(a) A "payable-on-death account" is created by a deposit in a financial institution in the name of an account holder or several joint account holders with a designation that the account is payable on death to one or more payees, known as "P.O.D. payees". On the death of the sole account holder or the last surviving joint account holder, any remaining balance in a payable-on-death account, including interests or dividends, shall vest solely in the surviving P.O.D. payee or equally and severally in the then surviving P.O.D. payees. Ninety days later, unless prevented as provided in subsection (c) of this section, the financial institution may pay the remaining balance to the new owner or owners or their legal representatives without further liability for the amount or amounts paid. If no P.O.D. payee is surviving 90 days after the last surviving account holder dies, the balance of the account shall be payable to the personal representative of that account holder.

(b) Recital of the words "payable-on-death," the abbreviation "P.O.D.," or words of like effect in the order creating the account, signed by the person or persons furnishing the funds for the deposit, shall be conclusive evidence, as between the legal representatives of account holders and the payable-on-death payees or their legal representatives, of the creation of an absolute payable-on-death account, except as provided in subsection (c) of this section. However, nothing in this section shall prevent proof of fraud, undue influence, or incapacity to defeat a payable-on-death interest.

(c) If other assets of the probate estate of the last surviving account holder are insufficient to pay debts and expenses, including statutory allowances and assignments to the surviving spouse, a payable-on-death account shall not transfer to P.O.D. payees sums needed for that purpose. A P.O.D. payee who receives payment from a payable-on-death account after the death of the last surviving account holder shall be liable to the account holder's personal representative for the amount of payment to the extent necessary to discharge debts and expenses remaining unpaid after application of the decedent's estate. No proceeding shall be commenced later than two years after 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 from a payable-on-death account to a P.O.D. payee 90 days after the death of the last surviving account holder or make a financial institution liable to the personal representative of the estate of a deceased account holder unless before making payment the financial institution is served with process in a proceeding brought by the personal representative or with an order from the Probate Division of the Superior Court prohibiting payment. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001; amended 2009, No. 154 (Adj. Sess.), § 238a, eff. Feb. 1, 2011.)