By Bernsen                                            S.B. No. 1640
         77R2720 KLA-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a provision for the payment or transfer of a person's
 1-3     interest in a mutual fund account on the person's death.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 450(a), Texas Probate Code, is amended to
 1-6     read as follows:
 1-7           (a)  Any of the following provisions in an insurance policy,
 1-8     contract of employment, bond, mortgage, promissory note, deposit
 1-9     agreement, employees' trust, retirement account, deferred
1-10     compensation arrangement, custodial agreement, pension plan, trust
1-11     agreement, conveyance of real or personal property, securities,
1-12     accounts with financial institutions as defined in Part 1 of this
1-13     chapter, mutual fund account, or any other written instrument
1-14     effective as a contract, gift, conveyance, or trust is deemed to be
1-15     nontestamentary, and this code does not invalidate the instrument
1-16     or any provision:
1-17                 (1)  that money or other benefits theretofore due to,
1-18     controlled, or owned by a decedent shall be paid after his death to
1-19     a person designated by the decedent in either the instrument or a
1-20     separate writing, including a will, executed at the same time as
1-21     the instrument or subsequently;
1-22                 (2)  that any money due or to become due under the
1-23     instrument shall cease to be payable in event of the death of the
1-24     promisee or the promissor before payment or demand; or
 2-1                 (3)  that any property which is the subject of the
 2-2     instrument shall pass to a person designated by the decedent in
 2-3     either the instrument or a separate writing, including a will,
 2-4     executed at the same time as the instrument or subsequently.
 2-5           SECTION 2. The change in law made by this Act to Section
 2-6     450(a), Texas Probate Code, applies to a provision for the payment
 2-7     or transfer of a person's interest in a mutual fund account on the
 2-8     person's death, regardless of when the provision was executed or
 2-9     the account was established.
2-10           SECTION 3.  This Act takes effect immediately if it receives
2-11     a vote of two-thirds of all the members elected to each house, as
2-12     provided by Section 39, Article III, Texas Constitution. If this
2-13     Act does not receive the vote necessary for immediate effect, this
2-14     Act takes effect September 1, 2001.