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