SUMMARY--Enacts Uniform TOD Security Registration Act. (BDR 10-163)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to property; providing for the registration of securities transferable on death; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1 Chapter 111 of NRS is hereby amended by adding thereto the provisions set forth as sections 2 to 19, inclusive, of this act.
Sec. 2 Sections 2 to 19, inclusive, of this act:
1. May be cited as the Uniform TOD Security Registration Act; and
2. Must be construed and applied to effectuate their general purpose to make uniform the law with respect to their subject among states enacting the Uniform TOD Security Registration Act.
Sec. 3 As used in sections 2 to 19, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections 4 to 8, inclusive, of this act have the meanings ascribed to them in those sections.
Sec. 4 "Beneficiary" means a person designated to become the owner of a security upon the death of the preceding owner.
Sec. 5 "Beneficiary form" means the registration of a security that indicates the present owner of the security and designates a beneficiary.
Sec. 6 "Register" 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. Its derivatives have a corresponding meaning.
Sec. 7 "Registering entity" means a person who originates or transfers title to a security by registration. The term includes a broker maintaining securities accounts for customers and a transfer agent or other person acting for or as an issuer of securities.
Sec. 8 "Security" means a share, participation or other interest in property, in a business or in an obligation of an enterprise or other issuer. The term includes a certificated security, an uncertificated security and a securities account. As used in this section, "securities account" means:
1. 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 a securities account, a reinvestment account or a brokerage account, whether or not credited to the account before the owner's death; or
2. A cash balance or other property held for or due to the owner of a security as a replacement for or product of a security held in a securities account, whether or not credited to the account before the owner's death.
Sec. 9 Only natural persons whose registration of a security shows sole ownership by one natural person or multiple ownership by two or more natural persons 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. 10 1. A security may be registered in beneficiary form if the Uniform TOD Security Registration Act or a similar statute is in force in:
(a) The state of organization of the issuer or registering entity or the location of the registering entity's principal office, the office of its transfer agent or its office making the registration; or
(b) The state listed as the owner's address at the time of registration.
2. A registration governed by the law of a jurisdiction in which the Uniform TOD Security Registration Act 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.
3. As used in this section, "state" includes a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands and any territory or possession subject to the jurisdiction of the United States.
Sec. 11 A security, whether evidenced by certificate or account, is registered in beneficiary form if the registration includes a designation of a beneficiary to become the owner at the death of the owner or the deaths of all multiple owners.
Sec. 12 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. 13 The designation of a 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. 14 On the death of a sole owner or the last to die of all multiple owners, ownership of securities registered in beneficiary form transfers to the beneficiary or beneficiaries who survive all owners. Upon 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. 15 1. A registering entity is not required to offer or to accept a request for registration of a security 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 sections 2 to 19, inclusive, of this act.
2. By accepting a request for registration of a security in beneficiary form, the registering entity agrees that the registration will be effective on the death of the deceased owner as provided in sections 2 to 19, inclusive, of this act.
Sec. 16 1. 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 a security in accordance with section 14 of this act and does so relying in good faith on:
(a) The registration;
(b) Sections 2 to 19, inclusive, of this act; and
(c) 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.
2. The protections of sections 2 to 19, inclusive, of this act do not extend to a reregistration or payment made after a registering entity has received written notice from a claimant to any interest in the security objecting to effectuation of a registration in beneficiary form. No other notice or other information available to the registering entity affects its right to protection under sections 2 to 19, inclusive, of this act.
3. The protection provided by sections 2 to 19, inclusive, of 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.
4. As used in this section:
(a) "Devisee" means a person designated in a will to receive a disposition of real or personal property.
(b) "Heirs" means those persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent.
(c) "Personal representative" includes an executor, administrator, successor personal representative, special administrator and persons who perform substantially the same function.
Sec. 17 1. 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 sections 2 to 19, inclusive, of this act and is not testamentary.
2. Sections 2 to 19, inclusive, of this act do not limit the rights of creditors of owners of securities against beneficiaries and other transferees under other laws of this state.
Sec. 18 1. A registering entity offering to accept registrations in beneficiary form may establish the terms and conditions under which it will receive requests for registrations in beneficiary form and for effectuation of registrations in beneficiary form, including requests for cancellation of previously registered designations of beneficiary 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.
2. 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.
3. 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. 19 Sections 2 to 19, inclusive, of this act apply to registrations of securities in beneficiary form made before, on or after October 1, 1997, by decedents dying on or after October 1, 1997.
Sec. 20 NRS 133.105 is hereby amended to read as follows:
133.105 1. A security issued in registered form which contains the words "transferable on death to" a named person, or equivalent language or abbreviation, is effective to transfer the interest evidenced by the security to that person, upon the death of its owner, without compliance with the formal requirements of this chapter for the execution of wills. As used in this [section,] subsection, "security" and "registered form" have the meanings ascribed to them in NRS 104.8102.
2. A security registered in beneficiary form pursuant to sections 2 to 19, inclusive, of this act is effective to transfer the interest evidenced by the security to the beneficiary at the death of the owner or the deaths of all multiple owners, without compliance with the formal requirements of this chapter for the execution of wills.