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Bill 4154

Indicates Matter Stricken

Indicates New Matter

COMMITTEE REPORT

April 2, 2002

    H. 4154

S. Printed 4/2/02--H.

Read the first time May 17, 2001.

    To whom was referred a Bill (H. 4154) to enact the South Carolina Estates and Probate Reform Act; to amend Subarticle 5, Article 3, Chapter 7, Title 20, Code of Laws of South Carolina, 1976, etc., respectfully

    That they have duly and carefully considered the same and recommend that the same do pass with amendment:

    Amend the bill, as and if amended, by striking all after the enacting words and inserting:

    / SECTION    1.    This act may be cited as the South Carolina Estates and Probate Reform Act.

    SECTION    2.    Section 20-7-150(1) and (11) of the 1976 Code, as last amended by Act 152 of 1997, is further amended to read:

    "(1)    'Adult' is a person who has attained the age of eighteen twenty-one years.

    (11)    'Minor' is a person who has not attained the age of eighteen twenty-one years, excluding a person under the age of eighteen twenty-one who is married or emancipated as decreed by the family court."

    SECTION    3.    Section 20-7-180(4) of the 1976 Code is amended to read:

    "(4)    To the extent that the custodial property is not so expended, the custodian shall deliver or pay it over to the minor on his attaining the age of eighteen twenty-one years or, if the minor dies before attaining the age of eighteen twenty-one years, he the custodian shall thereupon then deliver or pay it over to the estate of the minor. Notwithstanding the requirements of this section, the custodian, in his discretion, may deliver or pay over the custodial property to the payee when the payee attains the age of eighteen."

    SECTION    4.    Section 20-7-190(3)(c) of the 1976 Code is amended to read:

    "(c) The statute of this State applicable to guardians and conservators;"

    SECTION    5.    Section 20-7-210(4) of the 1976 Code is amended to read:

    "(4)    If a person designated as custodian or as a successor custodian by the custodian as provided in subsection (1) is not eligible, dies, or becomes legally incapacitated before the minor attains the age of eighteen years and if the minor has a guardian, the guardian of the minor shall be is successor custodian. If the minor has no guardian and if no successor custodian who is eligible and has not died or became legally incapacitated has been designated as provided in subsection (1), a donor, his representative, the legal representative of the custodian, or an adult members member of the minor's family may petition the court for the designation of a successor custodian. The provisions of this subsection shall do not affect the power of a personal representative or trustee to appoint a custodian pursuant to items (g) and (h) of subsection (1) of Section 20-7-160, or the power of an owner of a life insurance policy or annuity contract to appoint a successor custodian pursuant to subsection (4) of Section 20-7-160."

    SECTION    6.    Section 62-5-501 of the 1976 Code, as last amended by Act 152 of 1997, is further amended by adding at the end:

    "(F)(1)    A third person in this State who receives or is presented with a valid power of attorney executed pursuant to this section, and has not received actual written notice of its revocation or termination, shall not refuse to honor the power of attorney if:

                (a)    it contains the following provision or a substantially similar provision:

    'No person who may act in reliance upon the representations of my attorney-in-fact for the scope of authority granted to the attorney-in-fact shall incur any liability to me or to my estate as a result of permitting the attorney-in-fact to exercise any such authority, nor shall any such person who deals with my attorney-in-fact be responsible to determine or insure the proper application of funds or property.'; or

            (b)    the attorney-in-fact gives him an affidavit under oath and subject to perjury, stating that the powers of the attorney-in-fact are then in effect, the action the attorney-in-fact desires to take is within the scope of his authority granted pursuant to the power of attorney, and the power of attorney has not been revoked or terminated by the principal.

        (2)    Unless the third person actually has received written notice of the revocation or termination of a valid power of attorney executed in accordance with this section, a third person in this State who receives or is presented with a power of attorney:

            (a)    does not incur liability to the principal or the principal's estate by reason of acting upon the authority of it or permitting the attorney-in-fact to exercise authority;

            (b)    is not required to inquire whether the attorney-in-fact has power to act or is properly exercising the power; or

            (c)    is not responsible to determine or ensure the proper application of assets, funds, or property belonging to the principal.

        (3)    A 'third person' means an individual, a corporation, an organization, or other legal entity for purposes of this subsection.

    (G)(1)    An attorney-in-fact is entitled to reimbursement for expenses and compensation for services as provided in the power of attorney. In the absence of a provision in the power of attorney regarding reimbursement or compensation, or both:

            (a)    an attorney-in-fact is entitled to reimbursement for all reasonable costs and expenses actually incurred and paid by the attorney-in-fact on the principal's behalf;

            (b)    an attorney-in-fact, upon the approval of the probate court, is entitled to reasonable compensation based upon the responsibilities he assumed and the effort he expended; and

            (c)    if two or more attorneys-in-fact are serving together, the compensation paid must be divided by them in a manner as they agree or as determined by a court of competent jurisdiction if they fail to agree.

        (2)    An interested person may petition a court of competent jurisdiction to review the propriety and reasonableness of payment for reimbursement or compensation to the attorney-in-fact, and an attorney-in-fact who has received excessive payment may be ordered to make appropriate refunds to the principal."

    SECTION    7.    Section 62-2-701 of the 1976 Code as added by Act 521 of 1990, is amended to read:

    "Section 62-2-701.    A contract to make a will or devise, or to revoke a will or devise, or not to revoke a will or devise, or to die intestate, if executed after the effective date of this act, can be established only by (1) provisions of a will of the decedent stating material provisions of the contract; (2) an express reference in a will of the decedent to a contract and extrinsic evidence proving the terms of the contract; or (3) a writing signed by the decedent evidencing the contract and extrinsic evidence proving the terms of the contract. The execution of a joint will or mutual wills does not create a presumption of a contract not to revoke the will or wills. In the absence of a finding of a contrary intention, the rules of construction in this part control the construction of a governing instrument. The rules of construction in this part apply to a governing instrument of any type, except as the application of a particular section is limited by its terms to a specific type or types of provision or governing instrument."

    SECTION    8.    The 1976 Code is amended by adding:

    "Section 62-2-702.    (A)    The issue of a deceased transferee who survive the transferor take in place of a deceased transferee, who is a great-grandparent or a lineal descendant of a great-grandparent of the transferor, if the deceased transferee:

        (1)    is dead as the time of execution of the governing instrument;

        (2)    fails to survive the transferor; or

        (3)    is treated as if he predeceased the transferor.

    (B)    If they are all of the same degree of kinship to the transferee, they take equally. If they are of unequal degree, then those of more remote degree take by representation. One who would have been a transferee under a class gift if he had survived the transferor is treated as a transferee for purposes of this section whether his death occurred before or after the execution of the governing instrument."

    SECTION    9.    The 1976 Code is amended by adding:

    "Section 62-2-805.    (A)    As used in this section:

        (1)    'Disposition or appointment of property' includes a transfer of an item of property or other benefit to a beneficiary designated in a governing instrument.

        (2)    'Divorce or annulment' means any divorce or annulment, or any dissolution or declaration of invalidity of a marriage, that excludes the spouse as a surviving spouse within the meaning of Section 62-2-802. A decree of separation that does not terminate the status of husband and wife is not a divorce for purposes of this section.

        (3)    'Divorced individual' includes an individual whose marriage has been either dissolved or declared invalid.

        (4)    'Governing instrument' means a governing instrument executed by the divorced individual before the divorce or annulment of his marriage to his former spouse.

        (5)    'Relative of the divorced individual's former spouse' means an individual who is related to the divorced individual's former spouse by blood, adoption, or affinity and who, after the divorce or annulment, is not related to the divorced individual by blood, adoption, or affinity.

        (6)    'Revocable', with respect to a disposition, appointment, provision, or nomination, means one under which the divorced individual, at the time of the divorce or annulment, was alone empowered by law or under the governing instrument to cancel the designation in favor of his former spouse or former spouse's relative, whether or not the divorced individual was then empowered to designate himself in place of his former spouse or in place of his former spouse's relative and whether or not the divorced individual then had the capacity to exercise the power.

    (B)    Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage:

        (1)    revokes a revocable:

            (a)    disposition or appointment of property made by a divorced individual to his former spouse in a governing instrument and a disposition or appointment created by law or in a governing instrument to a relative of the divorced individual's former spouse;

            (b)    provision in a governing instrument conferring a general or nongeneral power of appointment on the divorced individual's former spouse or on a relative of the divorced individual's former spouse; and

            (c)    nomination in a governing instrument nominating a divorced individual's former spouse or a relative of the divorced individual's former spouse to serve in a fiduciary or representative capacity, including a personal representative, executor, trustee, conservator, agent, or guardian; and

        (2)    severs the interests of the former spouses in property held by them at the time of the divorce or annulment as joint tenants with the right of survivorship, or as community property with the right of survivorship, in a community property jurisdiction, transforming the interests of the former spouses into tenancies in common.

    (C)    A severance pursuant to subsection (B)(2) does not affect a third-party interest in property acquired for value and in good faith reliance on an apparent title by survivorship in the survivor of the former spouses unless a writing declaring the severance has been noted, registered, filed, or recorded in records appropriate to the kind and location of the property which are relied upon, in the ordinary course of transactions involving such property, as evidence of ownership.

    (D)    Provisions of a governing instrument that are not revoked by this section are given effect as if the former spouse and relatives of the former spouse disclaimed the revoked provisions or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the former spouse and relatives of the former spouse died immediately before the divorce or annulment.

    (E)    Provisions revoked only by this section are revived by the divorced individual's remarriage to the former spouse or by a nullification of the divorce or annulment.

    (F)    A change of circumstances other than as provided in this section and in Section 62-2-803 does not result in a revocation.

    (G)(1)    A payor or other third party is not liable for having made a payment or transferred an item of property or other benefit to a beneficiary designated in a governing instrument affected by a divorce, annulment, or remarriage or for having taken other action in good faith reliance on the validity of the governing instrument before the payor or other third party received written notice of the divorce, annulment, or remarriage. A payor or other third party is liable for a payment made or other action taken after the payor or other third party received written notice of a claimed forfeiture or revocation pursuant to this section.

        (2)    Written notice of the divorce, annulment, or remarriage must be mailed to the payor's or other third party's main office or home by registered or certified mail, return receipt requested, or served upon the payor or other third party in the same manner as a summons in a civil action. Upon receipt of written notice of the divorce, annulment, or remarriage, a payor or other third party may pay any amount owed or transfer or deposit any item of property held by it to or with the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to or with the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the funds or item of property and, upon its determination pursuant to this section, shall order disbursement or transfer in accordance with the determination. Payments, transfers, or deposits made to or with the court discharge the payor or other third party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

    (H)(1)    A person who purchases property from a former spouse, relative of a former spouse, or other person for value and without notice of the divorce, annulment, or remarriage, or who receives from a former spouse, relative of a former spouse, or another person a payment or other item of property in partial or full satisfaction of a legally enforceable obligation, is neither obligated to return the payment, item of property, or benefit, nor liable for the amount of the payment or the value of the item of property or benefit. A former spouse, relative of a former spouse, or other person who, not for value, received a payment, item of property, or other benefit to which that person is not entitled pursuant to this section is obligated to return the payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person who is entitled to it pursuant to this section.

        (2)    If this section or part of this section is preempted by federal law with respect to a payment, an item of property, or another benefit provided in this section, a former spouse, relative of the former spouse, or other person who, not for value, received a payment, item of property, or another benefit to which that person is not entitled pursuant to this section is obligated to return that payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person entitled to it if this section or part of this section were not preempted."

    SECTION    10.    Section 34-19-120 of the 1976 Code, as added by Act 499 of 1988, is amended to read:

    "Section 34-19-120.    In cases where a person has been given a durable power of attorney by a lessee of a safe deposit box who has become mentally incompetent, and the original copy of the power is put in the box, the lessor may permit the person given the power to open the box to obtain the original copy of the power. The lessor may request the person purporting to have been given the durable power of attorney to produce a certified copy of the power or an affidavit declaring that he has been given the power before opening the box. No other contents may be removed from the box pursuant to this section.

    The durable power of attorney provided for in this section means a power made durable under the provisions of Section 62-5-501. (A)(1)    The person who has been given a durable power of attorney by a lessee of a safe deposit box may open, or direct the lessor to open, the safe deposit box of the lessee and obtain the original copy of the durable power of attorney; provided that a statement in the form of item (3), or in a similar form showing the same intent, is:

            (a)    incorporated in the body of the original durable power of attorney contained in the safe deposit box; or

            (b)    contained in a separate statement in the form provided in subsection (B), or in a similar form showing the same intent as that attached or annexed to the original durable power of attorney contained in the safe deposit box.

        (2)    If the statement is contained in a separate writing, the execution of the separate statement is not an amendment, modification, or revision of the original power of attorney.

        (3)    The statement must be substantially in the following form:

    'I__________________, the Principal, do hereby authorize and direct my appointee or appointees as my Attorney-in-Fact in my durable power of attorney, to have access at any time or times to any safe deposit box rented by me, wherever located, in order to remove my original durable power of attorney, and any institution in which any such safe deposit box may be located shall not be required to make any inquiry and shall not incur any liability to me or my estate as a result of permitting my appointee or appointees in my original durable power of attorney to exercise this power. This power shall be exercisable without: (i) any contact with, or notice to, me, my spouse, and/or any interested persons to my estate; (ii) any prior court order or authorization; (iii) any knowledge of, or any prior determination as to, my mental or physical capacity or incapacity; (iv) any knowledge as to my whereabouts regardless whether my whereabouts are known or unknown; or (v) any inquiry.'

    (B)    The lessee, at any time after the execution of his durable power of attorney, may execute a separate statement authorizing the removal of his original durable power of attorney from his safe deposit box pursuant to subsection (A), provided that the separate statement is executed by the Principal with the same formalities as the execution and recording of a deed in the State of South Carolina pursuant to Section 30-5-30, and the separate statement is attached or annexed to the original durable power of attorney in the following form, or in a similar form showing the same intent, with the acknowledgement for recorded deeds pursuant to Section 30-5-30(B) or (C).

    'STATE OF _____________        )

    COUNTY OF ____________________    )

    I, _______ the Principal, do hereby authorize and direct my appointee or appointees as my Attorney-in-Fact in my durable power of attorney dated the __day of __, in the year __, to have access at any time or times to any safe deposit box rented by me, wherever located, in order to remove my original durable power of attorney, and any institution in which any such safe deposit box may be located shall not be required to make any inquiry and shall not incur any liability to me or my estate as a result of permitting my appointee or appointees in my original durable power of attorney to exercise this power. This power shall be exercisable without: (i) any contact with, or notice to, me, my spouse, and/or any interested persons to my estate; (ii) any prior court order or authorization; (iii) any knowledge of, or any prior determination as to, my mental or physical capacity or incapacity; (iv) any knowledge as to my whereabouts regardless whether my whereabouts are known or unknown; or (v) any inquiry.'

    IN WITNESSETH WHEREOF, I have executed this statement on the ______ day of _________, in the year, ___________.

    _______________        ______________

    (Witness)                Principal

    _______________________(Witness)'

    (C)    If the original durable power of attorney does not contain a statement in the form provided in subsection (A) or in a similar form showing the same intent, or a separate statement in the form provided in subsection (B) or in a similar form showing the same intent is not attached or annexed to the original durable power of attorney, then to allow removal of the lessee's durable power of attorney from the lessee's safe deposit box the financial institution must have:

        (1)    contact with or notice to the lessee, the lessee's spouse, or an interested person in the lessee's estate;

        (2)    a prior court order or court authorization;

        (3)    knowledge of, or a prior determination as to, the mental or physical capacity or incapacity of the lessee;

        (4)    knowledge as to the lessee's whereabouts, whether the lessee's whereabouts are known or unknown; or

        (5)    other inquiry.

    (D)    A witness to a statement provided for in subsection (B), who also is an officer authorized to administer oaths pursuant to the laws of this State may notarize the signature of the other witness of the statement in the manner provided by this section.

    (E)    A financial institution that authorizes a person who has been given a durable power of attorney by a lessee of a safe deposit box, to remove the original durable power of attorney from the safe deposit box of the lessee, pursuant to subsection (A) or (B), or a financial institution that removes the original durable power of attorney from the safe deposit box of the lessee pursuant to the direction of the person who has been given a durable power of attorney by the lessee, is not required to make further inquiry, and is not liable to the lessee or the lessee's estate as a result of permitting removal of the original power of attorney. The financial institution may request the person purporting to have been given the durable power of attorney to produce a certified copy of the power or an affidavit declaring that he has been given the power before opening the box. No other contents may be removed from the box pursuant to this section.

    (F)    The provisions of this section enable the person who has been given a durable power of attorney by a lessee of a safe deposit box to remove or obtain the original durable power of attorney from the safe deposit box of the lessee, and enable the financial institution to allow the removal of the durable power of attorney from the safe deposit box without court action or findings of incapacity of the lessee. This section supplements and does not supplant the current procedures for obtaining the power of attorney of the lessee from the safe deposit box, and is not the exclusive method."

    SECTION 11.    Section 27-7-40(a)(iv) of the 1976 Code, as added by Act 398 of 2000, is amended to read:

    "(iv)    If all the joint tenants who own real estate held in joint tenancy join in an encumbrance or deed of conveyance, the interest in the real estate shall be is effectively encumbered or conveyed to a third party or parties."

    SECTION    12.    Section 62-7-405(3) of the 1976 Code, as last amended by Act 80 of 2001, is further amended to read:

    "(3)    shall distribute to a beneficiary who receives a pecuniary amount outright the rate of interest or other amount provided by the will, or the terms of the trust, or applicable law from net income as determined by item (2) or from principal to the extent that net income is insufficient. If the will or the terms of the trust provide no interest amount, then the beneficiary of a pecuniary amount outright may not receive interest or other income on the bequest for one year after the first appointment of a personal representative. Beginning one year after the first appointment of a personal representative, and notwithstanding another provision of this chapter to the contrary, the beneficiary of a pecuniary amount outright must be treated like any other beneficiary pursuant to item (4). If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends and no interest or other amount is provided for by the terms of the trust or applicable law, the fiduciary shall distribute the interest or other amount to which the beneficiary would be entitled under applicable law if treat the pecuniary amount as if it were required to be paid under a will and as if the payment were being made beginning one year after the first appointment of a personal representative;"

    SECTION    13.    Section 62-7-302(C)(5) of the 1976 Code, as last amended by Act 80 of 2001, is further amended to read:

    "(5)(a)    A trustee may invest in any kind of property or type of investment consistent with the standards of this section.

        (b)    Nothing in this section prohibits affiliate investments if they otherwise comply with the standards of this section. For these purposes, 'affiliate' means an entity that owns or is owned by the trustee, in whole or in part, or is owned by the same entity that owns the trustee. Affiliate investments include:

            ( i)    investment and reinvestment in the securities of an open-end or closed-end management investment company or of an investment trust registered under the Investment Company Act of 1940, as amended. A bank or trustee, or both of them, may invest in these securities even if the bank or trustee, or an affiliate of the bank or trustee, provides services to the investment company or investment trust such as that of an investment advisor, custodian, transfer agent, registrar, sponsor, distributor, manager, or otherwise, and receives reasonable remuneration for those services;

            ( ii)    retention of the securities into which corporate securities owned by the trustee may be converted or which may be derived as a result of merger, consolidation, stock dividends, splits, liquidations, and similar procedures, and the exercise by purchase or otherwise any rights, warrants, or conversion features attaching to the securities;

            (iii)    purchase or other acquisition and retention of a security underwritten by a syndicate, even if the trustee or its affiliate participates or has participated as a member of the syndicate, provided the trustee does not purchase the security from itself, its affiliate, or from another member of the underwriting syndicate, or its affiliate, pursuant to an implied or express reciprocal agreement between the trustee, or its affiliate, and the other member, or its affiliate, to purchase all or part of each other's underwriting participation commitment within the syndicate."

    SECTION    14.    Section 15-51-42 of the 1976 Code, as last amended by Act 55 of 1999, is further amended by adding at the end:

    "(G)    The specific duties, and corresponding time requirements, of the personal representative for the expeditious settlement and distribution of the estate of a decedent under the supervision of the probate court, as provided in Section 62-3-704, may be deferred, in whole or in part, in a reasonable manner during the pendency of a survival action brought on behalf of the estate upon petition by the personal representative of the probate court. For purposes of this subsection, a 'reasonable manner' of deferral includes a tolling of all filing and notice deadlines until a final judgment is entered or a final settlement is approved in the survival action, except that the personal representative shall file an annual report with the probate court of the status of the pending survival action."

    SECTION    15.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

    SECTION    16.    This act takes effect upon approval by the Governor. Section 62-7-302 of the 1976 Code as contained in Section 13 applies to affiliate investments and reinvestments made on or after July 18, 2001, the effective date of the South Carolina Prudent Investor Act. /

    Renumber sections to conform.

    Amend totals and title to conform.

JAMES H. HARRISON for Committee.

TO ENACT THE SOUTH CAROLINA ESTATES AND PROBATE REFORM ACT; TO AMEND SUBARTICLE 5, ARTICLE 3, CHAPTER 7, TITLE 20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE UNIFORM GIFTS TO MINORS ACT, SO AS TO DESIGNATE SUBARTICLE 5 AS THE "UNIFORM TRANSFERS TO MINORS ACT", TO CHANGE THE AGE OF DISTRIBUTION TO TWENTY-ONE YEARS, INCLUDE BOTH GRATUITOUS TRANSFERS AND TRANSFERS FOR CONSIDERATION TRANSFERS AND BOTH LIFETIME TRANSFERS AND TRANSFERS FROM TRUSTS, ESTATES, AND GUARDIANSHIPS, AND LIMIT THE MINOR'S LIABILITY TO THIRD PARTIES TO CASES OF PERSONAL FAULT; TO AMEND SECTION 62-5-501, AS AMENDED, RELATING TO THE DURABLE POWER OF ATTORNEY, SO AS TO PROVIDE FOR REASONABLE COMPENSATION FOR AN ATTORNEY-IN-FACT ACTING PURSUANT TO A DURABLE POWER OF ATTORNEY, AND TO PROVIDE FOR PROTECTION OF THIRD PARTIES RELYING ON THE ACTS OF AN INDIVIDUAL ACTING PURSUANT TO A DURABLE POWER OF ATTORNEY; TO AMEND ARTICLE 2, CHAPTER 2, TITLE 62, RELATING TO INTESTACY, SUCCESSION AND WILLS, SO AS TO CHANGE THE TITLE OF THE ARTICLE TO "INTESTACY, WILLS, AND DONATIVE TRANSFERS; TO AMEND PART 7, ARTICLE 2, CHAPTER 2, TITLE 62, RELATING TO CONTRACTUAL ARRANGEMENTS RELATING TO DEATH, SO AS TO REPLACE PART 7 WITH RULES FOR CONSTRUCTION OF WILLS AND OTHER INSTRUMENTS GOVERNING TRANSFERS; TO AMEND SECTION 62-2-803, RELATING TO THE EFFECT OF HOMICIDE ON INTESTATE SUCCESSION, WILLS, JOINT ASSETS, LIFE INSURANCE, AND BENEFICIARY DESIGNATIONS, SO AS TO PROVIDE FOR A JUDICIAL DETERMINATION OF CRIMINAL ACCOUNTABILITY, USING THE PREPONDERANCE OF THE EVIDENCE STANDARD, IN THE ABSENCE OF A CRIMINAL CONVICTION; TO AMEND PART 8, ARTICLE 2, CHAPTER 2, TITLE 62, RELATING TO GENERAL PROVISIONS AS TO INTESTATE SUCCESSION, BY ADDING SECTION 62-2-805 SO AS TO PROVIDE FOR REVOCATION OF PROBATE AND NONPROBATE TRANSFERS BY DIVORCE AND ANNULMENT; TO AMEND SECTION 34-19-120, RELATING TO ACCESS TO A LOCKBOX TO OBTAIN A POWER OF ATTORNEY, SO AS TO FACILITATE ACCESS CONDITIONED ON A VERIFIED DOCUMENT; AND TO AMEND SECTION 27-7-40, RELATING TO THE CREATION AND SEVERANCE OF A JOINT TENANCY, SO AS TO CLARIFY THAT A JOINT TENANCY WITH A RIGHT OF SURVIVORSHIP IN REAL ESTATE MAY TRANSFER HIS INTEREST WITHOUT JOINDER OF THE OTHER JOINT TENANTS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    This act may be cited as the South Carolina Estates and Probate Reform Act.

SECTION    2.    Subarticle 5, Article 3, Chapter 7, Title 20 of the 1976 Code is amended to read:

    Section 20-7-140.    This subarticle may be cited as the 'South Carolina Uniform Gifts Transfers to Minors Act'.

        Section 20-7-150.    In this subarticle, unless the context otherwise requires:

    (1)    'Adult' is a person who has attained the age of eighteen years.

    (2)    'Bank' is any bank, trust company, national banking association or industrial bank.

    (3)    'Broker' is a person lawfully engaged in the business of effecting transactions in securities for the account of others. The term includes a bank which effects such transactions. The term also includes a person lawfully engaged in buying and selling securities for his own account through a broker or otherwise as a part of a regular business.

    (4)    'Court' means the court or branch having jurisdiction.

    (5)    'Custodial property' includes:

        (a)    All securities, life insurance policies, annuity contracts, real estate, tangible personal property and money and any other type of property under the supervision of the same custodian for the same minor as a consequence of a gift made to the minor in a manner prescribed in this subarticle.

        (b)    The income from the custodial property.

        (c)    The proceeds, immediate and remote, from the sale, exchange, conversion, investment, reinvestment, surrender or other disposition of such securities, money, life insurance policies, annuity contracts, real estate, tangible personal property and other property.

    (6)    'Custodian' is a person so designated in manner prescribed in this chapter and the term includes a successor custodian.

    (7)    'Guardian' of a minor means the general guardian, guardian, tutor or curator of his property or estate, appointed or qualified by a court of this State or another state.

    (8)    'Issuer' is a person who places or authorizes the placing of his name on a security, other than as a transfer agent, to evidence that it represents a share, participation or other interest in his property or in an enterprise, or to evidence his duty or undertaking to perform an obligation evidenced by the security or who becomes responsible for in place of any such person.

    (9)    'Legal representative' of a person in his executor or the administrator, general guardian, guardian, committee, conservator, tutor or curator of his property or estate.

    (10)    'Member of a minor's family' means any of the minor's parents, grandparents, brothers, sisters, uncles and aunts, whether of the whole blood or the half blood, or by or through legal adoption.

    (11)    'Minor' is a person who has not attained the age of eighteen years, excluding a person under the age of eighteen who is married or emancipated as decreed by the family court.

    (12)    'Savings and loan association' is a state-chartered savings and loan association or building and loan association or a federally-chartered savings and loan association.

    (13)    'Security' includes any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease, collateral trust certificate, transferable share, voting -trust certificate or, in general, any interest or instrument commonly known as a security, any certificate of interest or participation in any temporary or interim certificate, receipt or certificate of deposit for or any warrant or right to subscribe to or purchase any of the foregoing. The term does not include a security of which the donor is the issuer. A security is in 'registered form' when it specifies a person entitled to it or to the rights it evidences and its transfer may be registered upon books maintained for that purpose by or on behalf of the issuer.

    (14)    'Transfer agent' is a person who acts as authenticating trustee, transfer agent, registrar or other agent for an issuer in the registration of transfers of its securities or in the issue of new securities in the cancellation of surrendered securities.

    (15)    'Trust company' is a bank, corporation or other legal entity authorized to exercise trust powers in this State.

    (16)    'Financial institution' is a bank, a federal savings and loan association, a savings institution chartered and supervised as a savings and loan or similar institution under federal law or the laws of a state, a federal credit union or a credit union chartered and supervised under the laws of a state; a 'domestic financial institution' is one chartered and supervised under the laws of this State or chartered and supervised under federal law and having its principal office in this State; an 'insured financial institution' is one in which deposits (including a savings, share, certificate or deposit account) are, in whole or in part, insured by the Federal Deposit Insurance Corporation, by the Federal Savings and Loan Insurance Corporation or by a deposit insurance fund approved by this State.

    (17)    'Life insurance policy or annuity contract' means a life insurance policy or annuity contract issued by an insurance company on the life of a minor to whom a gift of the policy or contract is made in the manner prescribed in this subarticle or on the life of a member of the minor's family.

Section 20-7-160.    (1)    An adult person may, during his lifetime, make a gift of security, a life insurance policy or annuity contract or money or real estate, tangible personal property or any other property to a person who is a minor on the date of the gift:

        (a)    If the subject of the gift is a security in registered form, by registering it in the name of the donor, another adult person or a trust company followed in substance by the words: 'As custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act'.

        (b)    If the subject of the gift is a security not in registered form, by delivering it to an adult other than the donor, a guardian of the minor or a trust company, accompanied by a statement of gift in the following form, in substance, signed by the donor and the person designated as custodian:

'GIFT UNDER THE SOUTH CAROLINA UNIFORM GIFTS TO MINORS ACT

__________(name of donor) __________ hereby delivers to __________ (name of custodian) __________ as custodian for __________ (name of minor) __________ under the South Carolina Uniform Gifts to Minors Act the following security: (insert an appropriate description of the security delivered sufficient to identify it)

(signature of donor)

__________ (name of custodian) __________ hereby acknowledges receipt of the above-described security as custodian for the above minor under the Uniform Gifts to Minors Act.

Dated: __________

(Signature of custodian)'

        (c)    If the subject of the gift is money, by paying or delivering it to a broker or a domestic financial institution for credit to an account in the name of the donor, another adult or a trust company followed in substance by the words: 'as custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act'.

        (d)    If the subject of the gift is a life insurance policy or annuity contract, by causing the ownership of the policy or contract to be registered with the issuing insurance company in the name of the donor, another adult or a trust company followed in substance by the words 'as custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act'.

        (e)    If the subject of the gift is an interest in real estate, by executing and delivering in the appropriate manner a deed, assignment or similar instrument in the name of the donor, another adult or guardian of the minor or a trust company followed in substance by the words: 'as custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act'.

        (f)    If the subject of the gift is an interest in any property not described in items (a) through (e) above, by causing the ownership of the property to be transferred by any written document in the name of the donor, another adult, a guardian or the minor or a trust company followed in substance by the words: 'as custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act'.

        (g)    If the gift is by will, by stating in the will that the bequest or devise is made under the South Carolina Uniform Gifts to Minors Act. Unless the testator in his will designates the custodian, who shall be an adult, a guardian of the minor or a trust company, his personal representative shall, subject to any limitations contained within the will, have the power to name as the custodian an adult, a guardian of the minor or a trust company and shall distribute the subject of the gift by transferring it in the manner and form provided in the preceding items of this subsection.

        (h)    If the gift is preceded by a gift in trust to some other person, by stating in the will or inter vivos trust instrument that it is made under the South Carolina Uniform Gifts to Minors Act. Unless the custodian, who shall be an adult, a guardian of the minor or a trust company, is designated in the will or inter vivos trust instrument, the trustee shall, subject to any limitations contained within the will or inter vivos trust instrument, have the power to name as custodian an adult, a guardian of the minor or a trust company, and shall distribute the subject of the gift by transferring it in the manner and form provided in the preceding items of this subsection.

    (2)    Any gift made in a manner prescribed in subsection (1) may be made to only one minor and only one person may be the custodian.

    (3)    A donor who makes a gift to a minor in the manner prescribed in subsection (1) shall promptly do all things within his power to put the subject of the gift in the possession and control of the custodian but the donor's failure to comply with this subsection, his designation of an ineligible person as custodian, or renunciation by the person designated as custodian shall not affect the consummation of the gift.

    (4)    Whether or not a gift of the ownership of a life insurance policy or annuity contract has been made, the owner of such a policy or contract may designate a custodian (or a successor custodian) as the beneficiary of any such policy or contract. When the custodian receives any proceeds of such policy or contract, the proceeds shall at that time become custodian property.

    Section 20-7-170.    (1)    A gift made in a manner prescribed in this subarticle is irrevocable and conveys to the minor indefeasibly vested legal title to the security, life insurance policy, annuity contract, money, real estate or any other property given, but no guardian of the minor has any right, power, duty or authority with respect to the custodial property except as provided in this subarticle.

    (2)    By making a gift in a manner prescribed in this subarticle, the donor incorporates in his gift, inter vivos trust instrument or will all provisions of this subarticle and grants to the custodian and to any issuer, transfer agent, bank, life insurance company, broker or third person, dealing with a person designated as custodian the respective powers, rights and immunities provided in this subarticle.

    Section 20-7-180.    (1)    The custodian shall collect, hold, manage, invest and reinvest the custodial property.

(2) The custodian shall pay over to the minor for expenditure by him, or expend for the minor's benefit, so much of or all the custodial property as the custodian deems advisable for the support, maintenance, education and benefit of the minor in the manner, at the same time or times, and to the extent that the custodian in his discretion deems suitable and proper, with or without court order, with or without regard to the duty of himself or of any other person to support the minor or his ability to do so, and with or without regard to any other income or property of the minor which may be applicable or available for any such purpose.

(3) The court, on the petition of a parent or guardian of the minor or of the minor, if he has attained the age of fourteen years, may order the custodian to pay over to the minor for expenditure by him or to expend so much of or all of the custodial property as is necessary for the minor's support, maintenance or education.

(4) To the extent that the custodial property is not so expended, the custodian shall deliver or pay it over to the minor on his attaining the age of eighteen years or, if the minor dies before attaining the age of eighteen years, he shall thereupon deliver or pay it over to the estate of the minor.

(5) The custodian, notwithstanding statutes restricting investments by fiduciaries, shall invest and reinvest the custodial property as would a prudent man of discretion and intelligence who is seeking a reasonable income and the preservation of his capital, except that he may, in his discretion and without liability to the minor or his estate, retain custodial property given to the minor in a manner prescribed in this subarticle or hold money so given in an account in the financial institution to which it was paid or delivered by the donor.

(6) The custodian may sell, exchange, convert, surrender or otherwise dispose of custodial property in the manner, at the time or times, for the price or prices and upon the terms he deems advisable. He may vote in person or by general or limited proxy a security which is custodial property. He may consent, directly or through a committee or other agent, to the reorganization, consolidation, merger, dissolution or liquidation of an issuer, a security of which is custodial property, and to the sale, lease, pledge or mortgage of any property by or to such an issuer, and to any other action by such an issuer. He may execute and deliver any and all instruments in writing which he deems advisable to carry out any of his powers as custodian. With respect to any interest in real estate, he may perform the same acts that any unmarried adult could perform, including, but not limited to, the power to buy, sell, assign, transfer, convey, dedicate, partition, exchange, mortgage, create or redeem ground rents, deeds, grant or exercise options, effect and keep in force fire, rent, liability, casualty, and other insurance; make, execute, acknowledge, and deliver deeds, conveyances, mortgages, releases, leases, including leases for ninety-nine years renewable forever, and leases extending beyond the minority of the minor; collect rents; improve, subdivide, or develop property; construct, alter, demolish or repair property; settle boundary lines and easements; pay taxes; and protect assessments.

(7) The custodian shall register each security which is custodial property and in registered form in the name of the custodian followed in substance by the words: 'as custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act'. The custodian shall hold all money which is custodial property in an account with a broker or in an insured financial institution in the name of the custodian followed in substance by the words: 'as custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act'. The custodian shall keep all other custodial property separate and distinct from his own property in a manner to identify it clearly as custodial property.

(8) The custodian shall keep records of all transactions with respect to the custodial property and make them available for inspection at reasonable intervals by a parent or legal representative of the minor or by the minor, if he has attained the age of fourteen years.

(9) A custodian has, with respect to the custodial property, in addition to the rights and powers provided in this subarticle, all the rights and powers which a guardian has with respect to property not held as custodial property.

(10) If the subject of the gift is a life insurance policy or annuity contract, the custodian:

(a) In his capacity as custodian, has all the incidents of ownership in the policy or contract to the same extent as if he were the owner, except that the designated beneficiary of any policy or contract on the life of the minor shall be the minor's estate and the designated beneficiary of any policy or contract on the life of a person other than the minor shall be the custodian as custodian for the minor for whom he is acting;

(b) May pay premiums on the policy or contract out of the custodial property.

    Section 20-7-190.    (1)    A custodian is entitled to reimbursement from the custodial property for his reasonable expenses incurred in the performance of his duties.

(2) A custodian may act without compensation for his services.

(3) Unless he is a donor, a custodian may receive from the custodial property reasonable compensation for his services determined by one of the following standards in the order stated:

(a) A direction by the donor when the gift is made;

(b) A statute of this State applicable to custodians;

(c) The statute of this State applicable to guardians;

(d) An order of the court.

(4) Except as otherwise provided in this subarticle, a custodian shall not be required to give a bond for the performance of his duties.

(5) A custodian not compensated for his services is not liable for losses to the custodial property unless they result from his bad faith, intentional wrongdoing or gross negligence or from his failure to maintain the standard of prudence in investing the custodial property provided in this subarticle.

    Section 20-7-200.    No issuer, transfer agent, bank, life insurance company, broker or other person or financial institution acting on the instructions of or otherwise dealing with any person purporting to act as a donor or in the capacity of a custodian is responsible for determining whether the person designated as custodian by the purported donor or by the custodian or purporting to act as a custodian has been duly designated or whether any purchase, sale or transfer to or by or any other act of any person purporting to act in the capacity of custodian is in accordance with or authorized by this subarticle, or is obliged to inquire into the validity or propriety under this subarticle of any instrument or instructions executed or given by a person purporting to act as a donor or in the capacity of a custodian, or is bound to see to the application by any person purporting to act in the capacity of a custodian of any money or other property paid or delivered to him. No issuer, transfer agent, bank, life insurance company, broker or other person or financial institution acting on any instrument of designation of a successor custodian, executed as provided in subsection (1) of Section 20-7-210 by a minor to whom a gift has been made in a manner prescribed in this subarticle and who has attained the age of fourteen years, is responsible for determining whether the person designated by the minor as successor custodian has been duly designated, or is obliged to inquire into the validity or propriety under this subarticle of the instrument of designation.

    Section 20-7-210.    (1)    Only an adult member of the minor's family, a guardian of the minor or a trust company is eligible to become successor custodian. A custodian may designate his successor by executing and dating an instrument of designation before a subscribing witness other than the successor, the instrument of designation may, but need not, contain the resignation of the custodian. If the custodian does not so designate his successor before he dies or becomes legally incapacitated, and the minor has attained the age of fourteen years, the minor may designate a successor custodian by executing an instrument of designation before a subscribing witness other than the successor. A successor custodian has all the rights, powers, duties and immunities of a custodian designated in a manner prescribed by this subarticle.

(2) The designation of a successor custodian as provided in subsection (1) takes effect as to each item of the custodial property when the custodian resigns, dies or becomes legally incapacitated, and the custodian or his legal representative:

(a) Causes the item, if it is a security in registered form, or a life insurance policy or annuity contract, to be registered with the issuing insurance company in the case of a life insurance policy or annuity contract, or an interest in real property in the name of the successor custodian followed in substance by the words: 'as custodian for __________ (name of minor) __________ under the Uniform Gifts to Minors Act';

(b) Delivers or causes to be delivered to the successor custodian any other item of the custodial property, together with the instrument of designation of the successor custodian or a true copy thereof, and any additional instruments required for the transfer thereof to the successor custodian.

(3) A custodian who executes an instrument of designation of his successor containing the custodian's resignation as provided in subsection (1) shall promptly do all things within his power to put each item of the custodial property in the possession and control of the successor custodian named in the instrument. The legal representative of a custodian who dies or becomes legally incapacitated shall promptly do all things within his power to put each item of the custodial property in the possession and control of the successor custodian named in an instrument of designation executed as provided in subsection (1) by the custodian or, if none, by the minor if he has no guardian and has attained the age of fourteen years, or in the possession and control of the guardian of the minor if he has a guardian. If the custodian has executed as provided in subsection (1) more than one instrument of designation, his legal representative shall treat the instrument dated on an earlier date as having been revoked by the instrument dated on a later date.

(4) If a person designated as custodian or as a successor custodian by the custodian as provided in subsection (1) is not eligible, dies or becomes legally incapacitated before the minor attains the age of eighteen years and if the minor has a guardian, the guardian of the minor shall be successor custodian. If the minor has no guardian and if no successor custodian who is eligible and has not died or became legally incapacitated has been designated as provided in subsection (1), a donor, his representative, the legal representative of the custodian or an adult members of the minor's family may petition the court for the designation of a successor custodian. The provisions of this subsection shall not affect the power of a personal representative or trustee to appoint a custodian pursuant to items (g) and (h) of subsection (1) of Section 20-7-160, or the power of an owner of a life insurance policy or annuity contract to appoint a successor custodian pursuant to subsection (4) of Section 20-7-160.

(5) A donor, the legal representative of a donor, a successor custodian, an adult member of the minor's family, a guardian of the minor or the minor, if he has attained the age of fourteen years, may petition the court that, for cause shown in the petition, the custodian be removed and a successor custodian be designated or, in the alternative, that the custodian be required to give bond for the performance of his duties.

(6) Upon the filing of a petition as provided in this section, the court shall grant an order, directed to the persons and returnable on such notice as the court may require, to show cause why the relief prayed for in the petition should not be granted and, in due course, grant such relief as the court finds to be in the best interests of the minor.

    Section 20-7-220.    (1)    The minor, if he has attained the age of fourteen years, or the legal representative of the minor, an adult member of the minor's family or a donor or his legal representative may petition the court for an accounting by the custodian or his legal representative.

(2) The court, in a proceeding under this subarticle or otherwise, may require or permit the custodian or his legal representative to account and, if the custodian is removed, shall so require and order delivery of all custodial property to the successor custodian and the execution of all instruments required for the transfer thereof.

    Section 20-7-220.    (1)    The minor, if he has attained the age of fourteen years, or the legal representative of the minor, an adult member of the minor's family or a donor or his legal representative may petition the court for an accounting by the custodian or his legal representative.

(2) The court, in a proceeding under this subarticle or otherwise, may require or permit the custodian or his legal representative to account and, if the custodian is removed, shall so require and order delivery of all custodial property to the successor custodian and the execution of all instruments required for the transfer thereof.

    Section 20-7-230.    (1)    This subarticle shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it.

(2) This subarticle shall not be construed as providing an exclusive method for making gifts to minors.

        Section 20-7-240.    No amendment to this subarticle shall be construed to adversely affect any gift legally made under its provisions in effect prior to the amendment.

    Section 20-7-145.    In this subarticle, unless the content requires otherwise:

    (1)    'Adult' means an individual who has attained the age of twenty-one years.

    (2)    'Benefit plan' means an employer's plan for the benefit of an employee or partner.

    (3)    'Broker' means a person lawfully engaged in the business of effecting transactions in securities or commodities for the person's own account or for the account of others.

    (4)    'Conservator' means a person appointed or qualified by a court to act as conservator of a minor's property pursuant to Section 62-5-401(1) or a person legally authorized to perform substantially the same functions.

    (5)    'Court' means the Probate Court.

    (6)    'Custodial property' means:

        (a)    any interest in property transferred to a custodian pursuant to this subarticle; and

        (b)    the income from and proceeds of that interest in property.

    (7)    'Custodian' means a person or the successor or substitute designated pursuant to Sections 20-7-165 and 20-7-200.

    (8)    'Financial institution' means a bank, trust company, savings institution, or credit union that is chartered and supervised pursuant to state or federal law.

    (9)    'Legal representative' means an individual's personal representative or conservator.

    (10)    'Member of the minor's family' means the minor's parent, stepparent, spouse, grandparent, brother, sister, uncle, or aunt, whether of the whole or half blood or by adoption.

    (11)    'Minor' means an individual who has not attained the age of twenty-one years.

    (12)    'Person' means an individual, corporation, organization, or other legal entity.

    (13)    'Personal representative' means an executor, administrator, successor personal representative, or special administrator of a decedent's estate, or a person legally authorized to perform substantially the same functions.

    (14)    'State' includes a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and a territory or possession subject to the legislative authority of the United States.

    (15)    'Transfer' means a transaction that creates custodial property pursuant to Section 20-7-165.

    (16)    'Transferor' means a person who makes a transfer under this pursuant to this subarticle.

    (17)    'Trust company' means a financial institution, corporation, or other legal entity, authorized to exercise general trust powers.

    Section 20-7-150.    (A)    This subarticle applies to a transfer as provided in Section 20-7-165 by which the transfer is made if at the time of the transfer, the transferor, the minor, or the custodian is a resident of this State or the custodial property is located in this State. The custodianship created remains subject to this subarticle even if there is subsequent change in residence of a transferor, the minor, or the custodian, or the removal of custodial property from this State.

    (B)    A person designated as custodian pursuant to this subarticle is subject to personal jurisdiction in this State with respect to any matter relating to the custodianship.

    (C)    A transfer that purports to be made, and which is valid, under the Uniform Transfers to Minors Act, the Uniform Gifts to Minors Act, or a substantially similar act of another state is governed by the law of that state and may be executed and is enforceable in this State if, at the time of the transfer, the transferor, the minor, or the custodian is a resident of the designated state or the custodial property is located in the designated state.

    (D)    This subarticle is not the exclusive procedure for transferring a property interest to a minor and another procedure for transferring a property interest to a minor authorized by the law of this State, and, not specifically repealed, continues in effect.

    Section 20-7-155.    (A)    A person having the right to designate the recipient of property transferable upon the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary upon the occurrence of the event by naming the custodian followed in substance by the words: 'as custodian for ____________________ (name of minor) under the South Carolina Uniform Transfers to Minors Act'. The nomination may name one or more persons as substitute custodians to whom the property must be transferred, in the order named, if the first nominated custodian dies before the transfer or is unable, declines, or is ineligible to serve. The nomination may be made in a will, a trust, a deed, an instrument exercising a power of appointment, or in a writing designating a beneficiary of contractual rights which is registered with or delivered to the payor, issuer, or other obligor of the contractual rights.

    (B)    A custodian nominated pursuant to this section must be a person to whom a transfer of property of that kind may be made pursuant to Section 20-7-165.

    (C)    The nomination of a custodian provided by this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed pursuant to Section 20-7-165. Unless the nomination of a custodian has been revoked, the custodianship becomes effective upon the occurrence of the future event and the custodian shall enforce a transfer of the custodial property pursuant to Section 20-7-165.

    Section 20-7-160.    (A)    A person may make a transfer by irrevocable gift to, or the irrevocable exercise of a power of appointment in favor of, a custodian for the benefit of a minor pursuant to Section 20-7-165.

    (B)(1)    A personal representative or trustee may make an irrevocable transfer pursuant to Section 20-7-165 to a custodian for the benefit of a minor as authorized in the governing will or trust.

        (2)    If the testator or settlor has nominated a custodian pursuant to Section 20-7-155 to receive the custodial property, the transfer must be made to that person.

        (3)    If the testator or settlor has not nominated a custodian pursuant to Section 20-7-155, or if all persons nominated as custodian die before the transfer or are unable, decline, or are ineligible to serve, the personal representative or the trustee shall designate the custodian from among those eligible to serve as custodian for property of that kind pursuant to Section 20-7-176(A).

    (C)(1)    Subject to item (3), a personal representative or trustee may make an irrevocable transfer to another adult or trust company as custodian for the benefit of a minor pursuant to Section 20-7-165, in the absence of a will or pursuant to a will or trust that does not contain an authorization to do so.

        (2)    Subject to item (3), a conservator may make an irrevocable transfer to another adult or trust company as custodian for the benefit of the minor pursuant to Section 20-7-165.

        (3)    A transfer pursuant to item (1) or (2) may be made only if:

            (a)    the personal representative, trustee, or conservator considers the transfer to be in the best interest of the minor; and

            (b)    the transfer is not prohibited by or inconsistent with the provisions of the applicable will, trust agreement or other governing instrument.

    If the value of the property transferred pursuant to item (1) or (2) totals more than ten thousand dollars, whether in one or more transfers, that transfer must be authorized by the court. If the transfer pursuant to item (1) or (2) is to the transferor then the transfer must be authorized by the court.

    (D)(1)    Subject to items (2) and (3), a person not covered by subsection (B) or (C) who holds property of or owes a liquidated debt to a minor not having a conservator may make an irrevocable transfer to a custodian for the benefit of the minor pursuant to Section 20-7-165.

        (2)    If a person having the right to nominate pursuant to Section 20-7-155 has nominated a custodian to receive the custodial property, the transfer must be made to that person.

        (3)    If a custodian has not been nominated as provided by Section 20-7-155, or all persons nominated as custodian die before the transfer or are unable, decline, or are ineligible to serve, a transfer pursuant to this subsection may be made to an adult member of the minor's family or to a trust company unless the property exceeds ten thousand dollars in value.

    (E)    A written acknowledgment of delivery by a custodian constitutes a sufficient receipt and discharge for custodial property transferred to the custodian pursuant to this subarticle.

    Section 20-7-165.    (A)    Custodial property is created and a transfer is made when:

        (1)    an uncertificated security or a certificated security in registered form is either:

            (a)    registered in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: 'as custodian for ____________________ (name of minor) under the South Carolina Uniform Transfers to Minors Act'; or

            (b)    delivered if in certificated form, or if in uncertificated form any document necessary for its transfer is delivered, together with a necessary endorsement to an adult other than the transferor or to a trust company as custodian, accompanied by an instrument in substantially the form provided in subsection (B);

        (2)    money is paid or delivered, or a security held in the name of a broker, financial institution, or its nominee is transferred, to a broker or financial institution for credit to an account in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: 'as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act';

        (3)    the ownership of a life or endowment insurance policy or annuity contract is either:

            (a)    registered with the issuer in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: 'as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act'; or

            (b)    assigned in a writing delivered to an adult other than the transferor or to a trust company whose name in the assignment is followed in substance by the words: 'as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act';

        (4)    an irrevocable exercise of a power of appointment or an irrevocable present right to future payment under a contract is the subject of a written notification delivered to the payor, issuer, or other obligor that the right is transferred to the transferor, an adult other than the transferor, or a trust company, whose name in the notification is followed in substance by the words: 'as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act';

        (5)    an interest in real property is conveyed or devised to the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: 'as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act';

        (6)    a certificate of title issued by a department or agency of a state or of the United States which evidences title to tangible personal property is either:

            (a)    issued in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: 'as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act'; or

            (b)    delivered to an adult other than the transferor or to a trust company, endorsed to that person followed in substance by the words: 'as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act'; or

        (7)    an interest in any property not described in items (1) through (6) is transferred to an adult other than the transferor or to a trust company by a written instrument in substantially the form as provided in subsection (b).

    (B)    An instrument in the following form satisfies the requirements of items (1)(b) and (7) of subsection (A):

        I, ____________________ (name of transferor or name and representative capacity if a fiduciary) hereby transfer to ____________________ (name of custodian), as custodian for ____________________ (name of minor) as provided in the South Carolina Uniform Transfers to Minors Act, the following: (insert a description of the custodial property sufficient to identify it).

Dated: ____________________

__________________________________________________

                                                                                    (Signature)

____________________ (name of custodian) acknowledges receipt of the property described above as custodian for the minor named above as provided in the South Carolina Uniform Transfers to Minors Act.

Dated: ____________________

__________________________________________________'

                                                                (Signature of Custodian)

    (C)    A transferor shall place the custodian in control of the custodial property as soon as practicable.

    Section 20-7-170.    A transfer may be made only for one minor, and only one person may be the custodian. All custodial property held pursuant to this subarticle by the same custodian for the benefit of the same minor constitutes a single custodianship.

    Section 20-7-175.    (A)    The validity of a transfer made in a manner prescribed in this subarticle is not affected by:

        (1)    failure of the transferor to comply with Section 20-7-165(C) concerning possession and control;

        (2)    designation of an ineligible custodian, except designation of the transferor in the case of property for which the transferor is ineligible to serve as custodian pursuant to Section 20-7-165(A);

        (3)    death or incapacity of a person nominated as provided by Section 20-7-155 or designated as provided by Section 20-7-165 as custodian or the disclaimer of the office by that person; or

        (4)    the use of an abbreviation in referring to this subarticle or the equivalent act of another state.

    (B)    A transfer made pursuant to Section 20-7-165 is irrevocable. Upon transfer, the custodial property is indefeasibly vested in the minor, however, the custodian has all the rights, powers, duties, and authority provided in this subarticle, and neither the minor nor the minor's legal representative has any right, power, duty, or authority with respect to the custodial property except as provided in this subarticle.

    (C)    By making a transfer, the transferor incorporates in the disposition all the provisions of this subarticle and grants to the custodian, and to a third person dealing with a person designated as custodian, the respective powers, rights, and immunities provided in this subarticle.

    Section 20-7-180.    (A)(1)    A custodian shall:

            (a)    take control of custodial property;

            (b)    register or record title to custodial property if appropriate; and

            (c)    collect, hold, manage, invest, and reinvest custodial property.

        (2)    In dealing with custodial property, a custodian shall observe the standard of care observed by a prudent person dealing with property of another and is not limited by another statute restricting investments by fiduciaries. If a custodian has a special skill or expertise or is named custodian on the basis of representations of a special skill or expertise, the custodian shall use that skill or expertise. However, a custodian, in the custodian's discretion and without liability to the minor or the minor's estate, may retain custodial property received from a transferor.

        (3)    A custodian may invest in or pay premiums on life insurance or endowment policies on the life of:

            (a)    the minor, only if the minor or the minor's estate or the custodian in the capacity of custodian is the sole beneficiary; or

            (b)    another person in whom the minor has an insurable interest, only to the extent that the minor, the minor's estate, or the custodian in the capacity of custodian, is the irrevocable beneficiary.

        (4)    A custodian shall keep custodial property separate and distinct from all other property in a manner sufficient to identify it clearly as custodial property of the minor. Custodial property consisting of an undivided interest is identified if the minor's interest is held as a tenant in common and is fixed. Custodial property subject to recordation is identified if it is recorded. Custodial property subject to registration is identified if it is either registered or held in an account designated in the name of the custodian, followed in substance by the words: 'as a custodian for ____________________ (name of minor) under the South Carolina Uniform Transfers to Minors Act'.

        (5)    A custodian shall keep records of all transactions with respect to custodial property, including information necessary for the preparation of the minor's tax returns, and shall make them available for inspection at reasonable intervals by a parent or legal representative of the minor or by the minor if the minor has attained the age of fourteen years.

    (B)(1)    A custodian, acting in a custodial capacity, has all rights, powers, and authority over custodial property that an unmarried adult owner has over his own property. A custodian may exercise those rights, powers, and authority only in the capacity of a custodian.

        (2)    This section does not relieve a custodian from liability for breach of subsection (A).

    (C)(1)    A custodian may deliver or pay to the minor or expend for the minor's benefit as much of the custodial property as the custodian considers advisable for the use and benefit of the minor, without court order and without regard to:

            (a)    the duty or ability of the custodian personally or of any other person to support the minor; or

            (b)    other income or property of the minor that may be applicable or available for that purpose.

        (2)    On petition of an interested person, or the minor if the minor has attained the age of fourteen years, the court may order the custodian to deliver or pay to the minor or expend for the minor's benefit as much of the custodial property as the court considers advisable for the use and benefit of the minor.

        (3)    A delivery, payment, or expenditure pursuant to this subsection is in addition to, not in substitution for, and does not otherwise affect an obligation of a person to support the minor.

    Section 20-7-185.    (A)    A custodian may use custodial property for payment of or reimbursement for reasonable expenses incurred in the performance of the custodian's duties.

    (B)    Except for a transferor pursuant to Section 20-7-160(A), a custodian has a noncumulative election during each calendar year to charge reasonable compensation for services performed during that year.

    (C)    Except as provided in Section 20-7-200(F), a custodian is not required to give a bond.

    Section 20-7-190.    A third person, in good faith and without court order, may act on the instructions of or otherwise deal with a person purporting to make a transfer or purporting to act in the capacity of a custodian and, in the absence of knowledge, is not responsible for determining:

        (1)    the validity of the purported custodian's designation;

        (2)    the propriety of, or the authority pursuant to this subarticle for, any act of the purported custodian;

        (3)    the validity or propriety pursuant to this subarticle of any instrument or instructions executed or given either by the person purporting to make a transfer or by the purported custodian; or

        (4)    the propriety of the application of property of the minor delivered to the purported custodian.

    Section 20-7-195.    (A)    A claim may be asserted against the custodial property by proceeding against the custodian in the custodial capacity, whether or not the custodian or the minor is liable personally for the claim, if the claim is based on:

        (1)    a contract entered into by a custodian acting in a custodial capacity;

        (2)    an obligation arising from the ownership or control of custodial property; or

        (3)    a tort committed during the custodianship.

    (B)    A custodian is not liable personally:

        (1)    on a contract properly entered into in the custodial capacity if the custodian fails to reveal that capacity and to identify the custodianship in the contract; or

        (2)    for an obligation arising from control of custodial property or for a tort committed during the custodianship unless the custodian is personally at fault.

    (C)    A minor is not liable personally for:

        (1)    an obligation arising from ownership of custodial property; or

        (2)    a tort committed during the custodianship unless the minor is personally at fault.

    Section 20-7-200.    (A)    A person nominated as provided by Section 20-7-155 or designated as provided by Section 20-7-165 as custodian may decline to serve by delivering a valid disclaimer to the person who made the nomination or to the transferor or the transferor's legal representative. If the event giving rise to a transfer has not occurred and a substitute custodian able, willing, and eligible to serve is not nominated pursuant to Section 20-7-155, the person who made the nomination may nominate a substitute custodian pursuant to Section 20-7-155, or the transferor or the transferor's legal representative shall designate a substitute custodian at the time of the transfer. In either case, the designation must be from among the persons eligible to serve as custodian for that kind of property pursuant to Section 20-7-165(A). The designated custodian has the rights of a successor custodian.

    (B)    A custodian may designate at any time a trust company or an adult other than a transferor as provided by Section 20-7-160(A) as successor custodian by executing and dating an instrument of designation before a subscribing witness other than the successor. If the instrument of designation does not contain or is not accompanied by the resignation of the custodian, the designation of the successor does not take effect until the custodian resigns, dies, becomes incapacitated, or is removed.

    (C)    A custodian may resign at any time by delivering written notice to the minor if the minor has attained the age of fourteen years and to the successor custodian and by delivering the custodial property to the successor custodian.

    (D)    If a custodian is ineligible, dies, or becomes incapacitated without effectively having designated a successor and the minor has attained the age of fourteen years, the minor may designate as successor custodian, in the manner prescribed in subsection (B), an adult member of the minor's family, a conservator of the minor, or a trust company. If the minor has not attained the age of fourteen years or fails to act within sixty days after the ineligibility, death, or incapacity, the conservator of the minor becomes successor custodian. If the minor has no conservator or the conservator declines to act, the transferor, the legal representative of the transferor or of the custodian, an adult member of the minor's family, or any other interested person may petition the court to designate a successor custodian.

    (E)    A custodian who declines to serve as provided by subsection (A) or resigns as provided by subsection (C), or the legal representative of a deceased or incapacitated custodian, as soon as practicable, shall put the custodial property and records in the possession and control of the successor custodian. The successor custodian by action may enforce the obligation to deliver custodial property and records and becomes responsible for each item as received.

    (F)    A transferor, the legal representative of a transferor, an adult member of the minor's family, a guardian of the person of the minor, the conservator of the minor, or the minor if the minor has attained the age of fourteen years may petition the court to remove the custodian for cause and to designate a successor custodian other than a transferor as provided by Section 20-7-160(A) or to require the custodian to give appropriate bond.

    Section 20-7-205.    (A)    A minor who has attained the age of fourteen years, the minor's guardian of the person or legal representative, an adult member of the minor's family, a transferor, or a transferor's legal representative may petition the court for:

        (1)    an accounting by the custodian or the custodian's legal representative; or

        (2)    a determination of responsibility, as between the custodial property and the custodian personally, for claims against the custodial property unless the responsibility has been adjudicated in an action pursuant to Section 20-7-195 to which the minor or the minor's legal representative was a party.

    (B)    A successor custodian may petition the court for an accounting by the predecessor custodian.

    (C)    The court, in a proceeding pursuant to this subarticle or in another proceeding, may require or permit the custodian or the custodian's legal representative to account.

    (D)    If a custodian is removed pursuant to Section 20-7-200(F), the court shall require an accounting and order delivery of the custodial property and records to the successor custodian and the execution of all instruments required for transfer of the custodial property.

    Section 20-7-210.    The custodian shall transfer the custodial property in an appropriate manner to the minor or to the minor's estate upon the earlier of:

    (1)    the minor's attainment of twenty-one years of age with respect to custodial property transferred pursuant to Section 20-7-160(A) or (B);

    (2)    the minor's attainment of eighteen years of age with respect to custodial property transferred pursuant to Section 20-7-160(C) or (D); or

    (3)    the minor's death.

    Section 20-7-215.    This subarticle applies to a transfer within the scope of Section 20-7-150 and made after its effective date if:

    (1)    the transfer purports to have been made pursuant to the Uniform Gifts to Minors Act of South Carolina; or

    (2)    the instrument by which the transfer was made uses in substance the designation 'as custodian pursuant to the Uniform Gifts to Minors Act' or 'as custodian pursuant to the Uniform Transfers to Minors Act' of any other state, and the application of this subarticle is necessary to validate the transfer.

    Section 20-7-220.    (A)    A transfer of custodial property, as defined in this subarticle, made before its effective date is a valid transfer, notwithstanding that there was no specific authority in the Uniform Gifts to Minors Act of South Carolina for the coverage of custodial property of that kind or for a transfer from that source at the time the transfer was made.

    (B)    This subarticle applies to all transfers made before the effective date of this subarticle in a manner and form prescribed in the Uniform Gifts to Minors Act of South Carolina, except to the extent the application impairs constitutionally vested rights or extends the duration of custodianships in existence on the effective date of this subarticle.

    (C)    Sections 20-7-145 and 20-7-210, with respect to the age of a minor for whom custodial property is held pursuant to this subarticle, do not apply to custodial property held in a custodianship that terminated before the effective date of this subarticle because of the minor's attainment of the age of majority.

    Section 20-7-225.    This subarticle must be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this subarticle among states enacting it."

SECTION    3.    Section 62-5-501 of the 1976 Code, as last amended by Act 152 of 1997, is further amended by adding at the end:

    "(F)(1)    A third person in this State who receives or is presented with a valid power of attorney executed pursuant to this section, and has not received actual written notice of its revocation or termination, shall not refuse to honor the power of attorney if:

                (a)    it contains the following provision or a substantially similar provision:

    'No person who may act in reliance upon the representations of my attorney-in-fact for the scope of authority granted to the attorney-in-fact shall incur any liability to me or to my estate as a result of permitting the attorney-in-fact to exercise any such authority, nor shall any such person who deals with my attorney-in-fact be responsible to determine or insure the proper application of funds or property.'; or

            (b)    the attorney-in-fact gives him an affidavit under oath and subject to perjury, stating that the powers of the attorney-in-fact are then in effect, the action the attorney-in-fact desires to take is within the scope of his authority granted pursuant to the power of attorney, and the power of attorney has not been revoked or terminated by the principal.

        (2)    Unless the third person actually has received written notice of the revocation or termination of a valid power of attorney executed in accordance with this section, a third person in this State who receives or is presented with a power of attorney:

            (a)    does not incur liability to the principal or the principal's estate by reason of acting upon the authority of it or permitting the attorney-in-fact to exercise authority;

            (b)    is not required to inquire whether the attorney-in-fact has power to act or is properly exercising the power; or

            (c)    is not responsible to determine or ensure the proper application of assets, funds, or property belonging to the principal.

        (3)    A 'third person' means an individual, a corporation, an organization, or other legal entity for purposes of this subsection.

    (G)(1)    Subject to the provisions of the power of attorney or separate written agreement:

            (a)    an attorney-in-fact is entitled to reimbursement for all reasonable costs and expenses actually incurred and paid by the attorney-in-fact on the principal's behalf;

            (b)    an attorney-in-fact is entitled to reasonable compensation based upon the responsibilities he assumed and the effort he expended; and

            (c)    if two or more attorneys-in-fact are serving together, the compensation paid must be divided by them in a manner as they agree or as determined by a court of competent jurisdiction if they fail to agree.

        (2)    An interested person may petition a court of competent jurisdiction to review the propriety and reasonableness of payment for reimbursement or compensation to the attorney-in-fact, and an attorney-in-fact who has received excessive payment may be ordered to make appropriate refunds to the principal."

SECTION    4.    The title of Article 2, Chapter 2, Title 62 of the 1976 Code is amended to read:

SECTION    5.    Part 7, Article 2, Chapter 2, Title 62 of the 1976 Code is amended to read:

    Section 62-2-701.    A contract to make a will or devise, or to revoke a will or devise, or not to revoke a will or devise, or to die intestate, if executed after the effective date of this act, can be established only by (1) provisions of a will of the decedent stating material provisions of the contract; (2) an express reference in a will of the decedent to a contract and extrinsic evidence proving the terms of the contract; or (3) a writing signed by the decedent evidencing the contract and extrinsic evidence proving the terms of the contract. The execution of a joint will or mutual wills does not create a presumption of a contract not to revoke the will or wills. In the absence of a finding of a contrary intention, the rules of construction in this part control the construction of a governing instrument. The rules of construction in this part apply to a governing instrument of any type, except as the application of a particular section is limited by its terms to a specific type or types of provision or governing instrument.

    Section 62-2-702.    (A)    For the purposes of probate, not including purposes of the Uniform Transfer on Death Security Registration Act and except as provided in subsection (D), an individual who is not established by clear and convincing evidence to have survived an event, including the death of another individual, by one hundred twenty hours is considered to have predeceased the event.

    (B)    Except as provided in subsection (D) and except for a security registered in beneficiary form pursuant to the Uniform Transfer on Death Security Registration Act, for purposes of a provision of a governing instrument that relates to an individual surviving an event, including the death of another individual, an individual who is not established by clear and convincing evidence to have survived the event by one hundred twenty hours is considered to have predeceased the event.

    (C)(1)    Except as provided in subsection (D), if:

            (a)    it is not established by clear and convincing evidence that one of two co-owners with right of survivorship survived the other co-owner by one hundred twenty hours, one-half of the property passes as if one had survived by one hundred twenty hours and one-half as if the other had survived by one hundred twenty hours; and

            (b)    there are more than two co-owners and it is not established by clear and convincing evidence that at least one of them survived the others by one hundred twenty hours, the property passes in the proportion that one bears to the whole number of co-owners.

        (2)    For the purposes of this subsection, 'co-owners with right of survivorship' includes joint tenants and other co-owners of property or accounts held under circumstances that entitles one or more to the whole of the property or account on the death of the other or others.

    (D)    This section does not apply if:        (1)    the governing instrument contains language dealing explicitly with simultaneous deaths or deaths in a common disaster and that language is operable under the facts of the case;

        (2)    the governing instrument expressly indicates that an individual is not required to survive an event, including the death of another individual, by a specified period or expressly requires the individual to survive the event by a specified period;

        (3)    the imposition of a one hundred twenty-hour requirement of survival causes a nonvested property interest or a power of appointment to fail to qualify for validity pursuant to the Uniform Statutory Rule Against Perpetuities; or

        (4)    the application of this section to multiple governing instruments results in an unintended failure or duplication of a disposition.

    (E)(1)    A payor or other third party is not liable for having made a payment or transferred an item of property or another benefit to a beneficiary designated in a governing instrument who, pursuant to this section, is not entitled to the payment or item of property, or for having taken another action in good faith reliance on the beneficiary's apparent entitlement pursuant to the terms of the governing instrument, before the payor or other third party received written notice of a claimed lack of entitlement pursuant to this section. A payor or other third party is liable for a payment made or other action taken after the payor or other third party receives written notice of a claimed lack of entitlement pursuant to this section.

        (2)    Written notice of a claimed lack of entitlement pursuant to item (1) must be mailed to the payor's or other third party's main office or home by registered or certified mail, return receipt requested, or served upon the payor or other third party in the same manner as a summons in a civil action. Upon receipt of written notice of a claimed lack of entitlement pursuant to this section, a payor or other third party may pay an amount owed or transfer or deposit an item of property held by it to or with the court having jurisdiction of the probate proceedings relating to the decedent's estate, or if no proceedings have been commenced, to or with the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the funds or item of property and shall order disbursement in accordance with its determination pursuant to this section. Payments, transfers, or deposits made to or with the court discharge the payor or other third party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

    (F)(1)    A person who purchases property for value and without notice of entitlement, or who receives a payment or other item of property in partial or full satisfaction of a legally enforceable obligation, is neither obligated to return the payment, item of property, or benefit, nor liable for the amount of the payment or the value of the item of property or benefit. A person who, not for value, receives a payment, item of property, or other benefit to which the person is not entitled pursuant to this section is obligated to return the payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person who is entitled to it pursuant to this section.

        (2)    If this section or a part of this section is preempted by federal law with respect to a payment, an item of property, or another benefit covered by this section, a person who, not for value, receives the payment, item of property, or another benefit to which the person is not entitled pursuant to this section is obligated to return the payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person entitled to it if this section or part of this section were not preempted.

    Section 62-2-703.    The meaning and legal effect of a governing instrument is determined by the local law of the state selected by the transferor in the governing instrument, the provisions relating to exempt property and allowances provided in Part 4 of this article, or another public policy of this State otherwise applicable to the disposition.

    Section 62-2-704.    If a governing instrument creating a power of appointment expressly requires that the power be exercised by a reference, an express reference, or a specific reference, to the power or its source, it is presumed that the donor's intention, in requiring that the donee exercise the power by making reference to the particular power or to the creating instrument, was to prevent an inadvertent exercise of the power.

    Section 62-2-705.    The issue of a deceased transferee who survive the transferor take in place of the deceased transferee if the transferee, who is a great-grandparent or a lineal descendant of a great-grandparent of the transferor:

    (1)    is dead at the time of execution of the governing instrument;

    (2)    fails to survive the transferor; or

    (3)    is treated as if he predeceased the transferor. If they are all of the same degree of kinship to the transferee they take equally. If they are of unequal degree, then those of more remote degree take by representation. One who would have been a transferee under a class gift if he had survived the transferor is treated as a transferee for purposes of this section whether his death occurred before or after the execution of the governing instrument.

    Section 62-2-706.    (A)    As used in this section:

        (1)    'Alternative beneficiary designation' means a beneficiary designation that is expressly created by the governing instrument and, under the terms of the governing instrument, can take effect instead of another beneficiary designation on the happening of one or more events, including survival of the decedent or failure to survive the decedent, whether an event is expressed in condition-precedent, condition-subsequent, or any other form.

        (2)    'Beneficiary' means the beneficiary of a beneficiary designation and includes:

            ( i)    a class member if the beneficiary designation is in the form of a class gift; and

            (ii)    an individual or class member who was deceased at the time the beneficiary designation was executed as well as an individual or class member who was then living but who failed to survive the decedent.

        (3)    'Beneficiary designation' includes an alternative beneficiary designation and a beneficiary designation in the form of a class gift.

        (4)    'Class member' includes an individual who fails to survive the decedent but who would have taken under a beneficiary designation in the form of a class gift had he survived the decedent.

        (5)    'Surviving beneficiary' or 'surviving descendant' means a beneficiary or a descendant who neither predeceased the decedent nor is considered to have predeceased the decedent pursuant to Section 62-2-702.    (B)    If a beneficiary fails to survive the decedent and is a grandparent of the decedent, or a descendant of a grandparent of the decedent, then:

        (1)    except as provided in item (4), if the beneficiary designation is not in the form of a class gift and the deceased beneficiary leaves surviving descendants, a substitute gift is created in the beneficiary's surviving descendants, who take by representation the property to which the beneficiary would have been entitled had the beneficiary survived the decedent;

        (2)    except as provided in item (4), if the beneficiary designation is in the form of a class gift, other than a beneficiary designation to 'issue', 'descendants', 'heirs of the body', 'heirs', 'next of kin', 'relatives', or 'family', or a class described by language of similar import, a substitute gift is created in the surviving descendants of the deceased beneficiary or beneficiaries. The property to which the beneficiaries would have been entitled had all of them survived the decedent passes to the surviving beneficiaries and the surviving descendants of the deceased beneficiaries. Each surviving beneficiary takes the share to which he would have been entitled had the deceased beneficiaries survived the decedent. Each deceased beneficiary's surviving descendants who are substituted for the deceased beneficiary take by representation the share to which the deceased beneficiary would have been entitled had the deceased beneficiary survived the decedent. For the purpose of this item, 'deceased beneficiary' means a class member who failed to survive the decedent and left one or more surviving descendants;

        (3)    for the purpose of Section 62-2-701, words of survivorship, such as in a beneficiary designation to an individual 'if he survives me', or in a beneficiary designation to 'my surviving children', are not, in the absence of additional evidence, a sufficient indication of an intent contrary to the application of this section;

        (4)    if a governing instrument creates an alternative beneficiary designation with respect to a beneficiary designation for which a substitute gift is created by item (1) or (2), the substitute gift is superseded by the alternative beneficiary designation only if an expressly designated beneficiary of the alternative beneficiary designation is entitled to take.

    (C)(1)    If, pursuant to subsection (B), substitute gifts are created and not superseded with respect to more than one beneficiary designation and the beneficiary designations are alternative beneficiary designations, one to the other, the determination of which of the substitute gifts takes effect is resolved:

            (a)    except as provided in subitem (b), the property passes under the primary substitute gift;

            (b)    if there is a younger-generation beneficiary designation, the property passes under the younger-generation substitute gift and not under the primary substitute gift.        (2)    As used this subsection :            (a)    'Primary beneficiary designation' means the beneficiary designation that would have taken effect had all the deceased beneficiaries of the alternative beneficiary designations who left surviving descendants survived the decedent.

            (b)    'Primary substitute gift' means the substitute gift created with respect to the primary beneficiary designation.

            (c)    'Younger-generation beneficiary designation' means a beneficiary designation that:

                ( i)    is to a descendant of a beneficiary of the primary beneficiary designation;

                (ii)    is an alternative beneficiary designation with respect to the primary beneficiary designation;

                (iii)    is a beneficiary designation for which a substitute gift is created; and

                (iv)    would have taken effect had all the deceased beneficiaries who left surviving descendants survived the decedent except the deceased beneficiary or beneficiaries of the primary beneficiary designation.

            (d)    'Younger-generation substitute gift' means the substitute gift created with respect to the younger-generation beneficiary designation.

    (D)(1)    A payor is protected from liability in making payments under the terms of the beneficiary designation until the payor has received written notice of a claim to a substitute gift pursuant to this section. Payment made before the receipt of written notice of a claim to a substitute gift pursuant to this section discharges the payor, but not the recipient, from all claims for the amounts paid. A payor is liable for a payment made after the payor has received written notice of the claim. A recipient is liable for a payment received, whether or not written notice of the claim is given.

        (2)    The written notice of the claim to a substitute gift must be mailed to the payor's main office or home by registered or certified mail, return receipt requested, or served upon the payor in the same manner as a summons in a civil action. Upon receipt of written notice of the claim, a payor may pay any amount owed by it to the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the funds and, upon its determination pursuant to this section, order disbursement in accordance with the determination. Payment made to the court discharges the payor from all claims for the amounts paid.

    (E)(1)    A person who purchases property for value and without notice of claim to a substitute gift, or who receives a payment or other item of property in partial or full satisfaction of a legally enforceable obligation, is neither obligated to return the payment, item of property, or benefit, nor liable for the amount of the payment or the value of the item of property or benefit. A person who, not for value, receives a payment, item of property, or other benefit to which the person is not entitled pursuant to this section is obligated to return the payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person who is entitled to it pursuant to this section.

        (2)    If this section or a part of this section is preempted by federal law with respect to a payment, an item of property, or another benefit provided by this section, a person who, not for value, receives the payment, item of property, or another benefit to which the person is not entitled pursuant to this section is obligated to return the payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person entitled to it if this section or part of this section were not preempted.

    Section 62-2-707.    If a class gift in favor of 'descendants', 'issue', or 'heirs of the body' does not specify the manner in which the property is distributed among the class members, the property is distributed among the class members who are living when the interest takes effect in possession or enjoyment, in the shares they would receive, pursuant to the applicable law of intestate succession if the designated ancestor died intestate owning the subject matter of the class gift.

    Section 62-2-708.    If an applicable statute or a governing instrument calls for a future distribution to, or creates a future interest in, a designated individual's 'heirs', 'heirs at law', 'next of kin', 'relatives', or 'family', or language of similar import, the property passes to those persons, including the state, pursuant to Section 62-2-106, and in the shares that would succeed to the designated individual's intestate estate pursuant to the intestate succession law of the designated individual's domicile if the designated individual died intestate."

SECTION    6.    Section 62-2-803(e) of the 1976 Code is amended to read:

    "(e)    A final judgment of conviction of felonious and intentional killing is conclusive for purposes of this section. In the absence of a conviction of felonious and intentional killing the court may determine by a preponderance of evidence whether the killing was felonious and intentional for purposes of this section. After all right to appeal has been exhausted, a judgment of conviction establishing criminal accountability for the felonious and intentional killing of the decedent conclusively establishes the convicted individual as the decedent's killer for purposes of this section. In the absence of a conviction, the court, upon the petition of an interested person, shall determine whether, using the preponderance of evidence standard, the individual would be found criminally accountable for the felonious and intentional killing of the decedent. If the court determines using that standard, that the individual would be found criminally accountable for the felonious and intentional killing of the decedent, the determination conclusively establishes that individual as the decedent's killer for purposes of this section."

SECTION    7.    Part 8, Article 2, Chapter 2, Title 62 of the 1976 Code is amended by adding:

    "Section 62-2-805.    (A)    As used in this section:

        (1)    'Disposition or appointment of property' includes a transfer of an item of property or other benefit to a beneficiary designated in a governing instrument.

        (2)    'Divorce or annulment' means any divorce or annulment, or any dissolution or declaration of invalidity of a marriage, that excludes the spouse as a surviving spouse within the meaning of Section 62-2-802. A decree of separation that does not terminate the status of husband and wife is not a divorce for purposes of this section.

        (3)    'Divorced individual' includes an individual whose marriage has been either dissolved or declared invalid.

        (4)    'Governing instrument' means a governing instrument executed by the divorced individual before the divorce or annulment of his marriage to his former spouse.

        (5)    'Relative of the divorced individual's former spouse' means an individual who is related to the divorced individual's former spouse by blood, adoption, or affinity and who, after the divorce or annulment, is not related to the divorced individual by blood, adoption, or affinity.

        (6)    'Revocable,' with respect to a disposition, appointment, provision, or nomination, means one under which the divorced individual, at the time of the divorce or annulment, was alone empowered by law or under the governing instrument to cancel the designation in favor of his former spouse or former spouse's relative, whether or not the divorced individual was then empowered to designate himself in place of his former spouse or in place of his former spouse's relative and whether or not the divorced individual then had the capacity to exercise the power.

    (B)    Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage:

        (1)    revokes a revocable:

            (a)    disposition or appointment of property made by a divorced individual to his former spouse in a governing instrument and a disposition or appointment created by law or in a governing instrument to a relative of the divorced individual's former spouse;

            (b)    provision in a governing instrument conferring a general or nongeneral power of appointment on the divorced individual's former spouse or on a relative of the divorced individual's former spouse; and

            (c)    nomination in a governing instrument nominating a divorced individual's former spouse or a relative of the divorced individual's former spouse to serve in a fiduciary or representative capacity, including a personal representative, executor, trustee, conservator, agent, or guardian; and

        (2)    severs the interests of the former spouses in property held by them at the time of the divorce or annulment as joint tenants with the right of survivorship, or as community property with the right of survivorship, in a community property jurisdiction, transforming the interests of the former spouses into tenancies in common.

    (C)    A severance pursuant to subsection (B)(2) does not affect a third-party interest in property acquired for value and in good faith reliance on an apparent title by survivorship in the survivor of the former spouses unless a writing declaring the severance has been noted, registered, filed, or recorded in records appropriate to the kind and location of the property which are relied upon, in the ordinary course of transactions involving such property, as evidence of ownership.

    (D)    Provisions of a governing instrument that are not revoked by this section are given effect as if the former spouse and relatives of the former spouse disclaimed the revoked provisions or, in the case of a revoked nomination in a fiduciary or representative capacity, as if the former spouse and relatives of the former spouse died immediately before the divorce or annulment.

    (E)    Provisions revoked only by this section are revived by the divorced individual's remarriage to the former spouse or by a nullification of the divorce or annulment.

    (F)    A change of circumstances other than as provided in this section and in Section 62-2-803 does not result in a revocation.

    (G)(1)    A payor or other third party is not liable for having made a payment or transferred an item of property or other benefit to a beneficiary designated in a governing instrument affected by a divorce, annulment, or remarriage or for having taken other action in good faith reliance on the validity of the governing instrument before the payor or other third party received written notice of the divorce, annulment, or remarriage. A payor or other third party is liable for a payment made or other action taken after the payor or other third party received written notice of a claimed forfeiture or revocation pursuant to this section.

        (2)    Written notice of the divorce, annulment, or remarriage must be mailed to the payor's or other third party's main office or home by registered or certified mail, return receipt requested, or served upon the payor or other third party in the same manner as a summons in a civil action. Upon receipt of written notice of the divorce, annulment, or remarriage, a payor or other third party may pay any amount owed or transfer or deposit any item of property held by it to or with the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to or with the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the funds or item of property and, upon its determination pursuant to this section, shall order disbursement or transfer in accordance with the determination. Payments, transfers, or deposits made to or with the court discharge the payor or other third party from all claims for the value of amounts paid to or items of property transferred to or deposited with the court.

    (H)(1)    A person who purchases property from a former spouse, relative of a former spouse, or other person for value and without notice of the divorce, annulment, or remarriage, or who receives from a former spouse, relative of a former spouse, or another person a payment or other item of property in partial or full satisfaction of a legally enforceable obligation, is neither obligated to return the payment, item of property, or benefit, nor liable for the amount of the payment or the value of the item of property or benefit. A former spouse, relative of a former spouse, or other person who, not for value, received a payment, item of property, or other benefit to which that person is not entitled pursuant to this section is obligated to return the payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person who is entitled to it pursuant to this section.

        (2)    If this section or part of this section is preempted by federal law with respect to a payment, an item of property, or another benefit provided in this section, a former spouse, relative of the former spouse, or other person who, not for value, received a payment, item of property, or another benefit to which that person is not entitled pursuant to this section is obligated to return that payment, item of property, or benefit, or is liable personally for the amount of the payment or the value of the item of property or benefit, to the person entitled to it if this section or part of this section were not preempted."

SECTION    8.    Section 34-19-120 of the 1976 Code, as added by Act 499 of 1988, is amended to read:

    "Section 34-19-120.    In cases where a person has been given a durable power of attorney by a lessee of a safe deposit box who has become mentally incompetent, and the original copy of the power is put in the box, the lessor may permit the person given the power to open the box to obtain the original copy of the power. The lessor may request the person purporting to have been given the durable power of attorney to produce a certified copy of the power or an affidavit declaring that he has been given the power before opening the box. No other contents may be removed from the box pursuant to this section.

    The durable power of attorney provided for in this section means a power made durable under the provisions of Section 62-5-501. (A)(1)    The person who has been given a durable power of attorney by a lessee of a safe deposit box may open, or direct the lessor to open, the safe deposit box of the lessee and obtain the original copy of the durable power of attorney; provided that a statement in the form of item (3), or in a similar form showing the same intent, is:

            (a)    incorporated in the body of the original durable power of attorney contained in the safe deposit box; or

            (b)    contained in a separate statement in the form provided in subsection (B), or in a similar form showing the same intent as that attached or annexed to the original durable power of attorney contained in the safe deposit box.

        (2)    If the statement is contained in a separate writing, the execution of the separate statement is not an amendment, modification, or revision of the original power of attorney.

        (3)    The statement must be substantially in the following form:

'I__________________, the Principal, do hereby authorize and direct my appointee or appointees as my Attorney-in-Fact in my durable power of attorney, to have access at any time or times to any safe deposit box rented by me, wherever located, in order to remove my original durable power of attorney, and any institution in which any such safe deposit box may be located shall not be required to make any inquiry and shall not incur any liability to me or my estate as a result of permitting my appointee or appointees in my original durable power of attorney to exercise this power. This power shall be exercisable without: (i) any contact with, or notice to, me, my spouse, and/or any interested persons to my estate; (ii) any prior court order or authorization, (iii) any knowledge of, or any prior determination as to, my mental or physical capacity or incapacity, (iv) any knowledge as to my whereabouts regardless whether my whereabouts are known or unknown, or (v) any inquiry.'

    (B)    The lessee, at any time after the execution of his durable power of attorney, may execute a separate statement authorizing the removal of his original durable power of attorney from his safe deposit box pursuant to subsection (A), provided that the separate statement is executed by the Principal with the same formalities as the execution and recording of a deed in the State of South Carolina pursuant to Section 30-5-30, and the separate statement is attached or annexed to the original durable power of attorney in the following form, or in a similar form showing the same intent, with the acknowledgement for recorded deeds pursuant to Section 30-5-30(B) or (C).

'STATE OF _____________        )                                            )

COUNTY OF ____________________    )

I, _______ the Principal, do hereby authorize and direct my appointee or appointees as my Attorney-in-Fact in my durable power of attorney dated the __day of __, in the year __, to have access at any time or times to any safe deposit box rented by me, wherever located, in order to remove my original durable power of attorney, and any institution in which any such safe deposit box may be located shall not be required to make any inquiry and shall not incur any liability to me or my estate as a result of permitting my appointee or appointees in my original durable power of attorney to exercise this power. This power shall be exercisable without: (i) any contact with, or notice to, me, my spouse, and/or any interested persons to my estate; (ii) any prior court order or authorization; (iii) any knowledge of, or any prior determination as to, my mental or physical capacity or incapacity; (iv) any knowledge as to my whereabouts regardless whether my whereabouts are known or unknown; or (v) any inquiry.'

IN WITNESSETH WHEREOF, I have executed this statement on the ________ day of ______________, in the year, ___________.

_________________________        ________________________

(Witness)                                            Principal

_________________________(Witness)'

    (C)    If the original durable power of attorney does not contain a statement in the form provided in subsection (A) or in a similar form showing the same intent, or a separate statement in the form provided in subsection (B) or in a similar form showing the same intent is not attached or annexed to the original durable power of attorney, then to allow removal of the lessee's durable power of attorney from the lessee's safe deposit box the financial institution must have:

        (1)    contact with or notice to the lessee, the lessee's spouse, or an interested person in the lessee's estate;

        (2)    a prior court order or court authorization;

        (3)    knowledge of, or a prior determination as to, the     mental or physical capacity or incapacity of the lessee;

        (4)    knowledge as to the lessee's whereabouts, whether the lessee's whereabouts are known or unknown; or

        (5)    other inquiry.

    (D)    A witness to a statement provided for in subsection (B), who also is an officer authorized to administer oaths pursuant to the laws of this State may notarize the signature of the other witness of the statement in the manner provided by this section.

    (E)    A financial institution that authorizes a person who has been given a durable power of attorney by a lessee of a safe deposit box, to remove the original durable power of attorney from the safe deposit box of the lessee, pursuant to subsection (A) or (B), or a financial institution that removes the original durable power of attorney from the safe deposit box of the lessee pursuant to the direction of the person who has been given a durable power of attorney by the lessee, is not required to make further inquiry, and is not liable to the lessee or the lessee's estate as a result of permitting removal of the original power of attorney. The financial institution may request the person purporting to have been given the durable power of attorney to produce a certified copy of the power or an affidavit declaring that he has been given the power before opening the box. No other contents may be removed from the box pursuant to this section.

    (F)    The provisions of this section enable the person who has been given a durable power of attorney by a lessee of a safe deposit box to remove or obtain the original durable power of attorney from the safe deposit box of the lessee, and enable the financial institution to allow the removal of the durable power of attorney from the safe deposit box without court action or findings of incapacity of the lessee. This section supplements and does not supplant the current procedures for obtaining the power of attorney of the lessee from the safe deposit box, and is not the exclusive method."

SECTION 9.    Section 27-7-40(a)(iv) of the 1976 Code, as added by Act 398 of 2000, is amended to read:

    '(iv)    If all the joint tenants who own real estate held in joint tenancy join in an encumbrance or deed of conveyance, the interest in the real estate shall be is effectively encumbered or conveyed to a third party or parties."

SECTION    10.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

SECTION    11.    This act takes effect upon approval by the Governor. To the extent that SECTION 2 does not apply to transfers made in a manner prescribed in the Gifts to Minors Act of South Carolina or to the powers, duties, and immunities conferred by transfers in that manner upon custodians and persons dealing with custodians, this section does not affect those transfers or those powers, duties, and immunities, subject to Sections 20-7-215 and 20-7-220 of the 1976 Code.

This web page was last updated on Thursday, June 25, 2009 at 2:17 P.M.