Bill Text: TX HB1954 | 2017-2018 | 85th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Relating to certain accounts established at financial institutions, including disclosures related to those accounts.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Engrossed - Dead) 2017-05-22 - Not again placed on intent calendar [HB1954 Detail]

Download: Texas-2017-HB1954-Introduced.html

---

85R5955 MTB-D
By: Murr H.B. No. 1954

A BILL TO BE ENTITLED
AN ACT
relating to convenience and trust accounts established at financial
institutions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 113.002, Estates Code, is amended to
read as follows:
Sec. 113.002. DEFINITION OF PARTY. (a) In this chapter,
"party" means a person who, by the terms of a multiple-party
account, has a present right, subject to request, to payment from
the account. Except as otherwise required by the context, the term
includes a guardian, personal representative, or assignee,
including an attaching creditor, of a party. [The term also
includes a person identified as a trustee of an account for another
regardless of whether a beneficiary is named. The term does not
include a named beneficiary unless the beneficiary has a present
right of withdrawal.]
(b) A P.O.D. payee, including a charitable organization,
[or beneficiary of a trust account] is a party only after the
account becomes payable to the P.O.D. payee [or beneficiary] by
reason of the P.O.D. payee [or beneficiary] surviving the original
payee [or trustee].
SECTION 2. Section 113.004, Estates Code, is amended to
read as follows:
Sec. 113.004. TYPES OF ACCOUNTS. In this chapter:
(1) ["Convenience account" means an account that:
[(A) is established at a financial institution by
one or more parties in the names of the parties and one or more
convenience signers; and
[(B) has terms that provide that the sums on
deposit are paid or delivered to the parties or to the convenience
signers "for the convenience" of the parties.
[(2)] "Joint account" means an account payable on
request to one or more of two or more parties, regardless of whether
there is a right of survivorship.
(2) [(3)] "Multiple-party account" means a joint
account or[, a convenience account,] a P.O.D. account[, or a trust
account]. The term does not include an account established for the
deposit of funds of a partnership, joint venture, or other
association for business purposes, or an account controlled by one
or more persons as the authorized agent or trustee for a
corporation, unincorporated association, charitable or civic
organization, or a regular fiduciary or trust account in which the
relationship is established other than by deposit agreement.
(3) [(4)] "P.O.D. account," including an account
designated as a transfer on death or T.O.D. account, means an
account payable on request to:
(A) one person during the person's lifetime and,
on the person's death, to one or more P.O.D. payees; or
(B) one or more persons during their lifetimes
and, on the death of all of those persons, to one or more P.O.D.
payees.
[(5) "Trust account" means an account in the name of
one or more parties as trustee for one or more beneficiaries in
which the relationship is established by the form of the account and
the deposit agreement with the financial institution and in which
there is no subject of the trust other than the sums on deposit in
the account. The deposit agreement is not required to address
payment to the beneficiary. The term does not include:
[(A) a regular trust account under a testamentary
trust or a trust agreement that has significance apart from the
account; or
[(B) a fiduciary account arising from a fiduciary
relationship, such as the attorney-client relationship.]
SECTION 3. Section 113.052, Estates Code, is amended to
read as follows:
Sec. 113.052. FORM. 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. You
may choose to designate one or more convenience signers on an
account[, even if the account is not a convenience account]. A
designated convenience signer may make transactions on your behalf
during your lifetime, but does not own the account during your
lifetime. The designated convenience signer owns the account on
your death only if the convenience signer is also designated as a
P.O.D. payee [or trust account beneficiary].
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:
________________________________________________________________
Enter the name(s) of the convenience signer(s), if you want
one or more convenience signers on this account:
________________________________________________________________
________________________________________________________________
___ (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:
________________________________________________________________
________________________________________________________________
Enter the name(s) of the convenience signer(s), if you want
one or more convenience signers on this account:
________________________________________________________________
________________________________________________________________
___ (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:
________________________________________________________________
________________________________________________________________
________________________________________________________________
Enter the name(s) of the convenience signer(s), if you want
one or more convenience signers on this account:
________________________________________________________________
________________________________________________________________
___ (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:
________________________________________________________________
________________________________________________________________
Enter the name(s) of the convenience signer(s), if you want
one or more convenience signers on this account:
________________________________________________________________
________________________________________________________________
___ (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:
________________________________________________________________
________________________________________________________________
Enter the name(s) of the convenience signer(s), if you want
one or more convenience signers on this account:
________________________________________________________________
________________________________________________________________
[___ (6) CONVENIENCE ACCOUNT. The parties to the account
own the account. One or more convenience signers to the account
may make account transactions for a party. A convenience signer
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 before the financial institution receives
notice of the death of the last surviving party. The payment to a
convenience signer does not affect the parties' ownership of the
account.
[Enter the names of the parties:
________________________________________________________________
________________________________________________________________
[Enter the name(s) of the convenience signer(s):
________________________________________________________________
________________________________________________________________
[___ (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:
________________________________________________________________
________________________________________________________________
[Enter the name(s) of the convenience signer(s), if you want
one or more convenience signers on this account:
________________________________________________________________
_______________________________________________________________]
SECTION 4. Section 113.101, Estates Code, is amended to
read as follows:
Sec. 113.101. EFFECT OF CERTAIN PROVISIONS REGARDING
OWNERSHIP BETWEEN PARTIES AND OTHERS. The provisions of this
subchapter and Subchapters B and D that relate to beneficial
ownership between parties[,] or between parties and P.O.D. payees
[or beneficiaries] of multiple-party accounts:
(1) are relevant only to controversies between those
persons and those persons' creditors and other successors; and
(2) do not affect the withdrawal power of those
persons under the terms of an account contract.
SECTION 5. Section 113.106, Estates Code, is amended to
read as follows:
Sec. 113.106. OWNERSHIP AND OPERATION OF [OTHER] ACCOUNT
WITH CONVENIENCE SIGNER; PAYMENT; LIABILITY. (a) An account
established by one or more parties at a financial institution that
is [not designated as a convenience account, but is instead]
designated as a single-party account or another type of
multiple-party account, may provide that the sums on deposit may be
paid or delivered to the parties or to one or more convenience
signers "for the convenience of the parties."
(b) Subsections (c)-(i) apply to an account described by
Subsection (a) except [Except] as provided by Section 113.1541[:
[(1) the provisions of Sections 113.105, 113.206, and
113.208 apply to an account described by Subsection (a), including
provisions relating to the ownership of the account during the
lifetimes and on the deaths of the parties and provisions relating
to the powers and duties of the financial institution at which the
account is established; and
[(2) any other law relating to a convenience signer
applies to a convenience signer designated as provided by this
section to the extent the law applies to a convenience signer on a
convenience account].
(c) The making of a deposit in an account described by
Subsection (a) does not affect the title to the deposit.
(d) A party to an account described by Subsection (a) is not
considered to have made a gift of the deposit, or of any additions
or accruals to the deposit, to a convenience signer.
(e) An addition made to an account described by Subsection
(a) by anyone other than a party, and accruals to the addition, are
considered to have been made by a party.
(f) Deposits to an account described by Subsection (a) and
additions and accruals to the deposits may be paid to a party or a
convenience signer.
(g) A financial institution is completely released from
liability for a payment made from an account described by
Subsection (a) before the financial institution receives notice in
writing signed by a party not to make the payment in accordance with
the terms of the account. After receipt of the notice from a party,
the financial institution may require a party to approve any
further payments from the account.
(h) A financial institution that makes a payment of the sums
on deposit in an account described by Subsection (a) to a
convenience signer after the death of the last surviving party, but
before the financial institution receives written notice of the
last surviving party's death, is completely released from liability
for the payment.
(i) A financial institution that makes a payment of the sums
on deposit in an account described by Subsection (a) to the personal
representative of the deceased last surviving party's estate after
the death of the last surviving party, but before a court order
prohibiting payment is served on the financial institution, is, to
the extent of the payment, released from liability to any person
claiming a right to the funds. The personal representative's
receipt of the funds is a complete release and discharge of the
financial institution.
SECTION 6. Section 113.151(d), Estates Code, is amended to
read as follows:
(d) If there are two or more surviving parties to a joint
account that is subject to a right of survivorship agreement:
(1) during the parties' lifetimes respective
ownerships are in proportion to the parties' previous ownership
interests under Sections 113.102 and[,] 113.103[, and 113.104], as
applicable, augmented by an equal share for each survivor of any
interest a deceased party owned in the account immediately before
that party's death; and
(2) the right of survivorship continues between the
surviving parties if a written agreement signed by a party who dies
provides for that continuation.
SECTION 7. Section 113.1541, Estates Code, is amended to
read as follows:
Sec. 113.1541. OWNERSHIP OF [OTHER] ACCOUNT WITH
CONVENIENCE SIGNER ON DEATH OF LAST SURVIVING PARTY. On the death
of the last surviving party to an account that has a convenience
signer designated as provided by Section 113.106, the convenience
signer does not have a right of survivorship in the account and the
estate of the last surviving party owns the account unless the
convenience signer is also designated as a P.O.D. payee [or as a
beneficiary].
SECTION 8. Sections 113.155, 113.156, and 113.158, Estates
Code, are amended to read as follows:
Sec. 113.155. EFFECT OF DEATH OF PARTY ON CERTAIN ACCOUNTS
WITHOUT RIGHTS OF SURVIVORSHIP. The death of a party to a
multiple-party account to which Sections 113.151 and[,] 113.152[,
and 113.153] do not apply has no effect on the beneficial ownership
of the account, other than to transfer the rights of the deceased
party as part of the deceased party's estate.
Sec. 113.156. APPLICABILITY OF CERTAIN PROVISIONS ON DEATH
OF PARTY. Sections 113.151, 113.152, [113.153,] and 113.155 as to
rights of survivorship are determined by the form of the account at
the death of a party.
Sec. 113.158. NONTESTAMENTARY NATURE OF CERTAIN TRANSFERS.
Transfers resulting from the application of Sections 113.151,
113.152, [113.153,] and 113.155 are effective by reason of the
account contracts involved and this chapter and are not to be
considered testamentary transfers or subject to the testamentary
provisions of this title.
SECTION 9. Section 113.203(b), Estates Code, is amended to
read as follows:
(b) Payment may not be made to the personal representative
or heir of a deceased party unless:
(1) proofs of death are presented to the financial
institution showing that the deceased party was the last surviving
party; or
(2) there is no right of survivorship under Sections
113.151, 113.152, [113.153,] and 113.155.
SECTION 10. Section 113.209(a), Estates Code, is amended to
read as follows:
(a) Payment made in accordance with Section 113.202,
113.203, 113.204, [113.205,] or 113.207 discharges the financial
institution from all claims for those amounts paid regardless of
whether the payment is consistent with the beneficial ownership of
the account between parties, P.O.D. payees, [or beneficiaries,] or
their successors.
SECTION 11. Sections 113.251(a) and (d), Estates Code, are
amended to read as follows:
(a) 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 applicable, a P.O.D. payee, [a
beneficiary,] a convenience signer, or any other party to a joint
account, regardless of whether a right of survivorship exists.
(d) The financial institution is not required to provide the
notice described by Subsection (c) to a P.O.D. payee[,
beneficiary,] or convenience signer.
SECTION 12. Section 113.252(b), Estates Code, is amended to
read as follows:
(b) A party or[,] P.O.D. payee[, or beneficiary] who
receives payment from a multiple-party account after the death of a
deceased party is liable to account to the deceased party's
personal representative for amounts the deceased party owned
beneficially immediately before the party's death to the extent
necessary to discharge the claims and charges described by
Subsection (a) that remain unpaid after application of the deceased
party's estate. The party or[,] P.O.D. payee[, or beneficiary] is
not liable in an amount greater than the amount the party or[,]
P.O.D. payee[, or beneficiary] received from the multiple-party
account.
SECTION 13. Section 153.001(3), Estates Code, is amended to
read as follows:
(3) "P.O.D. account" has [and "trust account" have]
the meaning [meanings] assigned by Section 113.004.
SECTION 14. Section 153.002, Estates Code, is amended to
read as follows:
Sec. 153.002. INAPPLICABILITY OF CHAPTER. This chapter
does not apply to:
(1) an account with a beneficiary designation;
(2) a P.O.D. account; or
(3) [a trust account; or
[(4)] an account that provides for a right of
survivorship.
SECTION 15. Sections 113.001(2), 113.104, 113.105,
113.153, 113.154, 113.205, 113.206, and 113.208, Estates Code, are
repealed.
SECTION 16. (a) The changes in law made by this Act,
including the repeal of provisions of Chapter 113, Estates Code,
apply only to a financial institution account opened or modified on
or after the effective date of this Act. A financial institution
account opened or modified before the effective date of this Act is
governed by the law in effect on the date the account was opened or
modified, and the former law is continued in effect for the limited
purpose of winding up convenience and trust accounts and the
agreements governing those accounts until a convenience or trust
account is closed or the last surviving party to a convenience or
trust account dies.
(b) The repeal by this Act of provisions of Chapter 113,
Estates Code, relating to trust and convenience accounts does not
affect the validity of any account or deposit agreement between a
financial institution and a depositor or other person that is
entered into before September 1, 2017.
SECTION 17. This Act takes effect September 1, 2017.