By: Paxton (Senate Sponsor - Carona) H.B. No. 1590
(In the Senate - Received from the House April 28, 2003;
May 1, 2003, read first time and referred to Committee on
Jurisprudence; May 20, 2003, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 6, Nays 0;
May 20, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 1590 By: Averitt
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, a 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. Not later than the 30th day after the date
on which a security interest on a multiple-party account is
perfected, a secured creditor that is a financial institution the
accounts of which are insured by the Federal Deposit Insurance
Corporation shall provide written notice of the pledge of the
account to any other party to the account who did not create the
security interest. The notice must be sent by certified mail to any
other party at the last address the party provided to the depository
bank and is not required to be provided to a P.O.D. payee, a
beneficiary, or a convenience signer. 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, 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 date 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.
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