SB 116 - This act pertains to certain nonprobate transfers.

CERTAIN CONTRACT PROVISIONS DEEMED NONTESTAMENTARY: Certain contract provisions shall be deemed nontestamentary. These are: 1) money or benefits payable upon death; 2) any mone that ceases to be payable in the event of death of the promisee or promisor; and 3) property that is transferred to designated beneficiaries upon death.

This act defines certain terms as they relate to nonprobate transfers. A nonprobate transfer is defined as a transfer of property taking effect upon the death of the owner, pursuant to a beneficiary designation. Nonprobate transfers shall be effective with or without consideration. The agent of the property owner shall continue to have authority to make transfers after the death of the owner. The agent, or transferring entity, shall transfer the property to the designated beneficiary. In certain instances, the transfer of property is subject to agreement between the owner and the agent. When a beneficiary designation, revocation or change is subject to the transferring entity's acceptance, any change in designation will relate back to the time such entity received the request.

THE BENEFICIARY DESIGNATION: This act provides for transfers of tangible personal property effective on the death of the owner without consideration. A transferor may directly transfer property to a transferee to hold as owner in beneficiary form. Such transferee shall be the owner of the property for all purposes. A beneficiary has no rights in property by reason of the beneficiary designation prior to the death of the owner. If one of two or more joint owners dies, property designated for a beneficiary of the deceased owner shall be owned by the surviving owner or owners. A subsequent beneficiary designation revokes a prior beneficiary designation unless otherwise provided. An owner may not change or revoke a beneficiary designation in a will unless this power is specifically granted in the designation itself. A transfer during the owner's lifetime terminates the beneficiary designation with respect to the property transferred.

No agent may make, revoke or change a beneficiary designation unless the document establishing the agent's right to act, or a court order, expressly authorizes such action. Such agent may make certain transfers of property which effectively extinguish a beneficiary's right to receive such property. If property subject to a beneficiary designation is lost, destroyed, damaged or involuntarily converted during the owner's life, the beneficiary will retain any claims for recovery that the owner would have had during his life. A beneficiary of a nonprobate transfer of a bank, savings or other account shall take such an interest subject to any claims upon such account. A beneficiary of a nonprobate transfer must survive the owner by one hundred twenty hours to be entitled to the transfer unless the owner and transferring entity designate otherwise.

A beneficiary designation that designates a trustee under a trust shall not be invalid because the trust is amendable or revocable. A trust that is revoked, terminated, or does not yet exist before the owner's death shall be deemed not to have survived the owner. When a nonprobate transfer is made to a beneficiary's lineal descendants, such descendants shall take as if they were inheriting personal property and the beneficiary had died at the time of the owner's death. If a beneficiary disclaims a transfer, such beneficiary is treated as having predeceased the owner for purposes of that transfer unless the beneficiary designation provides otherwise. Any provision of the beneficiary designation in favor of the owner's former spouse or relatives of that spouse is revoked at the time of the dissolution or annulment of marriage, unless the designation specifies otherwise.

FRAUD AND UNDUE INFLUENCE: Any beneficiary designation or revocation of such designation procured by fraud or undue influence is void. A beneficiary who willfully and unlawfully causes the death of the property owner or an insurance policy holder is disqualified from receiving any benefit. Any interested person may petition the court to determine if a beneficiary designation is void or if any person is barred from receiving a transfer.

No law intended to protect a spouse or child from unintentional disinheritance shall apply to nonprobate transfers. If an owner has children by birth or adoption after naming a child as beneficiary, these children shall take a fractional share of the owner's property, unless a beneficiary designation provides otherwise.

GOVERNING LAW: The rights of the owner, transferring entity, and the beneficiary shall be governed by the nonprobate transfers law of Missouri. When a transfer provision is a matter of agreement between the owner and the transferring entity, the transferring entity may adopt certain rules by reference to the nonprobate transfers law. A written request for execution of a nonprobate transfer may be made by any beneficiary or by the owner's representative. Such request shall be accompanied by: 1) a certificate of ownership; 2) proof of death of the owner and any nonsurviving beneficiary; 3) an inheritance tax waiver; 4) a copy of the court order appointing the legal representative (if a representative is making the request); and 5) such other proof as the transferring entity may require. The transferring entity may execute a nonprobate transfer with or without a written request.

SUBSEQUENT TAKERS OF PROPERTY: A good faith purchaser or lender with a security interest in nonprobate property previously transferred to a beneficiary shall take the property free of any claims of the owner's estate, unless such purchaser or lender knew that the original transfer was improper.

APPLICATION OF THIS ACT: The provisions of this act apply where: 1) the owner was a resident of this state; 2) the obligation to pay arose in this state or the property was situated in this state; or 3) the transferring entity was a resident of this state, had a business in this state or accepted the obligation to make the transfer in this state. The probate division of the circuit court shall determine questions concerning determination of the beneficiary entitled to receive a nonprobate transfer.

CHOICE OF LAW PROVISIONS: A beneficiary designation that is valid under a general probate law or a law of another state may be enforced in Missouri. The effect of a nonprobate transfer shall be determined by the local law of the state selected in the governing instrument. All nonprobate beneficiaries and persons receiving property other than from the administration of the decedent's probate estate shall have to pay back to the representative of the estate any amounts due the decedent's spouse, unmarried children and other claims due the estate. To enforce such an obligation, an action for accounting may be brought within eighteen months after the decedent's death. The right of a transferring entity to make a nonprobate transfer shall not be affected by such an accounting unless before payment or transfer is made the transferring entity has been served with process and has a reasonable time to act on it.
JAMES KLAHR