Multiple-Party Accounts

P.O.D. Account

Parker v. JPMorgan Chase Bank, 95 S.W.3d 428 (Tex. App.—Houston [1st Dist.] 2002, no pet.).


Depositor opened accounts in payable on death form in favor of Beneficiary. However, Depositor did not sign the account contracts. After Depositor’s death, Bank paid the proceeds to the executor of Depositor’s estate. Beneficiary brought suit against Bank asserting that the Bank made the payments in error. The trial court granted summary judgment in favor of Bank.

The appellate court affirmed. The court held that Depositor did not create P.O.D. accounts because she did not sign written agreements creating the P.O.D. feature as required by Probate Code § 439(b).

The court also rejected Beneficiary’s argument that Bank had no standing to raise the lack of Depositor’s signature because of Probate Code § 448 which eliminates a financial institution’s protection from liability if it receives written notice from a party able to request present payment that withdrawals are not to be allowed. In this case, Beneficiary had no right to request withdrawals because the account was not a valid P.O.D. account.

Moral: The attorney should personally inspect all signature cards and account contracts to make certain they are signed and unambiguously create precisely the type of account the client desires.