IBA Compliance Connection

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We have a payable on death (POD) account for which the owner died almost five years ago. The owner’s daughter was named as the POD beneficiary. The daughter lives in a nursing home and has not been able to sign a new signature card confirming that she is the account owner. She has not made any transactions on the account and does not hold any other accounts at our bank. Do we need to report the account as abandoned property, since there has not been any activity on the account since the date of the original owner’s death?

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It depends. You are not required to report the POD account as unclaimed property to the Illinois Treasurer provided that your bank creates and maintains documentation confirming the account owner’s indication of interest in the account. The current Illinois unclaimed property law does not treat an account as abandoned if the owner has “indicated an interest in the deposit as evidenced by a memorandum on file with the banking organization.”

In this case, you are aware of the account owner’s whereabouts and situation, but apparently you do not have any record indicating her interest in the account. If you have had interactions with her, you should document what was stated and by whom, the account’s details, and the basis for your conclusion that the account is not inactive. If you have not had any direct interactions with her, you may wish to ask the nursing home whether she has a guardian or other person with a power of attorney for property (who could confirm her interest in the account). Absent any such documentation, we recommend treating the account as abandoned and reporting it to the Treasurer.

Note that Illinois’ new unclaimed property law — which will repeal and replace the existing law as of January 1, 2018 — modifies the provision relating to the account owner’s intent. Under the new law, an oral communication will constitute activity on an account only if the property holder “contemporaneously makes and preserves a record of the fact of the apparent owner’s communication.”

For resources related to our guidance, please see:

  • Illinois Trust and Payable on Death Accounts Act, 205 ILCS 625/4(c) (“Upon the death of the last surviving holder of the account, the beneficiary designated to be the owner of the account . . . shall be the sole owner of the account . . . .”)

  • Uniform Disposition of Unclaimed Property Act, 765 ILCS 1025/2(a)(3) [Repealed effective 1/1/18] (“The following property held or owing by a banking or financial organization is presumed abandoned: (a) Any demand, savings, or matured time deposit with a banking organization . . . unless the owner has, within 5 years: . . . (3) Otherwise indicated an interest in the deposit as evidenced by a memorandum on file with the banking organization; . . . .”)

  • Revised Uniform Unclaimed Property Act, 765 ILCS 1026/15-210(b)(2) [Effective 1/1/18] (“Under this Act, an indication of an apparent owner’s interest in property includes: . . . (2) an oral communication by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held, if the holder or its agent contemporaneously makes and preserves a record of the fact of the apparent owner’s communication.”)