7) "Probate estate" means property, whether movable or immovable, wherever

situated, that would pass by intestate succession if the decedent died

without a valid will.

(8) "Property" includes values subject to a beneficiary designation.

(9) "Right to income" includes a right to payments under a commercial or

private annuity, an annuity trust, a unitrust, or a similar arrangement.

(10) "Transfer", as it relates to a transfer by or of the decedent, includes:

(a) An exercise or release of a presently exercisable general power of

appointment held by the decedent;

(b) A lapse at death of a presently exercisable general power of

appointment held by the decedent; and

(c) An exercise, release, or lapse of a general power of appointment that

the decedent created in the decedent and of a power described in

subparagraph b of paragraph 2 of subdivision b of subsection 2 that

the decedent conferred on a nonadverse party.

b. In subparagraph a of paragraph 3 of subdivision b of subsection 2, "termination",

with respect to a right or interest in property, means that the right or interest

terminated by the terms of the governing instrument or that the decedent

transferred or relinquished the right or interests; and, with respect to a power over

property, means that the power terminated by exercise, release, lapse, in default,

or otherwise, except that, with respect to a power described in subparagraph a of

paragraph 1 of subdivision b of subsection 2, "termination" means that the power

terminated by exercise or release, but not by lapse nor in default or otherwise.

2. The augmented estate consists of the sum of:

a. The value of the decedent's probate estate, reduced by funeral and

administration expenses, homestead allowance as defined in section 47-18-01,

family allowances, exempt property, and enforceable claims.

b. The value of the decedent's nonprobate transfers to others, which are composed

of all property, whether movable or immovable, wherever situated, not included in

consists of the sum of:

a. The value of the decedent's probate estate, reduced by funeral and

administration expenses, homestead allowance as defined in section 47-18-01,

family allowances, exempt property, and enforceable claims.

b. The value of the decedent's nonprobate transfers to others, which are composed

of all property, whether movable or immovable, wherever situated, not included in

the decedent's probate estate, of any of the following types:

(1) Property of any of the following types that passed outside probate at the

decedent's death:

(a) Property over which the decedent alone, immediately before death,

held a presently exercisable general power of appointment created by

the decedent during the marriage; the amount included is the value of

the property subject to the power, to the extent that the property

passed at the decedent's death, by exercise, release, lapse, in default,

or otherwise, to or for the benefit of any person other than the

decedent's estate or surviving spouse.

(b) The decedent's fractional interest in property, held by the decedent in

joint tenancy with the right of survivorship; the amount included is the

value of the decedent's fractional interest contributed by the decedent

during the marriage, to the extent that that fractional interest passed

by right of survivorship at the decedent's death to a surviving joint

tenant other than the decedent's surviving spouse.

(c) The decedent's ownership interest in property or accounts held in

POD, TOD, or co-ownership registration with the right of survivorship;

the amount included is the value of the decedent's ownership interest,

to the extent that the decedent's ownership interest passed at the

decedent's death to or for the benefit of any person other than the

decedent's estate or surviving spouse.

(2) Property transferred in any of the following forms by the decedent during

marriage:

(a) Any irrevocable transfer in which the decedent retained the right to the

possession or enjoyment of, or the income from, the property if and to

the extent that the decedent's right terminated at or continued beyond

the decedent's death; the amount included is the value of the fraction

of the property to which the decedent's right related, to the extent that

that fraction of the property passed outside probate to or for the

benefit of any person other than the decedent's estate or surviving

spouse.

(b) Any transfer in which the decedent created a power over the income

or principal of the transferred property, exercisable by the decedent

alone or in conjunction with any other person, or exercisable by a

nonadverse party, for the benefit of the decedent, the decedent's

creditors, the decedent's estate, or the creditors of the decedent's

estate; the amount included is the value of the property subject to the

power, to the extent that the power was exercisable at the decedent's

death to or for the benefit of any person other than the decedent's

surviving spouse or to the extent that the property subject to the power

passed at the decedent's death, by exercise, release, lapse, in default,

or otherwise, to or for the benefit of any person other than the

decedent's estate or surviving spouse.

(3) Property that passed during marriage and during the two-year period next

preceding the decedent's death as a result of a transfer by the decedent if

the transfer was of any of the following types:

ect to the power

passed at the decedent's death, by exercise, release, lapse, in default,

or otherwise, to or for the benefit of any person other than the

decedent's estate or surviving spouse.

(3) Property that passed during marriage and during the two-year period next

preceding the decedent's death as a result of a transfer by the decedent if

the transfer was of any of the following types:

(a) Any property that passed as a result of termination of a right or

interest in, or power over, property that would have been included in

the augmented estate under subparagraph a, b, or c of paragraph 1 of

this subdivision, or under paragraph 2 of this subdivision, if the right,

interest, or power had not terminated until the decedent's death; the

amount included is the value of the property that would have been

included under these subsections, except that the property is valued

at the time that the right, interest, or power terminated, and is included

only to the extent that the property passed upon termination to or for

the benefit of any person other than the decedent or the decedent's

estate, spouse, or surviving spouse.

(b) Any transfer of property, to the extent not otherwise included in the

augmented estate, made to or for the benefit of a person other than

the decedent's surviving spouse, the amount included is the value of

the transferred property to the extent that the aggregate transfers to

any one donee in either of the two years exceeded ten thousand

dollars.

c. The value of the decedent's nonprobate transfers to the decedent's surviving

spouse, which are composed of all property that passed outside probate at the

decedent's death from the decedent to the surviving spouse by reason of the

decedent's death, including:

(1) The decedent's fractional interest in property held as a joint tenant with the

right of survivorship, to the extent that the decedent's fractional interest

passed to the surviving spouse as surviving joint tenant;

(2) The decedent's ownership interest in property or accounts held in

co-ownership registration with the right of survivorship, to the extent the

decedent's ownership interest passed to the surviving spouse as surviving

co-owner;

(3) Proceeds of insurance, including accidental death benefits, on the life of the

decedent, if the decedent owned the insurance policy immediately before

death or if, and to the extent that, the decedent alone and immediately

before death held a presently exercisable general power of appointment

over the policy or its proceeds, the amount included is the value of the

proceeds, to the extent that they were payable at the decedent's death; and

(4) All other property that would have been included in the augmented estate

under paragraph 1 or 2 of subdivision b of this subsection had it passed to

or for the benefit of a person other than the decedent's spouse, surviving

spouse, the decedent, or the decedent's creditors, estate, or estate

creditors, but excluding property passing to the surviving spouse under the

federal social security system.

d. Except to the extent included in the augmented estate under subdivision a or c,

the value of property:

(1) That was owned by the decedent's surviving spouse at the decedent's

death, including:

(a) The surviving spouse's fractional interest in property held in joint

tenancy with the right of survivorship;

(b) The surviving spouse's ownership interest in property or accounts held

in co-ownership registration with the right of survivorship; and

e under subdivision a or c,

the value of property:

(1) That was owned by the decedent's surviving spouse at the decedent's

death, including:

(a) The surviving spouse's fractional interest in property held in joint

tenancy with the right of survivorship;

(b) The surviving spouse's ownership interest in property or accounts held

in co-ownership registration with the right of survivorship; and

(c) Property that passed to the surviving spouse by reason of the

decedent's death, but not including the spouse's right to homestead

allowance, family allowance, exempt property, or payments under the

federal social security system.

(2) That would have been included in the surviving spouse's nonprobate

transfers to others, other than the spouse's fractional and ownership interest

included under subparagraphs a and b of paragraph 1, had the spouse been

the decedent. Property included under this paragraph is valued at the

decedent's death, taking the fact that the decedent predeceased the spouse

into account, except that, for purposes of subparagraphs a and b of

paragraph 1, the values of the spouse's fractional and ownership interests

are determined immediately before the decedent's death if the decedent

was then a joint tenant or a co-owner of the property or accounts. The value

of property included under this paragraph is reduced in each category by

enforceable claims against the included property and is reduced by

enforceable claims against the surviving spouse.

3. The value of any property is excluded from the decedent's nonprobate transfers to

others to the extent the decedent received adequate and full consideration in money or

money's worth for a transfer of the property or if the property was transferred with the

written joinder of, or if the transfer was consented to in writing by, the surviving spouse.

Life insurance, accident insurance, pension, profit-sharing, retirement, and other

benefit plans payable to persons other than the decedent's surviving spouse or the

decedent's estate are also excluded from the decedent's nonprobate transfers.

4. The value of property includes the commuted value of any present or future interest

and the commuted 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 system.

5. In case of overlapping application to the same property of the paragraphs or

subparagraphs of subsection 2, the property is included in the augmented estate

under the provision yielding the highest value, but under any one, but only one, of the

overlapping provisions if they all yield the same value.