PRINTER'S NO. 4368
No. 3148 Session of 1994
INTRODUCED BY RUBLEY, FARGO, WOGAN, GANNON, E. Z. TAYLOR,
HENNESSEY, NICKOL, BARLEY, SAURMAN, KENNEY, CESSAR, MERRY AND
STEELMAN, NOVEMBER 14, 1994
REFERRED TO COMMITTEE ON JUDICIARY, NOVEMBER 14, 1994
AN ACT
1 Amending Title 20 (Decedents, Estates and Fiduciaries) of the
2 Pennsylvania Consolidated Statutes, allowing owners of
3 securities to register the title to same in transfer-on-death
4 form.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Title 20 of the Pennsylvania Consolidated
8 Statutes is amended by adding a chapter to read:
9 CHAPTER 64
10 TRANSFER ON DEATH SECURITY REGISTRATION
11 Sec.
12 6401. Definitions.
13 6402. Registration in beneficiary form.
14 6403. Law applicable to registration.
15 6404. Origination of registration in beneficiary form.
16 6405. Form of registration in beneficiary form.
17 6406. Effect of registration in beneficiary form.
18 6407. Ownership on death of owner.
1 6408. Protection of registering entity.
2 6409. Nontestamentary transfer on death.
3 6410. Terms, conditions and forms for registration.
4 6411. Construction of chapter.
5 6412. Application of chapter.
6 § 6401. Definitions.
7 The following words and phrases when used in this chapter
8 shall have the meanings given to them in this section unless the
9 context clearly indicates otherwise:
10 "Beneficiary form." A registration of a security which
11 indicates the present owner of the security and the intention of
12 the owner regarding the person who will become the owner of the
13 security upon the death of the owner.
14 "Devisee." A person designated in a will to receive a
15 disposition of real or personal property.
16 "Heirs." Those persons, including the surviving spouse, who
17 are entitled under the statutes of intestate succession to the
18 property of a decedent.
19 "Person." An individual, a corporation, an organization or
20 other legal entity.
21 "Personal representative." The term includes an executor,
22 administrator, successor personal representative, special
23 administrator and persons who perform substantially the same
24 function under the law governing their status.
25 "Property." The term includes both real and personal
26 property or any interest therein and anything that may be the
27 subject of ownership.
28 "Register." To issue a certificate showing the ownership of
29 a certificated security or, in the case of an uncertificated
30 security, to initiate or transfer an account showing ownership
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1 of securities.
2 "Registering entity." A person who originates or transfers a
3 security title by registration. The term includes a broker
4 maintaining security accounts for customers and a transfer agent
5 or other person acting for or as an issuer of securities.
6 "Security." A share, participation or other interest in
7 property, in a business or in an obligation of an enterprise or
8 other issuer. The term also includes a certificated security, an
9 uncertificated security and a security account.
10 "Security account."
11 (1) A reinvestment account associated with a security, a
12 securities account with a broker, a cash balance in a
13 brokerage account, cash, interest, earnings or dividends
14 earned or declared on a security in an account, a
15 reinvestment account or a brokerage account, whether or not
16 credited to the account before the owner's death.
17 (2) A cash balance or other property held for or due to
18 the owner of a security as a replacement for or product of an
19 account security, whether or not credited to the account
20 before the owner's death.
21 "State." Any state of the United States, the District of
22 Columbia, the Commonwealth of Puerto Rico and any territory or
23 possession subject to the legislative authority of the United
24 States.
25 § 6402. Registration in beneficiary form.
26 Only individuals whose registration of a security shows sole
27 ownership by one individual or multiple ownership by two or more
28 with right of survivorship, rather than as tenants in common,
29 may obtain registration in beneficiary form. Multiple owners of
30 a security registered in beneficiary form hold as joint tenants
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1 with right of survivorship, as tenants by the entireties or as
2 owners of community property held in survivorship form and not
3 as tenants in common.
4 § 6403. Law applicable to registration.
5 A security may be registered in beneficiary form if the form
6 is authorized by this or a similar statute of the state of
7 organization of the issuer or registering entity, the location
8 of the registering entity's principal office, the office of its
9 transfer agent or its office making the registration, or by this
10 or a similar statute of the law of the state listed as the
11 owner's address at the time of registration. A registration
12 governed by the law of a jurisdiction in which this or similar
13 legislation is not in force or was not in force when a
14 registration in beneficiary form was made is nevertheless
15 presumed to be valid and authorized as a matter of contract law.
16 § 6404. Origination of registration in beneficiary form.
17 A security, whether evidenced by certificate or account, is
18 registered in beneficiary form when the registration includes a
19 designation of a beneficiary to take the ownership at the death
20 of the owner or the deaths of all multiple owners.
21 § 6405. Form of registration in beneficiary form.
22 Registration in beneficiary form may be shown by the words
23 "transfer on death" or the acronym "TOD," or by the words "pay
24 on death" or the acronym "POD," after the name of the registered
25 owner and before the name of a beneficiary.
26 § 6406. Effect of registration in beneficiary form.
27 The designation of a TOD beneficiary on a registration in
28 beneficiary form has no effect on ownership until the owner's
29 death. A registration of a security in beneficiary form may be
30 canceled or changed at any time by the sole owner or all then
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1 surviving owners, without the consent of the beneficiary.
2 § 6407. Ownership on death of owner.
3 On death of a sole owner or the last to die of all multiple
4 owners, ownership of securities registered in beneficiary form
5 passes to the beneficiary or beneficiaries who survive all
6 owners. On proof of death of all owners and compliance with any
7 applicable requirements of the registering entity, a security
8 registered in beneficiary form may be reregistered in the name
9 of the beneficiary or beneficiaries who survived the death of
10 all owners. Until division of the security after the death of
11 all owners, multiple beneficiaries surviving the death of all
12 owners hold their interests as tenants in common. If no
13 beneficiary survives the death of all owners, the security
14 belongs to the estate of the deceased sole owner or the estate
15 of the last to die of all multiple owners.
16 § 6408. Protection of registering entity.
17 (a) General rule.--A registering entity is not required to
18 offer or to accept a request for security registration in
19 beneficiary form. If a registration in beneficiary form is
20 offered by a registering entity, the owner requesting
21 registration in beneficiary form assents to the protections
22 given to the registering entity by this chapter.
23 (b) Implementation.--By accepting a request for registration
24 of a security in beneficiary form, the registering entity agrees
25 that the registration will be implemented on death of the
26 deceased owner as provided in this chapter.
27 (c) Discharge.--A registering entity is discharged from all
28 claims to a security by the estate, creditors, heirs or devisees
29 of a deceased owner if it registers a transfer of a security in
30 accordance with section 6407 (relating to ownership on death of
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1 owner) and does so in good faith reliance on the registration,
2 on this chapter and on information provided to it by affidavit
3 of the personal representative of the deceased owner or by the
4 surviving beneficiary or by the surviving beneficiary's
5 representatives, or other information available to the
6 registering entity. The protections of this chapter do not
7 extend to a reregistration or payment made after the registering
8 entity has received written notice from any claimant to any
9 interest in the security objecting to implementation of a
10 registration in beneficiary form. No other notice or other
11 information available to the registering entity affects its
12 right to protection under this chapter.
13 (d) Rights of beneficiaries not affected.--The protection
14 provided by this chapter to the registering entity of a security
15 does not affect the rights of beneficiaries in disputes between
16 themselves and other claimants to ownership of the security
17 transferred or its value or proceeds.
18 § 6409. Nontestamentary transfer on death.
19 (a) General rule.--A transfer on death resulting from a
20 registration in beneficiary form is effective by reason of the
21 contract regarding the registration between the owner and the
22 registering entity and this chapter and is not testamentary.
23 (b) Creditors.--This chapter does not limit the rights of
24 creditors of security owners against beneficiaries and other
25 transferees under other laws of this Commonwealth.
26 § 6410. Terms, conditions and forms for registration.
27 (a) Terms and conditions.--A registering entity offering to
28 accept registrations in beneficiary form may establish the terms
29 and conditions under which it will receive requests for
30 registrations in beneficiary form and for implementation of
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1 registrations in beneficiary form, including requests for
2 cancellation of previously registered TOD beneficiary
3 designations and requests for reregistration to effect a change
4 of beneficiary. The terms and conditions so established may
5 provide for proving death, avoiding or resolving any problems
6 concerning fractional shares, designating primary and contingent
7 beneficiaries and substituting a named beneficiary's descendants
8 to take in the place of the named beneficiary in the event of
9 the beneficiary's death. Substitution may be indicated by
10 appending to the name of the primary beneficiary the letters
11 "LDPS," standing for "lineal descendants per stirpes." This
12 designation substitutes a deceased beneficiary's descendants who
13 survive the owner for a beneficiary who fails to so survive, the
14 descendants to be identified and to share in accordance with the
15 law of the beneficiary's domicile at the owner's death governing
16 inheritance by descendants of an intestate. Other forms of
17 identifying beneficiaries who are to take on one or more
18 contingencies, and rules for providing proofs and assurances
19 needed to satisfy reasonable concerns by registering entities
20 regarding conditions and identities relevant to accurate
21 implementation of registrations in beneficiary form, may be
22 contained in a registering entity's terms and conditions.
23 (b) Forms.--The following are illustrations of registrations
24 in beneficiary form which a registering entity may authorize:
25 (1) Sole owner-sole beneficiary: John S. Brown TOD (or
26 POD) John S. Brown, Jr.
27 (2) Multiple owners-sole beneficiary: John S. Brown Mary
28 B. Brown JT TEN TOD John S. Brown, Jr.
29 (3) Multiple owners-primary and secondary (substituted)
30 beneficiaries: John S. Brown Mary B. Brown JT TEN TOD John S.
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1 Brown, Jr. SUB BENE Peter Q. Brown or John S. Brown Mary B.
2 Brown JT TEN TOD John S. Brown, Jr., LDPS.
3 § 6411. Construction of chapter.
4 This chapter shall be liberally construed and applied to
5 promote its underlying purposes and policy and to make uniform
6 the laws with respect to the subject of this chapter among
7 states enacting it. Unless displaced by the particular
8 provisions of this chapter, the principles of law and equity
9 supplement its provisions.
10 § 6412. Application of chapter.
11 This chapter applies to registration of securities in
12 beneficiary form made before or after the effective date of this
13 chapter by decedents dying on or after the effective date of
14 this chapter.
15 Section 2. This act shall take effect in 60 days.
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