UCC Governs Whether Securities Transferred After Death Are Part of the Probate Estate

In a South Carolina case decided earlier this year, the husband gave a bank with which he had a discretionary account agreement instructions to transfer various investments to his wife’s investment account.  The transfer was made in four stages, two completed before husband’s death and two after.  Litigation arose between the wife and the personal representative of the husband’s estate over the ownership of the securities transferred after death.

In In re Estate of Rider, 756 S.E.2d 136 (2014), the Supreme Court of South Carolina held that the provisions of the South Carolina U.C.C. controlled, specifically Article 8, under which the bank was required to comply with husband’s direction to transfer property to his wife who became entitled to the property when the husband’s direction was complete, thereby giving her ownership of all of the transferred property. 

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.