Topic: Death of a Customer
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The executor for an estate has presented us with a check payable to “Jane Doe, as Executor of the Estate of Julie Doe, deceased, acting with full authority under the Independent Administration of Estates Act, Superior Court of California.” She wishes to deposit the check into her personal account under her name, not an estate account. The check represents funds from the sale of the decedent’s house, and the executor tells us that the estate already has closed. Can we allow her to deposit the check into a personal account?
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No, we do not recommend permitting the customer to deposit a check made payable to her as the executor of an estate into her personal account. This transaction could result in a breach of the Uniform Commercial Code (UCC) warranties. When delivering the check to the payor bank for payment, the UCC would require your…
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Our bank sends checks to the family in order to honor deceased customers. If such a check never is cashed, even after we attempt to contact the deceased customer’s family, what procedures should we follow?
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If such a check remains uncashed and undeposited for three years, your bank must report the check to the Illinois Treasurer as unclaimed property. Under the new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA), a check on which your bank is directly liable will become reportable as unclaimed property when three years have passed…
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Our bank has a customer who is the grantor of an irrevocable trust. The trust has a deposit account at our bank. The trustee of the irrevocable trust has died, and the trust agreement does not name a successor trustee. What happens now?
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When the role of the trustee becomes vacant due to death, resignation, or refusal or inability to act, Illinois law provides that the beneficiaries of the trust may appoint a successor trustee. When the amount of each beneficiaries’ interest in the trust estate is known, the beneficiaries with the majority interest may appoint a successor…
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What is a bank’s legal responsibility when an account owner dies, and what is the proper waiting period before closing the account? Also, with respect to a joint account with rights of survivorship, how long should a deceased customer’s name remain on the joint account? Currently, when we are notified of the death of a customer who had a joint account with right of survivorship, we leave their name on the account for up to six months to allow sufficient time to stop automatic withdrawals and to receive final disbursements.
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First, with respect to an account solely owned by the decedent, a bank may pay or certify checks drawn on the account no more than ten days after the date of the decedent’s death, unless ordered to stop payment sooner by a person claiming an interest in the account. If the bank does not learn…
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One of our customers died two years ago. An estate representative came to the bank and closed the customer’s deposit account last year. The teller who closed the account neglected to inform the estate representative that the customer also held a safe deposit box, which remains open. The teller also neglected to collect the estate representative’s contact information. Can we drill the box and remit the contents as unclaimed property? Or does the estate representative’s visit count as an activity?
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Yes, we believe that your bank may report and remit the safe deposit box property to the Treasurer’s office under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). As a general rule, safe deposit box property is considered unclaimed five years after the expiration of the lease or rental period for the box. But…
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An LLC customer recently changed its ownership structure. We are reevaluating a loan made to the LLC and discovered the change when reviewing a recent tax filing: one of eight original members died, with four new members replacing that member (the deceased member’s ownership interest was divvied up among the four new members). The deceased member was not the LLC’s manager and was not an authorized signer or guarantor for the loan account. Do we need to obtain an updated operating agreement from the LLC showing the new members?
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In our view, you do not need to obtain an updated operating agreement under these circumstances, but you may wish to do so. Since the deceased member was not the LLC’s manager and was not an authorized signer or guarantor for the loan, the event of this member’s death probably is not material to your…
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We have a customer whose wife suffered from Alzheimer’s disease. The customer had been advised to spend down his IRA so that he could access public assistance to pay for her care. Based on this advice, the customer paid for his wife’s care from his IRA and did not apply for medical assistance benefits. The wife recently died. Now the customer believes that advice was incorrect and has been advised to hire an elder law attorney to recoup the lost funds. Can the customer recover his IRA funds used to pay for his wife’s care?
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This is a complicated area of law, and it would be prudent for your customer to consult with an attorney who has expertise in this field. Also, while we understand the desire to assist a customer in a difficult situation, we recommend steering clear of providing any information that could be construed as legal advice.…
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Our trust department has been asked to act as executor for an individual who died in Florida. We believe the individual had residences in Illinois and Florida, but we have not seen the individual’s will and have no other information at this point. Can we serve as executor? In other words, how far do our trust powers extend geographically?
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We believe your answer will depend on the specific facts in this case, and we encourage you to consult with Florida counsel for further guidance. The Illinois Corporate Fiduciary Act authorizes your bank to engage in fiduciary activities — including serving as an executor — in another state, but those out-of-state fiduciary activities also are…
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Can a sole proprietorship account list a payable-on-death (POD) beneficiary?
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Yes, Illinois law permits a sole proprietorship accountholder to name a payable-on-death beneficiary. Accountholders may designate payable-on-death beneficiaries for “any account, deposit, certificate of deposit, withdrawable capital account or credit union share in any institution.” There is no exclusion for sole proprietorship accounts or other business purpose accounts. For resources related to our guidance, please…