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1 1 Section 1. NEW SECTION. 633.800 SHORT TITLE &endash; RULES OF
1 2 CONSTRUCTION.
1 3 1. This division shall be known and may be cited as the
1 4 uniform transfer on death security registration Act.
1 5 2. The provisions of this division shall be liberally
1 6 construed and applied to promote its underlying purposes and
1 7 policy and to make uniform the laws with respect to the
1 8 subject of its provisions among states enacting this uniform
1 9 Act.
1 10 3. Unless displaced by the particular provisions of this
1 11 division, the principles of law and equity supplement the
1 12 provisions of this division.
1 13 Sec. 2. NEW SECTION. 633.801 DEFINITIONS.
1 14 As used in this division, unless the context otherwise
1 15 requires:
1 16 1. "Beneficiary form" means a registration of a security
1 17 which indicates the present owner of the security and the
1 18 intention of the owner regarding the person who will become
1 19 the owner of the security upon the death of the owner.
1 20 2. "Devisee" means any person designated in a will to
1 21 receive a disposition of real or personal property.
1 22 3. "Heir" means a person, including the surviving spouse,
1 23 who is entitled under the statutes of intestate succession to
1 24 the property of a decedent.
1 25 4. "Register" means to issue a certificate showing the
1 26 ownership of a certificated security or, in the case of an
1 27 uncertificated security, to initiate or transfer an account
1 28 showing ownership of the security.
1 29 5. "Registering entity" means a person who originates or
1 30 transfers a security title by registration, including a broker
1 31 maintaining security accounts for customers and a transfer
1 32 agent or other person acting for or as an issuer of
1 33 securities.
1 34 6. "Security" means a share, participation, or other
1 35 interest in property, in a business, or in an obligation of an
2 1 enterprise or other issuer, including a certificated security,
2 2 an uncertificated security, and a security account.
2 3 7. "Security account" means either of the following:
2 4 a. Any of the following whether or not credited to the
2 5 account before the owner's death:
2 6 (1) A reinvestment account associated with a security.
2 7 (2) A securities account with a broker.
2 8 (3) A cash balance in a brokerage account.
2 9 (4) Cash, interest, earnings, or dividends earned or
2 10 declared on a security in an account, a reinvestment account,
2 11 or a brokerage account.
2 12 b. A cash balance or other property held for or due to the
2 13 owner of a security as a replacement for or product of an
2 14 account security, whether or not credited to the account
2 15 before the owner's death.
2 16 8. "State" includes any state of the United States, the
2 17 District of Columbia, the Commonwealth of Puerto Rico, and any
2 18 territory or possession subject to the legislative authority
2 19 of the United States.
2 20 Sec. 3. NEW SECTION. 633.802 REGISTRATION IN BENEFICIARY
2 21 FORM &endash; SOLE OR JOINT TENANCY OWNERSHIP.
2 22 Only an individual whose registration of a security shows
2 23 sole ownership by one individual or multiple ownership by two
2 24 or more individuals with a right of survivorship, rather than
2 25 as tenants in common, may obtain registration in beneficiary
2 26 form. Multiple owners of a security registered in beneficiary
2 27 form shall hold as joint tenants with rights of survivorship,
2 28 tenants by the entireties, or owners of community property
2 29 held in survivorship form and not as tenants in common.
2 30 Sec. 4. NEW SECTION. 633.803 REGISTRATION IN BENEFICIARY
2 31 FORM &endash; APPLICABLE LAW.
2 32 1. A security may be registered in beneficiary form if the
2 33 form is authorized by this division or a similar statute of
2 34 the state of any of the following:
2 35 a. The state of organization of the issuer or registering
3 1 entity.
3 2 b. The state of location of the registering entity's
3 3 principal office.
3 4 c. The state of location of the office of the entity's
3 5 transfer agent or the office of the entity making the
3 6 registration.
3 7 d. The state of the address listed as the owner's at the
3 8 time of registration.
3 9 2. A registration governed by the law of a jurisdiction in
3 10 which this division or a similar statute is not in force or
3 11 was not in force when a registration in beneficiary form was
3 12 made is presumed to be valid and authorized as a matter of
3 13 contract law.
3 14 Sec. 5. NEW SECTION. 633.804 ORIGINATION OF REGISTRATION
3 15 IN BENEFICIARY FORM.
3 16 A security, whether evidenced by a certificate or account,
3 17 is registered in beneficiary form when the registration
3 18 includes a designation of a beneficiary to take the ownership
3 19 at the death of the owner or the deaths of all multiple
3 20 owners.
3 21 Sec. 6. NEW SECTION. 633.805 FORM OF REGISTRATION IN
3 22 BENEFICIARY FORM.
3 23 Registration in beneficiary form may be shown by any of the
3 24 following, appearing after the name of the registered owner
3 25 and before the name of a beneficiary:
3 26 1. The words "transfer on death" or the abbreviation
3 27 "TOD".
3 28 2. The words "pay on death" or the abbreviation "POD".
3 29 Sec. 7. NEW SECTION. 633.806 EFFECT OF REGISTRATION IN
3 30 BENEFICIARY FORM.
3 31 The designation of a transfer on death or pay on death
3 32 beneficiary on a registration in beneficiary form has no
3 33 effect on ownership until the owner's death. A registration
3 34 of a security in beneficiary form may be canceled or changed
3 35 at any time by the sole owner or all surviving owners without
4 1 the consent of the beneficiary.
4 2 Sec. 8. NEW SECTION. 633.807 THE DEATH OF THE OWNER.
4 3 On the death of a sole owner or on the death of the sole
4 4 surviving owner of multiple owners, the ownership of
4 5 securities registered in beneficiary form passes to the
4 6 beneficiary or beneficiaries who survive all owners. On proof
4 7 of death of all owners and compliance with any applicable
4 8 requirements of the registering entity, a security registered
4 9 in beneficiary form may be reregistered in the name of the
4 10 beneficiary or beneficiaries who survived the death of all
4 11 owners. A registering entity shall provide notice to the
4 12 department of revenue and finance of all reregistrations made
4 13 pursuant to this division. The notice shall include the name,
4 14 address, and social security number of the descendant and all
4 15 transferees. Until the division of the security after the
4 16 death of all owners, multiple beneficiaries surviving the
4 17 death of all owners hold their interests as tenants in common.
4 18 If no beneficiary survives the death of all owners, the
4 19 security belongs to the estate of the deceased sole owner or
4 20 the estate of the last to die of multiple owners.
4 21 Sec. 9. NEW SECTION. 633.808 PROTECTION OF REGISTERING
4 22 ENTITY.
4 23 1. A registering entity is not required to offer or to
4 24 accept a request for security registration in beneficiary
4 25 form. If a registration in beneficiary form is offered by a
4 26 registering entity, the owner requesting registration in
4 27 beneficiary form assents to the protections provided to the
4 28 registering entity by this division.
4 29 2. By accepting a request for registration of a security
4 30 in beneficiary form, the registering entity agrees that the
4 31 registration in beneficiary form shall be implemented on the
4 32 death of the deceased owner as provided in this division.
4 33 3. A registering entity is discharged from all claims to a
4 34 security by the estate, creditors, heirs, or devisees of a
4 35 deceased owner if the registering entity registers a transfer
5 1 of the security in accordance with section 633.807 and does so
5 2 in good faith reliance on all of the following:
5 3 a. The registration.
5 4 b. The provisions of this division.
5 5 c. Information provided by affidavit of the personal
5 6 representative of the deceased owner, the surviving
5 7 beneficiary, or the surviving beneficiary's representative, or
5 8 other information available to the registering entity.
5 9 The protections of this division do not extend to a
5 10 reregistration or payment made after a registering entity has
5 11 received written notice from any claimant to any interest in
5 12 the security objecting to implementation of a registration in
5 13 beneficiary form. No other notice or other information
5 14 available to the registering entity affects its right to
5 15 protection under this division.
5 16 4. The protection provided by this division to the
5 17 registering entity of a security does not affect the rights of
5 18 beneficiaries in disputes between themselves and other
5 19 claimants to ownership of the transferred security, its value,
5 20 or its proceeds.
5 21 Sec. 10. NEW SECTION. 633.809 NONTESTAMENTARY TRANSFER
5 22 ON DEATH.
5 23 1. A transfer on death resulting from a registration in
5 24 beneficiary form shall be effective by reason of the contract
5 25 regarding the registration between the owner and the
5 26 registering entity under the provisions of this division, and
5 27 is not testamentary.
5 28 2. The provisions of this division do not limit the rights
5 29 of creditors or security owners against beneficiaries and
5 30 other transferees under other laws of this state.
5 31 Sec. 11. NEW SECTION. 633.810 TERMS, CONDITIONS, AND
5 32 FORMS FOR REGISTRATION.
5 33 1. A registering entity offering to accept registrations
5 34 in beneficiary form may establish the terms and conditions
5 35 under which the registering entity receives requests for
6 1 either of the following:
6 2 a. Registration in beneficiary form.
6 3 b. Implementation of registrations in beneficiary form,
6 4 including requests for cancellation of previously registered
6 5 transfer on death or pay on death beneficiary designations and
6 6 requests for reregistration to effect a change of beneficiary.
6 7 2. a. The terms and conditions established by the
6 8 registering entity may provide for proving death, avoiding or
6 9 resolving problems concerning fractional shares, designating
6 10 primary and contingent beneficiaries, and substituting a named
6 11 beneficiary's descendants to take in place of the name
6 12 beneficiary in the event of the beneficiary's death.
6 13 Substitution may be indicated by appending to the name of the
6 14 primary beneficiary the letters "LDPS" standing for "lineal
6 15 descendants per stirpes". This designation shall substitute a
6 16 deceased beneficiary's descendants who survive the owner for a
6 17 beneficiary who fails to survive, with the descendants to be
6 18 identified and to share in accordance with the law of the
6 19 beneficiary's domicile at the owner's death governing
6 20 inheritance by descendants of an intestate. Other forms of
6 21 identifying beneficiaries who are to take on one or more
6 22 contingencies, and rules for providing proofs and assurances
6 23 needed to satisfy reasonable concerns by registering entities
6 24 regarding conditions and identities relevant to accurate
6 25 implementation of registrations in beneficiary form, may be
6 26 contained in a registering entity's terms and conditions.
6 27 b. The following are illustrations of registrations in
6 28 beneficiary form which a registering entity may authorize:
6 29 (1) Sole owner-sole beneficiary: OWNER'S NAME transfer on
6 30 death (TOD) or pay on death (POD) to BENEFICIARY'S NAME.
6 31 (2) Multiple owners-sole beneficiary: OWNERS' NAMES, as
6 32 joint tenants or tenants in the entirety, transfer on death
6 33 (TOD) or pay on death (POD) to BENEFICIARY'S NAME.
6 34 (3) Multiple owners-primary and secondary (substituted)
6 35 beneficiaries: OWNERS' NAMES as joint tenants or tenants in
7 1 the entirety, transfer on death (TOD) or pay on death (POD) to
7 2 BENEFICIARY'S NAME, or lineal descendants per stirpes.
7 3 Sec. 12. APPLICATION. The provisions of this division
7 4 apply to registrations of securities in beneficiary form made
7 5 before, on, or after the effective date of this Act, by
7 6 decedents dying on or after the effective date of this Act.
7 7 EXPLANATION
7 8 This bill adopts the uniform transfer on death (TOD)
7 9 security registration Act as approved and recommended by the
7 10 national conference of commissioners on uniform state laws at
7 11 its annual conference on July 28 - August 4, 1989. The bill
7 12 allows the owner of securities to register the title in
7 13 "transfer-on-death" (TOD) form. The bill provides that a
7 14 person (e.g., an issuer or broker) may transfer the securities
7 15 directly to the designated transferee on the owner's death,
7 16 passing outside the probate process. The registration
7 17 provides a nonprobate transfer option without providing for
7 18 joint tenancy form of title. The registration form does not
7 19 affect the registered owner's control of the affected security
7 20 during the lifetime of the owner. The bill provides for the
7 21 right of survivorship by registered owners and the rights of
7 22 beneficiaries to take the asset upon the death of the last
7 23 surviving owner. An issuer is not required to implement the
7 24 procedure, and the bill provides protections to the
7 25 registering entity who acts in good faith.
7 26 Specifically the bill includes the following new Code
7 27 sections:
7 28 Section 633.800 provides for citation of the Act as the
7 29 Uniform Transfer on Death Security Registration Act and for
7 30 liberal construction of the Act to achieve uniformity among
7 31 states enacting this Act.
7 32 Section 633.801 provides definitions of relevant terms used
7 33 in TOD registration including "beneficiary form", "heir",
7 34 "register", "registering entity", "security", "security
7 35 account", and "state".
8 1 Terms such as "beneficiary form", "register", "registering
8 2 entity", "security", and "security account", are new terms to
8 3 the Probate Code and relate to securities products generally
8 4 and the companies that sell them. The term "security" is
8 5 defined similarly to the term defined in the Uniform
8 6 Commercial Code (Chapter 554) and is similar to section
8 7 554.8102. The bill defines the term "heir" differently than
8 8 provided in the probate Code, to include a surviving spouse.
8 9 Section 633.802 provides that a sole owner or multiple
8 10 owners of a security held in survivorship form may elect to
8 11 register their ownership in beneficiary form. This
8 12 registration is not available to persons holding as tenants in
8 13 common.
8 14 Section 633.803 provides circumstances which must exist
8 15 before a security may be registered in beneficiary form and
8 16 recognized under the bill's provisions. Further, the bill
8 17 provides general rights under Iowa contract law for Iowa
8 18 residents who elect beneficiary form registration of products
8 19 issued from or held in states that have not adopted the
8 20 Uniform Transfer on Death Security Registration Act.
8 21 Section 633.804 defines how registration in beneficiary
8 22 form takes place.
8 23 Section 633.805 adopts certain words and abbreviations
8 24 which will show registration in beneficiary form. These are
8 25 "transfer on death", "TOD", "pay on death", and "POD".
8 26 Section 633.806 explains that a designation of a "TOD" or
8 27 "POD" beneficiary has no effect until death of the owner or
8 28 the death of the last multiple owner and can be changed
8 29 without consent of the beneficiary.
8 30 Section 633.807 provides that on proof of death and
8 31 compliance with any requirements of the registering entity,
8 32 the security may be reregistered in the name of the designated
8 33 beneficiary. The bill requires the registering entity to
8 34 provide notice of reregistrations to the department of revenue
8 35 and finance. On the death of the owner, multiple
9 1 beneficiaries will hold as tenants in common. The bill also
9 2 provides guidelines for circumstances when no beneficiary
9 3 survives.
9 4 Section 633.808 provides that a registering entity which
9 5 elects to provide registration of securities in beneficiary
9 6 form agrees to the conditions of this division. The
9 7 registering entity is discharged from other claims to the
9 8 security if it acts in good faith reliance on the registration
9 9 and information provided by affidavit. The section provides
9 10 that it does not provide protection to a registering entity
9 11 which reregisters or distributes a security after receiving
9 12 written notice of an objection to registration in beneficiary
9 13 form. The bill does not attempt to regulate the rights or
9 14 claims of beneficiaries in disputes among themselves.
9 15 Section 633.809 provides that transfers made under the
9 16 bill's provisions are not testamentary and do not limit the
9 17 rights of creditors against beneficiaries.
9 18 Section 633.810 provides that the registering entity may
9 19 define the precise forms and conditions for registration in
9 20 beneficiary form. This includes examples of recommended
9 21 registrations to be used by registering entities to resolve
9 22 questions regarding fractional shares.
9 23 Section 12 of the bill provides for application of the
9 24 provisions of the bill to registrations of securities in
9 25 beneficiary form which predate or postdate adoption of the
9 26 bill for decedents dying on or after the effective date of the
9 27 bill.
9 28 LSB 3320YH 76
9 29 da/jj/8
Text: HF02122 Text: HF02124 Text: HF02100 - HF02199 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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