Massachusetts General Laws
Article II - Intestacy, Wills and Donative Transfers
Section 2-706 - Life Insurance; Retirement Plan; Account With Pod Designation; Transfer-on-Death Registration; Deceased Beneficiary

Section 2–706. [Life insurance; retirement plan; account with POD designation; transfer-on-death registration; deceased beneficiary.]
(a) If a beneficiary fails to survive the decedent and is a grandparent or a descendant of a grandparent, the following shall apply:
(1) If the beneficiary designation is not in the form of a class gift and the deceased beneficiary leaves surviving descendants, a substitute gift shall be created in the beneficiary's surviving descendants. Such descendants shall take per capita at each generation the property to which the beneficiary would have been entitled had the beneficiary survived the decedent.
(2) If the beneficiary designation is in the form of a class gift, other than a beneficiary designation to ''issue'', ''descendants'', ''heirs of the body'', ''heirs'', ''next of kin'', ''relatives'' or ''family'', or a class described by language of similar import, a substitute gift shall be created in the deceased beneficiary or beneficiaries' surviving descendants. The property to which the beneficiaries would have been entitled had all of them survived the decedent shall pass to the surviving beneficiaries and the surviving descendants of the deceased beneficiaries. Each surviving beneficiary shall take the share to which the surviving beneficiary would have been entitled had the deceased beneficiaries survived the decedent. Each deceased beneficiary's surviving descendants who are substituted for the deceased beneficiary shall take per capita at each generation the share to which the deceased beneficiary would have been entitled had the deceased beneficiary survived the decedent. For the purposes of this paragraph, ''deceased beneficiary'' is a class member who failed to survive the decedent and left 1 or more surviving descendants.
(b)(1) A payor shall be protected from liability in making payments under the terms of the beneficiary designation until the payor has received written notice of a claim to a substitute gift under this section. Payment made before the receipt of written notice of a claim to a substitute gift under this section shall discharge the payor, but not the recipient, from all claims for the amounts paid. A payor shall be liable for a payment made after the payor has received written notice of the claim. A recipient shall be liable for a payment received, whether or not written notice of the claim is given.
(2) The written notice of the claim shall be mailed to the payor's main office or home by registered or certified mail, return receipt requested, or served upon the payor in the same manner as a summons in a civil action. Upon receipt of written notice of the claim, a payor may pay any amount owed by it to the court having jurisdiction of the probate proceedings relating to the decedent's estate or, if no proceedings have been commenced, to the court having jurisdiction of probate proceedings relating to decedents' estates located in the county of the decedent's residence. The court shall hold the funds and, upon its determination under this section, shall order disbursement in accordance with the determination. Payment made to the court shall discharge the payor from all claims for the amounts paid.
(c)(1) A person who purchases property for value and without notice, or who receives a payment or other item of property in partial or full satisfaction of a legally enforceable obligation, shall not be obligated under this section to return the payment, item of property or benefit nor shall such person be liable under this section for the amount of the payment or the value of the item of property or benefit; provided, however, that a person who, not for value, receives a payment, item of property or any other benefit to which such person is not entitled under this section shall be obligated to return the payment, item of property or benefit or shall be personally liable for the amount of the payment or the value of the item of property or benefit to the person who is entitled to it under this section.
(2) If this section or any part of this section is preempted by federal law with respect to a payment, an item of property or any other benefit covered by this section, a person who, not for value, receives the payment, item of property or any other benefit to which such person is not entitled under this section shall be obligated to return the payment, item of property or benefit or shall be personally liable for the amount of the payment or the value of the item of property or benefit to the person who would have been entitled to it were this section, or part of this section, not so preempted.

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