Topic: Joint Accounts
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One of our customers is complaining that we improperly cashed a cashier’s check payable to “John and Jane JTWROS.” It was issued in July of 2002, and we cashed it for John in August of 2002. The customer, Jane, is complaining that we cashed the check without her signature. We believe that only one signature was required because it was payable JTWROS. Does Jane have a claim?
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Under the Uniform Commercial Code (UCC), your customer had three years in which to bring a claim for conversion of the cashier’s check or for breach of a warranty by your bank. Without commenting on your bank’s conclusion that Jane’s endorsement was unnecessary, we believe that any claim she may have is no longer be…
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On a regular passbook type savings account, checking account or any other similar account, what is the acceptable means of removing joint account holders? Is simply crossing off the unwanted name acceptable?
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Assuming that your bank has the proper authorization to remove a joint account holder from an account, we recommend asking the remaining account holder to execute a new signature card, rather than crossing out the former account holder’s name. While we are not aware of any authority that forbids the practice of crossing out a…
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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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We have a check payable to “John Doe, Mary Doe, Joint Tenants.” Do both John and Mary need to endorse the check, even though “AND” isn’t actually printed on the check?
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No, based on these facts, you do not need to obtain the endorsements of both John and Mary, notwithstanding that the check appears to have been made payable to both of them in their account held in joint tenancy. The Uniform Commercial Code (UCC) provides that when a check made payable to two or more…
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We are trying to understand the following ownership scenario under the new Illinois unclaimed property law. Say we have one account jointly owned by three owners — A, B, and C — as well as a second account owned by A and B and a third account by C alone. All three share the same mailing address. Can an indication of interest in the first account keep BOTH other accounts from being considered unclaimed property? Do we have to determine who initiated the activity to make this determination?
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We do not recommend treating activities on the first account (owned by A, B, and C) as indications of interest in the other accounts without determining who initiated the activity. The new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that an inactive deposit account is considered active if “any other accounts, including loan…
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As a hypothetical, say we have two accounts sharing the same mailing address — Account 1 and Account 2. Account 1 has just one owner, individual A. Account 2 has two owners, individuals A and B. Under the new Illinois unclaimed property law, if Account 2 is active due to individual B’s activities, does that count as activity on Account 1, even though individual B has no ownership interest in that account? Also, what if individual B has an active deposit account and is the beneficiary of a revocable trust account (in other words, he is not the legal owner of the trust account) that is using the same social security number and mailing address as the individual deposit account?
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As to your first question, we do not believe that activities by a non-owner of Account 1 could cause that account to be considered active. As to your second question, activities by the beneficiary of the trust account would cause both the trust account and the beneficiary’s individual account to be considered active. The new…
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An elderly customer opened a joint payable on death (POD) account with his sister a year ago. Recently, the customer became incapacitated and now has a court-appointed guardian. Can we add the guardian to the joint account? The guardianship order indicates that the guardian has authority to act on behalf of our customer with respect to the customer’s bank accounts. The guardian also is named as the POD account beneficiary (which occurred before he was appointed guardian). Can an account that has a guardian associated with it continue to have a beneficiary?
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Yes, we believe that you may add the guardian to the joint account. A guardian’s specific rights and responsibilities with respect to a ward are established through a court order when the guardian is appointed. In this case, you have indicated that the court order establishes the guardian’s authority to transact on the customer’s accounts.…
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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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Can a joint account owner remove another joint owner from a deposit account?
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No, we do not believe it would be advisable to permit one joint account owner to remove another joint owner from a joint deposit account. There is conflicting case law in Illinois as to whether joint account owners may unilaterally remove other joint owners from an account without their consent or signatures. At least two Illinois cases…
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As a hypothetical, let’s say we have two accounts that share the same address, Account 1 and Account 2. Account 1 has two owners, individuals A and B. Account 2 has just one owner, individual B. Under the new Illinois unclaimed property law, if Account 2 is active due to individual B’s activities, does that count as activity on Account 1?
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Yes, we believe that an owner’s account activities also will cause that owner’s other accounts to be considered active, even if the other accounts are held jointly with other individuals. The new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA) provides that an inactive deposit account is considered active if “any other accounts, including loan…