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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1985 

                        CHAPTER 292-H.F.No. 140 
           An act relating to financial institutions; providing 
          for deposits by minors and deposits in multi-party 
          accounts; regulating multi-party accounts; providing 
          for deposits of public funds in thrift institutions; 
          amending Minnesota Statutes 1984, sections 48.30; 
          51A.28; 52.13; 118.005; 528.02, subdivisions 3, 6, 8, 
          and 11; 528.04; 528.05; 528.06; 528.07; 528.08; 
          528.09; 528.10; 528.11; 528.13; and 528.15; proposing 
          coding for new law in Minnesota Statutes, chapters 48, 
          51A, and 52; repealing Minnesota Statutes 1984, 
          sections 51A.26; 528.02, subdivision 15; and 528.12.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 48.30, is 
amended to read: 
    48.30 [DEPOSITS BY IN NAME OF MINOR OR IN TRUST; JOINT 
DEPOSITS.] 
    Any deposit made in any bank or savings bank, by or in the 
name of a minor, shall be held for the exclusive right and 
benefit of the minor, free from the control or lien of all other 
persons, except creditors, and, together with the dividends or 
interest thereon, shall be paid to him the minor, and his the 
minor's receipt, check, or acquittance in any form shall be a 
sufficient release and discharge to the bank of the depository 
for the deposit, or any part thereof, until a conservator or 
guardian appointed in this state for the minor shall have 
delivered to the bank a certificate of his appointment to the 
depository.  When any deposit shall be made by any person in 
trust for another, and no other written notice of the existence 
and terms of any legal and valid trust shall have been given to 
the bank, in case of the death of the trustee, the same, or any 
part thereof, and the dividends or interest thereon, may be paid 
to the person for whom the deposit was made.  When any deposit 
shall be made by or in the names of two or more persons upon 
joint and several account, the same, or any part thereof, and 
the dividends or interest thereon, may be paid to either of 
these persons or to a survivor of them, or to a personal 
representative of the survivor.  
    Sec. 2.  [48.301] [MULTI-PARTY ACCOUNTS.] 
    When any deposit is made in the names of two or more 
persons jointly, or by any person payable on death (P.O.D.) to 
another, or by any person in trust for another, the rights of 
the parties and the financial institution are determined by 
Minnesota Statutes, chapter 528.  
    Sec. 3.  [51A.261] [DEPOSITS IN NAME OF MINOR.] 
    A deposit made in the name of a minor, or shares issued in 
a minor's name, shall be held for the exclusive right and 
benefit of the minor, free from the control or lien of all other 
persons except creditors, and together with the dividends or 
interest thereon shall be paid the minor, and the minor's 
receipt, check, or acquittance in any form shall be a sufficient 
release and discharge of the depository for the deposits or 
shares, or any part thereof, until a conservator or guardian 
appointed for the minor has delivered a certificate of 
appointment to the depository.  
    Sec. 4.  [51A.262] [MULTI-PARTY ACCOUNTS.] 
    When any deposit is made in the names of two or more 
persons jointly, or by any person payable on death (P.O.D.) to 
another, or by any person in trust for another, the rights of 
the parties and the financial institution are determined by 
Minnesota Statutes, chapter 528. 
    Sec. 5.  Minnesota Statutes 1984, section 51A.28, is 
amended to read: 
    51A.28 [ACCOUNTS OF ADMINISTRATORS, EXECUTORS, GUARDIANS, 
CUSTODIANS, TRUSTEES, AND OTHER FIDUCIARIES.] 
    Any association or federal association may accept savings 
accounts in the name of any administrator, executor, custodian, 
conservator, guardian, trustee, or other fiduciary for a named 
beneficiary or beneficiaries.  Any such fiduciary shall have 
power to vote as a member as if the membership were held 
absolutely, to open and to make additions to, and to withdraw 
any such account in whole or in part.  The withdrawal value of 
any such account, and earnings thereon, or other rights relating 
thereto may be paid or delivered, in whole or in part, to such 
fiduciary without regard to any notice to the contrary as long 
as such fiduciary is living.  The payment or delivery to any 
such fiduciary or a receipt or acquittance signed by any such 
fiduciary to whom any such payment or any such delivery of 
rights is made shall be a valid and sufficient release and 
discharge of an association for the payment or delivery so 
made.  Whenever a person holding an account in a fiduciary 
capacity dies and no written notice of the revocation or 
termination of the fiduciary relationship shall have been given 
to an association and the association has no written notice of 
any other disposition of the beneficial estate, the withdrawal 
value of such account, and earnings thereon, or other rights 
relating thereto may, at the option of an association, be paid 
or delivered, in whole or in part, to the beneficiary or 
beneficiaries.  Whenever an account shall be opened by any 
person, describing himself in opening such account as trustee 
for another and no other or further notice of the existence and 
terms of a legal and valid trust than such description shall 
have been given in writing to such association, in the event of 
the death of the person so described as trustee, the withdrawal 
value of such account or any part thereof, together with the 
earnings thereon, may be paid to the person for whom the account 
was thus described to have been opened.  The payment or delivery 
to any such beneficiary, beneficiaries, or designated person, or 
a receipt or acquittance signed by any such beneficiary, 
beneficiaries, or designated person for any such payment or 
delivery shall be a valid and sufficient release and discharge 
of an association for the payment or delivery so made.  This 
section does not apply to a P.O.D. account under chapter 528. 
    Sec. 6.  Minnesota Statutes 1984, section 52.13, is amended 
to read: 
    52.13 [SHARES AND DEPOSITS IN NAME OF MINOR.] 
    Any deposit made by or in the name of a minor, or shares 
issued in his a minor's name, shall be held for the exclusive 
right and benefit of the minor, free from the control or lien of 
all other persons except creditors, and together with the 
dividends or interest thereon shall be paid him to the minor; 
and his the minor's receipt, check, or acquittance in any form 
shall be a sufficient release and discharge to the credit union 
of the depository for the deposits or shares, or any part 
thereof, until a conservator or guardian appointed in this state 
for the minor shall have delivered to the credit union a 
certificate of his appointment to the depository.  When any 
deposits or shares shall be held by any person in trust for 
another, and no other written notice of the existence and terms 
of any legal and valid trust shall have been given to the credit 
union, in case of the death of the trustee, the same or any part 
thereof and the dividends or interest thereon may be paid to the 
beneficiaries thereof.  When any deposit shall be made or shares 
held by or in the names of two or more persons upon joint and 
several account, the same or any part thereof and the dividends 
or interest thereon may be paid to either of these persons or to 
a survivor of them or to a personal representative of the 
survivor; and the receipt or acquittance of such person or 
persons in any form shall be sufficient release and discharge to 
the credit union for the payment so made.  
    Sec. 7.  [52.131] [MULTI-PARTY ACCOUNTS.] 
    When any deposit is made in the names of two or more 
persons jointly, or by any person payable on death (P.O.D.) to 
another, or by any person in trust for another, the rights of 
the parties and the financial institution are determined by 
Minnesota Statutes, chapter 528.  
    Sec. 8.  Minnesota Statutes 1984, section 118.005, is 
amended to read: 
    118.005 [DESIGNATION, PROTECTION OF DEPOSIT.] 
    Subdivision 1.  The governing body of every municipality, 
as defined in section 118.01, which has the power to receive and 
disburse funds, shall designate as a depository of the funds 
such national, insured state banks or thrift institutions as 
defined in section 51A.02, subdivision 23, as it may deem proper.
    For purposes of this chapter, a credit union is a thrift 
institution. 
    Subd. 2.  In the event the bank or insured thrift 
institution selected as a depository is a member of the Federal 
Deposit Insurance Corporation or the Federal Savings and Loan 
Insurance Corporation, or is insured by the National Credit 
Union Administration, the custodian of the funds may deposit an 
amount not to exceed the maximum amount of insurance on the 
deposits.  In the event it is desired to deposit a greater 
amount in any bank or thrift institution prior to the deposit 
the governing body or officer shall require the bank or thrift 
institution to furnish a bond, executed by a corporate surety 
company authorized to do business in the state in a sum at least 
equal to the estimated sum to be deposited in excess of the 
maximum amount of insurance.  In lieu of the bond, the 
depository shall assign to the custodian of the funds collateral 
security in accordance with section 118.01. 
    Sec. 9.  Minnesota Statutes 1984, section 528.02, 
subdivision 6, is amended to read: 
    Subd. 6.  A "multiple-party account" is any of the 
following types of account:  (a) means a joint account, (b) or a 
P.O.D. account, or (c) a trust account.  It does not include 
accounts established for deposit of funds of a partnership, 
joint venture, or other association for business purposes, or 
accounts controlled by one or more persons as the duly 
authorized agent or trustee for a person, corporation, 
unincorporated association, charitable or civic organization or 
a regular fiduciary or trust account where the relationship is 
established other than by deposit agreement.  
    Sec. 10.  Minnesota Statutes 1984, section 528.02, 
subdivision 8, is amended to read: 
    Subd. 8.  "Party" means a person who, by the terms of the 
account, has a present right, subject to request, to payment 
from a multiple-party account.  A P.O.D. payee or beneficiary of 
a trust account is a party only after the account becomes 
payable to him by reason of his the payee surviving the original 
payee or trustee party.  Unless the context otherwise requires, 
it includes a guardian, conservator, personal representative, or 
assignee, including an attaching creditor, of a party.  It also 
includes a person identified as a trustee of an account for 
another whether or not a beneficiary is named, but it does not 
include any named beneficiary unless he the beneficiary has a 
present right of withdrawal.  
    Sec. 11.  Minnesota Statutes 1984, section 528.02, 
subdivision 11, is amended to read: 
    Subd. 11.  "P.O.D. account" means an account payable on 
request to one person during lifetime or more parties and on his 
the death of the parties to one or more P.O.D. payees, or to one 
or more persons during their lifetimes and on the death of all 
of them to one or more P.O.D. payees.  The term also means an 
account in the name of one or more parties as trustee for one or 
more beneficiaries where the relationship is established by the 
form of the account and the deposit agreement with the financial 
institution and there is no subject of the trust other than the 
sums on deposit in the account.  A P.O.D. account does not 
include a trust account established under a testamentary trust 
or inter vivos trust, or a fiduciary account arising from a 
fiduciary relationship such as attorney-client.  
    Sec. 12.  Minnesota Statutes 1984, section 528.04, is 
amended to read: 
    528.04 [OWNERSHIP DURING LIFETIME.] 
    (a) A joint account belongs, during the lifetime of all 
parties, to the parties in proportion to the net contributions 
by each to the sums on deposit, unless there is clear and 
convincing evidence of a different intent.  
    (b) A P.O.D. account belongs to the original purchasing or 
depositing payee party during his the party's lifetime and not 
to the P.O.D. payee or payees; if two or more parties are named 
as original payees parties, during their lifetimes, rights as 
between them are governed by clause (a).  
    (c) Unless a contrary intent is manifested by the terms of 
the account or the deposit agreement or there is other clear and 
convincing evidence of an irrevocable trust, a trust account 
belongs beneficially to the trustee during his lifetime, and if 
two or more parties are named as trustee on the account, during 
their lifetimes beneficial rights as between them are governed 
by clause (a).  If there is an irrevocable trust, the account 
belongs beneficially to the beneficiary.  
    Sec. 13.  Minnesota Statutes 1984, section 528.05, is 
amended to read: 
    528.05 [RIGHT OF SURVIVORSHIP.] 
    (a) Sums remaining on deposit at the death of a party to a 
joint account belong to the surviving party or parties as 
against the estate of the decedent unless there is clear and 
convincing evidence of a different intention, or there is a 
different disposition made by a valid will as herein provided, 
specifically referring to such account.  If there are two or 
more surviving parties, their respective ownerships during 
lifetime shall be in proportion to their previous ownership 
interests under section 528.04 augmented by an equal share for 
each survivor of any interest the decedent may have owned in the 
account immediately before his death; and the right of 
survivorship continues between the surviving parties.  The 
interest so determined is also the interest disposable by will. 
    (b) If the account is a P.O.D. account, on the death of the 
original payee party or of the survivor of two or more original 
payees parties, any sums remaining on deposit belong to the 
P.O.D. payee or payees if surviving, or to the survivor of them 
if one or more die before the surviving original payee party; if 
two or more P.O.D. payees survive, there is no right of 
survivorship in event of death of a P.O.D. payee thereafter 
unless the terms of the account or deposit agreement expressly 
provide for survivorship between them. 
    (c) If the account is a trust account, on death of the 
trustee or the survivor of two or more trustees, any sums 
remaining on deposit belong to the person or persons named as 
beneficiaries, if surviving, or to the survivor of them if one 
or more die before the trustee, unless there is clear and 
convincing evidence of a contrary intent; if two or more 
beneficiaries survive, there is no right of survivorship in 
event of death of any beneficiary thereafter unless the terms of 
the account or deposit agreement expressly provide for 
survivorship between them.  
    (d) In other cases, the death of any party to a 
multiple-party account has no effect on beneficial ownership of 
the account other than to transfer the rights of the decedent as 
part of his the estate.  
    (e) (d) A right of survivorship arising from the express 
terms of the account, or under this section, a beneficiary 
designation in a trust account, or under a P.O.D. payee 
designation, may be changed by specific reference by will, but 
the terms of such will shall not be binding upon any financial 
institution unless it has been given a notice in writing of a 
claim of a beneficiary thereunder, in which event the deposit 
shall remain undisbursed until an order has been made by the 
probate court adjudicating the decedent's interest disposable by 
will which is limited to decedent's contribution and increments 
thereto as stated above in clause (a).  
    Sec. 14.  Minnesota Statutes 1984, section 528.06, is 
amended to read: 
    528.06 [EFFECT OF A WRITTEN NOTICE TO FINANCIAL 
INSTITUTION.] 
    The provisions of section 528.05 as to rights of 
survivorship are determined by the form of the account at the 
death of a party.  This form may be altered by written order 
given by a party to the financial institution to change the form 
of the account or to stop or vary payment under the terms of the 
account.  The order or request must be signed by a party, and 
received by the financial institution during the party's 
lifetime, and not countermanded by other written order of the 
same party during his lifetime.  
    Sec. 15.  Minnesota Statutes 1984, section 528.07, is 
amended to read: 
    528.07 [ACCOUNTS AND TRANSFERS NONTESTAMENTARY.] 
    Any transfers resulting from the application of section 
528.05 are effective by reason of the account contracts involved 
and this statute, and are not to be considered as testamentary 
subject to probate except as to the transfers expressly changed 
by will, as provided for by section 528.05, clause (e) (d).  
    Sec. 16.  Minnesota Statutes 1984, section 528.08, is 
amended to read:  
    528.08 [RIGHTS OF CREDITORS.] 
    No multiple-party account will be effective against an 
estate of a deceased party to transfer to a survivor sums needed 
to pay debts, taxes, and expenses of administration, including 
statutory allowances to the surviving spouse, minor children and 
dependent children, if other assets of the estate are 
insufficient, to the extent the deceased party is the source of 
the funds or beneficial owner.  A surviving party, or P.O.D. 
payee, or beneficiary who receives payment from a multiple-party 
account after the death of a deceased party shall be liable to 
account to his the deceased party's personal representative for 
amounts the decedent owned beneficially immediately before his 
death to the extent necessary to discharge the claim any such 
claims and charges mentioned above remaining unpaid after the 
application of the assets of the decedent's estate.  No 
proceeding to assert this liability shall be commenced unless 
the personal representative has received a written demand by a 
surviving spouse, a creditor or one acting for a minor dependent 
child of the decedent, and no proceeding shall be commenced 
later than two years following the death of the decedent.  Sums 
recovered by the personal representative shall be administered 
as part of the decedent's estate.  This section shall not affect 
the right of a financial institution to make payment on 
multiple-party accounts according to the terms thereof, or make 
it liable to the estate of a deceased party unless, before 
payment, the institution has been served with process in a 
proceeding by the personal representative.  
    Sec. 17.  Minnesota Statutes 1984, section 528.09, is 
amended to read:  
    528.09 [FINANCIAL INSTITUTION PROTECTION; PAYMENT ON 
SIGNATURE OF ONE PARTY.] 
    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, to any one or more of the parties.  A financial 
institution shall not be required to inquire as to the source of 
funds received for deposit to a multiple-party account, or to 
inquire as to the proposed application of any sum withdrawn from 
an account, for purposes of establishing net contributions.  
     A minor may be a party to a joint account. 
    Sec. 18.  Minnesota Statutes 1984, section 528.10, is 
amended to read:  
    528.10 [FINANCIAL INSTITUTION PROTECTION; PAYMENT AFTER 
DEATH OR DISABILITY; JOINT ACCOUNT.] 
    Any sums in a joint account may be paid, on request, to any 
party without regard to whether any other party is incapacitated 
or deceased at the time the payment is demanded; but payment may 
not be made to the personal representative or heirs of a 
deceased party unless proofs of death are presented to the 
financial institution showing that the decedent was the last 
surviving party or unless there is no right of survivorship 
under section 528.05, or unless a will provides other 
distribution; in which case the procedure set forth in section 
528.05, clause (e) (d), shall be followed.  A minor may be a 
party to a joint account. 
    Sec. 19.  Minnesota Statutes 1984, section 528.11, is 
amended to read:  
    528.11 [FINANCIAL INSTITUTION PROTECTION; PAYMENT OF P.O.D. 
ACCOUNT.] 
    Any P.O.D. account may be paid, on request, to any original 
party to the account.  Payment of the interest of a P.O.D. payee 
may be made, on request, to the P.O.D. payee or to the personal 
representative or heirs of a deceased P.O.D. payee upon 
presentation to the financial institution of proof of death 
showing that the P.O.D. payee survived all persons named as 
original payees parties.  Payment may be made to the personal 
representative or heirs of a deceased original payee party if 
proof of death is presented to the financial institution showing 
that his decedent the original party was the survivor of all 
other persons named on the account either as an original payee 
party or as P.O.D. payee, unless otherwise provided by will; in 
which case disbursement shall be made as provided in section 
528.05, clause (e). 
    Sec. 20.  Minnesota Statutes 1984, section 528.13, is 
amended to read:  
    528.13 [FINANCIAL INSTITUTION PROTECTION; DISCHARGE.] 
    Payment made pursuant to sections 528.09 to 528.12 528.11 
discharges the financial institution from all claims for amounts 
so paid whether or not the payment is consistent with the 
beneficial ownership of the account as between parties, P.O.D. 
payees, or beneficiaries by will or otherwise, or their 
successors.  The protection here given does not extend to 
payments made after a financial institution has received written 
notice from any party able person entitled to request present 
payment to the effect that withdrawals in accordance with the 
terms of the account should not be permitted.  Unless the notice 
is withdrawn by the person giving it, the successor of any 
deceased party and all other parties entitled to payment must 
concur in any demand for withdrawal if the financial institution 
is to be protected under this section.  No other notice or any 
other information shown to have been available to a financial 
institution shall affect its right to the protection provided 
here.  The protection here provided shall have no bearing on not 
affect the rights of parties in disputes between themselves or 
their successors concerning the beneficial ownership of funds 
in, or withdrawn from, multiple-party accounts.  
    Sec. 21.  Minnesota Statutes 1984, section 528.15, is 
amended to read:  
    528.15 [PURPOSE; FORMS.] 
    Subdivision 1.  [SURVIVORSHIP ACCOUNT.] The declared 
purpose of sections 528.01 to 528.15 is to render certainty to 
the nature of accounts of deposit in relation to the rights of 
survivorship, and to distinguish accounts of survivorship from 
accounts established for the purpose of having an agent with 
power to draw on the account for the convenience of the owner 
with no survivorship rights in the agent.  To further accomplish 
this purpose, the forms contained in this section are 
recommended for use to be kept on file in the depository 
financial institution.  Deposits made using a form of account 
containing the following language signed by the depositor shall 
be conclusive evidence of the intent of decedent to establish a 
survivorship account the depositor, in the absence of fraud or 
misrepresentation, subject, nevertheless, to other disposition 
made by will specifically referring to the account as otherwise 
provided in section 528.05, clause (e), the form to read as 
follows (d), to establish a survivorship account: 
    "The undersigned signators of this account hereby 
acknowledge that the depositor or depositors, both as to the 
original deposit and any subsequent deposits, intend that such 
funds as may constitute the account balance upon the death of 
any party to this account, shall be the property of the 
surviving party or parties who shall take as a surviving joint 
tenant.  
    If two or more persons shall be the survivors, their 
interests shall continue to be held as joint tenants with right 
of survivorship.  
                          ..........................
                          ..........................
    (a) "I (we) direct that the balance remaining in this 
account shall be PAYABLE ON DEATH (of the survivor of us) to: 
     ........................     ........................
     ........................     ........................
                Signed:  .................................
                         .................................
    Dated:  .............." 
    (b) "I (we) intend and agree that the balance in this 
account, upon the death of any party to this account, shall 
belong to the surviving party, or if there are two or more 
surviving parties, they shall take as JOINT TENANTS. 
                Signed:  .................................
                         .................................
    Dated:  .............." 
    Subd. 2.  [ACCOUNT SUBJECT TO POWER OF ATTORNEY WITH NO 
SURVIVORSHIP RIGHTS.] Where no rights of survivorship are 
intended and the account is one to be established for 
convenience only between a depositor and his an agent, the 
following language is recommended for use, and when so used, any 
the account deposited in the form shall be construed as a matter 
of law to be an account subject to a power of attorney with no 
survivorship rights, the form to read as follows: 
    "I .................... (grantor of power), hereby 
constitute and appoint .................... (grantee of power), 
as my attorney in fact, to deposit or withdraw funds held in 
.................... (name of bank), in account No. ............ 
. 
                  Signed:  ............................... 
    Dated: 
    Acknowledgment:  In the presence of ....................... 
(an authorized person), ....................... (name of 
financial institution)."  
    The power so granted is subject to the provisions of Laws 
1984, chapter 603 sections 3 to 27. 
    Sec. 22.  [REPEALER.] 
    Minnesota Statutes 1984, sections 51A.26; 528.02, 
subdivisions 3 and 15; and 528.12 are repealed. 
    Approved June 4, 1985