SRC-AAA S.B. 504 75(R)    BILL ANALYSIS


Senate Research CenterS.B. 504
By: Harris
Jurisprudence
2-17-97
As Filed


DIGEST 

Currently, Texas does not allow a brokerage account or mutual fund account
owner to indicate a beneficiary, so that account passes directly to the
beneficiary, rather than becoming part of the deceased person's estate.
This bill allows certain persons to designate a beneficiary and includes
the form indicated, order of passage to beneficiaries, rights of
creditors, and procedures for registering entities. 

PURPOSE

As proposed, S.B. 504 allows certain persons to designate a beneficiary
and includes the form indicated, order of passage to beneficiaries, rights
of creditors, and procedures for registering entities. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter XI, Texas Probate Code, by adding Part 4, as
follows: 

PART 4. UNIFORM TRANSFER ON DEATH SECURITY REGISTRATION ACT

Sec. 466. DEFINITIONS. Defines "beneficiary form," "person," "register,"
"registering entity," "security," "security account," and "state." 

Sec. 467. REGISTRATION IN BENEFICIARY FORM; SOLE OR JOINT TENANCY
OWNERSHIP. Authorizes certain persons to obtain registration in
beneficiary form. Provides that 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, not as tenants in common.  

Sec. 468. REGISTRATION IN BENEFICIARY FROM; APPLICABLE LAW.  Sets forth
requirements for registering a security in beneficiary form.  

Sec, 469. ORIGINATION OF REGISTRATION IN BENEFICIARY FORM. Establishes a
security is registered in beneficiary form if 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. 

Sec. 470. FORM OF REGISTRATION IN BENEFICIARY FORM.  Sets forth the form
of registration in beneficiary form. 

Sec. 471. EFFECT OF REGISTRATION IN BENEFICIARY FORM. Sets forth the
effects of registration in beneficiary form.  

Sec. 472. OWNERSHIP ON DEATH OF OWNER. Sets forth ownership of a
registered security at the death of multiple or sole owners. 

 Sec. 473. PROTECTION OF REGISTERING ENTITY. Provides that a registering
entity is not required to offer or accept a request for security
registration in beneficiary form. Entitles an entity registering in
beneficiary form to certain protections.   Provides that the protection in
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. 

Sec. 474. NONTESTAMENTARY TRANSFER ON DEATH. Sets forth the effectiveness
of  a transfer resulting from a registration in beneficiary form on death.
Provides that this part does not limit the rights of creditors of security
owners against beneficiaries and other transferees. 

Sec. 475. RIGHTS OF CREDITOR ON REGISTRATION. Sets forth the rights and
procedures  of a creditor of  securities registered in beneficiary form in
order to gain access to those securities.  Provides that this section does
not affect the right of  certain persons to make payment from or transfer
of a security registered in beneficiary form according to the terms of the
security or impose liability on certain entities unless the entity
received notice of the need to pay debts, taxes, and expenses of
administration. 

Sec. 476. TERMS, CONDITIONS, AND FORMS FOR REGISTRATION. Sets forth
requirements of terms, conditions, and illustrations of registration in
beneficiary form.  

Sec. 477. NOTICE OF EFFECT OF REGISTRATION. Requires a registering entity
to provide a written statement on the effects of registration in
beneficiary form (statement). Sets forth the language of the statement.  

Sec. 478. EFFECT OF CERTAIN SECURITY ACCOUNT ON COMMUNITY PROPERTY
INTEREST.  Provides that a security account created with community
property does not alter community property rights.  

Sec. 478. SHORT TITLE: RULES OF CONSTRUCTION. Provides that this part may
be cited as the Uniform Transfer on Death Security Registration Act.
Requires this part to be liberally construed to promote its purposes and
policy.  Provides that unless displaced by the particular provisions of
this part, the principles of law and equity supplement its provisions. 

Sec. 480. APPLICATION OF ACT. Makes application of this Act prospective.

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.