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#1520689 - 03/11/11 04:37 PM Deceased Account
Doug Hendrickson Offline
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Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
If we have a customer whom we know to be deceased, but the relatives have not yet come forward with a death certificate and personal representative papers, can we close the account and hold the check for the funds until they do?

I'm concerned as this account is getting hit with recurring ACH/EFT debits and I'm being told we don't have a valid ACH return code to use. If I close the account, we can legitimately reject the items.
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#1520711 - 03/11/11 05:04 PM Re: Deceased Account Doug Hendrickson
Mocha's Mom Offline
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Mocha's Mom
Joined: Jun 2004
Posts: 633
Western MA
As part of our procedures, if it is a single name account and we are positive of the death, we place a Lockout hold on the account which stops all activity. We also shut off the debit card, remove any POA's and turn off internet banking access. This is the only way we have found to protect the account. Many times people "interested" in getting to the money will try ACH and Internet banking transfers. We do not close the account however because if no one ever comes forward for the money it would need to be escheated to the state after the dormancy period.

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#1520768 - 03/11/11 05:57 PM Re: Deceased Account Mocha's Mom
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
We do the same as Mocha's.
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#1520772 - 03/11/11 06:03 PM Re: Deceased Account Doug Hendrickson
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The law governing checks allows the bank to return items presented more than 10 days after the date of death. To my knowledge, the ACH rules still contain no parallel provision. If it's been added I'm anxious to read it because it would have been very hard to write.

While a person may be deceased, some of those ACH items may be legitimate. You don't want to turn off everything; e.g. the electricity in January or the property insurance a few weeks before the tornado.

It's the heirs' responsibility to act expeditiously and they will be in a position to question some ACH entries after the fact. I would not try to fix this one. If some of the entries are questionable on a case by case basis, it might be appropriate to contact the family and ask them to move on taking control of the funds.

I agree, voiding ATM cards, stopping Internet banking and removing the authority of attorneys-in-fact and agents should be done as a matter of course. You should also stop paying checks presented more than 10 days after the date of death, but I would not close the account or start returning ACH debits across the board.

Last edited by Ken_Pegasus; 03/11/11 06:29 PM. Reason: Add comment about discontinuing other debits
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#1520803 - 03/11/11 06:39 PM Re: Deceased Account Elwood P. Dowd
Mocha's Mom Offline
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Mocha's Mom
Joined: Jun 2004
Posts: 633
Western MA
No, Ken, we usually look at the debits clearing the account and if they were in existence prior to the death we would pay those (insurance, utilities, etc) however we have experienced way too many times that relatives or such that are fighting over who should have the money will set up new ACH transactions to deplete the account. We also do pay checks that the account owner wrote for the 10 days after the death by verifying the signatures on the items.

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#1521544 - 03/14/11 09:21 PM Re: Deceased Account Mocha's Mom
Here4Life Offline
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Joined: Feb 2010
Posts: 119
If the primary owner of an interest bearing account is deceased, at what point does the deceased need to be removed as primary owner?

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#1521821 - 03/15/11 03:28 PM Re: Deceased Account Here4Life
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,862
Cape Cod
There is no such thing as a "primary" co-owner. Co-owners are equal in ownership, right, and access. If a co-owner dies, ownership of the account legally changes at the moment of death, whether or not the bank addresses the change. Ideally, the change in tax reporting will take place before the end of the year.

That said, you cannot simply drop the decedent's name and change things the day you learn of the death of a co-owner. As efficient as that might be, it is certain to upset the surviving co-owner or a family member in 99% of the cases. I recommend waiting at least a couple of weeks to see if the surviving owner comes in on his or her own to ask for the updates. If no one shows up after 30 days (some would suggest going as long as 60 days), put a carefully-worded request in the mail that the survivor contact you to arrange for the changes to be completed. If year-end is rapidly approaching, you can push it a little more.
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