We believe that the POD beneficiary should receive the funds.

An authorized signer’s authority to sign on behalf of an accountholder is governed by agency law. Under Illinois law, an agency relationship terminates when the principal (the accountholder) dies. Consequently, we believe that the authorized signer’s authority expired when the accountholders died. Additionally, we note that an authorized signer agreement ordinarily would not confer any ownership rights on the signer.

As to the POD beneficiary, banks are required to distribute the proceeds of POD accounts to beneficiaries after the death of the last surviving account holder under the Illinois Trust and Payable on Death Accounts Act. However, your bank must ensure that it receives legal evidence of the death of all account holders, identification from the beneficiary, and written direction from the beneficiary to close the account and distribute the proceeds in a form acceptable to your bank.

For resources related to our guidance, please see:

• Washington v. Caseyville Healthcare Ass’n, 284 Ill. App.3d 97, 101 (5th Dist. 1996) (“Under agency principles, the death of the principal terminates the authority of the agent, even if the agent has no notice of the principal’s death.”)

• Illinois Trust and Payable on Death Accounts Act, 205 ILCS 625/10 (“Upon the death of the last surviving trustee or holder of the account, the institution that maintains the account shall distribute the proceeds to the beneficiary or beneficiaries designated in the agreement controlling the account without further liability. No institution, however, shall be required to distribute the account proceeds until the institution receives (i) legal evidence of death of all trustees or holders of the account, (ii) identification from each beneficiary then living, or business records evidencing the lawful existence and parties authorized to collect on behalf of each beneficiary not a natural person, and (iii) written direction from each beneficiary to close the account and distribute the proceeds in a form acceptable to the institution. If the institution, in its discretion, is unable to identify one or more beneficiaries, or cannot determine the lawful existence of any beneficiary, or cannot determine a party authorized to collect on behalf of any beneficiary, or if conflicting claims to the account are made by the beneficiaries or other interested parties, then the institution may refuse to distribute the proceeds, without liability to any beneficiary or other party, until the institution receives a determination of ownership by a court of appropriate jurisdiction.”)