Property: nonprobate transfer of ownership.

Plain English Breakdown

The bill summary text does not provide specific details on how it will affect companies that do not follow these rules properly, leaving this as an area of uncertainty.

Rules for Transferring Money and Property After Someone Dies

This law sets rules for companies holding money or property to follow when someone who owns it dies, ensuring beneficiaries receive their share without unnecessary steps.

What This Bill Does

• Requires companies holding securities designated for nonprobate transfer (called 'registering entities') to notify beneficiaries about a death if proof is provided.
• Limits the amount and type of information a company can ask from a beneficiary before giving them their share of the money or property.
• Prohibits companies from requiring beneficiaries to open new accounts with them just to get their share.
• Specifies that nonprofit corporations, charitable trusts, and entities exempt from federal taxation may be beneficiaries under this Act without providing extensive personal details.
• Requires registering entities to make good-faith efforts to notify all named beneficiaries when they know an owner has died.

Who It Names or Affects

• People who own securities set up for nonprobate transfer.
• Beneficiaries of those securities, including individuals and organizations like charities.
• Companies holding the securities.

Terms To Know

Nonprobate Transfer

A way to pass on money or property directly to someone after death without going through probate court.

Beneficiary

The person or organization that receives money or property from another when they die, according to a nonprobate transfer agreement.

Limits and Unknowns

• This law does not apply if the death of all owners happened before January 1, 2027.
• It is unclear how this will affect companies that do not follow these rules properly.

Official Summary Text

SB 1288, as amended, Laird.
Property: nonprobate transfer of ownership.
Existing law, the Uniform TOD Security Registration Act, provides for the transfer of ownership or proceeds of a security, as defined, by a registering entity to the designated beneficiary or beneficiaries upon the death of the owner without probate or estate administration, as specified.
This bill would require a registering entity that receives proof of the death of an owner of a security designated for non-probate transfer held by that registering entity to provide notice to a beneficiary, as specified. The bill would restrict the amount and type of information that a registering entity can require from such a beneficiary prior to
establishing its identity, as specified. The bill would also prohibit a registering entity from requiring a beneficiary to open an account with the registering entity to receive the security and from requiring multiple beneficiaries to coordinate to receive their share of the security, as specified. The bill would also specify that a nonprofit corporation, a charitable trust, or an entity exempt from federal taxation may be beneficiaries under the Act and limits the amount of information such entities are required to provide the registering entity in order to receive the property in which they have an interest.
This bill would require a registering entity that receives information establishing knowledge of the death of all owners of a security designated for nonprobate transfer held by that registering entity to initiate its beneficiary notification process, as
specified. The bill would require the registering entity to make a reasonable and good-faith effort, as defined, to notify each named beneficiary. The bill would require a beneficiary who has provided all required documentation to the registered entity to receive their designated share within 60 days of completing the registering entity’s process, as specified.
This bill would specify the necessary information for a nonprofit corporation, charitable trust, or entity that is exempt from federal taxation to establish its legal identity for these purposes. The bill would prohibit a registering entity from requesting additional information, including, among other things, a social security number and driver’s license number, from an individual employed by, or serving on the board of, those types of beneficiaries, except as specified. The bill would require a
registering entity to permit those types of beneficiaries to demonstrate their entitlement to a security by providing specific documentation.
This bill would provide that it does not apply when the death of all owners of a security occurred before January 1, 2027.

Current Bill Text

Download Bill PDF