CHAPTER XI. NONTESTAMENTARY TRANSFERS
PROBATE CODE
CHAPTER XI. NONTESTAMENTARY TRANSFERS
PART 1. MULTIPLE-PARTY ACCOUNTS
Text of article effective until January 01, 2014
Sec. 436. DEFINITIONS. In this part:
(1) "Account" means a contract of deposit of funds between a
depositor and a financial institution, and includes a checking
account, savings account, certificate of deposit, share account,
and other like arrangement.
(2) "Beneficiary" means a person named in a trust account as one
for whom a party to the account is named as trustee.
(3) "Financial institution" means an organization authorized to
do business under state or federal laws relating to financial
institutions, including, without limitation, banks and trust
companies, savings banks, building and loan associations, savings
and loan companies or associations, credit unions, and brokerage
firms that deal in the sales and purchases of stocks, bonds, and
other types of securities.
(4) "Joint account" means an account payable on request to one or
more of two or more parties whether or not there is a right of
survivorship.
(5) "Multiple-party account" means a joint account, a convenience
account, a P.O.D. account, or a trust account. It does not
include accounts established for deposit of funds of a
partnership, joint venture, or other association for business
purposes, or accounts controlled by one or more persons as the
duly authorized agent or trustee for a corporation,
unincorporated association, charitable or civic organization, or
a regular fiduciary or trust account where the relationship is
established other than by deposit agreement.
(6) "Net contribution" of a party to a joint account as of any
given time is the sum of all deposits made to that account by or
for him, less all withdrawals made by or for him which 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. The term includes, in addition, any proceeds of deposit
life insurance added to the account by reason of the death of the
party whose net contribution is in question.
(7) "Party" means a person who, by the terms of the account, has
a present right, subject to request, to payment from a
multiple-party account. A P.O.D. payee or beneficiary of a trust
account is a party only after the account becomes payable to him
by reason of his surviving the original payee or trustee. Unless
the context otherwise requires, it includes a guardian, personal
representative, or assignee, including an attaching creditor, of
a party. It also includes a person identified as a trustee of an
account for another whether or not a beneficiary is named, but it
does not include a named beneficiary unless the beneficiary has a
present right of withdrawal.
(8) "Payment" of sums on deposit includes withdrawal, payment on
check or other directive of a party, and any pledge of sums on
deposit by a party and any set-off, or reduction or other
disposition of all or part of an account pursuant to a pledge.
(9) "Proof of death" includes a certified copy of a death
certificate or the judgment or order of a court in a proceeding
where the death of a person is proved by circumstantial evidence
to the satisfaction of the court as provided by Section 72 of
this code.
(10) "P.O.D. account" means an account payable on request to one
person during lifetime and on his death to one or more P.O.D.
payees, or to one or more persons during their lifetimes and on
the death of all of them to one or more P.O.D. payees.
(11) "P.O.D. payee" means a person designated on a P.O.D. account
as one to whom the account is payable on request after the death
of one or more persons.
(12) "Request" means a proper request for withdrawal, or a check
or order for payment, which complies with all conditions of the
account, including special requirements concerning necessary
signatures and regulations of the financial institution, but if
the financial institution conditions withdrawal or payment on
advance notice, for purposes of this part the request for
withdrawal or payment is treated as immediately effective and a
notice of intent to withdraw is treated as a request for
withdrawal.
(13) "Sums on deposit" means the balance payable on a
multiple-party account including interest, dividends, and in
addition any deposit life insurance proceeds added to the account
by reason of the death of a party.
(14) "Trust account" means an account in the name of one or more
parties as trustee for one or more beneficiaries where the
relationship is established by the form of the account and the
deposit agreement with the financial institution and there is no
subject of the trust other than the sums on deposit in the
account. It is not essential that payment to the beneficiary be
mentioned in the deposit agreement. A trust account does not
include a regular trust account under a testamentary trust or a
trust agreement which has significance apart from the account, or
a fiduciary account arising from a fiduciary relation such as
attorney-client.
(15) "Withdrawal" includes payment to a third person pursuant to
check or other directive of a party.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979. Amended by Acts 1993, 73rd Leg., ch. 846, Sec. 25,
eff. Sept. 1, 1993.
Text of article effective until January 01, 2014
Sec. 437. OWNERSHIP AS BETWEEN PARTIES AND OTHERS. The
provisions of Sections 438 through 440 of this code that concern
beneficial ownership as between parties, or as between parties
and P.O.D. payees or beneficiaries of multiple-party accounts,
are relevant only to controversies between these persons and
their creditors and other successors, and have no bearing on the
power of withdrawal of these persons as determined by the terms
of account contracts.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979. Amended by Acts 1981, 67th Leg., p. 895, ch. 319,
Sec. 2, eff. Sept. 1, 1981.
Text of article effective until January 01, 2014
Sec. 438. OWNERSHIP DURING LIFETIME. (a) A joint account
belongs, during the lifetime of all parties, to the parties in
proportion to the net contributions by each to the sums on
deposit, unless there is clear and convincing evidence of a
different intent.
(b) A P.O.D. account belongs to the original payee during his
lifetime and not to the P.O.D. payee or payees. If two or more
parties are named as original payees, during their lifetimes
rights as between them are governed by Subsection (a) of this
section.
(c) Unless a contrary intent is manifested by the terms of the
account or the deposit agreement or there is other clear and
convincing evidence of an irrevocable trust, a trust account
belongs beneficially to the trustee during his lifetime, and if
two or more parties are named as trustee on the account, during
their lifetimes beneficial rights as between them are governed by
Subsection (a) of this section. If there is an irrevocable trust,
the account belongs beneficially to the beneficiary.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
Sec. 438A. CONVENIENCE ACCOUNT. (a) If an account is established
at a financial institution by one or more parties in the names of
the parties and one or more convenience signers and the terms of
the account provide that the sums on deposit are paid or
delivered to the parties or to the convenience signers "for the
convenience" of the parties, the account is a convenience
account.
(b) The making of a deposit in a convenience account does not
affect the title to the deposit.
(c) 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.
(d) On the death of the last surviving party, a convenience
signer 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
party, the addition and accruals to the addition are considered
to have been made by a party.
(f) All deposits to a convenience account and additions and
accruals to the deposits may be paid to a party or to a
convenience signer. 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 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.
(g) If the financial institution makes a payment of the sums on
deposit in a convenience account to a convenience signer 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.
Added by Acts 1993, 73rd Leg., ch. 795, Sec. 1, eff. Aug. 30,
1993; Acts 1993, 73rd Leg., ch. 846, Sec. 27, eff. Sept. 1, 1993.
Subsecs. (a) and (c) to (g) amended by Acts 2003, 78th Leg., ch.
658, Sec. 1, eff. Sept. 1, 2003.
Sec. 438B. CONVENIENCE SIGNER ON OTHER ACCOUNTS. (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 Subsection (c) of this section:
(1) the provisions of Section 438A of this chapter apply to an
account described by Subsection (a) of this section, 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) On the death of the last surviving party to an account that
has a convenience signer designated as provided by this section,
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.
Added by Acts 2009, 81st Leg., R.S., Ch.
929, Sec. 1, eff. June 19, 2009.
Text of article effective until January 01, 2014
Sec. 439. RIGHT OF SURVIVORSHIP. (a) Sums remaining on deposit
at the death of a party to a joint account belong to the
surviving party or parties against the estate of the decedent if,
by a written agreement signed by the party who dies, the interest
of such deceased party is made to survive to the surviving party
or parties. Notwithstanding any other law, an agreement is
sufficient to confer an absolute right of survivorship on parties
to a joint account under this subsection if the agreement states
in substantially the following form: "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." A survivorship agreement will not
be inferred from the mere fact that the account is a joint
account. If there are two or more surviving parties, their
respective ownerships during lifetime shall be in proportion to
their previous ownership interests under Section 438 of this code
augmented by an equal share for each survivor of any interest the
decedent may have owned in the account immediately before his
death, and the right of survivorship continues between the
surviving parties if a written agreement signed by a party who
dies so provides.
(b) 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 the
P.O.D. payee or payees if surviving, or to the survivor of them
if one or more P.O.D. payees die before the original payee. If
two or more P.O.D. payees survive, there is no right of
survivorship in event of death of a P.O.D. payee thereafter
unless the terms of the account or deposit agreement expressly
provide for survivorship between them.
(c) 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 the person or persons named as
beneficiaries, if surviving, or to the survivor of them if one or
more beneficiaries die before the trustee dies. If two or more
beneficiaries survive, there is no right of survivorship in event
of death of any beneficiary thereafter unless the terms of the
account or deposit agreement expressly provide for survivorship
between them.
(d) In other cases, the death of any party to a multiple-party
account has no effect on beneficial ownership of the account
other than to transfer the rights of the decedent as part of his
estate.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979. Amended by Acts 1987, 70th Leg., ch. 297, Sec. 1,
eff. Aug. 31, 1987; Acts 1993, 73rd Leg., ch. 846, Sec. 26, eff.
Sept. 1, 1993.
Text of section as repealed by Acts 2009, 81st Leg., R.S., Ch.
680, Sec. 10 effective January 1, 2014
Sec. 439A. UNIFORM SINGLE-PARTY OR MULTIPLE-PARTY ACCOUNT FORM.
Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch.
929, Sec. 2
(a) A contract of deposit that contains provisions substantially
the same as in the form provided by Subsection (b) of this
section establishes the type of account selected by a party. The
provisions of this part of Chapter XI of this code govern an
account selected under the form. A contract of deposit that does
not contain provisions substantially the same as in the form
provided by Subsection (b) of this section is governed by the
provisions of this chapter applicable to the account that most
nearly conforms to the depositor's intent.
(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. 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:
______________________________
______________________________
(c) A financial institution shall be deemed to have adequately
disclosed the information provided in this section if the
financial institution uses the form set forth in Subsection (b)
of this section. If a financial institution varies the format of
the form set forth in Subsection (b) of this section, then such
financial institution may make disclosures in the account
agreement or in any other form which adequately discloses the
information provided in this section.
(d) A financial institution may combine any of the provisions and
vary the format of the selections form and notices described in
Subsection (b) of this section provided that the customer
receives adequate disclosure of the ownership rights and there is
appropriate indication of the names of the parties. This may be
accomplished in a universal account form with options listed for
selection and additional disclosures provided in the account
agreement, or in any other manner which adequately discloses the
information provided in this section.
Added by Acts 1993, 73rd Leg., ch. 795, Sec. 2, eff. Aug. 30,
1993.
Subsec. (b) amended by Acts 2003, 78th Leg., ch. 658, Sec. 2,
eff. Sept. 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
680, Sec. 10(a), eff. January 1, 2014.
Acts 2009, 81st Leg., R.S., Ch.
929, Sec. 2, eff. June 19, 2009.
Text of article effective until January 01, 2014
Sec. 440. EFFECT OF WRITTEN NOTICE TO FINANCIAL INSTITUTION. The
provisions of Section 439 of this code as to rights of
survivorship are determined by the form of the account at the
death of a party. Notwithstanding any other provision of the law,
this form 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
other written order of the same party during his lifetime.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
Sec. 441. ACCOUNTS AND TRANSFERS NONTESTAMENTARY. Transfers
resulting from the application of Section 439 of this code are
effective by reason of the account contracts involved and this
statute and are not to be considered as testamentary or subject
to the testamentary provisions of this code.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
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,
claims, and expenses of administration.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Amended by Acts 2003, 78th Leg., ch. 564, Sec. 1, eff. Sept. 1,
2003.
Text of article effective until January 01, 2014
Sec. 443. PROTECTION OF FINANCIAL INSTITUTIONS. Sections 444
through 449 of this code govern the liability of financial
institutions that make payments as provided in this chapter and
the set-off rights of the institutions.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
Sec. 444. PAYMENT ON SIGNATURE OF ONE PARTY. Financial
institutions may enter into multiple-party accounts to the same
extent that they may enter into single-party accounts. A
multiple-party account may be paid, on request, to any one or
more of the parties. A financial institution shall not be
required to inquire as to the source of funds received for
deposit to a multiple-party account, or to inquire as to the
proposed application of any sum withdrawn from an account, for
purposes of establishing net contributions.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
Sec. 445. PAYMENT OF JOINT ACCOUNT AFTER DEATH OR DISABILITY.
Any sums 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, but payment may not
be made to the personal representative or heirs of a deceased
party unless proofs of death are presented to the financial
institution showing that the decedent was the last surviving
party or unless there is no right of survivorship under Section
439 of this code. A financial institution that pays a sum from a
joint account to a surviving party to that account pursuant to a
written agreement under Section 439(a) of this code is not liable
to an heir, devisee, or beneficiary of the decedent's estate.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979. Amended by Acts 1987, 70th Leg., ch. 297, Sec. 2,
eff. Aug. 31, 1987.
Text of article effective until January 01, 2014
Sec. 446. PAYMENT OF P.O.D. ACCOUNT. A P.O.D. account may be
paid, on request, to any original party to the account. 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 upon
presentation to the financial institution of proof of death
showing that the P.O.D. payee survived all persons named as
original payees. 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 his
decedent was the survivor of all other persons named on the
account either as an original payee or as P.O.D. payee.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
Sec. 447. PAYMENT OF TRUST ACCOUNT. A trust account may be paid,
on request, to any trustee. Unless the financial institution has
received written notice that the beneficiary has a vested
interest not dependent upon his 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 his decedent was the survivor of all
other persons named on the account either as trustee or
beneficiary. Payment may be made, on request, to the beneficiary
upon presentation to the financial institution of proof of death
showing that the beneficiary or beneficiaries survived all
persons named as trustees.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
Sec. 448. DISCHARGE FROM CLAIMS. Payment made as provided by
Section 444, 445, 446, or 447 of this code discharges the
financial institution from all claims for amounts so paid whether
or not the payment is consistent with the beneficial ownership of
the account as between parties, P.O.D. payees, or beneficiaries,
or their successors. The protection here given does not extend to
payments made after a financial institution has received written
notice from any party able to request present payment 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 it, the successor of any deceased party must
concur in any demand for withdrawal if the financial institution
is to be protected under this section. No other notice or any
other information shown to have been available to a financial
institution shall affect its right to the protection provided
here. The protection here provided shall have no bearing on the
rights of parties in disputes between themselves or their
successors concerning the beneficial ownership of funds in, or
withdrawn from, multiple-party accounts.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
Text of article effective until January 01, 2014
Sec. 449. SET-OFF TO FINANCIAL INSTITUTION. 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 his death a present right of
withdrawal. The amount of the account subject to set-off is that
proportion to which the debtor is, or was immediately before his
death, beneficially entitled, and in the absence of proof of net
contributions, to an equal share with all parties having present
rights of withdrawal.
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979.
PART 2. PROVISIONS RELATING TO EFFECT OF DEATH
Text of article effective until January 01, 2014
Sec. 450. PROVISIONS FOR PAYMENT OR TRANSFER AT DEATH. (a) Any
of the following provisions in an insurance policy, contract of
employment, bond, mortgage, promissory note, deposit agreement,
employees' trust, retirement account, deferred compensation
arrangement, custodial agreement, pension plan, trust agreement,
conveyance of real or personal property, securities, accounts
with financial institutions as defined in Part 1 of this chapter,
mutual fund account, or any other written instrument effective as
a contract, gift, conveyance, or trust is deemed to be
nontestamentary, and this code does not invalidate the instrument
or any provision:
(1) that money or other benefits theretofore due to, controlled,
or owned by a decedent shall be paid after his death to a person
designated by the decedent in either the instrument or a separate
writing, including a will, executed at the same time as the
instrument or subsequently;
(2) that any money due or to become due under the instrument
shall cease to be payable in event of the death of the promisee
or the promissor before payment or demand; or
(3) that any property which is the subject of the instrument
shall pass to a person designated by the decedent in either the
instrument or a separate writing, including a will, executed at
the same time as the instrument or subsequently.
(b) Nothing in this section limits the rights of creditors under
other laws of this state.
(c) In this section:
(1) "Employees' trust" means:
(A) a trust that forms a part of a stock-bonus, pension, or
profit-sharing plan under Section 401, Internal Revenue Code of
1954 (26 U.S.C.A. Sec. 401 (1986));
(B) a pension trust under Chapter 111, Property Code; and
(C) an employer-sponsored benefit plan or program, or any other
retirement savings arrangement, including a pension plan created
under Section 3, Employee Retirement Income Security Act of 1974
(29 U.S.C.A. Sec. 1002 (1986)), regardless of whether the plan,
program, or arrangement is funded through a trust.
(2) "Individual retirement account" means a trust, custodial
arrangement, or annuity under Section 408(a) or (b), Internal
Revenue Code of 1954 (26 U.S.C.A. Sec. 408 (1986)).
(3) "Retirement account" means a retirement-annuity contract, an
individual retirement account, a simplified employee pension, or
any other retirement savings arrangement.
(4) "Retirement-annuity contract" means an annuity contract under
Section 403, Internal Revenue Code of 1954 (26 U.S.C.A. Sec. 403
(1986)).
(5) "Simplified employee pension" means a trust, custodial
arrangement, or annuity under Section 408, Internal Revenue Code
of 1954 (26 U.S.C.A. Sec. 408 (1986)).
Added by Acts 1979, 66th Leg., p. 1756, ch. 713, Sec. 31, eff.
Aug. 27, 1979. Amended by Acts 1987, 70th Leg., ch. 94, Sec. 1,
2, eff. Aug. 31, 1987; Acts 1997, 75th Leg., ch. 1302, Sec. 14,
eff; Sept. 1, 1997; Acts 2001, 77th Leg., ch. 284, Sec. 1, eff.
May 22, 2001.
PART 3. COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP
Text of article effective until January 01, 2014
Sec. 451. RIGHT OF SURVIVORSHIP. At any time, spouses may agree
between themselves that all or part of their community property,
then existing or to be acquired, becomes the property of the
surviving spouse on the death of a spouse.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 452. FORMALITIES. An agreement between spouses creating a
right of survivorship in community property must be in writing
and signed by both spouses. If an agreement in writing is signed
by both spouses, the agreement shall be sufficient to create a
right of survivorship in the community property described in the
agreement if it includes any of the following phrases:
(1) "with right of survivorship";
(2) "will become the property of the survivor";
(3) "will vest in and belong to the surviving spouse"; or
(4) "shall pass to the surviving spouse."
An agreement that otherwise meets the requirements of this part,
however, shall be effective without including any of those
phrases.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 453. OWNERSHIP AND MANAGEMENT DURING MARRIAGE. Property
subject to an agreement between spouses creating a right of
survivorship in community property remains community property
during the marriage of the spouses. Such an agreement does not
affect the rights of the spouses concerning management, control,
and disposition of the property subject to the agreement unless
the agreement provides otherwise.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 454. TRANSFERS NONTESTAMENTARY. Transfers at death
resulting from agreements made in accordance with this part of
this code are effective by reason of the agreement involved and
are not testamentary transfers. Such transfers are not subject to
the provisions of this code applicable to testamentary transfers
except as expressly provided otherwise in this code.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 455. REVOCATION. An agreement between spouses made in
accordance with this part of this code may be revoked in
accordance with the terms of the agreement. If the agreement does
not provide a method for revocation, the agreement may be revoked
by a written instrument signed by both spouses or by a written
instrument signed by one spouse and delivered to the other
spouse. The agreement may be revoked with respect to specific
property subject to the agreement by the disposition of such
property by one or both of the spouses if such disposition is not
inconsistent with specific terms of the agreement and applicable
law.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 456. PROOF OF AGREEMENT. (a) Application for Adjudication.
An agreement between spouses creating a right of survivorship in
community property that satisfies the requirements of this part
is effective without an adjudication. After the death of a
spouse, however, the surviving spouse or the personal
representative of the surviving spouse may apply to the court for
an order stating that the agreement satisfies the requirements of
this code and is effective to create a right of survivorship in
community property. The original agreement shall be filed with
the application for an adjudication. An application for an
adjudication under this section must include:
(1) the name and domicile of the surviving spouse;
(2) the name and former domicile of the decedent and the fact,
time, and place of death;
(3) facts establishing venue in the court; and
(4) the social security number of the decedent, if known.
(b) Proof Required. An applicant for an adjudication under this
section must prove to the satisfaction of the court:
(1) that the spouse whose community property interest is at issue
is dead;
(2) that the court has jurisdiction and venue;
(3) that the agreement was executed with the formalities required
by law;
(4) that the agreement was not revoked; and
(5) that citation has been served and returned in the manner and
for the length of time required by this code.
(c) Method of Proof. The deceased spouse's signature to the
agreement may be proved by the sworn testimony of one witness
taken in open court, by the affidavit of one witness, or by the
deposition of one witness, either written or oral, taken in the
same manner and under the same rules as depositions in other
civil actions. If the surviving spouse is competent to make an
oath, the surviving spouse's signature to the agreement may be
proved by the sworn testimony of the surviving spouse taken in
open court, by the affidavit of the surviving spouse, or by the
deposition of the surviving spouse either written or oral, taken
in the same manner and under the same rules as depositions in
other civil actions. If the surviving spouse is not competent to
make an oath, the surviving spouse's signature to the agreement
may be proved in the manner provided above for the proof of the
deceased spouse's signature.
(d) Venue. An application for an adjudication under this section
must be filed in the county of proper venue for administration of
the deceased spouse's estate.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 457. ACTION OF COURT ON AGREEMENT. On completion of a
hearing on an application under Section 456 of this code, if the
court is satisfied that the requisite proof has been made, an
order adjudging the agreement valid shall be entered. Certified
copies of the agreement and order may be recorded in other
counties and may be used in evidence, as the original might be,
on the trial of the same matter in any other court, on appeal or
otherwise.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 458. EFFECT OF ORDER. An agreement between spouses creating
a right of survivorship in community property that satisfies the
requirements of this code is effective and enforceable without an
adjudication. If an order adjudging such an agreement valid is
obtained, however, the order shall constitute sufficient
authority to all persons owing money, having custody of any
property, or acting as registrar or transfer agent of any
evidence of interest, indebtedness, property, or right, that is
subject to the provisions of the agreement, and to persons
purchasing from or otherwise dealing with the surviving spouse
for payment or transfer to the surviving spouse, and the
surviving spouse may enforce his or her right to such payment or
transfer.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 459. CUSTODY OF ADJUDICATED AGREEMENTS. An original
agreement creating a right of survivorship in community property
that has been adjudicated together with the order adjudging it
valid shall be deposited in the office of the county clerk of the
county in which it was adjudicated and shall remain there, except
during such time when it may be removed for inspection to another
place on order of the court where adjudicated. If the court
orders an original agreement to be removed to another place for
inspection, the person removing the original agreement shall give
a receipt therefor, and the clerk of the court shall make and
retain a copy of the original agreement.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 460. PROTECTION OF PERSONS OR ENTITIES ACTING WITHOUT
KNOWLEDGE OR NOTICE. (a) Personal Representatives. If the
personal representative of a decedent's estate has no actual
knowledge of the existence of an agreement creating a right of
survivorship in community property in the decedent's surviving
spouse, the personal representative shall not be liable to the
surviving spouse or to any person claiming from the surviving
spouse for selling, exchanging, distributing, or otherwise
disposing of the property or an interest therein.
(b) Purchaser without Notice of Survivorship Agreement.
(1) If any person or entity purchases real or personal property
from a person claiming from a decedent more than six months after
the date of the decedent's death, for value, and without notice
of the existence of an agreement creating a right of survivorship
in the property in the decedent's surviving spouse, the purchaser
shall have good title to the interest which the person claiming
from the decedent would have had in the absence of the agreement,
as against the claims of the surviving spouse or any person
claiming from the surviving spouse.
(2) If any person or entity purchases real or personal property
from the personal representative of a decedent's estate, for
value, and without notice of the existence of an agreement
creating a right of survivorship in the property in the
decedent's surviving spouse, the purchaser shall have good title
to the interest which the personal representative would have had
the power to convey in the absence of the agreement, as against
the claims of the surviving spouse or any person claiming from
the surviving spouse.
(c) Purchaser without Notice of Revocation of Survivorship
Agreement. If any person or entity purchases real or personal
property from a decedent's surviving spouse more than six months
after the date of the decedent's death, for value, and:
(1) with respect to real or personal property, the purchaser has
received an original or certified copy of an agreement purporting
to create a right of survivorship in such property in the
decedent's surviving spouse, purportedly signed by the decedent
and the surviving spouse; or
(2) with respect to real property, an agreement purporting to
create a right of survivorship in such property in the decedent's
surviving spouse, purportedly signed by the decedent and the
surviving spouse, is properly recorded in a county in which a
part of the property is located; and the purchaser has no notice
that the agreement was revoked, the purchaser shall have good
title to the interest which the surviving spouse would have had
in the absence of a revocation of the agreement, as against the
claims of the personal representative of the decedent's estate
and all persons claiming from the decedent or the personal
representative of the decedent's estate.
(d) Debtors, Transfer Agents, and Other Persons Acting without
Notice of Survivorship Agreement. If any person or entity owing
money to a decedent or having custody of any property or acting
as registrar or transfer agent of any evidence of interest,
indebtedness, property, or right which was owned by a decedent
prior to death has no actual knowledge of an agreement creating a
right of survivorship in such property in the decedent's
surviving spouse, that person or entity may pay or transfer such
property to the personal representative of the decedent's estate
or to the heirs, legatees, or devisees of the decedent's estate
if no administration is pending on the estate, and the person or
entity shall be discharged from all claims for amounts or
property so paid or transferred.
(e) Debtors, Transfer Agents, and Persons Acting without Notice
of Revocation of Survivorship Agreement. If any person or entity
owing money to a decedent or having custody of any property or
acting as registrar or transfer agent of any evidence of
interest, indebtedness, property, or right which was owned by a
decedent prior to death is presented with the original or a
certified copy of an agreement creating a right of survivorship
in such property in the decedent's surviving spouse, purportedly
signed by the decedent and the decedent's surviving spouse and if
such person or entity has no actual knowledge that the agreement
was revoked, that person or entity may pay or transfer such
property to the decedent's surviving spouse and shall be
discharged from all claims for amounts or property so paid or
transferred.
(f) Definitions. Under this section:
(1) a person or entity has "actual knowledge" of an agreement
creating a right of survivorship in community property or of the
revocation of such an agreement only if the person or entity has
received written notice or has received the original or a
certified copy of the agreement or revoking instrument;
(2) a person or entity has "notice" of an agreement creating a
right of survivorship in community property or the revocation of
such an agreement if the person or entity has actual knowledge of
the agreement or revocation or, with respect to real property, if
the agreement or revoking instrument is properly recorded in the
county in which the real property is located; and
(3) a "certified copy" is a copy of an official record or of a
document authorized by law to be recorded or filed and actually
recorded or filed in a public office, certified as correct in
accordance with the provisions of Rule 902 of the Texas Rules of
Civil Evidence.
(g) Other Cases. Except as expressly provided in this section,
the provisions of this section do not affect the rights of a
surviving spouse or person claiming from the surviving spouse in
disputes with persons claiming from a decedent or the successors
of any of them concerning a beneficial interest in property or
the proceeds therefrom, subject to a right of survivorship
pursuant to an agreement that satisfies the requirements of this
code.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 461. RIGHTS OF CREDITORS. The provisions of Part 1 of this
chapter govern the rights of creditors in multiple-party
accounts, as defined by Section 436 of Part 1. Except as
expressly provided above in this section, the community property
subject to the sole or joint management, control, and disposition
of a spouse during marriage continues to be subject to the
liabilities of that spouse upon death without regard to a right
of survivorship in the decedent's surviving spouse under an
agreement made in accordance with the provisions of this part.
The surviving spouse shall be liable to account to the deceased
spouse's personal representative for the property received by the
surviving spouse pursuant to a right of survivorship to the
extent necessary to discharge such liabilities. No proceeding to
assert such a liability shall be commenced unless the personal
representative has received a written demand by a creditor, and
no proceeding shall be commenced later than two years following
the death of the decedent. Property recovered by the personal
representative shall be administered as part of the decedent's
estate. This section does not affect the protection given to
persons and entities under Section 460 of this code unless,
before payment or transfer to the surviving spouse, the person or
entity received a written notice from the decedent's personal
representative stating the amount needed to satisfy the
decedent's liabilities.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.
Text of article effective until January 01, 2014
Sec. 462. COORDINATION WITH PART 1 OF CHAPTER XI. The provisions
of Part 1 of this chapter apply to multiple-party accounts held
by spouses with a right of survivorship to the extent that such
provisions are not inconsistent with the provisions of this part.
Added by Acts 1989, 71st Leg., ch. 655, Sec. 2, eff. Aug. 28,
1989.