Senate Bill No. 59
(By Senator Wagner)
____________
[Introduced January 21, 1994; referred to the Committee
on Interstate Cooperation; and then to the Committee
on the Judiciary.]
____________
A BILL to amend chapter thirty-six of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article ten, relating to
enacting the uniform transfer on death security registration
act; definitions; registration in beneficiary form, sole or
joint tenancy ownership; applicable law; origination of
registration in beneficiary form; form of registration in
beneficiary form; effect of registration in beneficiary
form; ownership on death of owner; protection of registering
entity; nontestamentary transfer on death; terms, conditions
and forms for registration; short title; rules of
construction; and application of act.
Be it enacted by the Legislature of West Virginia:
That chapter thirty-six of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article ten, to read asfollows:
ARTICLE 10. UNIFORM TRANSFER ON DEATH SECURITY REGISTRATION ACT.
§36-10-1. Definitions.
In this article, unless the context otherwise requires:
(1) "Beneficiary form" means a registration of a security
which indicates the present owner of the security and the
intention of the owner regarding the person who will become the
owner of the security upon the death of the owner.
(2) "Devisee" means any person designated in a will to
receive a disposition of real or personal property.
(3) "Heirs" means those persons, including the surviving
spouse, who are entitled under the statutes of intestate
succession to the property of a decedent.
(4) "Person" means an individual, a corporation, an
organization or other legal entity.
(5) "Personal representative" includes executor,
administrator, successor personal representative, special
administrator and persons who perform substantially the same
function under the law governing their status.
(6) "Property" includes both real and personal property or
any interest therein and means anything that may be the subject
of ownership.
(7) "Register," including its derivatives, means to issue a
certificate showing the ownership of a certificated security or,
in the case of an uncertificated security, to initiate or
transfer an account showing ownership of securities.
(8) "Registering entity" means a person who originates or
transfers a security title by registration, and includes a broker
maintaining security accounts for customers and a transfer agent
or other person acting for or as an issuer of securities.
(9) "Security" means a share, participation, or other
interest in property, in a business, or in an obligation of an
enterprise or other issuer, and includes a certificated security,
an uncertificated security and a security account.
(10) "Security account" means (i) a reinvestment account
associated with a security, a securities account with a broker,
a cash balance in a brokerage account, cash, interest, earnings,
or dividends earned or declared on a security in an account, a
reinvestment account, or a brokerage account, whether or not
credited to the account before the owner's death, or (ii) a cash
balance or other property held for or due to the owner of a
security as a replacement for or product of an account security,
whether or not credited to the account before the owner's death.
(11) "State" includes any state of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, and any
territory or possession subject to the legislative authority of
the United States.
§36-10-2. Registration in beneficiary form; sole or joint
tenancy ownership.
Only individuals whose registration of a security shows sole
ownership by one individual or multiple ownership by two or more
with right of survivorship, rather than as tenants in common, mayobtain registration in beneficiary form. Multiple owners of a
security registered in beneficiary form hold as joint tenants
with right of survivorship, as tenants by the entireties, or as
owners of community property held in survivorship form, and not
as tenants in common.
§36-10-3. Registration in beneficiary form; applicable law.
A security may be registered in beneficiary form if the form
is authorized by this or a similar statute of the state of
organization of the issuer or registering entity, the location of
the registering entity's principal office, the office of its
transfer agent or its office making the registration, or by this
or a similar statute of the law of the state listed as the
owner's address at the time of registration. A registration
governed by the law of a jurisdiction in which this or similar
legislation is not in force or was not in force when a
registration in beneficiary form was made is nevertheless
presumed to be valid and authorized as a matter of contract law.
§36-10-4. Origination of registration in beneficiary form.
A security, whether evidenced by certificate or account, is
registered in beneficiary form when the registration includes a
designation of a beneficiary to take the ownership at the death
of the owner or the deaths of all multiple owners.
§36-10-5. Form of registration in beneficiary form.
Registration in beneficiary form may be shown by the words
"transfer on death" or the abbreviation "TOD," or by the words
"pay on death" or the abbreviation "POD," after the name of theregistered owner and before the name of a beneficiary.
§36-10-6. Effect of registration in beneficiary form.
The designation of a TOD beneficiary on a registration in
beneficiary form has no effect on ownership until the owner's
death. A registration of a security in beneficiary form may be
canceled or changed at any time by the sole owner or all then
surviving owners without the consent of the beneficiary.
§36-10-7. Ownership of death of owner.
On death of a sole owner or the last to die of all multiple
owners, ownership of securities registered in beneficiary form
passes to the beneficiary or beneficiaries who survive all
owners. On proof of death of all owners and compliance with any
applicable requirements of the registering entity, a security
registered in beneficiary form may be reregistered in the name of
the beneficiary or beneficiaries who survived the death of all
owners. Until division of the security after the death of all
owners, multiple beneficiaries surviving the death of all owners
hold their interests as tenants in common. If no beneficiary
survives the death of all owners, the security belongs to the
estate of the deceased sole owner or the estate of the last to
die of all multiple owners.
§36-10-8. Protection of registering entity.
(a) A registering entity is not required to offer or to
accept a request for security registration in beneficiary form.
If a registration in beneficiary form is offered by a registering
entity, the owner requesting registration in beneficiary formassents to the protections given to the registering entity by
this article.
(b) By accepting a request for registration of a security in
beneficiary form, the registering entity agrees that the
registration will be implemented on death of the deceased owner
as provided in this article.
(c) A registering entity is discharged from all claims to a
security by the estate, creditors, heirs or devisees of a
deceased owner if it registers a transfer of the security in
accordance with section seven of this article and does so in good
faith reliance (i) on the registration, (ii) on this article, and
(iii) on information provided to it by affidavit of the personal
representative of the deceased owner, or by the surviving
beneficiary or by the surviving beneficiary's representatives, or
other information available to the registering entity. The
protections of this article do not extend to a reregistration or
payment made after a registering entity has received written
notice from any claimant to any interest in the security
objecting to implementation of a registration in beneficiary
form. No other notice or other information available to the
registering entity affects its right to protection under this
article.
(d) The protection provided by this article to the
registering entity of a security does not affect the rights of
beneficiaries in disputes between themselves and other claimants
to ownership of the security transferred or its value orproceeds.
§36-10-9. Nontestamentary transfer on death.
(a) A transfer on death resulting from a registration in
beneficiary form is effective by reason of the contract regarding
the registration between the owner and the registering entity and
this article and is not testamentary.
(b) This article does not limit the rights of creditors of
security owners against beneficiaries and other transferees under
other laws of this state.
§36-10-10. Terms, conditions and forms for registration.
(a) A registering entity offering to accept registrations
in beneficiary form may establish the terms and conditions under
which it will receive requests (i) for registrations in
beneficiary form, and (ii) for implementation of registrations in
beneficiary form, including requests for cancellation of
previously registered TOD beneficiary designations and requests
for reregistration to effect a change of beneficiary. The terms
and conditions so established may provide for proving death,
avoiding or resolving any problems concerning fractional shares,
designating primary and contingent beneficiaries, and
substituting a named beneficiary's descendants to take in the
place of the named beneficiary in the event of the beneficiary's
death. Substitution may be indicated by appending to the name of
the primary beneficiary the letters LDPS, standing for "lineal
descendants per stirpes." This designation substitutes a
deceased beneficiary's descendants who survive the owner for abeneficiary who fails to so survive, the descendants to be
identified and to share in accordance with the law of the
beneficiary's domicile at the owner's death governing inheritance
by descendants of an intestate. Other forms of identifying
beneficiaries who are to take on one or more contingencies, and
rules for providing proofs and assurances needed to satisfy
reasonable concerns by registering entities regarding conditions
and identities relevant to accurate implementation of
registrations in beneficiary form, may be contained in a
registering entity's terms and conditions.
(b) The following are illustrations of registrations in
beneficiary form which a registering entity may authorize: (1)
Sole owner-sole beneficiary: John S Brown TOD (or POD) John S
Brown Jr. (2) Multiple owners-sole beneficiary: John S Brown
Mary B Brown JT TEN TOD John S Brown Jr. (3) Multiple owners-
primary and secondary (substituted) beneficiaries: John S Brown
Mary B Brown JT TEN TOD John S Brown Jr SUB BENE Peter Q Brown or
John S Brown Mary B Brown JT TEN TOD John S Brown Jr LDPS.
§36-10-11. Short title; rules of construction.
(a) This article shall be known as and may be cited as the
Uniform TOD Security Registration Act.
(b) This article shall be liberally construed and applied to
promote its underlying purposes and policy and to make uniform
the laws with respect to the subject of this article among states
enacting it.
(c) Unless displaced by the particular provisions of thisarticle the principles of law and equity supplement its
provisions.
§36-10-12. Application of act.
This article applies to registrations of securities in
beneficiary form made before or after its initial enactment, by
decedents dying on or after its initial enactment.
NOTE: The purpose of this bill is to adopt the Uniform
Transfer on Death Security Registration Act. The act provides a
method of transferring the ownership on death of the owner of the
security without becoming part of the owner's estate. The owner
retains complete control of the security during his or her
lifetime.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
This bill is recommended for enactment by the Commission on
Interstate Cooperation.