Substitute House Bill No. 5141
Substitute House Bill No. 5141
PUBLIC ACT NO. 97-42
AN ACT CONCERNING THE UNIFORM TRANSFER ON DEATH
SECURITY REGISTRATION ACT.
Be it enacted by the Senate and House of
Representatives in General Assembly convened:
Section 1. (NEW) As used in this act, 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) "Heir" means a person, including the
surviving spouse, who is entitled under the
statutes of intestate succession to the property
of a decedent.
(4) "Person" means an individual, a
corporation, an organization, a trustee of an
inter vivos trust 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 (A) 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 (B) 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.
Sec. 2. (NEW) Only individuals whose
registration of a security shows sole ownership by
one individual or multiple ownership by two or
more individuals with right of survivorship,
rather than as tenants in common, may obtain
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.
Sec. 3. (NEW) A security may be registered in
beneficiary form if the form is authorized by this
act or a similar statutory provision 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
act or a similar statutory provision 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 a similar statutory
provision to this act 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.
Sec. 4. (NEW) 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.
Sec. 5. (NEW) 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 the registered owner and before the name of a
beneficiary.
Sec. 6. (NEW) 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.
Sec. 7. (NEW) 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.
Sec. 8. (NEW) (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 form assents to the
protections given to the registering entity by
this act. No registering entity shall accept a
request from an owner of a security for
registration in beneficiary form unless such
request is in writing.
(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 act.
(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 7 of this act and does so in good
faith reliance (1) on the registration, (2) on
this act, and (3) 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 act 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 act.
(d) The protection provided by this act 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
or proceeds.
Sec. 9. (NEW) (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 is not testamentary.
(b) This act does not limit the rights of
creditors of security owners against beneficiaries
and other transferees under other laws of this
state.
Sec. 10. (NEW) A registering entity offering
to accept registrations in beneficiary form may
establish the terms and conditions under which it
will receive requests (1) for registrations in
beneficiary form, and (2) 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 a beneficiary 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.
Sec. 11. (NEW) Whenever any security is
registered in beneficiary form, the right of any
beneficiary to the immediate ownership of any such
security shall be a taxable transfer for the
purposes of chapter 216 of the general statutes.
Sec. 12. (NEW) When any security registered
in beneficiary form has been transferred to a
beneficiary of a deceased owner, any such
beneficiary shall be liable to the personal
representative of the deceased owner for
securities so registered or their proceeds
pursuant to section 45a-368 of the general
statutes for the payment of claims, taxes and
expenses of administration against the estate of
the decedent, to the extent such claims, taxes and
expenses of administration remain unpaid after the
application of the other assets of the deceased,
provided such liability shall not exceed the value
of any such security at the time of the death of
the deceased owner divided by the number of
beneficiaries.
Sec. 13. Section 45a-369 of the general
statutes is repealed and the following is
substituted in lieu thereof:
(a) Except as otherwise provided in
subsections (c) and (d) of this section,
beneficiaries are liable, as provided in section
45a-368, in the following order: (1) Distributees,
(2) residuary beneficiaries, (3) beneficiaries of
general dispositions, (4) beneficiaries of
specific dispositions of personal property, [and]
(5) beneficiaries of specific dispositions of real
property, AND (6) TRANSFER ON DEATH BENEFICIARIES.
(b) For the purposes of subsection (a) of
this section: (1) A beneficiary of a demonstrative
disposition shall be treated as a beneficiary of a
general disposition to the extent the property or
fund charged with a demonstrative disposition has
adeemed. (2) A beneficiary of a demonstrative
disposition shall be treated as a beneficiary of a
specific disposition if the property or fund
charged with a demonstrative disposition has not
adeemed, to the extent of the value of such
property or fund.
(c) A beneficiary who receives assets, which
assets are security for the payment of a debt of
the decedent, shall be liable for such debt prior
to any other beneficiary, in an amount not to
exceed the difference between the fair market
value of such assets received by him and the
amount which such secured creditor shall have
realized on the disposition of such security.
(d) The order of liability provided in
subsection (a) of this section shall not apply to
the liability for an estate, succession or other
death tax under the law of this state or of any
other jurisdiction, with respect to any property
required to be included in the gross tax estate of
a decedent under the provisions of any such law.
The apportionment of the United States estate
taxes and the estate and succession taxes in this
state, and the liability under section 45a-368 of
beneficiaries consequent to such apportionment,
are governed by the provisions of sections 12-401
and 12-376, respectively, and the apportionment of
such taxes assessed by another jurisdiction, and
the liability of the beneficiaries under section
45a-368 therefor, shall be governed by the
apportionment statutes of such other jurisdiction.
(e) The express or implied intention of the
testator to prefer certain beneficiaries shall be
effective to vary the order of liability
prescribed by subsection (a) of this section.
(f) If in an action under section 45a-368, it
is established to the satisfaction of the court
that: (1) The defendant is liable for the payment
of two or more of the obligations described in
subsection (a) of said section, preference in the
payment of such obligations must be given in the
order prescribed by law for payment of the
obligations of the decedent and his estate. (2) An
unsatisfied obligation described in subsection (a)
of said section exists which is legally preferred
to that of the plaintiff, the existence of such
unsatisfied obligation is a defense to the action
if the aggregate value of the assets passing to
the defendant does not exceed the defendant's pro
rata share, as provided in section 45a-370, of
such unsatisfied obligation. If the aggregate
value of the assets passing to the defendant
exceeds such pro rata share of such unsatisfied
obligation, the plaintiff, subject to the
provisions of section 45a-370, may recover such
excess from the defendant.
(g) (1) If at any time payment with respect
to an obligation described in subsection (a) of
section 45a-368 is made by a beneficiary having a
lower order of liability than another beneficiary
or beneficiaries, or out of assets due such
beneficiary having a lower order of liability,
then the beneficiary having a lower order of
liability shall be entitled to recover the amount
so paid from any beneficiary prior in liability to
him under subsection (a) of this section who
remains liable under sections 45a-266, 45a-353 to
45a-384, inclusive, 45a-390 and 45a-436 without
regard to the limitations of sections 45a-370 and
45a-373. (2) If by application of subdivision (1)
of subsection (g) of this section any beneficiary
has paid more than his ratable obligation, as
defined in section 45a-370, such beneficiary shall
be entitled to contribution from any beneficiary
within the same order of liability without regard
to the limitations of sections 45a-370 and
45a-373.
Sec. 14. (NEW) (a) This act shall be known
and may be cited as the Uniform Transfer on Death
Security Registration Act.
(b) This act 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 act among states enacting
it.
(c) Unless displaced by the particular
provisions of this act, the principles of law and
equity supplement its provisions.
Sec. 15. (NEW) This act applies to
registrations of securities in beneficiary form
made before or after October 1, 1997, by decedents
dying on or after October 1, 1997.
Approved May 14, 1997