78R11105 MTB-F


By:  Paxton                                                       H.B. No. 2238

Substitute the following for H.B. No. 2238:                                   

By:  Hughes                                                   C.S.H.B. No. 2238


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 438A, Texas Probate Code, is amended by amending Subsections (a), (c), (d), (e), (f), and (g) to read as follows: (a) If an account is established at a financial institution by one or more parties [a party] in the names of the parties [party] and one or more convenience signers [a cosigner] and the terms of the account provide that the sums on deposit are paid or delivered to the parties [party] or to the convenience signers [cosigner] "for the convenience" of the parties [party], the account is a convenience account. (c) A [The] party to a convenience account is not considered to have made a gift [of one-half] of the deposit or of any additions or accruals to the deposit to a convenience signer [the cosigner]. (d) On the death of the last surviving party, a convenience signer [the cosigner] shall have no right of survivorship in the account and ownership of the account remains in the estate of the last surviving party. (e) If an addition is made to the account by anyone other than a [the] party, the addition and accruals to the addition are considered to have been made by a [the] party. (f) All deposits to a convenience account and additions and accruals to the deposits may be paid to a [the] party or to a convenience signer [the cosigner]. The financial institution is completely released from liability for a payment made from the account before the financial institution receives notice in writing signed by a [the] party not to make the payment in accordance with the terms of the account. After receipt of the notice from a [the] party, the financial institution may require a [the] party to approve any further payments from the account. (g) If the financial institution makes a payment of the sums on deposit in a convenience account to a convenience signer [the cosigner] after the death of the last surviving party and before the financial institution has received written notice of the last surviving party's death, the financial institution is completely released from liability for the payment. If a financial institution makes payment to the personal representative of the deceased last surviving party's estate after the death of the last surviving party and before service on the financial institution of a court order prohibiting payment, the financial institution is released to the extent of the payment from liability to any person claiming a right to the funds. The receipt by the representative to whom payment is made is a complete release and discharge of the financial institution. SECTION 2. Section 439A(b), Texas Probate Code, is amended to read as follows: (b) A financial institution may use the following form to establish the type of account selected by a party: UNIFORM SINGLE-PARTY OR MULTIPLE-PARTY ACCOUNT SELECTION FORM NOTICE: The type of account you select may determine how property passes on your death. Your will may not control the disposition of funds held in some of the following accounts. Select one of the following accounts by placing your initials next to the account selected: ___ (1) SINGLE-PARTY ACCOUNT WITHOUT "P.O.D." (PAYABLE ON DEATH) DESIGNATION. The party to the account owns the account. On the death of the party, ownership of the account passes as a part of the party's estate under the party's will or by intestacy. Enter the name of the party: ______________________________ ___ (2) SINGLE-PARTY ACCOUNT WITH "P.O.D." (PAYABLE ON DEATH) DESIGNATION. The party to the account owns the account. On the death of the party, ownership of the account passes to the P.O.D. beneficiaries of the account. The account is not a part of the party's estate. Enter the name of the party: ______________________________ Enter the name or names of the P.O.D. beneficiaries: ______________________________ ______________________________ ___ (3) MULTIPLE-PARTY ACCOUNT WITHOUT RIGHT OF SURVIVORSHIP. The parties to the account own the account in proportion to the parties' net contributions to the account. The financial institution may pay any sum in the account to a party at any time. On the death of a party, the party's ownership of the account passes as a part of the party's estate under the party's will or by intestacy. Enter the names of the parties: ______________________________ ______________________________ ______________________________ ___ (4) MULTIPLE-PARTY ACCOUNT WITH RIGHT OF SURVIVORSHIP. The parties to the account own the account in proportion to the parties' net contributions to the account. The financial institution may pay any sum in the account to a party at any time. On the death of a party, the party's ownership of the account passes to the surviving parties. Enter the names of the parties: ______________________________ ______________________________ ___ (5) MULTIPLE-PARTY ACCOUNT WITH RIGHT OF SURVIVORSHIP AND P.O.D. (PAYABLE ON DEATH) DESIGNATION. The parties to the account own the account in proportion to the parties' net contributions to the account. The financial institution may pay any sum in the account to a party at any time. On the death of the last surviving party, the ownership of the account passes to the P.O.D. beneficiaries. Enter the names of the parties: ______________________________ ______________________________ Enter the name or names of the P.O.D. beneficiaries: ______________________________ ______________________________ ___ (6) CONVENIENCE ACCOUNT. The parties [party] to the account own [owns] the account. One or more convenience signers [The cosigner] to the account may make account transactions for a [the] party. A convenience signer [The cosigner] does not own the account. On the death of the last surviving party, ownership of the account passes as a part of the last surviving party's estate under the last surviving party's will or by intestacy. The financial institution may pay funds in the account to a convenience signer [the cosigner] before the financial institution receives notice of the death of the last surviving party. The payment to a convenience signer [the cosigner] does not affect the parties' [party's] ownership of the account. Enter the names [name] of the parties [party]: ______________________________ ______________________________ Enter the names [name] of the convenience signers [cosigner]: ______________________________ ______________________________ ___ (7) TRUST ACCOUNT. The parties named as trustees to the account own the account in proportion to the parties' net contributions to the account. A trustee may withdraw funds from the account. A beneficiary may not withdraw funds from the account before all trustees are deceased. On the death of the last surviving trustee, the ownership of the account passes to the beneficiary. The trust account is not a part of a trustee's estate and does not pass under the trustee's will or by intestacy, unless the trustee survives all of the beneficiaries and all other trustees. Enter the name or names of the trustees: ______________________________ ______________________________ Enter the name or names of the beneficiaries: ______________________________ ______________________________ SECTION 3. 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 covered by the law in effect when the account was created, and the former law is continued in effect for that purpose.