BILL NUMBER: AB 69 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Harman
JANUARY 3, 2005
An act to amend Sections 5301, 5303, and 5401 of the Probate Code,
relating to multiple-party accounts.
LEGISLATIVE COUNSEL'S DIGEST
AB 69, as introduced, Harman. Multiple-party accounts.
The California Multiple-Party Accounts Law regulates the ownership
interests of funds deposited in an account, as defined. Existing law
provides that an account belongs to the parties, during their
lifetimes, 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. Existing law provides that the withdrawl of
funds by a party from a multiple-party account limits the rights of
survivorship upon the death of the party, as specified.
This bill would provide that the proportional ownership interests
in an account, as described above, are not limited to the sums on
deposit. The bill would make clarifying changes with regard to the
right of survivorship with respect to funds in a multiple-party
account and would make conforming changes with regard to the
protection of financial institutions in connection with
multiple-party accounts.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 5301 of the Probate Code is amended to read:
5301. (a) An 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) In the case of a
P.O.D. account, the P.O.D. payee has no rights to the sums on deposit
during the lifetime of any party, unless there is clear and
convincing evidence of a different intent.
(c) In the case of a Totten trust account, the beneficiary has no
rights to the sums on deposit during the lifetime of any party,
unless there is clear and convincing evidence of a different intent.
If there is an irrevocable trust, the account belongs beneficially to
the beneficiary.
SEC. 2. Section 5303 of the Probate Code is amended to read:
5303. (a) The provisions of Section 5302 as to rights of
survivorship are determined by the form of the account at the death
of a party.(b) Once established, the terms of a multiple-party
account can be changed only by any of the following methods:
(1) Closing the account and reopening it under different terms.
(2) Presenting to the financial institution a modification
agreement that is signed by all parties with a present right of
withdrawal. If the financial institution has a form for this purpose,
it may require use of the form.
(3) If the provisions of the terms of the account or deposit
agreement provide a method of modification of the terms of the
account, complying with those provisions.
(4) As provided in subdivision (c) of Section 5405.
(c) During the lifetime of a party, the terms of the account may
be changed as provided in subdivision (b) to eliminate or to add
rights of survivorship. Withdrawal of funds from the account by a
party with a present right of withdrawal during the lifetime
of a party also eliminates rights of survivorship
upon the death of that party with respect to the funds
withdrawn to the extent of the party's net contribution to the
account .
SEC. 3. Section 5401 of the Probate Code is amended to read:
5401. (a) Financial institutions may enter into multiple-party
accounts to the same extent that they may enter into single-party
accounts. Any multiple-party account may be paid, on request and
according to its terms, to any one or more of the parties or agents.
(b) The terms of the account or deposit agreement may require the
signatures of more than one of the parties to a multiple-party
account during their lifetimes or of more than one of the survivors
after the death of any one of them on any check, check endorsement,
receipt, notice of withdrawal, request for withdrawal, or withdrawal
order. In such case, the financial institution shall pay the sums on
deposit only in accordance with such terms, but those terms do not
limit the right of the sole survivor or of all of the survivors to
receive the sums on deposit.
(c) A financial institution is not required to do any of the
following pursuant to Section 5301, 5303, or any other provision
of this part :
(1) Inquire as to the source of funds received for deposit to a
multiple-party account, or inquire as to the proposed application of
any sum withdrawn from an account, for purposes of establishing net
contributions.
(2) Determine any party's net contribution.
(3) Limit withdrawals or any other use of an account based on the
net contribution of any party, whether or not the financial
institution has actual knowledge of each party's contribution.
(d) All funds in an account, unless otherwise agreed in writing by
the financial institution and the parties to the account, remain
subject to liens, security interests, rights of setoff, and charges,
notwithstanding the determination or allocation of net contributions
with respect to the parties.