Governor signs SB 1288, closing a gap in the transfer of beneficiary-designated securities and extending protections to individual beneficiaries. A two-and-a-half-year struggle by Pleasanton-based Valley Humane Society to receive their share of a donor's IRA designations has resulted in a California law designed to help ensure all beneficiaries are notified of securities left to them, the first of its kind in the nation.
Bay Area's Valley Humane Society Helps Turn Local Experience into First-in-the-Nation California Law
Governor signs SB 1288, closing a gap in the transfer of beneficiary-designated securities and extending protections to individual beneficiaries
PLESANTON, Calif., Sept. 30, 2026 /PRNewswire-PRWeb/ -- A two-and-a-half-year struggle by Pleasanton-based Valley Humane Society to receive their share of a donor's IRA designations has resulted in a California law designed to help ensure all beneficiaries are notified of securities left to them, the first of its kind in the nation.
Governor Gavin Newsom signed Senate Bill 1288, the Legacy Act, authored by Senator John Laird (D-Santa Cruz) and co-sponsored by Valley Humane Society, San Diego Humane Society and CalNonprofits.
The new law addresses a gap in California's system for securities registered for nonprobate transfer, which allows an account owner to designate beneficiaries to receive assets directly after death without probate or estate administration. While a financial institution may have both knowledge of an account holder's death and the names of designated beneficiaries, existing law does not require the institution to notify those beneficiaries. At the same time, trustees, attorneys and family members attempting to settle the person's affairs might encounter privacy restrictions that prevent the institution from disclosing beneficiary information to them.
"Most people who name a beneficiary reasonably believe the financial institution will contact that person when they die," said Melanie Sadek, President and CEO of Valley Humane Society. "But we discovered that wasn't necessarily happening. The institution could have the beneficiary's name in its records while the beneficiary had no idea the asset even existed. That undermines the very reason people use beneficiary designations in the first place."
Valley Humane discovered the issue after being named as one of nine nonprofit beneficiaries of a donor's IRA. The organization knew about the gift only because the donor's sister found paperwork identifying the account and contacted the beneficiaries. Even with that information, administrative requirements delayed distribution of the gift for approximately two and a half years.
The experience raised a larger question: What happens when no one finds the paperwork?
Nonprobate transfers are intended to provide a direct path for assets to reach designated beneficiaries without probate administration. But if a beneficiary does not know an asset exists, the institution does not notify them, and those handling the deceased person's affairs cannot obtain the beneficiary information, that intended path can break down.
Over time, dormant financial property can ultimately be transferred to California's Unclaimed Property Program, creating an entirely different process for recovering assets that the owner had already designated to specific beneficiaries.
"The troubling part for us was realizing how easily someone's wishes could be lost in that gap," Sadek said. "People carefully complete beneficiary designations because they want their assets to go to specific people or organizations. A system designed to avoid probate should have a reliable way to connect those assets with the beneficiaries already named on the account."
SB 1288 places responsibility for notification with the registering entity that already possesses the beneficiary information. Once a registering entity receives information establishing knowledge of an owner's death, it must initiate its beneficiary notification process and, within 60 days, make a reasonable and good-faith effort to notify each named beneficiary. The initial notification does not disclose account balances, transaction history or other private financial information.
The law also addresses barriers beneficiaries may encounter when attempting to receive designated assets. Among its provisions:
- Registering entities must make a reasonable and good-faith effort to notify each named beneficiary within 60 days after receiving information establishing knowledge of the owner's death.
- Nonprofits can establish their legal identity using organizational information without requiring employees or board members to provide extensive personal information.
- Beneficiaries cannot be required to open an account or become customers of the financial institution simply to receive assets designated to them.
- Multiple beneficiaries cannot be required to coordinate their claims or submit them simultaneously.
- Once all required documentation has been provided, a beneficiary must receive the designated share within 60 days, subject to specific legal, regulatory and asset-related exceptions.
The legislation does not change an account owner's beneficiary designation or determine who is entitled to an asset. It establishes a process intended to help ensure that the designation already on file is carried out.
Other states have adopted versions of legislation commonly known as the Release IRA Funds Timely (RIFT) Act, focused on barriers charitable organizations encounter when collecting beneficiary-designated assets. California's approach goes further. SB 1288 is the first such measure in the nation to extend these protections beyond charitable organizations to individual beneficiaries.
Beginning January 1, 2027, the provisions apply to qualifying nonprofit and charitable beneficiaries when the death of the final owner occurs on or after that date. Beginning January 1, 2028, the protections extend to other beneficiaries, including individuals, when the death of the final owner occurs on or after that date.
Valley Humane worked with San Diego Humane Society, which had experienced similar barriers, and CalNonprofits to pursue the legislative solution. The three organizations co-sponsored SB 1288, with Senator Laird authoring and carrying the legislation.
Throughout the legislative process, the co-sponsors worked with Senator Laird and his staff, legislators, financial institutions and other stakeholders through multiple rounds of amendments. The final legislation addressed notification, documentation, distribution timelines, legal exceptions and implementation. Financial-industry organizations that initially opposed the legislation ultimately moved to neutral.
"Senator Laird and his staff took a problem we were experiencing in the real world and helped turn it into workable legislation," Sadek said. "San Diego Humane Society and CalNonprofits brought their experience and expertise, and the financial industry worked with us to address legitimate implementation concerns. We are incredibly proud that an experience here in Pleasanton helped create a first-in-the-nation solution for nonprofits, families and individual beneficiaries throughout California."
MEDIA MATERIALS
Interviewees:
Melanie Sadek, CAWA, is President and CEO of Valley Humane Society and chair of the Legislative & Advocacy Committee for the California Animal Welfare Association. Valley Humane co-sponsored SB 1288 after experiencing delays in receiving an estate gift left by a donor. Sadek can explain how such delays affect nonprofits and their ability to carry out a donor's wishes. Her work with animal welfare organizations across California also gives her a broader perspective on why clear standards for distributing charitable gifts matter.
Johni Hays, J.D., FCEP, is Executive Vice President of Thompson & Associates and a nationally recognized expert in charitable estate planning and planned giving. She has extensive experience helping donors, families, and nonprofit organizations navigate estate plans and the transfer of inherited retirement assets. Hays helped advance Iowa's Release IRA Funds Timely (RIFT) law; the nation's first state law focused on the timely release of IRA funds left to charitable beneficiaries. Her expertise provides important national context for the problems SB 1288 addresses and the growing effort to ensure that financial institutions honor account holders' beneficiary designations.
Robert Moore became the executor and successor trustee of his mother's estate after her death. Her assets included IRA and traditional brokerage accounts held at multiple financial institutions and divided among several beneficiaries, including charities. Although legally responsible for administering the estate, Moore could not obtain information confirming whether the institutions had distributed the funds as directed. More than two years after his mother's death, money remained in her accounts. His experience provides an important consumer perspective on the notification and distribution problems SB 1288 was created to address.
Interview clips featuring Melanie Sadek, Johni Hay, J.D, FCEP, and Robert Moore for media use here.
Video credit: Valley Humane Society
ABOUT VALLEY HUMANE
Envisioning a world in which every animal is loved and every person knows the love of an animal, Valley Humane Society creates a brighter future for cats and dogs by encouraging and strengthening the bond between people and pets. Valley Humane rescues and rehabilitates companion animals, champions responsible caretaking, shares pets' soothing affections with people in need of comfort, and supports and preserves existing pet-guardian relationships. Whether you'd like to adopt an animal, share your passion for pets, or meet like-minded people, Valley Humane Society is Your Means to a Friend™.
Media Contact
Melanie Sadek, Valley Humane Society, 1 925-462-8041, [email protected], https://valleyhumane.org
SOURCE Valley Humane Society
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