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#1542519 - 04/28/11 03:07 PM Collections trying to take beneficiaries money!
Anonymous
Unregistered

We have a customer who died (sole ownership) who listed beneficiaries on their checking account. The customer owes the bank money on a loan. Isn't this money entitled to the beneficiaries not the collection department. Thanks for a quick response. This account is in Florida.

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#1542627 - 04/28/11 04:12 PM Re: Collections trying to take beneficiaries money! Anonymous
Anonymous
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Bump

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#1542642 - 04/28/11 04:18 PM Re: Collections trying to take beneficiaries money! Anonymous
BSABecky Offline
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BSABecky
Joined: Mar 2011
Posts: 126
Seymour, IN USA
As far as I'm aware, banks reserve the right of offset in this type of situation; in reality they could have closed the account (or at least taken the entire balance) and placed the funds on the loan.

I'm in Indiana, however. Things may be different for your state.
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#1542663 - 04/28/11 04:30 PM Re: Collections trying to take beneficiaries money! BSABecky
Doug Hendrickson Offline
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Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
You might need advice of legal counsel. I would be under the presumption that the minute the customer died, the funds reverted to the beneficiaries; therefore, the bank had no legal claim on the funds despite the right of offset.
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I hear and I forget. I see and I remember. I do and I understand.--Confucius

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#1542668 - 04/28/11 04:32 PM Re: Collections trying to take beneficiaries money! Doug Hendrickson
#Just Jay Offline
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#Just Jay
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Posts: 14,390
Cheeseheadland
I concur with Doug. The legal entity you were dealing and trying to collect from no longer exists.

Your claim now will have to be against the estate.
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#1542676 - 04/28/11 04:37 PM Re: Collections trying to take beneficiaries money! #Just Jay
Anonymous
Unregistered

Thank you both. I'm looking at it as a gift to the beneficiaries that is no longer revocable since the owner has died. The money in the account would not be the owner's so it is like having the beneficiaries pay for the owners debt with their money.

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#1542783 - 04/28/11 05:36 PM Re: Collections trying to take beneficiaries money! Anonymous
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,965
Galveston, TX
I would be visiting with your attorney. If your loan contact contains a clause that the death of the borrower constitutes default on the loan, the bank may well have the right to offset prior to releasing any funds to the beneficiaries. It may also depend on the solvency of the estate.
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#1543059 - 04/28/11 08:29 PM Re: Collections trying to take beneficiaries money! rlcarey
Anonymous
Unregistered

Diff anon here,

Randy is right but, even though they may have the right, how is the bank going to look in court, taking money from a bene? I would say it probably wouldn't be worth taking (in most cases) for the cost and time it would take the bank to go to court and look like the bad guy.

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#1543223 - 04/29/11 12:44 PM Re: Collections trying to take beneficiaries money! Anonymous
Bob The Banker Offline
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Bob The Banker
Joined: May 2010
Posts: 958
Originally Posted By: Anonymous
Diff anon here,

Randy is right but, even though they may have the right, how is the bank going to look in court, taking money from a bene? I would say it probably wouldn't be worth taking (in most cases) for the cost and time it would take the bank to go to court and look like the bad guy.

No one will see. Happens all the time and no one ever notices, just not a fun situation for the beneficiaries. Retirement homes take an incredible amount from elderly but you never hear about it.

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