California's New TOD Brokerage Account Law (SB 1288): 60-Day Rules, 2027-2028 Dates, and How It Fits With a Living Trust

Quick answer: what does California's new SB 1288 law change for TOD brokerage accounts?

Short answer: California SB 1288 (Stats. 2026, Ch. 691, amending Probate Code §5507) sets statewide deadlines for Transfer on Death (TOD) securities accounts, effective January 1, 2027 for 501(c)(3) charities and January 1, 2028 for other beneficiaries. Brokerages must make a good-faith effort to notify named beneficiaries within 60 days and disburse shares within 60 days of complete documentation.

Why it matters for your estate plan: Under SB 1288, a beneficiary cannot be forced to wait for co-beneficiaries or open a new brokerage account. SB 1288 fixes real-world payout bottlenecks on TOD brokerage accounts, especially for charities and multi-beneficiary families. However, a TOD designation still only operates at death. It does not give anyone authority to manage your account if you become incapacitated, hold funds for minor or young-adult beneficiaries, or coordinate taxes and expenses across your whole estate the way a revocable living trust can.

---

What is a TOD brokerage account in California? (Probate Code §§5500 to 5512)

A Transfer on Death (TOD) registration on a brokerage or securities account lets an individual owner (or multiple owners who hold the account with right of survivorship under Probate Code §5502) name one or more beneficiaries to take ownership of the account when the sole owner, or the last surviving owner, dies.

California governs these accounts under the Uniform TOD Security Registration Act (Probate Code §§5500 through 5512, enacted in 1998):

• What counts as a "security account" (§5501(e)): A reinvestment account associated with a security, a securities account with a broker, a cash balance in a brokerage account, cash, cash equivalents, interest, earnings, or dividends earned or declared on a security in the account, and an investment management or custody account with a trust company or trust department of a commercial bank.
• Different from a bank POD account (§5501(f)): Probate Code §5501(f) specifically notes that the TOD Security Registration Act does not govern cash equivalents in multiple-party bank or credit union accounts governed by the California Multiple-Party Accounts Law (Probate Code §5100 and following), which are commonly called Payable on Death (POD) bank accounts. (And real estate TOD deeds are governed by a completely separate statute, the Revocable Transfer on Death Deed law in Probate Code §§5600 through 5698.)
• No effect while you are alive (§5506): Under Probate Code §5506, naming a TOD beneficiary has no effect on ownership until the owner's death, and the owner (or all surviving owners) can cancel or change the TOD designation at any time without the beneficiary's consent.
• Non-testamentary contract transfer (§5509): Under Probate Code §5509(a), a transfer on death resulting from registration in beneficiary form is effective by reason of the account contract and this statute and is not testamentary (so it transfers outside a will or probate court when the designation is valid and the beneficiary survives). Under §5509(b), the chapter does not limit the rights of a surviving spouse or creditors of security owners against beneficiaries and other transferees under other laws of this state.

See how account titles and beneficiary forms fit into a broader plan in how to fund a living trust in California.

Why did California pass SB 1288?

Before SB 1288, Probate Code §5507 consisted of a single paragraph stating that on the death of a sole owner or the last to die of multiple owners, ownership of securities registered in beneficiary form passes to the surviving beneficiary or beneficiaries, and the registering entity shall reregister the security on proof of death and compliance with the registering entity's requirements.

Because prior law set no timeline and no limits on internal brokerage paperwork, beneficiaries across California regularly ran into three roadblocks after an account owner died:

1. Silent accounts: Named beneficiaries often had no idea they were listed on a TOD brokerage account unless they happened to find a paper statement, and brokerages had no statutory deadline to notify them after learning of the owner's death.
2. Invasive demands on charities: When a donor named a 501(c)(3) charity or charitable trust as a TOD beneficiary, many brokerage compliance departments used individual "Know Your Customer" forms that demanded the personal Social Security numbers, birthdates, home addresses, and driver's licenses of nonprofit executives or volunteer board members, and required the charity to open an institutional brokerage account before releasing the gift.
3. Co-beneficiary gridlock: When an account named multiple beneficiaries (for example, three adult children or two siblings and a charity), some brokerages refused to pay any beneficiary until every beneficiary completed paperwork, or required every beneficiary to submit a separate certified death certificate.

SB 1288, sponsored by the California Association of Nonprofits (CalNonprofits) and authored by Senator John Laird, amended Probate Code §5507 to add subdivisions (b) through (m) addressing each of those bottlenecks.

What are the key rules in Probate Code §5507 after SB 1288?

1. One proof of death starts the process (§5507(b))

Under Probate Code §5507(b), a registering entity must initiate its beneficiary notification process upon receiving information that establishes knowledge of the death of all owners of a security. Qualifying proof includes:

• A certified informational copy of a death certificate (as described in Health and Safety Code §103526);
• A Consular Report of Death Abroad;
• A court order determining a presumption of death;
• A Death Master File match; or
• Other information in a registered entity's records from which it should know that the owner has died.

Importantly, only one such document from a party (including an executor, trustee, beneficiary, or personal representative) is required to begin the process (§5507(b)(2)), and when there are multiple beneficiaries, no more than one beneficiary may be required to submit proof of the owner's death (§5507(h)(2)).

2. 60-day beneficiary notification requirement (§5507(c))

Under Probate Code §5507(c)(1), within 60 days of receiving information establishing knowledge of the death of all owners, the registering entity must make a reasonable and good faith effort to notify each named beneficiary.

• To safeguard privacy before identity is verified, the initial notification shall not disclose the account balance, transaction history, or other private financial information (§5507(c)(1)).
• Once a beneficiary's identity is confirmed, the registering entity must disclose the percentage and amount of the beneficiary's designated share (§5507(c)(2)).

3. Standardized rules for 501(c)(3) nonprofits and charitable trusts (§5507(d), (e), and (f))

When a named TOD beneficiary is a nonprofit corporation, charitable trust, or tax-exempt entity under Internal Revenue Code §501(c)(3):

• How the charity establishes legal identity (§5507(d)(1)): By providing its Employer Identification Number (EIN), telephone number, and mailing address.
• Ban on demanding personal data from nonprofit staff or board members (§5507(d)(2)): The registering entity shall not request or require personal information from employees or board members of the nonprofit, including a Social Security number, driver's license, date of birth, passport, home address, home telephone number, source of income, personal assets, marital status, number of dependents, or spouse's maiden name. (If an employee or board member appears in person to claim a security, §5507(d)(3) allows the entity to request a valid government-issued photo ID solely to verify identity and authority; photo ID is not required for mail or electronic claims.)
• Four-item checklist to establish entitlement (§5507(e)): A nonprofit beneficiary establishes entitlement to its share by providing: (1) an informational copy of the death certificate (unless the entity already has knowledge of death under subd. (b)), (2) an IRS letter confirming tax-exempt status, (3) its EIN and contact information, and (4) a completed IRS Form W-9 verifying its tax ID, legal name, and address.
• No denial for lacking the donor's SSN (§5507(f)): The inability of a nonprofit corporation, charitable trust, or tax-exempt entity to provide the decedent's Social Security number is not grounds for denying the distribution.

4. No forced brokerage account (§5507(g))

Under Probate Code §5507(g), a security may be disbursed by check, fund transfer, or another method that does not require a beneficiary to open an account with the registering entity.

5. No waiting on co-beneficiaries and a 60-day payout deadline (§5507(h) and (i))

Under Probate Code §5507(h)(1), if a security has multiple beneficiaries, a registering entity shall not require simultaneous claims or impose coordination deadlines among co-beneficiaries.

Under Probate Code §5507(i)(1), a beneficiary shall receive their designated share within 60 days of providing all required documentation to the registering entity and shall not be required to wait for another beneficiary to act before the transfer occurs, unless one of five specific statutory exceptions applies:

1. (A) A lien, levy, or court order prohibits the transfer;
2. (B) The registering entity receives written notice of a pending court petition involving a dispute over the security;
3. (C) The registering entity receives written notice objecting to the implementation of the transfer on death registration pursuant to Probate Code §5508;
4. (D) The registering entity receives written notice from a claimant asserting an adverse dispute or claim over the security, in which case any delay shall not exceed 30 days in order to allow the claimant to obtain appropriate legal process; or
5. (E) Two or more beneficiaries share a single indivisible asset and a beneficiary has directed the registering entity not to liquidate the asset pending resolution of a dispute among the beneficiaries.

If federal or state law, or a rule of a registered self-regulatory organization (such as FINRA) under the Securities Exchange Act of 1934, requires additional action, Probate Code §5507(j) and (k) state that a brokerage's internal policy does not excuse compliance unless expressly required by law or SRO rule, and the entity must send written notice within 60 days citing the specific statute or regulation and explaining in plain language what is needed.

When does SB 1288 take effect? (2027 vs. 2028 rollout)

Under Probate Code §5507(m), SB 1288 uses a two-stage rollout tied to when the final owner of the account dies:

TOD brokerage account vs. revocable living trust: which should hold your investment account?

SB 1288 makes TOD brokerage payouts faster and cleaner at death, but it does not turn a TOD designation into an estate plan. Before relying on a TOD form for a major brokerage account, compare how a TOD registration works against titling the account in a revocable living trust (or naming your trust as beneficiary):

When a standalone TOD designation often fits well:

• A direct charitable gift of a specific brokerage account to a 501(c)(3) nonprofit (especially with SB 1288's new rules starting January 1, 2027).
• A simple, single-purpose account where incapacity management is already covered by a living trust or coordinated Durable Power of Attorney.

When titling the brokerage account in your revocable living trust is usually stronger:

• The brokerage account represents a substantial portion of your liquid net worth or is needed to pay your living expenses during incapacity or your trust's expenses after death.
• You have multiple beneficiaries, minor or young-adult beneficiaries, a blended family, or a beneficiary with special needs.

For a broader comparison of California planning tools, read living trust vs. will in California and California TOD deed vs. living trust. You can also look up common terms in our estate planning glossary.

How can CBM help?

When CBM Estate & Trust Law prepares or updates a California estate plan, we look at your whole balance sheet, including your home, bank accounts, brokerage accounts, retirement plans, and life insurance. We handle trust funding for California real estate, provide clear instructions for retitling non-retirement brokerage accounts into your revocable living trust, and review your beneficiary designations so they fit your overall plan. Where a trust is already in its administration phase after a loved one's death, we also advise trustees through trust administration. A properly funded trust may help avoid probate for the assets titled in it, and coordinated incapacity documents may help avoid a court conservatorship.

Attorney Carmen B. Marquez has practiced estate planning in California since 2001, and Carmen B. Marquez, P.C. (CBM Estate & Trust Law) was founded in 2012. Carmen speaks Spanish. Visit our estate planning page to learn more. We do not handle probate matters.

CBM Estate & Trust Law accepts MetLife Legal Plans for most estate planning services, including coverage for a spouse and dependents where the plan includes it (specific coverage depends on your employer's plan; Private Clients can add uncovered services). MetLife members can also upgrade to CBM's Private Client package at a reduced rate if they want services beyond what's covered. Mention MetLife when booking. CBM also accepts ARAG legal plan members.

---

Related guides

• California TOD deed vs. living trust
• How to fund a living trust in California
• Living trust vs. will in California
• Successor trustee vs. power of attorney in California
• Trust funding · Estate planning · Trust administration · Estate planning glossary

---

Frequently asked questions

What is California SB 1288 and what law does it change?

SB 1288 (Chapter 691, Statutes of 2026), signed on September 27, 2026, amends California Probate Code §5507 in the Uniform TOD Security Registration Act. It establishes a 60-day beneficiary notification window, a 60-day distribution deadline after required documents are submitted, anti-gridlock rules for co-beneficiaries, and streamlined documentation rules for 501(c)(3) nonprofit beneficiaries on Transfer on Death (TOD) brokerage accounts.

When does SB 1288 take effect in California?

Under Probate Code §5507(m), SB 1288 takes effect in two stages based on when the final account owner dies. It applies starting January 1, 2027 for 501(c)(3) nonprofit corporations, charitable trusts, and tax-exempt entities if the final owner dies on or after January 1, 2027. It applies starting January 1, 2028 for all other beneficiaries if the final owner dies on or after January 1, 2028.

How long does a brokerage have to notify and pay a TOD beneficiary under SB 1288?

Under Probate Code §5507(c)(1), the registering entity must make a reasonable and good-faith effort to notify each named TOD beneficiary within 60 days of receiving information establishing knowledge of the death of all account owners. Under §5507(i)(1), a beneficiary must receive their designated share within 60 days of providing all required documentation, unless a specific statutory dispute or legal-compliance exception applies.

Can one slow co-beneficiary still hold up everyone else's TOD brokerage payout?

Once SB 1288 applies to the account, no. Under Probate Code §5507(h) and (i)(1), a brokerage may not require simultaneous claims or impose coordination deadlines among co-beneficiaries, may not require more than one beneficiary to submit proof of death, and may not force a beneficiary who has submitted all required paperwork to wait for another beneficiary to act (unless a narrow statutory dispute exception applies).

Can a brokerage force a TOD beneficiary to open a new account with that brokerage to get paid?

No. Under Probate Code §5507(g), a security registered in beneficiary form may be disbursed by check, fund transfer, or another method that does not require a beneficiary to open an account with the registering entity.

What documents can a brokerage require from a 501(c)(3) charity named on a TOD account?

Under Probate Code §5507(d) and (e), a 501(c)(3) nonprofit or charitable trust establishes its identity and entitlement using four items: an informational copy of the death certificate (unless already provided), its IRS tax-exempt determination letter, its EIN and contact information, and a completed IRS Form W-9. The brokerage cannot demand personal Social Security numbers, birthdates, or home addresses from nonprofit staff or board members, and cannot deny the claim because the charity lacks the donor's SSN.

Does a TOD brokerage account replace a revocable living trust in California?

No. A TOD designation only transfers that specific securities account at death and gives your beneficiary zero authority to manage the account if you become incapacitated during life (Probate Code §5506). A revocable living trust provides incapacity management through your successor trustee, coordinates liquidity to pay taxes and expenses, and allows staged or special-needs distributions for beneficiaries.

Should I title my brokerage account in my living trust or use a TOD designation?

For most families with a revocable living trust, titling non-retirement brokerage accounts in the name of the trust gives your successor trustee immediate authority during incapacity and keeps your liquid funds coordinated with the rest of your plan. A TOD designation can still be useful for a direct charitable gift to a 501(c)(3) nonprofit. Book a free 60-minute consultation with CBM Estate & Trust Law to review your accounts: /contact · (805) 915-4793 · Trusts@cbm.estate

---

What sources does this guide rely on?

• Senate Bill 1288 (Laird), Chapter 691, Statutes of 2026, amending California Probate Code §5507 (approved by Governor September 27, 2026; filed with Secretary of State September 27, 2026): Official Bill Text on California Legislative Information.
• California Probate Code Division 5, Part 3, Uniform TOD Security Registration Act (§5500 et seq.), including §5501 (definitions of security, security account, and registering entity; exclusion of bank multiple-party accounts under §5100 et seq.), §5502 (eligible ownership forms), §5506 (no effect on ownership until death; revocability), §5507 (transfer on death and SB 1288 notification/payout procedures), §5508 (discharge of registering entity), and §5509 (non-testamentary contract transfer; creditor and spouse rights).
• Office of Senator John Laird (SD-17), New Laird Law Makes It Easier for Nonprofits to Receive Gifts Left by Donors (Sept. 28, 2026), and California Association of Nonprofits (CalNonprofits), SB 1288 Signed Into Law.
• California Probate Code §15000 et seq. (Trust Law).

Next step

Whether you hold brokerage accounts in your own name, want to leave a Transfer on Death gift to a charity, or need to coordinate your investment accounts with a revocable living trust, we can help you structure your accounts cleanly.

Book a free 60-minute consultation · /contact · (805) 915-4793 · Trusts@cbm.estate

Planning: Estate planning · Trust funding · Trust administration · Related: How to fund a living trust in California · Living trust vs. will in California · California TOD deed vs. living trust

Serving families throughout California, with an office in Simi Valley and meetings in Burbank by appointment.

Simi Valley: 2655 First Street, Suite 110, Simi Valley, CA 93065
Burbank (meetings by appointment): 3500 West Olive Avenue, 3rd Floor, Burbank, CA 91505

Se habla español. · Guides hub: /guides · Free seminar calendar: /seminar-calendar

---

Attorney advertising. This guide is general educational information about California law as of the date above. It is not legal, tax, or investment advice, does not create an attorney-client relationship, and may not reflect later changes in statutes, regulations, or brokerage rules. Consult a California attorney about your situation before you act. Results depend on your facts; no outcome is guaranteed. CBM Estate & Trust Law (Carmen B. Marquez, P.C.) practices in California only. We do not handle probate matters.