HB 1531 - Uniform Transfer on Death Security Registration Act; enact

First Reader Summary

A BILL to amend Chapter 5 of Title 53 of the Official Code of Georgia Annotated, relating to probate, so as to enact the "Uniform Transfer on Death Security Registration Act"; and for other purposes.

Richardson, James G (26th) Cooper, Sharon M (31st)
Status Summary HC: Judy SC: LA: 02/27/98 H - Favorably Reported
Page Numbers - 1/ 2/ 3/ 4/ 5/ 6
Code Sections - 53-5-60/ 53-5-61/ 53-5-62/ 53-5-63/ 53-5-64/ 53-5-65/ 53-5-66/ 53-5-67/ 53-5-68/ 53-5-69/ 53-5-70/ 53-5-71
House Action Senate
2/4/98 Read 1st Time
2/5/98 Read 2nd Time
2/27/98 Favorably Reported

HB 1531                                            LC 26 0582 
 
 
 
 
 
 
                        A BILL TO BE ENTITLED 
                               AN ACT 
 
 
  1- 1  To amend Chapter 5 of Title 53 of the Official Code of 
  1- 2  Georgia Annotated, relating to probate, so as to enact the 
  1- 3  "Uniform Transfer on Death Security Registration Act"; to 
  1- 4  provide for a short title; to provide for definitions; to 
  1- 5  provide for registration in beneficiary form with respect to 
  1- 6  certain types of ownership; to provide for applicable state 
  1- 7  law; to provide for origination of registration; to provide 
  1- 8  for form and effect of registration; to provide for 
  1- 9  ownership on death of owner; to provide for protection of 
  1-10  registering entities; to provide for nontestamentary 
  1-11  transfer on death; to provide for terms, conditions, and 
  1-12  forms for registration; to provide for applicability; to 
  1-13  provide for related matters; to provide an effective date; 
  1-14  to repeal conflicting laws; and for other purposes. 
 
  1-15       BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: 
 
  1-16                           SECTION 1. 
 
  1-17  Chapter 5 of Title 53 of the Official Code of Georgia 
  1-18  Annotated, relating to probate, as such chapter becomes 
  1-19  effective on January 1, 1998, is amended by inserting at the 
  1-20  end thereof a new article to read as follows: 
 
 
 
  1-21    53-5-60. 
 
  1-22    This article shall be known and may be cited as the 
  1-23    'Uniform Transfer on Death Security Registration Act.' 
 
  1-24    53-5-61. 
 
  1-25    As used in this article, the term: 
 
  1-26      (1) 'Beneficiary form' means a registration of a 
  1-27      security which indicates the present owner of the 
  1-28      security and the intention of the owner regarding the 
  1-29      person who will become the owner of the security upon 
  1-30      the death of the owner. 
 
 
 
 
                                 -1- 
 
 
 
  2- 1      (2) 'Register,' including its derivatives, means to 
  2- 2      issue a certificate showing the ownership of a 
  2- 3      certificated security or, in the case of an 
  2- 4      uncertificated security, to initiate or transfer an 
  2- 5      account showing ownership of securities. 
 
  2- 6      (3) 'Registering entity' means a person who originates 
  2- 7      or transfers a security title by registration and 
  2- 8      includes a broker maintaining security accounts for 
  2- 9      customers and a transfer agent or other person acting 
  2-10      for or as an issuer of securities. 
 
  2-11      (4) 'Security' means a share, participation, or other 
  2-12      interest in property, in a business, or in an obligation 
  2-13      of an enterprise or other issuer and includes a 
  2-14      certificated security, an uncertificated security, and a 
  2-15      security account. 
 
  2-16      (5) 'Security account' means: 
 
  2-17        (A) A reinvestment account associated with a security, 
  2-18        a securities account with a broker, a cash balance in 
  2-19        a brokerage account, cash, interest, earnings, or 
  2-20        dividends earned or declared on a security in an 
  2-21        account, a reinvestment account, or a brokerage 
  2-22        account, whether or not credited to the account before 
  2-23        the owner's death; or 
 
  2-24        (B) A cash balance or other property held for or due 
  2-25        to the owner of a security as a replacement for or 
  2-26        product of an account security, whether or not 
  2-27        credited to the account before the owner's death. 
 
  2-28    53-5-62. 
 
  2-29    Only individuals whose registration of a security shows 
  2-30    sole ownership by one individual or multiple ownership by 
  2-31    two or more with right of survivorship, rather than as 
  2-32    tenants in common, may obtain registration in beneficiary 
  2-33    form.  Multiple owners of a security registered in 
  2-34    beneficiary form hold as joint tenants with right of 
  2-35    survivorship, as tenants by the entireties, or as owners 
  2-36    of community property held in survivorship form, and not 
  2-37    as tenants in common. 
 
  2-38    53-5-63. 
 
  2-39    A security may be registered in beneficiary form if the 
  2-40    form is authorized by this or a similar statute of the 
  2-41    state of organization of the issuer or registering entity, 
 
 
 
                                 -2- 
 
 
 
  3- 1    the location of the registering entity's principal office, 
  3- 2    the office of its transfer agent or its office making the 
  3- 3    registration, or by this or a similar statute of the law 
  3- 4    of the state listed as the owner's address at the time of 
  3- 5    registration.  A registration governed by the law of a 
  3- 6    jurisdiction in which this or similar legislation is not 
  3- 7    in force or was not in force when a registration in 
  3- 8    beneficiary form was made is nevertheless presumed to be 
  3- 9    valid and authorized as a matter of contract law. 
 
  3-10    53-5-64. 
 
  3-11    A security, whether evidenced by certificate or account, 
  3-12    is registered in beneficiary form when the registration 
  3-13    includes a designation of a beneficiary to take the 
  3-14    ownership at the death of the owner or the deaths of all 
  3-15    multiple owners. 
 
  3-16    53-5-65. 
 
  3-17    Registration in beneficiary form may be shown by the words 
  3-18    'transfer on death' or the abbreviation 'TOD,' or by the 
  3-19    words 'pay on death' or the abbreviation 'POD,' after the 
  3-20    name of the registered owner and before the name of a 
  3-21    beneficiary. 
 
  3-22    53-5-66. 
 
  3-23    The designation of a transfer on death beneficiary on a 
  3-24    registration in beneficiary form has no effect on 
  3-25    ownership until the owner's death.  A registration of a 
  3-26    security in beneficiary form may be canceled or changed at 
  3-27    any time by the sole owner or all then surviving owners 
  3-28    without the consent of the beneficiary. 
 
  3-29    53-5-67. 
 
  3-30    On death of a sole owner or the last to die of all 
  3-31    multiple owners, ownership of securities registered in 
  3-32    beneficiary form passes to the beneficiary or 
  3-33    beneficiaries who survive all owners.  On proof of death 
  3-34    of all owners and compliance with any applicable 
  3-35    requirements of the registering entity, a security 
  3-36    registered in beneficiary form may be reregistered in the 
  3-37    name of the beneficiary or beneficiaries who survive the 
  3-38    death of all owners.  Until division of the security after 
  3-39    the death of all owners, multiple beneficiaries surviving 
  3-40    the death of all owners hold their interests as tenants in 
  3-41    common.  If no beneficiary survives the death of all 
  3-42    owners, the security belongs to the estate of the deceased 
 
 
                                 -3- 
 
 
 
  4- 1    sole owner or the estate of the last to die of all 
  4- 2    multiple owners. 
 
  4- 3    53-5-68. 
 
  4- 4    (a) A registering entity is not required to offer or to 
  4- 5    accept a request for security registration in beneficiary 
  4- 6    form.  If a registration in beneficiary form is offered by 
  4- 7    a registering entity, the owner requesting registration in 
  4- 8    beneficiary form assents to the protections given to the 
  4- 9    registering entity by this article. 
 
  4-10    (b) By accepting a request for registration of a security 
  4-11    in beneficiary form, the registering entity agrees that 
  4-12    the registration will be implemented on death of the 
  4-13    deceased owner as provided in this article. 
 
  4-14    (c) A registering entity is discharged from all claims to 
  4-15    a security by the estate, creditors, heirs, or devisees of 
  4-16    a deceased owner if it registers a transfer of the 
  4-17    security in accordance with Code Section 53-5-67 and does 
  4-18    so in good faith reliance on the registration, on this 
  4-19    article, and on information provided to it by affidavit of 
  4-20    the personal representative of the deceased owner, or by 
  4-21    the surviving beneficiary or by the surviving 
  4-22    beneficiary's representatives, or other information 
  4-23    available to the registering entity.  The protections of 
  4-24    this article do not extend to a reregistration or payment 
  4-25    made after a registering entity has received written 
  4-26    notice from any claimant to any interest in the security 
  4-27    objecting to implementation of a registration in 
  4-28    beneficiary form.  No other notice or other information 
  4-29    available to the registering entity affects its right to 
  4-30    protection under this article. 
 
  4-31    (d) The protection provided by this article to the 
  4-32    registering entity of a security does not affect the 
  4-33    rights of beneficiaries in disputes between themselves and 
  4-34    other claimants to ownership of the security transferred 
  4-35    or its value or proceeds. 
 
  4-36    53-5-69. 
 
  4-37    (a) A transfer on death resulting from a registration in 
  4-38    beneficiary form is effective by reason of the contract 
  4-39    regarding the registration between the owner and the 
  4-40    registering entity and this article and is not 
  4-41    testamentary. 
 
 
 
 
                                 -4- 
 
 
 
  5- 1    (b) This article does not limit the rights of creditors of 
  5- 2    security owners against beneficiaries and other 
  5- 3    transferees under other laws of this state. 
 
  5- 4    53-5-70. 
 
  5- 5    (a) A registering entity offering to accept registrations 
  5- 6    in beneficiary form may establish the terms and conditions 
  5- 7    under which it will receive requests for registrations in 
  5- 8    beneficiary form and for implementation of registrations 
  5- 9    in beneficiary form, including requests for cancellation 
  5-10    of previously registered transfer on death beneficiary 
  5-11    designations and requests for reregistration to effect a 
  5-12    change of beneficiary.  The terms and conditions so 
  5-13    established may provide for proving death, avoiding or 
  5-14    resolving any problems concerning fractional shares, 
  5-15    designating primary and contingent beneficiaries, and 
  5-16    substituting a named beneficiary's descendants to take in 
  5-17    the place of the named beneficiary in the event of the 
  5-18    beneficiary's death.  Substitution may be indicated by 
  5-19    appending to the name of the primary beneficiary the 
  5-20    letters LDPS, standing for 'lineal descendants per 
  5-21    stripes.'  This designation substitutes a deceased 
  5-22    beneficiary's descendants who survive the owner for a 
  5-23    beneficiary who fails to so survive, the descendants to be 
  5-24    identified and to share in accordance with the law of the 
  5-25    beneficiary's domicile at the owner's death governing 
  5-26    inheritance by descendants of an intestate.  Other forms 
  5-27    of identifying beneficiaries who are to take on one or 
  5-28    more contingencies and rules for providing proofs and 
  5-29    assurances needed to satisfy reasonable concerns by 
  5-30    registering entities regarding conditions and identities 
  5-31    relevant to accurate implementation of registrations in 
  5-32    beneficiary form may be contained in a registering 
  5-33    entity's terms and conditions. 
 
  5-34    (b) The following are illustrations of registrations in 
  5-35    beneficiary form which a registering entity may authorize: 
 
  5-36      (1) Sole owner-sole beneficiary: John S. Brown TOD (or 
  5-37      POD) John S. Brown, Jr.; 
 
  5-38      (2) Multiple owners-sole beneficiary: John S. Brown Mary 
  5-39      B. Brown JT TEN TOD John S. Brown, Jr.; 
 
  5-40      (3) Multiple owners-primary and secondary (substituted) 
  5-41      beneficiaries: John S. Brown Mary B. Brown JT TEN TOD 
  5-42      John S. Brown, Jr., SUB BENE Peter Q. Brown or John S. 
  5-43      Brown Mary B. Brown JT TEN TOD John S. Brown, Jr., LDPS. 
 
 
                                 -5- 
 
 
 
  6- 1    53-5-71. 
 
  6- 2    This article applies to registrations of securities in 
  6- 3    beneficiary form made before or after January 1, 1999, by 
  6- 4    decedents dying on or after January 1, 1999." 
 
  6- 5                           SECTION 2. 
 
  6- 6  This Act shall become effective on January 1, 1999. 
 
  6- 7                           SECTION 3. 
 
  6- 8  All laws and parts of laws in conflict with this Act are 
  6- 9  repealed. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                 -6- 

Clerk of the House
Robert E. Rivers, Jr., Clerk
Last Updated on 04/20/98

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