HOUSE BILL NO. 443
AN ACT TO AMEND PART III, TITLE 12 OF THE DELAWARE CODE RELATING TO DESCENT AND DISTRIBUTION; AND PROVIDING FOR A UNIFORM TOD SECURITY REGISTRATION ACT.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
chapter, to read:
"Chapter 8. UNIFORM TOD SECURITY REGISTRATION ACT
§ 801. Definitions
In this chapter, 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 uncertiticated 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 it share, participation, or other interest in property, in Section 1. Amend Part III, Title 12 of the Delaware Code by inserting a new a business, or in au obligation of an enterprise or other issuer, and includes a certificated security. 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.
§802. 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, 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.
§ 803. 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.
§ 804. 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.
§ 803. Form ot:Registratton 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 the registered owner and before the name of a beneficiary.
§ 805. 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.
807. Ownership on 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 entitle, a security registered in beneficiary form may he 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 M 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.
§ 808. Psigesainnafilegisierini,LEatity,
ta) A registering entity is not required to offer or to accept a request for security registration M 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 chapter.
(b) By accepting a request for registration of a security in beneficiary form, the registering entity agrees that the registration will be implemented on the death of the deceased owner as provided in this chapter.
(b) 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 807 of this Chapter and does so in good faith reliance (i) on the registration, (ii) on this chapter, 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 chapter 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 chapter.
(c) The protection provided by this chapter 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.
§ 809. 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 chapter and is not testamentary.
(b) This chapter does not limit the rights of creditors of security owners against beneficiaries and other transferees under other laws of this State.
§ 810. 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 a beneficiary who fails to 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.
§ 811. Short Title,
This chapter shall be known as and may be cited as the 'Uniform TOD Security Registration Act'.
§ 812. Application of chapter.
This chapter applies to registrations of securities in beneficiary form made before or after the effective date of this chapter, by decedents dying on or after the effective date of this chapter."
Approved June 26, 1996