Topic: Death of a Customer
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A husband and wife opened twelve-month, single ownership, automatically renewing certificates of deposit (CDs) at our bank in November 2013. The husband and wife passed away in May and June of 2019. The couple owned a business, and these CDs were pledged as collateral on a loan, but the loan has had no activity on it. The executor has not done anything with these CDs and has not contacted us at all since the couple died. Would the CDs be considered dormant in 2023 and need to be turned over as unclaimed property?
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We believe that the CDs should have been reported as unclaimed property in 2021, since neither the executor nor any beneficiaries have indicated interest in the CDs after your customers died. Generally, an automatically renewable time deposit is presumed abandoned under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) if it is unclaimed by…
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A customer who executed a small estate affidavit to close their mother’s accounts would now like to use the affidavit to open an estate account. Does this customer need to obtain letters of office to open an estate account?
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No, letters of office are not required to open an account for a small estate. The affiant of a small estate affidavit may act as the estate’s executor and open an account for the estate on the basis of the affidavit — provided that neither the affiant nor anyone else has requested or received letters…
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We have a dormant checking account that needs to be delivered to the State Treasurer this year. The account holder died in June of 2018 without a beneficiary on the account, and we previously tried contacting the account holder’s daughter but did not receive a response. The account holder’s daughter recently passed away, and her son has inquired about the account. Can we consider this an indication of interest that resets the abandonment period, and can we proceed in resolving this matter with the son?
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The son’s inquiry may qualify as an indication of interest in the account if he has a legal, beneficial, or equitable right in the account, for example as executor or administrator for the account holder’s estate. You likely will need more information to determine whether the son has a legal or equitable interest in the…
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When should a deceased customer who is the primary account holder on a joint account be removed from the account for tax reporting purposes? Is there a specific timeframe for completing this process?
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No, we are not aware of any law or regulation that requires a deceased owner of a joint account to be removed from the account within a specific timeframe. However, we recommend removing the deceased customer from the joint account as soon as you have confirmation of the death. Under Illinois law, when a joint…
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A borrower with a residential mortgage died, and their spouse (who signed the mortgage but is not on the note) is living in the property. The deceased borrower also had a car loan solely in their name. The mortgage and the car loan have not been paid for several months, and the spouse has not responded to our communications. What steps can we take moving forward?
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Since the spouse has not responded to your communications, and presumably has not indicated an interest in assuming either loan, we generally recommend following the same procedures you would follow when a living borrower has defaulted on a residential mortgage loan or a car loan — with the caveats addressed below. We also recommend conferring…
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A customer with two accounts held in individual ownership recently died. We received a copy of the customer’s will, which was filed with the court in December, and which names an executor and states that the executor is responsible for paying the estate expenses out of the remainder of the customer’s estate. The will also states that the remainder of the estate will pour over to the customer’s revocable trust. The trustee of the trust wants to close the accounts, and we have not had any communication with the executor. Who has the authority to close the accounts?
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It does not appear that you have sufficient information to determine who may close the accounts or to determine whether the accounts are held in the trust or the customer’s estate. As a result, we do not recommend closing the accounts based on the trustee’s request alone. The Illinois Probate Code authorizes pour-over wills in…
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A recently deceased customer owned a joint account with their minor child, aged sixteen. As a joint owner with the right of survivorship, does the minor child have ownership of the account and the funds? We are a federal savings bank.
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Yes, we believe that the minor child would have ownership over the account and the funds, provided that both the parent and the child signed the original joint account agreement. The Illinois Joint Tenancy Act provides that a right of survivorship is created when all joint account owners sign an agreement to that effect, and…
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The son of a deceased customer presented us with a will listing him as the executor of the customer’s estate along with a tax ID number for the estate. However, the will does not appear to have been filed with the court, and the son does not have letters of office appointing him as executor. We declined to open an estate account since we generally require letters of office or a small estate affidavit. The son (who is an existing customer) was very upset by our decision and said he does not want to spend money on an attorney. However, we are unsure what to make of the fact that he was able to obtain a tax ID number for the estate. Wouldn’t an estate have to be opened for a tax ID number to be issued to the estate?
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No, an estate would not necessarily need to be opened with the probate court for a tax ID number to be assigned. The IRS Employer Identification Number (EIN) application provides for persons administering an estate to obtain an EIN and does not require proof that they have opened an estate with a probate court. Although…