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THE NEW TRANSFER ON DEATH SECURITY REGISTRATION ACT Click here to save article in WinZip.exe format to your PC
A new Part 4 has been added to Article 13 of the New York Estates, Powers, and Trust Law which has been named the “Transfer-on-Death Security Registration Act.” The legislation deals with the registration of a security in “Beneficiary Form.” Beginning January 1, 2006, and effective for security owners dying on or after January 1, 2007, it is possible for owners of securities or owners of security accounts (e.g., at brokerage houses) to designate a beneficiary upon the death of the owner provided that the issuing entity and the state laws under which it was created permit such a designation. The statute provides a great deal of registration flexibility. The following are examples: (1) A (the owner) can designate B as beneficiary, (2) A1 and A2 can hold between themselves as joint tenants with right of survivorship, as tenants by the entirety, or as owners of community property in survivorship form. The registration form may provide the following language to effect the kind of registration: “Transfer on Death,” “TOD,” Pay on Death,” and “POD.” The beneficiary designation has no legal effect until the owner’s death, and the registration may be cancelled or changed by the owner(s) at any time before death. Furthermore, a change in the registration may be effected by the owner’s Will by a specific reference to the registration. On the death of the sole owner or the last to die of multiple owners, ownership passes to the beneficiaries who survive all of the owners. Multiple beneficiaries surviving the death of all owners hold their interests as tenants in common. If no beneficiary survives the death of the last of the owners to die, the security belongs to estate of the last owner. The entity may establish rules of its own to effect transfers including the providing of proof of death and other matters. Under the statute there is the possibility the certificate of registration may provide that if a beneficiary predeceases the owner(s), the interests of the deceased beneficiary may pass to the beneficiary’s lineal descendants per stirpes or by representation. The statute also provides examples of how the beneficiary form may be prepared including the use of abbreviations to effect ownership rights. |
