What changed in SF 240

Section 1.

NEW SECTION. 633F.1 Definitions. For purposes of this chapter:

1. “Adult” means an individual who is at least eighteen years of age.

2. “Beneficiary” means an individual for whom property has been transferred to or held under a declaration of trust by a custodial trustee for the individual’s use and benefit under this chapter.

3. “Consent” means affirmation given by a person who is not incapacitated; or if a person is incapacitated and there is no conflict of interest between the representer and the incapacitated person with respect to the fiduciary manner, the following may consent on behalf of the incapacitated individual:

a. A conservator may represent and bind the person whose estate the conservator controls.

b. A trustee may represent and bind the beneficiary of a trust.

c. A personal representative may represent and bind the persons interested in the decedent’s estate.

d. If no conservator has been appointed, a parent may represent and bind a minor child.

4. “Conservator” means a person appointed or qualified by a court to manage the estate of an individual or a person legally authorized to perform substantially the same functions.

5. “Court” means the probate court of this state.

6. “Custodial trust property” means an interest in property transferred to or held under a declaration of trust by a custodial trustee under this chapter and the income from and proceeds of that interest.

7. “Custodial trustee” means a person designated as trustee of a custodial trust under this chapter or a substitute or successor to the person designated.

8. “Guardian” means a person appointed or qualified by a court as a guardian of an individual, including a limited guardian, but not a person who is only a court visitor.

9. “Incapacitated” means the inability of an individual to manage property or business affairs because the individual is any of the following:

a. An individual whose decision-making is so impaired that the individual is unable to make, communicate, or carry out important decisions concerning the individual’s financial affairs.

b. Detailed or incarcerated in a penal system.

c. Outside the United States and unable to return.

d. A minor.

10. “Legal representative” means a living person’s agent acting under a durable financial power of attorney or conservator, a living or deceased person’s trustee acting under a revocable trust created by such person, or a deceased person’s personal representative.

11. “Member of the beneficiary’s family” means the following persons who are competent adults at the time of acting hereunder, with such action to be taken in the following order of priority:

a. The surviving spouse, if not legally separated from the beneficiary, whose whereabouts are reasonably ascertainable.

b. The surviving child of the beneficiary, or, if there is more than one, a majority of the surviving children whose whereabouts are reasonably ascertainable.

c. The surviving parents of the beneficiary whose whereabouts are reasonably ascertainable.

d. A surviving grandchild of the beneficiary, or if there is more than one, a majority of the surviving grandchildren whose whereabouts are reasonably ascertainable.

e. A surviving sibling of the beneficiary, or if there is more than one, a majority of the surviving siblings whose whereabouts are reasonably ascertainable.

f. A surviving grandparent of the beneficiary, or if there is more than one, a majority of the surviving grandparents whose whereabouts are reasonably ascertainable.

g. A person in the next degree of kinship to the beneficiary in the order named by law who would inherit the estate of the beneficiary under the rules of inheritance for intestate succession, or if there is more than one, a majority of such surviving persons whose whereabouts are reasonably ascertainable.

12. “Person” means an individual, corporation, business trust, estate, trust, partnership, joint venture, association, or any other legal or commercial entity.

13. “Personal representative” means an executor, administrator, or special administrator of a decedent’s estate, a person legally authorized to perform substantially the same functions, or a successor to any of them as defined in section 633.3.

14. “State” means a state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.

15. “Transferor” means a person who creates a custodial trust by transfer or declaration.

16. “Trust company” means a financial institution, corporation, or other legal entity, authorized to exercise general trust powers.

Sec.

2.

NEW SECTION. 633F.2 Custodial trust —— general.

1. A person may create a custodial trust of property by a written transfer of the property to another person, evidenced by registration or by other instrument of transfer, executed in any lawful manner, naming as beneficiary, an individual who may be the transferor, in which the transferee is designated, in substance, as custodial trustee under this chapter.

2. A person may create a custodial trust of property by a written declaration, evidenced by registration of the property or by other instrument of declaration executed in any lawful manner, describing the property and naming as beneficiary an individual other than the declarant, in which the declarant as titleholder is designated, in substance, as custodial trustee under this chapter. A registration or other declaration of trust for the sole benefit of the declarant is not a custodial trust under this chapter.

3. Title to custodial trust property is in the custodial trustee and the beneficial interest is in the beneficiary.

4. Except as provided in subsection 5, a transferor shall not terminate a custodial trust.

5. The beneficiary, if not incapacitated, or the legal representative of an incapacitated beneficiary, may terminate a custodial trust by delivering to the custodial trustee a writing signed by the beneficiary or legal representative declaring the termination. If not previously terminated, the custodial trust terminates on the death of the beneficiary.

6. Any person may augment existing custodial trust property by the addition of other property pursuant to this chapter, only upon receipt and acceptance by the custodial trustee.

7. The transferor may designate, or authorize the designation of, a successor custodial trustee in the trust instrument.

8. This chapter does not displace or restrict other means of creating trusts. A trust whose terms do not conform to this chapter may be enforceable according to its terms under other law.

Sec.

3.

NEW SECTION. 633F.3 Custodial trustee for future payment or transfer.

1. A person having the right to designate the recipient of property payable or transferable upon a future event may create a custodial trust upon the occurrence of the future event by designating in writing the recipient, followed in substance by: “as custodial trustee for __________________ (name of beneficiary) under the Iowa Uniform Custodial Trust Act”.

2. Persons may be designated as substitute or successor custodial trustees to whom the property must be paid or transferred in the order named if the first designated custodial trustee is unable or unwilling to serve.

3. A designation under this section may be made in a will, a trust, a multiple-party account, an insurance policy, an instrument exercising a power of appointment, or a writing designating a beneficiary of contractual rights. Otherwise, to be effective, the designation must be registered with or delivered to the fiduciary, payor, issuer, or obligor of the future right.

Sec.

4.

NEW SECTION. 633F.4 Form and effect of receipt and acceptance by custodial trustee —— jurisdiction.

1. Obligations of a custodial trustee, including the obligation to follow directions of the beneficiary, arise under this chapter upon the custodial trustee’s acceptance, express or implied, of the custodial trust property.