By: Murr (Senate Sponsor - Nichols) H.B. No. 1954
         (In the Senate - Received from the House May 1, 2017;
  May 4, 2017, read first time and referred to Committee on Business &
  Commerce; May 19, 2017, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 8, Nays 0;
  May 19, 2017, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 1954 By:  Nichols
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to certain accounts established at financial
  institutions, including disclosures related to those accounts.
         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:
  ________________________________________________________________
  ________________________________________________________________
         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
         [___   (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 113.053, Estates Code, is amended to
  read as follows:
         Sec. 113.053.  REQUIRED DISCLOSURE; USE OF FORM.
  (a)  Except as provided by Subsection (d), a [A] financial
  institution shall disclose the information provided in this
  subchapter to a customer before [at the time] 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 [places the customer's initials to the right of each
  paragraph] of the form.
         (b)  If a financial institution varies the format of the form
  provided by Section 113.052, the financial institution shall
  disclose [may make disclosures in the account agreement or in any
  other form that discloses] the information provided by this
  subchapter[.  Disclosures under this subsection must:
               [(1)  be given] 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[;
               [(2)     be provided before account selection or
  modification;
               [(3)  be printed in 14-point boldfaced type; and
               [(4)     if the discussions that precede the account
  opening or modification are conducted primarily in a language other
  than English, be in that language].
         (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.
         SECTION 5.  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 to multiple-party accounts[,] 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 6.  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)  One or more
  convenience signers may be designated on [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 party or parties." A convenience signer is
  not an owner of the account but, on behalf of the party or parties to
  the account, may make deposits to and be paid or delivered sums on
  deposit from the account during the lifetime of the party or
  parties. A convenience signer may be designated as a P.O.D. payee
  of the account.
         (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 7.  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 8.  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 9.  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 10.  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 11.  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 12.  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 13.  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 14.  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 15.  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 16.  Sections 113.001(2), 113.104, 113.105,
  113.153, 113.154, 113.205, 113.206, and 113.208, Estates Code, are
  repealed.
         SECTION 17.  (a) In this section, "convenience account" and
  "trust account" have the meanings assigned by Section 113.004,
  Estates Code, as that section existed on January 1, 2017.
         (b)  Except as provided by Subsection (e) of this section,
  the changes in law made by this Act, including the repeal by this
  Act of certain provisions of Chapter 113, Estates Code, apply only
  to:
               (1)  a financial institution account opened on or after
  the effective date of this Act; and
               (2)  a convenience account or trust account opened
  before the effective date of this Act with respect to which a
  financial institution has notified the party or parties to the
  account in writing that the financial institution has converted the
  account to a type of account, other than a convenience account or
  trust account.
         (c)  A convenience account or trust account opened before the
  effective date of this Act with respect to which a financial
  institution has not notified the party or parties to the account in
  writing that the financial institution has converted the account to
  a type of account, other than a convenience account or trust
  account, is governed by the law in effect on the date the account
  was opened or last modified, and the former law is continued in
  effect until the earliest of the date on which:
               (1)  the financial institution notifies the party or
  parties to the account in writing that it has converted the account
  to a type of account, other than a convenience account or a trust
  account;
               (2)  the convenience account or trust account is
  closed; or
               (3)  the last surviving party to a convenience account
  or trust account dies.
         (d)  The repeal by this Act of provisions of Chapter 113,
  Estates Code, relating to trust accounts 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.
         (e)  Section 113.053, Estates Code, as amended by this Act,
  applies 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 that
  purpose.
         SECTION 18.  This Act takes effect September 1, 2017.
 
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