Anyone Know Banks That Don't Require SSNs for POD's?

[brewer12345]

Banks have to comply with a litany of regulations around this area. Just off the top of my head:


- Know Your Customer rules
- Anti Money Laundering and Bank Secrecy Act requirements
- Consumer fairness/disclosure rules
- Unclaimed property rules


All of these basically boil down to banks needing to figure out how to toe the various lines and still do business. This stuff has only gotten more onerous in the last 20 years for reasons I will leave as an exercise for the reader.


Regulators usually leave it up to the individual bank how they will comply with regulations. As such, you might find a bank that will not require your POD beneficiary SSN, but if you do and jump in that pond I would not be shocked if some day down the road the bank does not start requiring that information either as a consequence of new requirements, a change in how the bank runs its compliance program, or due to regulators deeming what the bank is doing to be not sufficient for compliance.

 

[gerntz]

One strange thread.

 

[Dash man]

If the money is paid out to the beneficiary before final income tax, inheritance tax (some states) or estate tax is collected, the government wants to be able to track down every recipient of funds from the estate.

 

[pb4uski]

As an US expat living in MX I am very aware of KYC laws affecting others like myself. But had hoped for US residents there was a way around collecting SSN's for POD's. Guess not.

Why is providing a SSN for a POD beneficiary a problem?

 

[pb4uski]

.... I'd be o.k. with a law that says they can't be sued for handing over the money to the wrong person.

I wouldn't

 

[mexexpat]

Why is providing a SSN for a POD beneficiary a problem?

We have no kids. We have 13 nieces/nephews.

Spouse and I do not agree on who/how to bequest.

One of us believes even-steven for everyone. One of us wants to give to those who aren't (given current circumstances) going to inherit a lot from their parents. This person also thinks that as we and our nieces/nephews age, there may be circumstances where some need more $$ than others, i.e., what if one/some have children with special needs or they themselves are disabled in the future??

We ourselves are in good shape (knock wood) and figure we have another 25 years on the planet.

In the meantime, we want to have PODs on our bank accounts and have agreed we would at this point, name all nieces and nephews. We further agree that the last person standing (alive) has the OK to set the final beneficiaries as s/he sees fit. However we further agree that upon the death of spouse #1, spouse #2 would leave the then current equivalent of the maximum non-taxable gift to whichever nieces/nephews are chosen by spouse #1.

If you are still with me , the issue NOW is that we have no beneficiaries or PODs on our bank accounts and should we die together in an accident, our money would theoretically via our State law, go to our siblings...we do NOT want that to happen. We are trying to avoid wills and trusts, but even with them, the same issue arises.

BUT if we ask for SSN's now from all nieces/nephews, there is a very real chance that some of them will not get any share if the Last Surviving Spouse decides to limit the # of POD's. It seems mean to have all nieces/nephews thinking they will inherit from us, when it's possible some will not.

This probably sounds peculiar, especially to those with kids.

 

[Dash man]

I wouldn't

Me either

 

[brewer12345]

mexexpat, why is a will such a bad idea? Something specific to your circumstances?

 

[mexexpat]

mexexpat, why is a will such a bad idea? Something specific to your circumstances?

Seems like too many rewrites?? POD sounds so neat and slick. Plus probate could be an issue with a will. Was looking for simple.

 

[razztazz]

Why is providing a SSN for a POD beneficiary a problem?

Some people don't feel comfortable giving out their SSAN to somebody else's bank even if it's for a good cause.

Some people with money don't feel comfortable asking the prospective beneficiary for their SSAN to give to the bank because it's one of those things people might take some offense at just for being asked. Or, maybe you're not all that close but you still want to leave them with something?

OR, the maybe the Rich Guy in question doesn't want the beneficiaries to even know they're the beneficiaries until the final jot is tiddled after the funeral.

 

[brewer12345]

Seems like too many rewrites?? POD sounds so neat and slick. Plus probate could be an issue with a will. Was looking for simple.

I think I would opt for the will, personally. It is going to be hard to find a bank that currently does not require POD SSNs and if you do, the bank may not stay that way.

 

[mexexpat]

I think I would opt for the will, personally. It is going to be hard to find a bank that currently does not require POD SSNs and if you do, the bank may not stay that way.

Wanted to avoid naming an executor/executrix as well.

 

[OldShooter]

... We are trying to avoid wills and trusts, but even with them, the same issue arises. ...

With respect, this is a little like saying you need to dig a hole but do not want to use a shovel.

Wills and testamentary trusts are the correct tools for setting your estate up to do what you want it to do. Specifically, with a trust you can give the trustee flexibility to provide funds based on nose count, to help with unexpected financial or health issues, death of a benficiary who has minor children, etc. Putting the funds in trust also eliminates the risk that some of your money will be wasted by a spendthrift, shared with divorcing spouses, given to plaintiffs with judgments, or get dissipated in other ways that you do not want.

I encourage you to reconsider this aversion to using what is IMO the correct tool for the job. A good trust and estates specialist attorney has seen problems like yours and many more. He/she will be able to guide you and DW to a plan that you are both enthusiastic about.

You do not want to die intestate.

 

[MRG]

I think I would opt for the will, personally. It is going to be hard to find a bank that currently does not require POD SSNs and if you do, the bank may not stay that way.

+1

Much of my last OMY was working with Megacorp's external audit as an IT resource.

I watched the audit firms learn from each other and have standard checklists. The best practices were getting all the same(go figure). There was no place left to hide.

A peer try to argue that some of PCI audits didn't apply to our installations as he felt many of the controls were about windows based threats. He lost the battle and the war.

IMHO. They will all implement the same practices over time.

 

[Dash man]

With respect, this is a little like saying you need to dig a hole but do not want to use a shovel.

Wills and testamentary trusts are the correct tools for setting your estate up to do what you want it to do. Specifically, with a trust you can give the trustee flexibility to provide funds based on nose count, to help with unexpected financial or health issues, death of a benficiary who has minor children, etc. Putting the funds in trust also eliminates the risk that some of your money will be wasted by a spendthrift, shared with divorcing spouses, given to plaintiffs with judgments, or get dissipated in other ways that you do not want.

I encourage you to reconsider this aversion to using what is IMO the correct tool for the job. A good trust and estates specialist attorney has seen problems like yours and many more. He/she will be able to guide you and DW to a plan that you are both enthusiastic about.

You do not want to die intestate.

+1000
A trust, or at least a will is necessary. You can always use a corporate trustee if you don’t want to use a family member.

 

[OldShooter]

... use a corporate trustee ... you don’t want to use a family member.

This.

 

[pb4uski]

While I agree with others that POD is a cumbersome way to achieve your goals and that a trust would be best or a will would work, if you must go the POD route... tell the potential beneficiaries that you are doing some estate planning and needs their SSNs... if they refuse or don't respond then just skip them... natural consequences.

 

[mexexpat]

My DH was both successor trustee and executor on his Dad's trust and will in 2015. I do not want to burden any niece/nephew with that. Yes, I can hire a financial institution but the fees are very high and totally unnecessary given the rise in the use of TODs and PODs. If you asked me about writing a trust 10 years ago, I would have said yes, that was the way to go. But with TODs and PODs, a trust isn't necessary these days.

We will go the POD route, collect SSNs from all and should some of these nieces/nephews wonder after the last of us dies, why they didn't get any inheritance, well, we won't be around to hear their complaints

 

[sengsational]

My uncle, no kids, sent a paper letter to every neice and nephew asking for SSN. All my sibs called me and asked if they should comply. There's 6 of them, so I thought "This is my chance...say 'no' and get more!" Seriously, I advised them all it was safe with him and who he was passing it to (Vanguard).



If I were the OP, I'd write a letter like that, explaining what was in the post above... percentages not decided, but if you want 'in', the SSN is a precondition. Set expectations low (you might not get anything), but say you want it simple and keep the government/ public out of it. The simple truth is often the best approach.

 

[mexexpat]

We have no kids. We have 13 nieces/nephews.

Spouse and I do not agree on who/how to bequest.

One of us believes even-steven for everyone. One of us wants to give to those who aren't (given current circumstances) going to inherit a lot from their parents. This person also thinks that as we and our nieces/nephews age, there may be circumstances where some need more $$ than others, i.e., what if one/some have children with special needs or they themselves are disabled in the future??

We ourselves are in good shape (knock wood) and figure we have another 25 years on the planet.

In the meantime, we want to have PODs on our bank accounts and have agreed we would at this point, name all nieces and nephews. We further agree that the last person standing (alive) has the OK to set the final beneficiaries as s/he sees fit. However we further agree that upon the death of spouse #1, spouse #2 would leave the then current equivalent of the maximum non-taxable gift to whichever nieces/nephews are chosen by spouse #1.

If you are still with me , the issue NOW is that we have no beneficiaries or PODs on our bank accounts and should we die together in an accident, our money would theoretically via our State law, go to our siblings...we do NOT want that to happen. We are trying to avoid wills and trusts, but even with them, the same issue arises.

BUT if we ask for SSN's now from all nieces/nephews, there is a very real chance that some of them will not get any share if the Last Surviving Spouse decides to limit the # of POD's. It seems mean to have all nieces/nephews thinking they will inherit from us, when it's possible some will not.

This probably sounds peculiar, especially to those with kids.

Again the reason we'd like NOT to ask these relatives for their SSN is because in the end some may not inherit from us. If banks didn't ask for their SSN's we would not be setting any of them up for disappointment if at the end, they are not part of the POD list. That is what we are trying to avoid.

 

[gauss]

You are making this more complicated than it needs to be.
Your situation is somewhat similar to ours. Here is a framework that you may wish to consider:

#1) You make your own will with wife as primary devisee (ie beneficiary) and then all the nieces and nephews as secondary ie your wife precedes you in death. No SSNs are included in the will(s).

#1b) Your wife makes a similar will with you as primary devisee and then all of her preferred secondary recipients if you precede her in death.

2) You each give a copy of your will to everyone named on it. You may wish to include a cover letter explaining that they are secondary recipients and will receive funds only if your spouse preceeds you in death, otherwise their will will dictate (and the spouses will is not disclosed to them if they are not named in it). You may also include an overview of the Probate process so they know their rights if the executor does not discharge their duties consistent with the law.

If you don't want to disclose the actual will to the recipients, you could file the will at the county office where you live and disclose this fact in the cover letter that you provide to the recipients.

No SSn's are required and you can have these wills on file quickly and ready to go. Spouses can change their individual wills if they need to in the future.

The only obvious problem that remains is identifying a Personal Representative (aka executor) for each of the wills.

You could each name your spouse as the Personal Representative and not name a contingent PR. The probate court will generally appoint someone in this case (then named PR is unavailable/unwilling to serve.) The court appointed PR could often be the person that bring the will to the Probate court (hence the cover letter with instructions mentioned above).

Now you may have a fear of Probate and feel that it is something to be avoided. If you cling to this concept, then you may want to investigate Trusts or consult a professional. Alternatively you may wish to critically question why you have this aversion to Probate. (hint - marketing by estate attorneys to sell trusts perhaps?)

Some will point out that I am not an estate attorney, but rather just (SGIT), so take this suggestion for what it is worth.

-gauss

 

[RunningBum]

My uncle, no kids, sent a paper letter to every neice and nephew asking for SSN. All my sibs called me and asked if they should comply. There's 6 of them, so I thought "This is my chance...say 'no' and get more!" Seriously, I advised them all it was safe with him and who he was passing it to (Vanguard).



If I were the OP, I'd write a letter like that, explaining what was in the post above... percentages not decided, but if you want 'in', the SSN is a precondition. Set expectations low (you might not get anything), but say you want it simple and keep the government/ public out of it. The simple truth is often the best approach.

I like this approach. Vanguard didn't require SSNs of beneficiaries for my TOD though, so I didn't have to deal with it. They did require birthdates, which is easier to get.

I like the TOD. Avoids probate without the cost of the trust, and much easier to update than a trust. My estate attorney thought it was fine for my uncomplicated situation.

 

[OldShooter]

... the cost of the trust ...

One of my many failings as a confirmed cheapskate is that I tend to look at expenses in terms of dollars rather than putting them in context. I wonder if that is happening here.

Let's just say that a good estate plan with health care powers, POAs, and a couple of testamentary trusts would cost $5K. (Ours was $4K.)

I would say that if this $5K was a small single-digit percentage of the estate, it would be a good investment in order to make sure that the estate $ went where they were supposed to go and were used wisely by the recipients.

Same-o for professional trust administration except its much easier because the charges are stated as a percentage. We just switched our testamentary trusts to Schwab and IIRC their sticker-price fee was 50bps vs megabank at 1.5%. Pretty cheap for professional stewardship of the assets we are leaving to support our heirs, even ignoring the benefit of having a professional in the line of fire versus a family member.

 

[Sunset]

We have no kids. We have 13 nieces/nephews.

Spouse and I do not agree on who/how to bequest.

.......

BUT if we ask for SSN's now from all nieces/nephews, there is a very real chance that some of them will not get any share if the Last Surviving Spouse decides to limit the # of POD's. It seems mean to have all nieces/nephews thinking they will inherit from us, when it's possible some will not.

....

So just agree on a minimum amount, example everyone gets $1,000 minimum. Then you can collect the SSN's from all and if anyone asks you can tell them, it's because you will leave them a bit of money if you die.

The surviving spouse can raise or lower the amounts of any beneficiary as long as the minimum amt remains the agreed upon minimum (or a haunting will ensue )

 

[mexexpat]

Not a fear of Probate, but a realistic opinion based on our dealings with the state of Virginia. My FIL had a trust but a few items never made it into the trust due to his dementia (he told us he transferred everything but he hadn't; those we were aware of, we got transferred with his signature but a few came to light after his death).

My DH (trustee and non-VA resident executor) wrapped up trust items in a month (in excess $ 1 million). The spillover that went via the will and Probate....almost a year, and the required paperwork was laughable, though not so funny when he was going through it. VA has a backwards, unfriendly Probate, especially if executor is not a VA resident. PITA to put it mildly. Maybe other states are better??

Hence our desire to directly transfer $$ upon death, yet keep it secret until that happens and hence not have to ask for SSNs, since some may not receive and $$ depending on who is last wo(man) standing.

I think what will work is what poster @Sunset suggested. I think the spouse who wants to disburse $$ based on NEED (not even-steven) will agree to small bequeaths to those who have no need, maybe a 1K to those.

So, thanks to all with ideas!