## Facts

- Charles Galen Rider held securities in an investment account managed by Wachovia Bank, N.A. under an investment agency agreement.
- On June 17, 2005, after being diagnosed with terminal cancer, Rider directed Wachovia to transfer $2 million in assets from his account to a new account in his wife Carolyn S. Rider’s name.
- Wachovia completed parts of the transfer before Rider’s death, including transfers on June 21 and July 8, 2005.
- Rider died on July 8, 2005, and Wachovia was notified the same day.
- Wachovia completed additional transfers after notice of death, including on July 11 and October 20, 2005, so that the total transferred equaled $2 million.
- The estate’s personal representative (aligned with Rider’s daughters from a prior marriage) sought a declaration that the post-death transfers were invalid and belonged to the probate estate.
- Carolyn contended the directive was an Article 8 “entitlement order” effective when issued, making later book-entry steps valid even if completed after death.

## Issues

1. Whether the transfer instruction to a securities intermediary is governed by UCC Article 8 (as an entitlement order) rather than common-law agency principles.
2. Whether assets transferred after the intermediary had notice of the entitlement holder’s death belong to the probate estate or to the transferee identified in the pre-death instruction.

## Decision

- The Supreme Court of South Carolina reversed the court of appeals.
- The court held UCC Article 8 governed the transaction and displaced conflicting common-law agency rules.
- Rider’s June 17 directive constituted a valid entitlement order effective when issued.
- The intermediary’s post-death transfers were treated as implementation of a single pre-death entitlement order, not new acts requiring continuing agency authority.
- All assets transferred to Carolyn pursuant to the $2 million instruction, including amounts moved after Rider’s death, were excluded from the probate estate.

## Legal Principles

- UCC Article 8 governs rights and duties in indirect (intermediated) holdings of securities and supplies controlling rules for securities intermediaries and entitlement holders.
- An “entitlement order” is a direction by an entitlement holder to a securities intermediary to transfer or redeem a financial asset; when properly issued, it is effective under Article 8 and obligates the intermediary to act.
- Where Article 8 applies, common-law agency doctrines that would alter the effectiveness or finality of a securities transfer instruction (including termination of authority at death) do not control.
- A pre-death entitlement order can remain enforceable even if operational book-entry transfers are completed after the entitlement holder’s death.

## Conclusion

The court held that a decedent’s pre-death instruction to a securities intermediary to transfer $2 million to his spouse was a valid Article 8 entitlement order effective upon issuance, so later book-entry transfers completing that instruction remained valid despite notice of death and the assets did not enter the probate estate.


In re Estate of Rider, 756 S.E.2d 136 (S.C. 2014)