Topic: Death of a Customer
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Our customers executed a small estate affidavit to settle the estate of their deceased son, who did not have an account with us. Subsequently, the parents received a tax refund check from the State of Illinois made payable to their son. Can the parents cash the check made out to their son?
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We believe that the appropriate course of action for your customers is to file a claim for the refund from the Illinois Department of Revenue (Illinois DOR) using Form-1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. We spoke with a representative from the Illinois DOR, who advised that submitting a Form-1310 would be…
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A customer passed away who had a deposit account and a credit card account at our bank. Can we access the deposit account funds to pay off the customer’s outstanding credit card balance? We believe that our account agreements include generic setoff provisions. The customer had not set up an automatic credit card bill payment. We have not attached a levy on the funds or obtained a court order with respect to the debt.
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Whether your bank may access the deposit account funds to pay the deceased customer’s credit card debt depends on a careful review of your account disclosures and agreements. Regulation Z generally prohibits banks from exercising setoff rights in deposit account funds with respect to consumer credit card debts. There is an exception for obtaining or…
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If one co-owner of a safe deposit box account passes away, can the executor of his estate access the box? Or does he need the permission of the surviving account owner? Our safe deposit box account agreements do not specifically include a right of survivorship, but after a co-lessee dies, we treat the survivor as the sole lessee of the box.
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In our view, the executor is entitled to access the box without the permission of the surviving co-lessee, provided that the executor presents the bank with letters of office, a small estate affidavit or an applicable court order, as required by the Safe Deposit Box Opening Act. We are aware that the surviving co-lessee could…
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The attorney representing a deceased customer’s estate has requested information about the customer’s credit life insurance policy on her mortgaged residential real estate. To facilitate the information request, the attorney would like to present us with a small estate affidavit and the customer’s death certificate. Can we provide this information to the attorney? We know the customer’s estate includes real property, so is it proper for us to rely on a small estate affidavit? Or should we require letters of office?
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Yes, we believe that your bank may release information about your deceased customer’s credit life insurance policy to the estate’s attorney. However, we recommend consulting with your bank counsel to determine what documentation would be sufficient to establish that the attorney is acting in a fiduciary or representative capacity on behalf of your customer’s estate…
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We sometimes learn of a customer’s death from a federal agency’s ACH death notification entry (DNE). Does a DNE notice count as confirmation of a customer’s death? Can we refuse to remit property until we have a death certificate on file, since we would end up remitting the property after three years of inactivity in any event?
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Yes, we believe that your institution should treat a DNE notice as confirmation of a customer’s death under the new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA). We do not recommend waiting until a death certificate is presented. Generally, the Illinois RUUPA shortens the presumed abandonment period for property held by a deceased customer…
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One of our customers had set up automatic transfers from his checking account at our bank to make loan payments (for non-credit card loans). The customer has died. Can we continue withdrawing loan payments? What other procedures should we follow?
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We recommend reviewing your bank’s agreement with the customer that authorizes the automatic loan payments. If it provides that the customer’s debit authorization expires when the customer dies, your bank should cease debiting the loan payments. If your agreement is silent on this issue, your bank may be able to continue debiting the loan payments.…
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A deceased customer’s family member would like to search her safe deposit box for a will. The family member has no keys, so we would have to drill the box. Do we need a court order to drill the box to search for a will?
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No, you do not need a court order to drill the box. Absent a court order, your bank should obtain a safety deposit box opening affidavit from the family member, who must satisfy certain requirements in the Illinois Safety Deposit Box Opening Act (the Act). The Act requires banks to open a safety deposit box…
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Is the small estate affidavit process available when a decedent owned real property and did not transfer title to a land or personal trust before death? In this case, the decedent’s personal property does not exceed the $100,000 threshold, but the decedent’s real property would cause the total estate’s value to exceed that threshold.
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The Illinois Probate Act’s plain language is unclear on this point, but there seems to be a consensus among Illinois practitioners that the small estate process is unavailable if the decedent’s estate includes real estate. The small estate provisions of the Probate Act require that “the decedent’s entire personal estate, including the value of…
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When we close a deceased customer’s account according to a small estate affidavit, should we make the check payable to the affiant or to the estate of the deceased customer?
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The terms of the small estate affidavit will dictate whom to make the check payable to. The statutory form for an Illinois small estate affidavit directs property holders (such as banks) to distribute the decedent’s property according to the terms of the affidavit. Accordingly, the affidavit may direct the bank to disburse the account funds…