SECTIONS 5500-5512 - California Statutes

PROBATE CODE

SECTION 5500-5512

5500. (a) This part shall be known as and may be cited as the
Uniform TOD Security Registration Act.
(b) This part shall be liberally construed and applied to promote
its underlying purposes and policy.
(c) The underlying purposes and policy of this act are to (1)
encourage development of a title form for use by individuals that is
effective, without probate and estate administration, for
transferring property at death in accordance with directions of a
deceased owner of a security as included in the title form in which
the security is held and (2) protect issuers offering and
implementing the new title form.
(d) Unless displaced by the particular provisions of this part,
the principles of law and equity supplement its provisions.

5501. For purposes of this part:
(a) "Beneficiary form" means a registration of a security that
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.
(b) "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.
(c) "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.
(d) "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.
(e) (1) "Security account" means any of the following:
(A) A reinvestment account associated with a security, a
securities account with a broker, a cash balance in a brokerage
account, cash, cash equivalents, 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.
(B) An investment management or custody account with a trust
company or a trust department of a bank with trust powers, including
the securities in the account, the cash balance in the account, and
cash equivalents, and interest, earnings, or dividends earned or
declared on a security in the account, whether or not credited to the
account before the owner's death.
(C) 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.
(2) For the purposes of this subdivision, "cash equivalent" means
an investment that is easily converted into cash, including, treasury
bills, treasury notes, money market funds, savings bonds, short-term
instruments, and short-term obligations.
(f) This section may not be construed to govern cash equivalents
in multiple-party accounts that are governed by the California
Multiple-Party Accounts Law, Part 2 (commencing with Section 5100).

5502. 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.

5503. 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.

5504. 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.

5505. 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.

5506. 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.

5507. 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 survive 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.

5508. (a) A registering entity is not required to offer or to
accept requests 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 part.
(b) By accepting a request for registration of a security in
beneficiary form, the registering entity agrees that the registration
will be implemented as provided in this part.
(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 5507 and does so in good faith reliance (1) on the
registration, (2) on this part, and (3) on information provided to it
by affidavit of the personal representative of the deceased owner,
or by the surviving beneficiary or the surviving beneficiary's
representatives, or other information available to the registering
entity. The protections of this part 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 shall affect its right to protection under this
part.
(d) The protection provided by this part 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.

5509. (a) Any 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
part and is not testamentary.
(b) This part does not limit the rights of a surviving spouse or
creditors of security owners against beneficiaries and other
transferees under other laws of this state.

5510. (a) A registering entity offering to accept registrations in
beneficiary form may establish the terms and conditions under which
it will receive requests for (1) registrations in beneficiary form,
and (2) 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.
(b) The terms and conditions established pursuant to subdivision
(a) may provide for (1) proving death, (2) avoiding or resolving any
problems concerning fractional shares, (3) designating primary and
contingent beneficiaries, and (4) 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.
(c) The following are illustrations of registrations in
beneficiary form that 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.

5511. Nothing in this part alters the community character of
community property or community rights in community property. This
part is subject to Chapter 2 (commencing with Section 5010) of Part 1
of Division 5.

5512. This part applies to registrations of securities in
beneficiary form made before, on, or after January 1, 1999, by
decedents dying on or after January 1, 1999.