Returning Tax Refund As "Beneficiary Deceased"

Answered by:

Question:

A customer has reported to us that his father has died. We have a joint account with this customer and the now deceased father. We tell the customer we need a copy of the death certificate and that we will remove the father's name from the account. The customer then tells us he is just about to file the father's tax return and that his accountant wants the father's name left on the account until his tax refund is direct deposited to the account. If this customer had presented a Treasury check payable to the father and attempted to deposit it, we would refuse as the check is now the property of the estate. Since we have knowledge of what the son is preparing to do, should we flag the account and return the tax refund as beneficiary deceased when it attempts to post to the account?

Answer:

Answer by Sonja Kriegsmann: If someone is filing a tax return on behalf of a deceased individual and would like to claim the refund owed to the decedent, they should file IRA Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. To avoid giving tax advice, advise your customer to contact the individual that is preparing the tax return for his deceased father or a CPA or attorney familiar with tax requirements with any questions about the Form 1310.

In the interim take whatever steps you would normally take and that are required by your state's laws to flag this account that one of the owners has died.

Answer:

Answer by Ken Golliher: That does not work in this circumstance or any other. The fact that a decedent's name remains on an account does not mean it's okay to deposit items payable to him there. The decedent no longer owns any portion of the account. He's dead.

First published on BankersOnline.com 6/17/13