78R7380 CLG-F

By:  Paxton                                                       H.B. No. 1590



A BILL TO BE ENTITLED

AN ACT

relating to multiple-party accounts.                                          
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 442, Texas Probate Code, is amended to 
read as follows:  
	Sec. 442.  RIGHTS OF CREDITORS; PLEDGE OF ACCOUNT.  No 
multiple-party account will be effective against an estate of a 
deceased party to transfer to a survivor sums needed to pay debts, 
taxes, and expenses of administration, including statutory 
allowances to the surviving spouse and minor children, if other 
assets of the estate are insufficient.  No multiple-party account 
will be effective against the claim of a secured creditor who has a 
lien on the account.  A party to a multiple-party account may pledge 
the account or otherwise create a security interest in the account 
without the joinder of, as appropriate, a P.O.D. payee, a 
beneficiary, convenience signer, or any other party to a joint 
account, regardless of whether there is a right of survivorship.  A 
convenience signer may not pledge or otherwise create a security 
interest in an account.  A party, P.O.D. payee, or beneficiary who 
receives payment from a multiple-party account after the death of a 
deceased party shall be liable to account to the deceased party's 
personal representative for amounts the decedent owned 
beneficially immediately before his death to the extent necessary 
to discharge the claims and charges mentioned above remaining 
unpaid after application of the decedent's estate, but is not 
liable in an amount greater than the amount that the party, P.O.D. 
payee, or beneficiary received from the multiple-party account.  No 
proceeding to assert this liability shall be commenced unless the 
personal representative has received a written demand by a 
surviving spouse, a creditor, or one acting for a minor child of the 
decedent, and no proceeding shall be commenced later than two years 
following the death of the decedent.  Sums recovered by the personal 
representative shall be administered as part of the decedent's 
estate.  This section shall not affect the right of a financial 
institution to make payment on multiple-party accounts according to 
the terms thereof, or make it liable to the estate of a deceased 
party unless before payment the institution received written notice 
from the personal representative stating the sums needed to pay 
debts, taxes, claims, and expenses of administration.
	SECTION 2.  This Act takes effect September 1, 2003, and 
applies only to an account created on or after the effective of this 
Act.  An account created before the effective date of this Act is 
governed by the law in effect when the account was created, and the 
former law is continued in effect for that purpose.