Section 6-101
(a)
A provision for a nonprobate transfer on death in an insurance policy, contract of employment, bond, mortgage promissory note, certificated or uncertificated security, account, agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, marital property agreement, or any other written instrument effective as a contract, gift, conveyance or trust, is nontestamentary.
(b)
This subsection includes a written provision that:
- (1) money or other benefits or property due to, controlled by, or owned by a decedent before death shall be paid after the decedent's death to a person whom the decedent designates either in the instrument or in a separate writing, including a will, executed either before, after, or at the same time as the instrument if:
- (i) the original document specifically provides for disposition in accordance with the later instrument; or
- (ii) the later instrument has independent significance such as a contract, gift, conveyance, trust or will.
- (2) money due or to become due under the instrument ceases to be payable in the event of death of the promisee or the promisor before payment or demand.
(c)
This section shall not limit rights of creditors under other laws of the commonwealth.
Comment
This section authorizes a variety of contractual arrangements that had sometimes been treated as testamentary in prior law. For example, most courts treated as testamentary a provision in a promissory note that if the payee died before making payment, the note should be paid to another named person; or a provision in a land contract that if the seller died before completing payment, the balance should be canceled and the property should belong to the vendee. These provisions often occurred in family arrangements. The result of holding such provisions testamentary was usually to invalidate them because not executed in accordance with the statute of wills. On the other hand, the same courts for years upheld beneficiary designations in life insurance contracts. Similar kinds of problems are arising in regard to beneficiary designations in pension funds and under annuity contracts. However, there appear to be no policy reasons for continuing to treat these varied arrangements as testamentary. The revocable inter vivos trust, the multiple-party bank account, and United States government bonds payable on death to named beneficiaries all demonstrate that the evils envisioned if the statute of wills is not rigidly enforced simply do not materialize. Because these provisions often are part of a business transaction and are evidenced by a writing, the danger of fraud is largely eliminated.
Because the modes of transfer authorized by an instrument under this section are declared to be nontestamentary, the instrument does not have to be executed in compliance with the formalities for wills prescribed under Section 2-502; nor does the instrument have to be probated, nor does the personal representative have any power or duty with respect to the assets.
The sole purpose of this section is to prevent the transfers authorized here from being treated as testamentary. This section does not invalidate other arrangements by negative implication. Thus, this section does not speak to the phenomenon of the oral trust to hold property at death for named persons, an arrangement already generally enforceable under trust law.
The reference to a "marital property agreement" in the introductory portion of subsection (a) of Section 6-101 includes an agreement made during marriage as well as a premarital contract.
Massachusetts comment
This section expands upon the provisions of G.L. c. 167D § 30 and c. 171 § 36. Limitations have been added to subsection (b) (1) with the intent to maintain present Massachusetts law regarding the validity of testamentary dispositions outside the will.