79R132 KSD-F

By:  Dutton                                                       H.B. No. 1176



A BILL TO BE ENTITLED

AN ACT

relating to the designation of a former spouse as a survivor or 
P.O.D. payee of a multiple-party account before a decree of divorce 
or annulment is rendered.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter D, Chapter 9, Family Code, is amended 
by adding Section 9.303 to read as follows:
	Sec. 9.303.  PRE-DECREE DESIGNATION OF FORMER SPOUSE AS 
SURVIVOR OR P.O.D. PAYEE OF MULTIPLE-PARTY ACCOUNT. (a)  In this 
section, the terms "account," "financial institution," 
"multiple-party account," "party," "P.O.D. payee," and "sums on 
deposit" have the meanings assigned those terms by Section 436, 
Probate Code.
	(b)  If a decree of divorce or annulment is rendered after a  
spouse has established a multiple-party account with the other 
spouse and the terms of the account contract provide that the other 
spouse has a right of survivorship or designate the other spouse as 
a P.O.D. payee, the terms of the account contract in favor of the 
other spouse are not effective unless:
		(1)  the decree provides that the terms of the account 
contract in favor of the other spouse remain in effect; or
		(2)  after rendition of the decree, the spouse 
designated in the decree as the owner of the account re-executes a 
contract governing the terms of the account that:
			(A)  provides that the other former spouse has a 
right of survivorship; or
			(B)  redesignates the other former spouse as a 
P.O.D. payee.        
	(c)  If the terms of a multiple-party account contract in 
favor of a surviving former spouse are not effective under 
Subsection (b), the sums on deposit in the account are payable to 
the other surviving parties to the account or to the alternative 
P.O.D. payee in the same manner as if the surviving former spouse 
had never been party to the account or a P.O.D. payee on the 
account.
	(d)  A financial institution that pays the sums on deposit in 
a multiple-party account to a surviving former spouse under terms 
of the account contract that are not effective under Subsection (b) 
is liable for payment of the sums on deposit in the account to the 
person described by Subsection (c) only if:
		(1)  before paying the sums on deposit to the surviving 
former spouse, the financial institution received written notice 
from an interested person at the institution's home office or at the 
branch office where the institution maintained the account 
providing that the terms of the account contract in favor of the 
surviving former spouse were not effective under Subsection (b); 
and
		(2)  the financial institution did not interplead the 
sums on deposit into the registry of a court in accordance with the 
Texas Rules of Civil Procedure.
	(e)  This section does not affect the right of a former 
spouse to assert an ownership interest in an undivided account 
described by this section as provided by this subchapter.
	SECTION 2.  This Act applies only to a decree of divorce or 
annulment rendered on or after the effective date of this Act.  A 
decree of divorce or annulment rendered before the effective date 
of this Act is governed by the law in effect immediately before that 
date, and the former law is continued in effect for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.