H. B. 2233
(By Delegate Carper)
[Introduced February 23, 1993; referred to the
Committee on the Judiciary then Finance.]
A BILL to amend article eleven, chapter twenty-seven of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
four-a, relating to authorizing an incompetent individual's
committee to make tax-motivated gifts or other dispositions
from the incompetent's estate.
Be it enacted by the Legislature of West Virginia:
That article eleven, chapter twenty-seven of the code of
West Virginia, one thousand nine hundred thirty-one, as amended,
be amended by adding thereto a new section, designated section
four-a, to read as follows:
ARTICLE 11. COMMITTEE; DISPOSITION OF PROPERTY.
§27-11-4a. Authority of committee to make tax-motivated gifts.
(a) Upon application of a committee duly appointed to manage
the business affairs of an incompetent to the circuit court of
the county wherein the incompetent resides, and after a hearing
with notice given to all persons having an interest in theincompetent's estate and to such other persons as the circuit
court may direct, on a showing that the incompetent will probably
remain an incompetent during the remainder of his or her
lifetime, the circuit court may order and direct that the
committee apply such principal and income of the incompetent's
estate as is not needed for the continuation of proper care,
comfort, and maintenance of the incompetent in accordance with
the incompetent's established standard of living or for the
support of the incompetent's legal dependents, if any, towards
the establishment of an estate plan for the purpose of minimizing
income, estate, inheritance, or other taxes payable out of the
incompetent's estate.
(b) The circuit court may authorize the committee to make
tax-motivated gifts or other dispositions of the incompetent's
personal property or real estate, outright or in trust, on behalf
of the incompetent, to or for the benefit of:
(1) Charitable organizations to which tax-exempt
contributions may be made under the Internal Revenue Code and in
which it is shown that the incompetent has an interest evidenced
by the incompetent's previous giving to such charity or the
incompetent's pledging of a gift in writing to such charity prior
to being declared incompetent;
(2) The incompetent's heirs at law who are identifiable at
the time of the circuit court's order: Provided, That such gifts
may, in the discretion of the circuit court considered
advancements to those individuals who would otherwise expect totake property from the incompetent person's estate under the laws
of descent and distribution;
(3) Devisees or legatees under the incompetent's last
validly executed will, if there is such a will: Provided, That
such gifts may, in the discretion of the circuit court considered
advancements of the bequests or legacies to those individuals who
would otherwise take property under the incompetent's will;
(4) Individuals not related to the incompetent by blood or
marriage: Provided, That the incompetent has an established
history of gift giving to any such individual prior to being
found incompetent; and
(5) An individual serving as committee for the incompetent:
Provided, That such individual is eligible to receive a gift
under subsections (2), (3) or (4) above.
(c) When making application to the circuit court approval of
the making of tax-motivated gifts from an incompetent's estate,
the committee shall, in writing, set forth the specifics of the
proposed estate plan, which may provide for repetitive gifts,
including a statement explaining the benefits to be derived
therefrom. Additionally, the committee shall explain how the
proposed estate plan is consistent with the incompetent's past
donative intentions insofar as they can be ascertained. If an
incompetent's past donative intentions cannot be ascertained, the
incompetent will be presumed to favor reducing the incidence of
taxation and the partial distribution of his or her estate as
provided in this section.
(d) The circuit court may appoint a guardian ad litem for
the incompetent or any interested party at any stage of the
proceedings if it is deemed advisable for the protection of the
incompetent or other interested party.
(e) Subsequent modifications of any estate plan approved
pursuant to this section may be made by similar application to
the circuit court.
(f) No committee may be required to file an application
provided for in this section and a failure or refusal to do so
does not constitute a breach of the fiduciary duties of the
committee.
NOTE: The purpose of this bill is to authorize the making
of tax-motivated gifts or other dispositions from an
incompetent's estate. As far as practicable, the committee is
required to demonstrate that the gifts or other disposition of
assets is consistent with the intentions of the incompetent
before the disability.
This section is new; therefore, strike-throughs and
underscoring have been omitted.