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My father wants to add his children as PODs on one of his investment accounts. He is being told that his wife - stepmother- must sign off and ok this change. It is only in his name- but they are saying that since Texas is a community property state this is the way it is done.
Optional Information: State/Country relating to question: Texas
Hello,Thank you for using JA. This would be correct. Because TX is a community property state, any assets that are acquired during the marriage are considered marital property and the spouse acquires a marital interest in them. In order to be able to change any beneficiary or add someone as one to an existing account, his spouse must "disclaim" her interest in that asset by signing as well. If she doesn't sign, then she would still be able to make a claim to that asset after father passes because she never specifically disclaimed her interest..
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Thanks.
Barrister
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Experience: 13 yrs estate law, real estate. Wills/Trusts/Probate
So if the monies were brought into the marriage is it then considered separate property?
So, if I through in the POA - would she still have to disclaim her interest? Or could the POA move the money from the investment?
Yes, the assets are separate when they were brought in, but over time they would have appreciated and money father earned, which would have been marital property, would likely have been added to the account, thereby giving his spouse a marital interest in the accounts..A POA would have the power to move or take control over any assets that father had in his name while he was living and with his consent. But if he is alive, he could just move the account himself to a new brokerage company and just tell them that he wanted to add the children as POD beneficiaries. However, I believe that they would ask if he is married and then require the same sign off by wife to disclaim her interest to the accounts. Even if they didn't, if she doesn't disclaim her interest, she could then sue the children for her marital share later after father passed and a court would order the children to disgorge some portion of the proceeds depending on what the court found her percentage to be..Long story short, she is going to have to disclaim her interest in order for children to take all the proceeds free and clear when dad passes.
Thank you