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Texas Wills and Probate Law 
MULTIPLE-PARTY ACCOUNTS

TEXAS ESTATES CODE TITLE 2. SUBTITLE C. CHAPTER 113. 

GENERAL PROVISIONS

§ 113.001. GENERAL DEFINITIONS.

In this chapter:

(1) "Account" means a contract of deposit of funds between a depositor and a financial institution. The term includes a checking account, savings account, certificate of deposit, share account, or other similar arrangement.

(2) "Beneficiary" means a person or trustee of an express trust evidenced by a writing who is named in a trust account as a person for whom a party to the account is named as trustee.

(2-a) "Charitable organization" means any corporation, community chest, fund, or foundation that is exempt from federal income tax under Section 501(a) of the Internal Revenue Code of 1986 by being listed as an exempt organization in Section 501(c)(3) of that code.

(2-b) "Express trust" has the meaning assigned by Section 111.004, Property Code.

(3) "Financial institution" means an organization authorized to do business under state or federal laws relating to financial institutions. The term includes a bank or trust company, savings bank, building and loan association, savings and loan company or association, credit union, and brokerage firm that deals in the sale and purchase of stocks, bonds, and other types of securities.

(4) "Payment" of sums on deposit includes a withdrawal, a payment on a check or other directive of a party, and a pledge of sums on deposit by a party and any set-off, or reduction or other disposition of all or part of an account under a pledge.

(5) "P.O.D. payee" means a person, trustee of an express trust evidenced by a writing, or charitable organization designated on a P.O.D. account as a person to whom the account is payable on request after the death of one or more persons.

(6) "Proof of death" includes:

(A) a certified copy of a death certificate; or

(B) a judgment or order of a court in a proceeding in which the death of a person is proved to the satisfaction of the court by circumstantial evidence in accordance with Chapter 454.

(7) "Request" means a proper request for withdrawal, or a check or order for payment, that complies with all conditions of the account, including special requirements concerning necessary signatures and regulations of the financial institution. If a financial institution conditions withdrawal or payment on advance notice, for purposes of this chapter a request for withdrawal or payment is treated as immediately effective and a notice of intent to withdraw is treated as a request for withdrawal.

(8) "Sums on deposit" means the balance payable on a multiple-party account including interest, dividends, and any deposit life insurance proceeds added to the account by reason of the death of a party.

(9) "Withdrawal" includes payment to a third person in accordance with a check or other directive of a party.

§ 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.

§ 113.003. DEFINITION OF NET CONTRIBUTION.

(a) In this chapter, "net contribution" of a party to a joint account at any given time is the sum of all deposits made to that account by or for the party, less all withdrawals made by or for the party that have not been paid to or applied to the use of any other party, plus a pro rata share of any interest or dividends included in the current balance of the account. The term also includes any deposit life insurance proceeds added to the account by reason of the death of the party whose net contribution is in question.

(b) A financial institution may not be required to inquire, for purposes of establishing net contributions, about:

(1) the source of funds received for deposit to a multiple-party account; or

(2) the proposed application of an amount withdrawn from a multiple-party account.

§ 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.

(3) "Multiple-party account" means a joint account, 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.

(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.

§ 113.005. AUTHORITY OF FINANCIAL INSTITUTIONS TO ENTER INTO CERTAIN ACCOUNTS.

A financial institution may enter into a multiple-party account to the same extent that the institution may enter into a single-party account.

UNIFORM ACCOUNT FORM

§ 113.051. ESTABLISHMENT OF TYPE OF ACCOUNT; APPLICABILITY OF CERTAIN LAW.

(a) A contract of deposit that contains provisions substantially the same as in the form provided by Section 113.052 establishes the type of account selected by a party. This chapter governs an account selected under the form.

(b) A contract of deposit that does not contain provisions substantially the same as in the form provided by Section 113.052 is governed by the provisions of this chapter applicable to the type of account that most nearly conforms to the depositor's intent.

§ 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:

________________________________________________________________

________________________________________________________________

ACKNOWLEDGMENT: I acknowledge that I have read each paragraph of this form and have received disclosure of the ownership rights to the accounts listed above. I have placed my initials next to the type of account I want.

_______________________

Signature

§ 113.053. REQUIRED DISCLOSURE; USE OF FORM.

(a) Except as provided by Subsection (d), a financial institution shall disclose the information provided in this subchapter to a customer before the customer selects or modifies an account.

(a-1) A financial institution is considered to have disclosed the information provided in this subchapter if:

(1) the financial institution uses the form provided by Section 113.052; and

(2) the customer signs the acknowledgment provided at the end of the form.

(b) If a financial institution varies the format of the form provided by Section 113.052, the financial institution shall disclose the information provided by this subchapter separately from other account information except that the financial institution may disclose that information as part of other account documentation if the disclosures are the first items of the documentation.

(c) The financial institution shall notify the customer of the type of account the customer selected. This requirement is satisfied by providing the customer with a copy of the account opening or modification documentation, as appropriate, in paper or electronic format.

(d) If a type of multiple-party account is not available from a financial institution, the financial institution is not required to make a disclosure about that type of account.

(e) This section does not apply to:

(1) a credit union; or

(2) an account that is opened or modified by a customer who:

(A) is a legal entity, including a governmental entity; or

(B) is acting as a legal representative for another person.

§ 113.0531. USE OF FORM AND DISCLOSURE BY CREDIT UNIONS.

(a) A credit union is considered to have disclosed the information provided by this subchapter if the credit union uses the form provided by Section 113.052.

(b) If a credit union varies the format of the form provided by Section 113.052, the credit union may make disclosures in the account agreement or in any other form that discloses the information provided by this subchapter.

(c) If the customer receives disclosure of the ownership rights to an account and the names of the parties are indicated, a credit union may combine any of the provisions in, and vary the format of, the form and notices described in Section 113.052 in:

(1) a universal account form with options listed for selection and additional disclosures provided in the account agreement; or

(2) any other manner that adequately discloses the information provided by this subchapter.

OWNERSHIP AND OPERATION OF ACCOUNTS

§ 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.

§ 113.102. OWNERSHIP OF JOINT ACCOUNT DURING PARTIES' LIFETIMES.

During the lifetime of all parties to a joint account, the account belongs to the parties in proportion to the net contributions by each party to the sums on deposit unless there is clear and convincing evidence of a different intent.

§ 113.103. OWNERSHIP OF P.O.D. ACCOUNT DURING ORIGINAL PAYEE'S LIFETIME.

(a) During the lifetime of an original payee of a P.O.D. account, the account belongs to the original payee and does not belong to the P.O.D. payee or payees.

(b) If two or more parties are named as original payees of a P.O.D. account, during the parties' lifetimes rights between the parties are governed by Section 113.102.

§ 113.104. OWNERSHIP OF TRUST ACCOUNT DURING TRUSTEE'S LIFETIME.

(a) A trust account belongs beneficially to the trustee during the trustee's lifetime unless:

(1) the terms of the account or the deposit agreement manifest a contrary intent; or

(2) other clear and convincing evidence of an irrevocable trust exists.

(b) If two or more parties are named as trustees on a trust account, during the parties' lifetimes beneficial rights between the parties are governed by Section 113.102.

(c) An account that is an irrevocable trust belongs beneficially to the beneficiary.

§ 113.105. OWNERSHIP OF CONVENIENCE ACCOUNT; ADDITIONS AND ACCRUALS.

(a) The making of a deposit in a convenience account does not affect the title to the deposit.

(b) A party to a convenience account is not considered to have made a gift of the deposit, or of any additions or accruals to the deposit, to a convenience signer.

(c) An addition made to a convenience account by anyone other than a party, and accruals to the addition, are considered to have been made by a party.

§ 113.106. OWNERSHIP AND OPERATION OF OTHER ACCOUNT WITH CONVENIENCE SIGNER.

(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) 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.

RIGHTS OF SURVIVORSHIP IN ACCOUNTS

§ 113.151. ESTABLISHMENT OF RIGHT OF SURVIVORSHIP IN JOINT ACCOUNT; OWNERSHIP ON DEATH OF PARTY.

(a) Sums remaining on deposit on the death of a party to a joint account belong to the surviving party or parties against the estate of the deceased party if the interest of the deceased party is made to survive to the surviving party or parties by a written agreement signed by the party who dies.

(b) Notwithstanding any other law, an agreement is sufficient under this section to confer an absolute right of survivorship on parties to a joint account if the agreement contains a statement substantially similar to the following: "On the death of one party to a joint account, all sums in the account on the date of the death vest in and belong to the surviving party as his or her separate property and estate."

(c) A survivorship agreement may not be inferred from the mere fact that the account is a joint account or that the account is designated as JT TEN, Joint Tenancy, or joint, or with other similar language.

(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, 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.

§ 113.152. OWNERSHIP OF P.O.D. ACCOUNT ON DEATH OF PARTY.

(a) If the account is a P.O.D. account and there is a written agreement signed by the original payee or payees, on the death of the original payee or on the death of the survivor of two or more original payees, any sums remaining on deposit belong to:

(1) the P.O.D. payee or payees if surviving; or

(2) the survivor of the P.O.D. payees if one or more P.O.D. payees die before the original payee.

(b) If two or more P.O.D. payees survive, no right of survivorship exists between the surviving P.O.D. payees unless the terms of the account or deposit agreement expressly provide for survivorship between those payees.

(c) A guardian of the estate or an attorney in fact or agent of an original payee may sign a written agreement described by Subsection (a) on behalf of the original payee.

§ 113.153. OWNERSHIP OF TRUST ACCOUNT ON DEATH OF TRUSTEE.

(a) If the account is a trust account and there is a written agreement signed by the trustee or trustees, on death of the trustee or the survivor of two or more trustees, any sums remaining on deposit belong to:

(1) the person or persons named as beneficiaries, if surviving; or

(2) the survivor of the persons named as beneficiaries if one or more beneficiaries die before the trustee.

(b) If two or more beneficiaries survive, no right of survivorship exists between the surviving beneficiaries unless the terms of the account or deposit agreement expressly provide for survivorship between those beneficiaries.

§ 113.154. OWNERSHIP OF CONVENIENCE ACCOUNT ON DEATH OF PARTY.

On the death of the last surviving party to a convenience account:

(1) a convenience signer has no right of survivorship in the account; and

(2) ownership of the account remains in the estate of the last surviving party.

§ 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.

§ 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, 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.

§ 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.

§ 113.157. WRITTEN NOTICE TO FINANCIAL INSTITUTIONS REGARDING FORM OF ACCOUNT.

Notwithstanding any other law, the form of an account may be altered by written order given by a party to the financial institution to change the form of the account or to stop or vary payment under the terms of the account. The order or request must be signed by a party, received by the financial institution during the party's lifetime, and not countermanded by another written order of the same party during the party's lifetime.

§ 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.

PROTECTION OF FINANCIAL INSTITUTIONS

§ 113.201. APPLICABILITY OF SUBCHAPTER.

This subchapter and Section 113.003(b) govern:

(1) the liability of financial institutions that make payments as provided by this subchapter; and

(2) the set-off rights of those institutions.

§ 113.202. PAYMENT OF MULTIPLE-PARTY ACCOUNT.

A multiple-party account may be paid, on request, to any one or more of the parties.

§ 113.203. PAYMENT OF JOINT ACCOUNT.

(a) Subject to Subsection (b), amounts in a joint account may be paid, on request, to any party without regard to whether any other party is incapacitated or deceased at the time the payment is demanded.

(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.

§ 113.204. PAYMENT OF P.O.D. ACCOUNT.

(a) A P.O.D. account may be paid, on request, to any original payee of the account.

(b) Payment may be made, on request, to the P.O.D. payee or to the personal representative or heirs of a deceased P.O.D. payee on the presentation to the financial institution of proof of death showing that the P.O.D. payee survived each person named as an original payee.

(c) Payment may be made to the personal representative or heirs of a deceased original payee if proof of death is presented to the financial institution showing that the deceased original payee was the survivor of each other person named on the account as an original payee or a P.O.D. payee.

§ 113.205. PAYMENT OF TRUST ACCOUNT.

(a) A trust account may be paid, on request, to any trustee.

(b) Unless a financial institution has received written notice that a beneficiary has a vested interest not dependent on the beneficiary's surviving the trustee, payment may be made to the personal representative or heirs of a deceased trustee if proof of death is presented to the financial institution showing that the deceased trustee was the survivor of each other person named on the account as a trustee or beneficiary.

(c) Payment may be made, on request, to a beneficiary if proof of death is presented to the financial institution showing that the beneficiary or beneficiaries survived all persons named as trustees.

§ 113.206. PAYMENT OF CONVENIENCE ACCOUNT.

Deposits to a convenience account and additions and accruals to the deposits may be paid to a party or a convenience signer.

§ 113.207. LIABILITY FOR PAYMENT FROM JOINT ACCOUNT AFTER DEATH.

A financial institution that pays an amount from a joint account to a surviving party to that account in accordance with a written agreement under Section 113.151 is not liable to an heir, devisee, or beneficiary of the deceased party's estate.

§ 113.208. LIABILITY FOR PAYMENT FROM CONVENIENCE ACCOUNT.

(a) A financial institution is completely released from liability for a payment made from a convenience account 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.

(b) A financial institution that makes a payment of the sums on deposit in a convenience account 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.

(c) A financial institution that makes a payment of the sums on deposit in a convenience account 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.

§ 113.209. DISCHARGE FROM CLAIMS.

(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.

(b) The protection provided by Subsection (a) does not extend to payments made after a financial institution receives, from any party able to request present payment, written notice to the effect that withdrawals in accordance with the terms of the account should not be permitted. Unless the notice is withdrawn by the person giving the notice, the successor of a deceased party must concur in a demand for withdrawal for the financial institution to be protected under Subsection (a).

(c) No notice, other than the notice described by Subsection (b), or any other information shown to have been available to a financial institution affects the institution's right to the protection provided by Subsection (a).

(d) The protection provided by Subsection (a) does not affect the rights of parties in disputes between the parties or the parties' successors concerning the beneficial ownership of funds in, or withdrawn from, multiple-party accounts.

§ 113.210. SET-OFF TO FINANCIAL INSTITUTION.

(a) Without qualifying any other statutory right to set-off or lien and subject to any contractual provision, if a party to a multiple-party account is indebted to a financial institution, the financial institution has a right to set-off against the account in which the party has, or had immediately before the party's death, a present right of withdrawal.

(b) The amount of the account subject to set-off under this section is that proportion to which the debtor is, or was immediately before the debtor's death, beneficially entitled, and in the absence of proof of net contributions, to an equal share with all parties having present rights of withdrawal.

RIGHTS OF CREDITORS; PLEDGE OF ACCOUNT

§ 113.251. PLEDGE OF ACCOUNT.

(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.

(b) A convenience signer may not pledge or otherwise create a security interest in an account.

(c) Not later than the 30th day after the date a security interest on a multiple-party account is perfected, a secured creditor that is a financial institution with accounts 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 each other party at the last address the party provided to the depository bank.

(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.

§ 113.252. RIGHTS OF CREDITORS.

(a) A multiple-party account is not effective against:

(1) an estate of a deceased party to transfer to a survivor:

(A) amounts equal to the amounts of estate taxes and expenses charged under Subchapter A, Chapter 124, to the deceased party, P.O.D. payee, or beneficiary of the account; or

(B) if other assets of the estate are insufficient, amounts needed to pay debts, other taxes, and expenses of administration, including statutory allowances to the surviving spouse and minor children; or

(2) the claim of a secured creditor who has a lien on the account.

(b) A party, P.O.D. payee, or beneficiary who receives payment from a multiple-party account or causes a payment to be made to another person 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, expenses, and charges described by Subsection (a). The party, P.O.D. payee, or beneficiary is not liable in an amount greater than the amount the party, P.O.D. payee, or beneficiary received or caused to be paid to another person from the multiple-party account after the deceased party's death.

(c) Any proceeding by the personal representative of a deceased party to assert liability under Subsection (b) must be commenced on or before the second anniversary of the death of the deceased party.

(d) Amounts recovered by the personal representative under this section must be administered as part of the decedent's estate.

§ 113.253. NO EFFECT ON CERTAIN RIGHTS AND LIABILITIES OF FINANCIAL INSTITUTIONS.

This subchapter does not:

(1) affect the right of a financial institution to make payment on multiple-party accounts according to the terms of the account; or

(2) make the financial institution liable to the estate of a deceased party unless, before payment, the institution received written notice from the personal representative stating the amounts needed to pay debts, taxes, claims, and expenses of administration.

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