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#1413862 - 07/12/10 03:09 PM Accounts of Deceased Persons
Doug Hendrickson Offline
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Our new accounts staff review the local paper each day of publication (Mon., Wed. and Fri.) for obituaries of folks who have accounts with us. They then mark the account with a high-level alert so that tellers can have any other owners/signers on the account come to the new accounts staff to see what else needs to be done (e.g., death certificates, re-titling). This last part never seems to happen. So we have a ton of high-level alerts that clog the system and the accounts don't get updated.

I'm advocating that they send a note/letter to the remaining holders of the accounts, expressing sympathy for the loss (this town is small so they usually know the relationships) and asking them to come in so as to take care of any necessary changes (e.g., putting on a POD if the original account was husband and wife).

I'd like to know how others are handling this or do you just leave them alone until someone comes in or something happens?
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#1413878 - 07/12/10 03:26 PM Re: Accounts of Deceased Persons Doug Hendrickson
BrendaC Offline
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You have opened a can of worms by reviewing the obits and flagging the accounts. Once you have knowledge, you need to act on it. I would never define "acting on it" as recommending someone add a POD since I am not qualified to act as an estate planner or financial adviser. What I am here to do it update paper work to remove deceased persons, identify new account owners, etc. You need to pay particular attention to the interest-bearing accounts where the deceased person's SSN is used for interesting reporting to the IRS. Those can be very problematic for you down the road. I would either use the flag to address during subsequent visits by joint owners or send a letter to update paperwork.
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#1413882 - 07/12/10 03:39 PM Re: Accounts of Deceased Persons BrendaC
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Thanks. If we do decide to go the 'note/letter' route it will be plain vanilla language expressing our sympathies and recommending that they come in to update paperwork, period. What they do with the account will be up to them and I'll ensure that we don't make any recommendations to them.
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#1413924 - 07/12/10 04:51 PM Re: Accounts of Deceased Persons Doug Hendrickson
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Read this thread:

http://www.bankersonline.com/forum/ubbth...true#Post632350

You may be creating your own nightmare.....
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#1413933 - 07/12/10 05:28 PM Re: Accounts of Deceased Persons rlcarey
Doug Hendrickson Offline
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Thanks to both of you for your comments.

And after reading the thread, I think this is one of those "we've always done it this way" practices that we should consider abandoning. I'll leave it to the other joint owners, signatories and relatives to advise us, through submission of death certificates, of the deaths of account holders.

Just a follow-up: at daily officers' meetings, once or twice the president has indicated that we should send so and so a sympathy card or flowers on the death of a customer. Is this formal knowledge that we would then have to follow-up on for account modification?
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#1413939 - 07/12/10 05:37 PM Re: Accounts of Deceased Persons rlcarey
Doug Hendrickson Offline
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I talked to our auditor, and she indicated that one of the reasons why this practice was instituted was to minimize the reclamation of social security checks. If we know that a client is deceased, we apparently return any government checks so as to minimize our liability.

I'd appreciate your thoughts.
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#1413985 - 07/12/10 06:38 PM Re: Accounts of Deceased Persons Doug Hendrickson
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If "normal" procedures are followed in the death of a person, the SSA is generally notified promptly of an individual's death. If you analyze the risks, I doubt the amount you might save because of this process vs. the costs associated with review of notices, flagging accounts and sending notices is really worth the headache. While we have all experiened that "one time we lost our shirt" situation, in my realm of experience it has been very rare (just memorable).
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#1414075 - 07/12/10 09:18 PM Re: Accounts of Deceased Persons BrendaC
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This practice was long gone after someone was marked deceased and it wasn't that particular person. However, I too was just told that because of social security we have reverted back to looking at obits and marking accounts. Can someone please give me a scenario of losing out to social security? thanks
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#1414120 - 07/13/10 12:21 AM Re: Accounts of Deceased Persons Hockey Rules
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If you know and don't stop the deposits, you are on the hook. If you don't know, you just send whatever there is in the account at the time of reclamation up to the reclamation amount. The bank has no additional liability.
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#1414340 - 07/13/10 04:26 PM Re: Accounts of Deceased Persons rlcarey
kiemo Offline
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If anyone in the financial institution has constructive knowledge of a customer's decease, the financial will not have a right to limit their liability on ACH US Treasury benefits received....much more detail in fms.treas Green Book regulations. ( there is the potential, albeit small, for years of loss if we're talking about ACH Gov't benefits...) Like everything, decisions must be risk based for each institution.

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#1414558 - 07/13/10 09:19 PM Re: Accounts of Deceased Persons kiemo
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So, my question is what is considered actual knowledge? A call from a daughter that morning, yet we don't see the death certificate until a week later? Or would it be better to wait for actual documents?
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#1414563 - 07/13/10 09:31 PM Re: Accounts of Deceased Persons Hockey Rules
Doug Hendrickson Offline
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"The reports of my death are greatly exaggerated"....Mark Twain quotation after hearing that his obituary had been published in the New York Journal.

Personally, I'd want to see a death certificate.
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#1414571 - 07/13/10 09:44 PM Re: Accounts of Deceased Persons Doug Hendrickson
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LOL Doug, that is pretty much what happened to us years ago.
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#1414593 - 07/13/10 11:42 PM Re: Accounts of Deceased Persons Hockey Rules
BetsyS Offline
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I was told in one of WesPay's Reclamation seminars I attended that "constructive knowledge" would include checking the daily obits, and is not restricted to just one department in your FI. For example, if someone in your Loan Dept. has knowledge of the death of one of the bank depositors, that would be considered constructive knowledge even though it was never reported to your department.

From the Green Book: "Notification of death by any source constitutes notification for all federal benefit payments received by the recipient. This includes notification of death by survivors, executors, or federal agencies." It goes on to include personal knowledge by the RDFI staff. Here's a link to the page: http://fms.treas.gov/greenbook/reclam/reclam-3a1.html

One school of thought is that you actually limit your liability by not checking the Obituaries. We've been caught both ways.
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#1414605 - 07/14/10 10:58 AM Re: Accounts of Deceased Persons BetsyS
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You fill out the form and say you didn't know and return the money you can. If someone has done that, has anyone ever experienced the agency coming back to the bank for more money??
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#1414735 - 07/14/10 02:51 PM Re: Accounts of Deceased Persons rlcarey
BrendaC Offline
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The only time we were contacted for additional information involved a case of fraud. A family member had drawn off the funds for almost a year. Bank didn't know customer was deceased and apparently the government didn't either for some reason. We didn't have to repay the government, but we did have to repay some money drawn off of pension payments.
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#1414738 - 07/14/10 02:52 PM Re: Accounts of Deceased Persons rlcarey
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The feedback that I'm getting from our operations folks is that they DO come back and 'bill' us for the entire amount. I'm trying to see if anyone has something definitive as to our liability. Thankss
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#1414741 - 07/14/10 02:54 PM Re: Accounts of Deceased Persons Doug Hendrickson
BrendaC Offline
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Is this "bill" the notice that you return explaining the circumstances of any withdrawals subsequent to receipt of automated deposit and the current balance?
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#1414748 - 07/14/10 02:56 PM Re: Accounts of Deceased Persons BrendaC
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If I understood correctly it is a debiting of our Fed account. They seem to just debit for the full amount they're looking for.
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#1414790 - 07/14/10 03:36 PM Re: Accounts of Deceased Persons Doug Hendrickson
Georgia Plum
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Doug, they shouldn't be just debiting you unless you've NOT responded to their initial reclamation request. The initial request allows you to respond if funds are no longer there. Maybe your ops folks aren't responding?

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#1414811 - 07/14/10 03:50 PM Re: Accounts of Deceased Persons Doug Hendrickson
John Burnett Offline
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Dig into the process a bit. The Fed and Treasury should be sending you correspondence in advance of the debit in an effort to determine whether your bank is entitled to reduce its liability for these post-mortem payments. Someone should be following up on the notices (which used to come in paper form back in the day), which may appear in your FedLine messages.
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#1414835 - 07/14/10 04:00 PM Re: Accounts of Deceased Persons John Burnett
Doug Hendrickson Offline
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John and Georgia Plum...thanks...I just reviewed one of the reclamations in process and to my (not so) suprise, we got a follow up letter indicating that the orginal notice was not responded to in a timely fashion...I have a feeling if I look at the others I'm going to find the same thing...that's why we're getting the debits to the fed account...I guess my work is cut out for me...thanks again to you both.
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#1414964 - 07/14/10 06:38 PM Re: Accounts of Deceased Persons Doug Hendrickson
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Happy Birthday, Doug!
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#1415004 - 07/14/10 07:10 PM Re: Accounts of Deceased Persons John Burnett
Doug Hendrickson Offline
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Thanks very much!
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