It will be easier to transfer a bank account to designated heirs after the owner dies, set up trust funds for heirs, and simpler and more predictable to set up bank accounts with multiple owners, if legislation approved in committee Friday becomes law.
The bill [Bill 31-0226] called the V.I. Uniform Multiple Person Accounts Act, sponsored by Sens. Janette Millin Young and Myron Jackson, would re-enact a part of the Uniform Probate Code in the territory.
The bill aims "to make it easier for Virgin Islanders to transfer their property to the person they wish to," Young said while introducing the bill to the Committee on Economic Development, Agriculture and Planning Friday on St. Thomas.
"It will make the process less difficult and costly," and reduce confusion, she said.
Duane Howell, deputy commissioner of the Department of Human Services, testified in support, saying it would ease the transfer of accounts and give clear definitions of the owners of the account and how proceeds are to be divided through Payment On Death or POD designations.
"We believe this measure will provide some protection to curtail the exploitation of our more senior residents in the community," Howell said.
"Over the past four years, the Office of Aging and Adult Services has investigated more than 85 cases of financial exploitation against the aging and vulnerable adults in the territory. These investigations have included exploitation originating from the establishment of joint accounts, as a necessity for ease of access upon death. It is believed the POD designation will aid our elderly and vulnerable adults in the protection of their assets throughout their lifetime," Howell said.
St. Thomas attorney Tom Bolt, chair of the V.I. Uniform Law Commission, gave a detailed explanation of the bill’s provisions and urged support.
Under existing law, the traditional joint account does not fully allow the depositor to distinguish among the different functions of the multiple-person account.
"If the account is not clearly titled, there can be confusion about the parties’ rights in the account when one party dies," Bolt said.
"For many years, Virgin Islanders have opened bank accounts within the territory with an account name such as John Smith ITF Mary Smith with the understanding that the account was held by one individual in trust for another. The problem ensues as there is in fact no actual trust — sometimes known as a “naked trust” as there in no language to clothe the trust," he said.
But under the bill’s terms, an account is owned by the parties during their respective lifetimes in accordance with each party’s net contribution. Clarifying these rules will help people avoid confusion among heirs and lessen the need to go to probate court, he said.
It is the second bill before the Legislature this month affecting probate law, Young said. The other bill would re-enact portions of the Uniform Probate Code affecting how securities and retirement portfolios are handled. (See Related Links below)
In late 2009, the Legislature passed a massive, several-hundred page bill codifying the entire Uniform Probate Code, the uniform law used in most states, and it was signed into law in 2010. But, concerned about a few passages that had not been examined closely, the Legislature turned around and repealed most of it in 2011 and 2012, overriding then-Gov. John deJongh Jr.’s veto for much of it. (See Related Links below)
Legislative Legal Counsel Yvonne Tharpes told senators the Legislature moved to repeal the act over concerns with two sections.
"The issue had to do with notice requirements and the elected heir of the spouse," Tharpes said. But several parts of the law that are stand-alone acts "were inadvertently repealed."
"It was thought they were housekeeping matters but in fact were substantive," she said.
Some senators, including Young and Sen. Clifford Graham, said taking a piecemeal approach and enacting several bills, instead of one massive bill, would help ensure the measures were well vetted and that there would be no surprises or unintended consequences.
Voting to send the probate bill out of committee to the Rules and Judiciary Committee for more consideration were: Sens. Graham, Young, Jackson, Novelle Francis, Almando "Rocky" Liburd and Tregenza Roach. Sens. Neville James, Nereida "Nellie" Rivera-O’Reilly and Kurt Vialet were absent.
The committee also voted to send two Coastal Zone Management permits on to the Rules and Judiciary Committee.
– Minor CZM permit No. CZJ-12-14W would allow the Great Cruz Bay Homeowner’s Association continued use and occupancy of a 37’ x 6’ rectangular floating dock occupying 228.5 square feet of water Great Cruz Bay, St. John. It entails a fee of $3,000 per year for the first five years, with a provision for increases beginning after six years. The permit is for 10 years.
– Minor CZM Permit No. CZT-09-14(FL) would allow Challenger’s Transport Services continued use and occupancy of 18,774 square feet of filled submerged land at Parcel No. 45 Estate Crown Bay Fill, St. Thomas as a trucking yard facility. It brings the existing 900 square foot building into compliance and allows for perimeter fencing, re-surfacing the parking area and landscaping. It calls for an annual fee of $24,000 per year for the first five years, with a provision for increases beginning in year six of the 20-year permit.
Planning and Natural Resources Division of Coastal Zone Management officials testified in support of both permits.