Why States Should Adopt UTODSRA

The highlights of the Uniform TOD Security Registration Act are:

  • Permits issuers of securities (stocks, bonds, mutual fund shares, security accounts) to offer customer/owners the ability to name death beneficiaries, to whom the securities transfer upon the death of a customer/owner.
  • Allows owners of investment securities to designate death beneficiaries when the issuers provide such a service to their customers.
  • Permits issuers of securities to set the standards for allowing TOD registrations and for transferring securities when a customer/owner dies, including standards for proof of death.
  • Frees issuers of any liability for a good faith transfer to any beneficiaries.
  • Preserves the rights of a deceased owner's creditors in securities that are transferred to any beneficiaries.
  • Preserves a customer/owner's control over the securities, including the power to revoke any beneficiary designation, during the life of that customer/owner.
  • Provides that TOD transfers are nontestamentary transfers.
  • Provides a simple method for registering a death beneficiary, using the acronym TOD (Transfer on Death).
  • Corrects the deficiencies of the popular, but flawed, joint tenancy with right of survivorship.
  • Does for investment securities what POD (Pay on Death) statutes have done for cash accounts in almost every state.