BILL NUMBER: AB 1624	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 21, 2012
	AMENDED IN ASSEMBLY  MARCH 15, 2012

INTRODUCED BY   Assembly Member Gatto

                        FEBRUARY 9, 2012

   An act to amend Sections 5301, 5303, and 5401 of the Probate Code,
relating to multiple-party accounts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1624, as amended, Gatto. Multiple-party accounts.
   The California Multiple-Party Accounts Law regulates the ownership
interest of parties to a multiple-party account, and provides that
during the lifetime of the parties, a party's ownership interest is
based on the proportion of the party's net contribution to the sums
on deposit.
   This bill instead would base a party's ownership interest in the
account on the proportion of the party's net contributions to the
account.  The bill would also provide that when one party
makes a withdrawal from the account and uses the funds solely for the
benefit of another party, and the benefited party or its estate,
heir, or agent subsequently seeks to recover a proportion of the
amount withdrawn from the party that made the withdrawal, a court
may, at its discretion and in the interest of justice, reduce the
benefited party's ownership interest in the amount withdrawn.
  The bill would specify that if a party makes an excess
withdrawal, as defined, from an account, the other parties to the
account shall have an ownership interest in the excess withdrawal in
proportion to the net contributions of each to the amount on deposit
in the account immediately following the excess withdrawal, unless
there is clear and convincing evidence of a contrary agreement
between the parties. The bill would define excess withdrawal as the
amount of a party's withdrawal that exceeds that party's net
contribution on deposit in the account immediately preceding the
withdrawal. The bill would also provide that only a living party, or
a conservator, guardian, or agent acting on behalf of a living party,
shall be permitted to make a claim to recover the living party's
ownership interest in an excess withdrawal pursuant   to the
provisions above. However, the bill would authorize a court, at its
discretion, and in the interest of justice, to reduce any recovery
under the provisions above to reflect funds withdrawn and applied
  solely for the benefit of the claiming party. 
   Existing law provides that rights of survivorship are eliminated
for funds withdrawn by a party with a right of withdrawal during the
lifetime of the party.
   This bill instead would eliminate those rights of survivorship
with respect to funds withdrawn to the extent of the withdrawing
party's net contribution to the account. The bill would also make
conforming changes.
   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)  (1)    An account
belongs, during the lifetime of all parties, to the parties in
proportion to the net contributions by each, unless there is clear
and convincing evidence of a different intent. 
   (2) If one party makes a withdrawal from the account and uses the
funds withdrawn solely for the benefit of another party, and the
benefited party or its estate, heir, or agent subsequently seeks to
recover a proportion of the amount withdrawn from the party that made
the withdrawal, a court may, at its discretion and in the interest
of justice, reduce the benefited party's ownership interest in the
amount withdrawn.  
   (b) If a party makes an excess withdrawal from an account, the
other parties to the account shall have an ownership interest in the
excess withdrawal in proportion to the net contributions of each to
the amount on deposit in the account immediately following the excess
withdrawal, unless there is clear and convincing evidence of a
contrary agreement between the parties.  
   (c) Only a living party, or a conservator, guardian, or agent
acting on behalf of a living party, shall be permitted to make a
claim to recover the living party's ownership interest in an excess
withdrawal, pursuant to subdivision (b). A court may, at its
discretion, and in the interest of justice, reduce any recovery under
this section to reflect funds withdrawn and applied solely for the
benefit of the claiming party.  
   (b) 
    (d)  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) 
    (e)  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. 
   (f) For purposes of this section, "excess withdrawal" means the
amount of a party's withdrawal that exceeds that party's net
contribution on deposit in the account immediately preceding the
withdrawal. 
  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 also eliminates rights of survivorship with respect to the
funds withdrawn to the extent of the withdrawing 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.