By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate Planning & Administration Attorney

Let’s discuss the law governing the designation of beneficiaries in relation to probate matters. The Uniform TOD Securities Registration Act (N.J.S.A. 3B:30-1 to -12) sets forth the method by which the owner of either an individual security or a security account can identify an individual or individuals who will take the account upon the account owner’s death, without the account becoming a probate asset. “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 owners.” N.J.S.A. 3B:3-5. “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 the beneficiary.” N.J.S.A. 3B:3-6.

The registration of either a particular security or an account containing securities must include an indication of both the present owner and the future owner. The permitted words are “transfer-on-death,” “TOD,” “pay-on-death,” or “POD.” N.J.S.A. 3B:30-6. More specifically, the statute requires securities or a securities account to be “registered in beneficiary form” for such securities to transfer non-probate upon the death of the owner. N.J.S.A. 3B:30-5. Beneficiary form “means a registration of a security which 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.” N.J.S.A. 3B:30-2.

“A registering entity offering to accept registration in beneficiary form may establish the terms and conditions under which it will receive request for registration in beneficiary form, including requests for registrations to effect a change in beneficiary.” N.J.S.A. 3B:30-11(a). The controlling statutes require a registration that indicates a beneficiary. N.J.S.A. 3B:30-2; N.J.S.A. 3B:30-6.

To discuss your NJ Estate Planning & Administration matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.