On March 7, Governor Mills signed L.D. 242 “An Act To Amend the Laws Governing Multiple-party Accounts with Financial Institutions.” The bill, which was supported by the League, removes barriers for financial institutions when establishing multiple-party accounts.
Last year, the Maine Legislature enacted legislation that changed how financial institutions open multiple-party accounts through the passage of L.D. 968. The intent of the law was to help protect seniors from financial exploitation, but it created uncertainty for credit unions when opening or changing multiple-party accounts. Financial institutions were required to ask if the individual opening the account intended to leave the money in the account to the other party on the account, but there was no consensus on what to do if parties answered “No.”
Senator Heather Sanborn (D-Cumberland) sponsored L.D. 242 as an emergency measure to suspend these requirements until the new Probate Code takes effect on July 1, 2019
The updated Probate Code will provide guidance to address the ownership of an account during the lives of the holders and direction on what happens to the balance upon the death of the account holders.