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Panel backs change to probate code to treat cooperative patronage capital as accounts
Summary
The subcommittee unanimously reported favorably on House Bill 3,914, which would expand the probate code’s definition of “account” to include patronage capital accounts held by members of electric or telephone cooperatives, clarifying how those funds pass at death.
The Domestic Relations Business and Probate Law Subcommittee voted 5-0 to give House Bill 3,914 a favorable report. The bill would amend the South Carolina Probate Code to include patronage capital accounts of electric or telephone cooperatives in the statutory definition of “account.”
Under the bill described to the committee, patronage capital accounts — cooperative members’ shares of surplus earnings allocated annually — would be explicitly treated as probate accounts for purposes of transfer on death, survivorship, or estate administration. The change is intended to clarify whether small patronage capital payments pass directly to surviving co-owners when survivorship is recorded, or otherwise pass into the decedent’s estate under probate rules.
Committee members said the change is intended to prevent situations in which a small cooperative payment would trigger a full probate estate. The bill text discussed a specific effective date of July 1, 2025, if enacted. A committee member said they had discussed the proposal with the Richland County probate judge, who “didn't see any issues with this.”
Representative discussion included one anecdote from the record: a member relayed a constituent example in which a decedent’s only asset eligible for probate treatment was a $67 cooperative check; under current law that could require opening a probate estate to handle the payment. The bill would avoid that outcome by clarifying the probate status of patronage capital accounts.
Votes at the meeting: The roll call on House Bill 3,914 recorded yes votes from Representatives Bernstein, Paula Calhoun, Guess, John King and David Martin; the vote was 5 in favor, 0 opposed. The subcommittee ordered a favorable report to the next House stage.
What the bill does not do: The committee did not discuss changes to cooperative law beyond classification for probate purposes, and no fiscal note or funding appropriation was discussed at the hearing.
