Texas Estates Code 113.251 – Pledge of Account
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(a) A party to a multiple-party account may pledge the account or otherwise create a security interest in the account without the joinder of, as applicable, a P.O.D. payee, a beneficiary, a convenience signer, or any other party to a joint account, regardless of whether a right of survivorship exists.
(b) A convenience signer may not pledge or otherwise create a security interest in an account.
Terms Used In Texas Estates Code 113.251
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Qualified delivery method: means delivery by:
(1) hand delivery by courier, with courier's proof of delivery receipt;
(2) certified or registered mail, return receipt requested, with return receipt; or
(3) a private delivery service designated as a designated delivery service by the United States Secretary of the Treasury under Section 7502(f)(2), Internal Revenue Code of 1986, with proof of delivery receipt. See Texas Estates Code 22.0295 - Right of survivorship: The ownership rights that result in the acquisition of title to property by reason of having survived other co-owners.
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) Not later than the 30th day after the date a security interest on a multiple-party account is perfected, a secured creditor that is a financial institution with accounts insured by the Federal Deposit Insurance Corporation shall provide written notice of the pledge of the account to any other party to the account who did not create the security interest. The notice must be sent by a qualified delivery method to each other party at the last address the party provided to the depository bank.
(d) The financial institution is not required to provide the notice described by Subsection (c) to a P.O.D. payee, beneficiary, or convenience signer.