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Armstrong v. Roberts, 211 S.W.3d 867 (Tex. App.—El Paso 2006, pet. filed).

Miscellaneous

Power of Attorney

Father named Daughter as his agent under a non-statutory power of attorney.  Using this authority, Daughter opened three pay on death certificates of deposit naming various individuals, including herself, as the pay on death payees.  The court concluded that Daughter had the authority to open the CDs because the power of attorney granted her broad and unlimited powers such as the power “to do any and every act and exercise any and every power that I might or could do or exercise.”

However, the court held that Daughter did not have the authority to designate the pay on death payees.  The court relied on Probate Code § 439(b) which states that a pay on death account requires a written agreement “signed by the original payee.”  Father did not sign the agreement and thus Daughter’s designations were ineffective.

Moral:  An agent lacks the authority to name pay on death payees.

Miscellaneous

Multiple-Party Accounts

Designation of Pay on Death Payees

The appellate court held that an agent under a power of attorney lacks the authority to designate a pay on death payee.  The court relied on Probate Code § 439(b) which states that a pay on death account requires a written agreement “signed by the original payee.”

Moral:  An agent lacks the authority to name pay on death payees.

Miscellaneous

Multiple-Party Accounts

Language Sufficient to Create Survivorship Rights

The front of the signature card for a joint account read, “Ownership: Joint w suv.”  The court indicated that standing alone, this language was insufficient to create survivorship rights under Probate Code 439(a).  However, the front of the card made express reference to the terms on the back of the card.  The language on the back of the card was substantially similar to the “safe harbor” language of the Code and thus the account had the survivorship feature.

Moral:  To avoid problems, financial institutions should follow the statutory safe harbor language when creating multiple-party accounts and give serious consideration to using the statutory form in Probate Code 439A.

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