Disclaimer Law and UDPIA's Unintended Consequences

Abstract

The Uniform Disclaimer of Property Interests Act of 2000 (UDPIA) offers a Uniform law to define the rights of a beneficiary to reject (or disclaim) an inheritance. In prior articles, I have criticized various provisions of UDPIA on policy grounds. The present article identifies a number of instances where the Act fails to operate as it was intended to do. The legislative history of UDPIA reveals that as concerns (1) the formal requirements for executing a disclaimer, (2) the time limit for disclaiming, (3) the treatment of disclaimers of joint interests, (4) the right of an insolvent beneficiary to disclaim, and (5) the right of a beneficiary to disclaim following a judicial sale of inherited property, the drafters of the Act contemplated that it would operate differently from the way it actually does. The legislative history further suggests that the drafters' failure accurately to interpret the consequences of their own work product stemmed from time pressure, coupled with the complexity of the enterprise. But the upshot is that the plenary body of NCCUSL, voting to promulgate the Act, and local drafting committees, voting to adopt it, have relied on presentations and comments prepared by the drafting committee that misstate UDPIA's operation and thereby misled the Act's various electorates.

Keywords: disclaimer, inheritance, bequest, unintended consequences

JEL Classification: K11