SECTION 2-605. INCREASE IN SECURITIES; ACCESSIONS Uniform Probate code
(a) If a testator executes a will that devises securities and the testator then owned securities that meet the description in the will, the devise includes additional securities owned by the testator at death to the extent the additional securities were acquired by the testator after the will was executed as a result of the testator’s ownership of the described securities and are securities of any of the following types:
(1) securities of the same organization acquired by reason of action initiated by the organization or any successor, related, or acquiring organization, excluding any acquired by exercise of purchase options;
(2) securities of another organization acquired as a result of a merger, consolidation, reorganization, or other distribution by the organization or any successor, related, or acquiring organization; or
(3) securities of the same organization acquired as a result of a plan of
(a) If a testator executes a will that devises securities and the testator then owned securities that meet the description in the will, the devise includes additional securities owned by the testator at death to the extent the additional securities were acquired by the testator after the will was executed as a result of the testator’s ownership of the described securities and are securities of any of the following types:
(1) securities of the same organization acquired by reason of action initiated by the organization or any successor, related, or acquiring organization, excluding any acquired by exercise of purchase options;
(2) securities of another organization acquired as a result of a merger, consolidation, reorganization, or other distribution by the organization or any successor, related, or acquiring organization; or
(3) securities of the same organization acquired as a result of a plan of
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reinvestment.
(b) Distributions in cash before death with respect to a described security are not part of
the devise.
Comment
Purpose and Scope of Revisions. The rule of subsection (a), as revised, relates to a devise of securities (such as a devise of 100 shares of XYZ Company), regardless of whether that devise is characterized as a general or specific devise. If the testator executes a will that makes a devise of securities and if the testator then owned securities that meet the description in the will, then the devisee is entitled not only to the described securities to the extent they are owned by the testator at death; the devisee is also entitled to any additional securities owned by the testator at death that were acquired by the testator during his or her lifetime after the will was executed and were acquired as a result of the testator’s ownership of the described securities by reason of an action specified in subsection (a)(1), (2), or (3), such as the declaration of stock splits or stock dividends or spinoffs of a subsidiary.
The impetus for these revisions derives from the rule on stock splits enunciated by Bostwick v. Hurstel, 364 Mass. 282, 304 N.E.2d 186 (1973), and now codified in Massachusetts as to actions covered by subsections (a)(1) and (2). Mass. Gen. Laws c. 191, § 1A(4).
Subsection (a) Not Exclusive. Subsection (a) is not exclusive, i.e., it is not to be understood as setting forth the only conditions under which additional securities of the types described in subsections (a)(1), through (3) are included in the devise. For example, the express terms of subsection (a) do not apply to a case in which the testator owned the described securities when he or she executed the will, but later sold (or otherwise disposed of) those securities, and then later purchased (or otherwise acquired) securities that meet the description in the will, following which additional securities of the type or types described in subsection (a)(1), (2), or (3) are acquired as a result of the testator’s ownership of the later-acquired securities. Nor do the express terms of subsection (a) apply to a similar (but less likely) case in which the testator did not own the described securities when he or she executed the will, but later purchased (or otherwise acquired) such securities. Subsection (a) does not preclude a court, in an appropriate case, from deciding that additional securities of the type described in subsection (a)(1), (2), or (3) acquired as a result of the testator’s ownership of the later-acquired securities pass under the devise in either of these two cases, or in other cases if appropriate.
Subsection (b) codifies existing law that distributions in cash such as interest, accrued rent, or cash dividends declared and payable as of a record date before the testator’s death, do not pass as a part of the devise. It makes no difference whether such cash distributions were paid before or after death. See Section 4 of the Revised Uniform Principal and Income Act.
Cross Reference. The term “organization” is defined in Section 1-201.
(b) Distributions in cash before death with respect to a described security are not part of
the devise.
Comment
Purpose and Scope of Revisions. The rule of subsection (a), as revised, relates to a devise of securities (such as a devise of 100 shares of XYZ Company), regardless of whether that devise is characterized as a general or specific devise. If the testator executes a will that makes a devise of securities and if the testator then owned securities that meet the description in the will, then the devisee is entitled not only to the described securities to the extent they are owned by the testator at death; the devisee is also entitled to any additional securities owned by the testator at death that were acquired by the testator during his or her lifetime after the will was executed and were acquired as a result of the testator’s ownership of the described securities by reason of an action specified in subsection (a)(1), (2), or (3), such as the declaration of stock splits or stock dividends or spinoffs of a subsidiary.
The impetus for these revisions derives from the rule on stock splits enunciated by Bostwick v. Hurstel, 364 Mass. 282, 304 N.E.2d 186 (1973), and now codified in Massachusetts as to actions covered by subsections (a)(1) and (2). Mass. Gen. Laws c. 191, § 1A(4).
Subsection (a) Not Exclusive. Subsection (a) is not exclusive, i.e., it is not to be understood as setting forth the only conditions under which additional securities of the types described in subsections (a)(1), through (3) are included in the devise. For example, the express terms of subsection (a) do not apply to a case in which the testator owned the described securities when he or she executed the will, but later sold (or otherwise disposed of) those securities, and then later purchased (or otherwise acquired) securities that meet the description in the will, following which additional securities of the type or types described in subsection (a)(1), (2), or (3) are acquired as a result of the testator’s ownership of the later-acquired securities. Nor do the express terms of subsection (a) apply to a similar (but less likely) case in which the testator did not own the described securities when he or she executed the will, but later purchased (or otherwise acquired) such securities. Subsection (a) does not preclude a court, in an appropriate case, from deciding that additional securities of the type described in subsection (a)(1), (2), or (3) acquired as a result of the testator’s ownership of the later-acquired securities pass under the devise in either of these two cases, or in other cases if appropriate.
Subsection (b) codifies existing law that distributions in cash such as interest, accrued rent, or cash dividends declared and payable as of a record date before the testator’s death, do not pass as a part of the devise. It makes no difference whether such cash distributions were paid before or after death. See Section 4 of the Revised Uniform Principal and Income Act.
Cross Reference. The term “organization” is defined in Section 1-201.
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