Text: SSB02123 Text: SSB02125 Text: SSB02100 - SSB02199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 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 7. "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 3279XL 76 9 29 da/jj/8
Text: SSB02123 Text: SSB02125 Text: SSB02100 - SSB02199 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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