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