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#2131389 - 05/22/17 03:40 PM right of offset?
madukes Offline
Diamond Poster

Registered: 07/17/09
Posts: 1355
Loc: Flyers Country
My brother died suddenly (no insurance or burial arrangement/prepayments) leaving his daughter (adult - his only heir) with the bills. He has a small savings account at a credit union and she is named as the beneficiary on the account. The balance is less than what he owes on the credit card at the same credit union. Can they use the right of offset to pay down the credit card even with her named as the beneficiary? She's already had to come up with almost $20,000 to bury him by borrowing and doing a hardship withdraw from her 401k I'd hate to see her get stuck with this too. Besides this small account, his only other asset is his home (he added his daughter to the deed about a year ago when he refinanced - she is only on the deed not on the mortgage).

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#2131404 - 05/22/17 04:36 PM Re: right of offset? [Re: madukes]
kh5040 Offline
New Poster

Registered: 02/27/17
Posts: 6
Assuming the deposit account is an ITF account/Totten trust, I think what you are asking is a legal question whether the CU's right to setoff supersedes the multiple party account provisions at 20 PaCS 6301. I doubt there is much case law on the subject, so it will probably come down to the language in the account agreements and the MPAA. If it comes down to a negotiation with the CU, you should take the position that the MPAA says in section 6304(b) that "At the death of the trustee or the survivor of two or more trustees, any sum remaining on deposit belongs to the person or persons named as beneficiaries..." and therefore, because he is deceased, the funds belong to the niece, not his estate.

That is of course if you get stuck in a negotiation. Your niece might get luck and the deposit/retail functions may just release the funds upon verification of her identity, especially if the CC account is not delinquent.

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#2131572 - 05/23/17 04:21 PM Re: right of offset? [Re: kh5040]
madukes Offline
Diamond Poster

Registered: 07/17/09
Posts: 1355
Loc: Flyers Country
thank you!

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#2134952 - 06/20/17 11:29 AM Re: right of offset? [Re: madukes]
Ken_Pegasus Offline

10K Club

Registered: 08/30/01
Posts: 21817
Loc: Another trip around the sun
You're not going to negotiate. As it's a credit card, federal law would control; there generally is no right of offset. Based on the quality of your other posts, you're pretty smart and this should be more than adequate to get you started in pulling together your proof.
_________________________
My employer agrees with everything I say, but I'm not sure how that helps you.

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#2135242 - 06/21/17 04:15 PM Re: right of offset? [Re: madukes]
madukes Offline
Diamond Poster

Registered: 07/17/09
Posts: 1355
Loc: Flyers Country
Thank you Ken for your kind words and the information!

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