Authorized card user on decedent's account

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Question:

We were just notified of the death of one of our debit cardholders. He passed away over the weekend. The person who told us about his passing is an authorized signer (not a joint owner) on our customer's account, and also has a debit card that accesses the account that she used to do shopping and other errands for our customer, who was often too ill to go out on his own. We know that we have to watch the account and stop paying any checks our customer drew once ten days have passed since his date of death, but what do we do about transactions conducted by the authorized signer, by check or by debit card?

Answer:

The authorized signer's access to the account officially ended on the depositor's date of death. Any authorizations that your customer may have given to have the account debited via ACH, remotely created check or debit card likewise ended on that date.

Start by verifying that your customer has actually died. Although the authorized signer may be a reliable source, if you know of any other family member, consider contacting him or her to verify the information you've received, or keep an eye on the obituaries or funeral notices in the local paper. In the meantime, watch for checks that may have been dated (by the authorized signer) after the date of death. They should be returned "Depositor deceased" or "No authority to pay."

Once you've confirmed the date of death and that your customer was the sole owner of the account, take action to discontinue paying any checks on the account beginning on the eleventh (calendar) day after the date of death, even those apparently signed by the customer before his death. Your authority (actually mandate) to do so is UCC Section 4-405 -- check the language of that section in your state's UCC.

Review account activity to see if there's an indication that there were recurring ACH entries (debits or credits) and be prepared to send back any future such entries marked R15 (account holder deceased). Determine whether any recent ACH credits will need to be returned based on whether the depositor was eligible for the payment. For example, if there is an SSA direct deposit in the current calendar month, was the depositor alive on the first day of the current month? If he died on or before the last day of the previous month, SSA will look for a refund.

Retrieve the authorized signer's debit card if you can. Hot list both cards to protect the bank from having to pay for any recurring debits not yet initiated.

First published on BankersOnline.com 10/18/10