Topic: Joint Accounts
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An internal audit revealed a record of a cashier’s check that is stale. We would like to contact the purchaser to determine if the check was ever provided to the payee or if the purchaser would like the check to be reissued. Our records indicate that a husband and wife co-owned an account with us, and the wife purchased the cashier’s check when she closed the account. We believe the account was closed as part of the couple’s divorce. Should we contact both account owners or just the wife, who was the only one to actually purchase the check?
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In our view, you should reach out to the purchaser of the cashier’s check (the wife) if you wish to determine whether the check was ever delivered to the payee. Regulation P generally prohibits a bank from disclosing nonpublic personal information about a consumer, including “the fact that an individual is or has been one…
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We sometimes have customers who want to add an older teenager who is a minor to an account. Can a minor have joint ownership in a joint account, such as with a parent? Could the bank exercise a right of setoff in the parent’s other accounts for the minor’s overdrafts on the joint account? What identification should we require from the minor establishing a joint account with their parent?
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Yes, a minor can hold an account in joint ownership with another party, such as a parent. The Illinois Banking Act permits banks to open accounts for minors, “and the rules and regulations of such bank . . . shall be as binding upon such minor as if such minor were of full age and…
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A customer passed away several months ago. She held a joint account with her son and also has an outstanding unsecured loan (not a credit card debt). Can we use the funds in the joint account to setoff the loan? Our loan agreement states that “all obligations of the Undersigned shall be binding upon Undersigned’s heirs, personal representatives, successors and assigns.” Our deposit account agreement permits us to “set-off funds in your account, held by you, jointly or individually to pay any debt you may owe us.”
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We believe that your bank may exercise a valid right of setoff in the joint account funds, even after the joint owner has died. Under Illinois law, the right of setoff can arise either contractually (when a loan agreement or account agreement provides for a right of setoff) or under common law when there is…
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If we are removing a joint owner from a joint account because that individual has died, can we rely on a newspaper obituary as confirmation of their death? We don’t always have a copy of a death certificate. Also, if the deceased joint owner was the primary account holder for tax reporting purposes, should we begin reporting taxes to the surviving owner as the primary account holder?
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Yes, we believe that your bank may rely on a newspaper obituary, although we recommend checking with the living joint owner to confirm that the obituary refers to the deceased joint owner and not to someone else with the same name. We think you should treat the surviving joint owner as the primary account holder…
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If we have a joint account with rights of survivorship, and one of two owners passes away, can we change the account into an individual account naming only the surviving owner without a signed signature card for the new account? We would like to clear up accounts with a deceased joint owner where we have been unable to contact the surviving owner, sometimes for a period of a year. We also have this problem when a tenant in common dies and the deceased owner’s executor or beneficiary does not remove the deceased owner from the account.
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Yes, your bank may remove a deceased joint owner’s name and social security number from an account, but we do not recommend opening a new account without a signed signature card from the surviving owner. As of the date of death, joint account funds automatically pass to the surviving joint owner. Assuming that your bank…
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We typically allow parents to open joint accounts with their minor children by having the parent sign the account agreement for both the child and the parent. Does the parent’s signature on behalf of the child create a right of survivorship for the child under the Joint Tenancy Act?
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We cannot confirm that a parent’s signature on behalf of a minor child would create a right of survivorship. Under the Joint Tenancy Act, a right of survivorship in a joint deposit account may be established only when all account owners sign an agreement to that effect. It is conceivable that a court would view…
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A 16 year-old minor has a joint savings account with her father. She would like to remove her father from this account and add her mother. Is the father’s permission required? We believe that an adult could make this account change, but we are uncertain about minors.
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We recommend obtaining the father’s permission as a joint account owner before removing him from the account. The Illinois Banking Act states that banks may accept deposits from minors and open accounts in the name of minors, and the bank’s rules and regulations are the same as for accounts held by adults. However, there is…
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A grandma opened an account with her minor grandchild. The account agreement creates a joint account with a right of survivorship. However, the child did not sign the account agreement. The grandma signed in her own name and on behalf of the child. We used both the child’s social security number and the grandma’s to open the account. We do not have any evidence or documentation that the grandma is the child’s legal guardian. The child never has transacted on the account, and the grandma has passed away. Is this account now part of the grandma’s estate?
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We recommend consulting with bank counsel regarding the ownership of the account, but in our view, a joint tenancy never was created, so the account passed to the estate of the grandma upon her death. The Illinois Banking Act permits banks to establish deposit accounts for minors with the same terms as if the minor…
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A safe deposit box customer recently died. His sister is executor of his estate. She has asked us for the date on which the customer added a joint owner to the box (his fiancée). There seem to be bad feelings between the sister and the deceased customer’s fiancée. Can we provide that information? Our safe deposit account agreement treats boxes with multiple lessees as joint tenancies with rights of survivorship, so we took the position that we could not provide this information because the fiancée now is the sole lessee on the box.
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We believe that you may provide the requested information to your customer’s executor, since she is requesting information about an event that occurred before his death. The executor would not have any right to information about the safe deposit box account after the date of death. The federal privacy regulations permit banks to disclose account…
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We have a customer who had a joint account at the bank, which he held jointly with his wife. He is a doctor. A few years back, he wanted to protect the bank account from potential creditors in a malpractice suit. He asked us to remove his name from the account. We obtained his signature but not his wife’s on the confirmation for his removal. Now they are having marital problems, and he is claiming that he is a joint owner on the account. He told us that we cannot remove a joint owner from an account without all of the joint owners’ signatures. Our attorney checked and said that was not the case. Can you confirm?
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We believe that the husband could and did remove himself from the joint account without his wife’s signature. Under the Illinois Joint Tenancy Act, funds held in a joint account may be “paid to any one of” the account owners. Unless otherwise stated in your account agreement, this provided the husband with the authority to…