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

[OldShooter]

Quote:

Originally Posted by Dash man ... 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]

Quote:

Originally Posted by 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]

Quote:

Originally Posted by 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.

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]

Quote:

Originally Posted by RunningBum ... 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]

Quote:

Originally Posted by mexexpat 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!

[OldShooter]

Just to be clear, what I am talking about and others (probably) too is not a trust (aka "living trust") that is created prior to death. What I am talking about is testamentary trusts that are created on death, legal "persons" that are beneficiaries of some or all of the estate.

An example from our plan, we have two sons. One is likely to be a spendthrift and the other is financially very naive. 1/3 of the estate goes to various charities and 1/3 goes into each of the boys' trusts. The trusts will be professionally managed. Each trust document goes into some detail about what money the boys will receive but leaves the trustee with considerable discretion to deal with future events. For one example, if one becomes very ill and needs home health services, the trustee can pay for that. Also, the $$ of the trust are protected against a divorcing spouse taking some of our money and are protected if there is a judgment against one of the boys. The trust documents also specify what happens to the $$ on death of the principal beneficiary.

A "living" trust is AFIK primarily designed to benefit the lawyers.

[RunningBum]

Quote:

Originally Posted by OldShooter 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.

I agree but I saw no advantage to a trust over my TOD at Vanguard plus a will to cover the other bits and pieces. And as I said in the continuation of that sentence, I'd lose flexibility. My brother adopted a girl? A few key strokes and she's included in my TOD. With a trust I'd have to pay my attorney to make that update, as I understand it. So pay $4000 (I think that's about what my attorney quoted me) and lose flexibility, with no gains that I can see for my case? I know I can be cheap, but in this case I think it's prudent. It could be $100 and I still don't think I'd want it. TOD works for me because my case is simple. My TOD distributes a good portion of my VG account mostly to my son, with some going to other relatives. My real estate also has TODs going to my son. The rest of my stuff all goes to my son via the will, and he is set as beneficiary of my IRAs and other accounts. If my situation gets more complicated I'll gladly pay up for a trust if that's what it takes to make sure things go smoothly.

Maybe I'm wrong about how easy a TOD is at VG. My understanding is that VG opens an account for each beneficiary for their part to go into. Each person can then keep the account, sell everything off and close the account, or transfer into their own account at VG or elsewhere. Sounds as easy as anything. Is the reality a lot different from that?

[jazz4cash]

Quote:

Originally Posted by OldShooter Just to be clear, what I am talking about and others (probably) too is not a trust (aka "living trust") that is created prior to death. What I am talking about is testamentary trusts that are created on death, legal "persons" that are beneficiaries of some or all of the estate. An example from our plan, we have two sons. One is likely to be a spendthrift and the other is financially very naive. 1/3 of the estate goes to various charities and 1/3 goes into each of the boys' trusts. The trusts will be professionally managed. Each trust document goes into some detail about what money the boys will receive but leaves the trustee with considerable discretion to deal with future events. For one example, if one becomes very ill and needs home health services, the trustee can pay for that. Also, the $$ of the trust are protected against a divorcing spouse taking some of our money and are protected if there is a judgment against one of the boys. The trust documents also specify what happens to the $$ on death of the principal beneficiary. A "living" trust is AFIK primarily designed to benefit the lawyers.

Every resource I’ve found states that a testamentary trust will not bypass probate. Maybe that’s not an issue if real estate is not involved in the OPs scenario. I’m helping someone with an issue that brought the limitations on this type of trust to light. The person I’m working with has same opinion of living trust as you do. I agree with the sentiment that the living trust is worth low single digit percentage of the estate. Or you can get one online for $39.99.

[njhowie]

Quote:

Originally Posted by mexexpat Checked with our current banks and both require SSNs of Payable On Death beneficiaries. Are there banks that won't require this?

Fidelity does not require the SSN - it indicates that it is optional. Relationship (Spouse, Non-spouse, Trust, or Entity), Name and Birthdate are required.

I just went to the beneficiaries screen in my account to verify this.

[OldShooter]

Quote:

Originally Posted by jazz4cash Every resource I’ve found states that a testamentary trust will not bypass probate. ...

I'm pretty sure I never said it did & I don't think it does. The purpose of a testamentary trust is to protect, manage and distribute the estate's assets after the grantor's death.

I have no reason to be concerned about probate. DW, who retired as a megabank SVP and business unit manager in Investments and Trust has seen many, many estates settled and has never even mentioned probate as something of concern. Ditto our attorney, who is one of the best that DW knows. (I wonder if this widespread fear of probate has been created by the living trust salespeople.)

There seem to be many here who want to do their own lawyering. I do not. With respect to estates, if there are problems they will appear after it becomes impossible to fix them. Literally after "game over." DW has seen a lot of this, even with documents drawn by lawyers who claim to be specialists. Sometimes she has had to go to court to get approval to fix problems. This is a cost to the estate, a delay, and the "fix" may not be consistent with the (then unknown) wishes of the decedent.

The aphorism I remember from long ago is "A man who is his own lawyer has a fool for a client." I suppose it needs to be fixed up for sexist language these days, though.

Quote:

Originally Posted by jazz4cash ... I’m helping someone with an issue that brought the limitations on this type of trust to light. ...

Are you a lawyer?

[jazz4cash]

Quote:

Originally Posted by OldShooter I'm pretty sure I never said it did & I don't think it does. The purpose of a testamentary trust is to protect, manage and distribute the estate's assets after the grantor's death. I have no reason to be concerned about probate. DW, who retired as a megabank SVP and business unit manager in Investments and Trust has seen many, many estates settled and has never even mentioned probate as something of concern. Ditto our attorney, who is one of the best that DW knows. (I wonder if this widespread fear of probate has been created by the living trust salespeople.) There seem to be many here who want to do their own lawyering. I do not. With respect to estates, if there are problems they will appear after it becomes impossible to fix them. Literally after "game over." DW has seen a lot of this, even with documents drawn by lawyers who claim to be specialists. Sometimes she has had to go to court to get approval to fix problems. This is a cost to the estate, a delay, and the "fix" may not be consistent with the (then unknown) wishes of the decedent. The aphorism I remember from long ago is "A man who is his own lawyer has a fool for a client." I suppose it needs to be fixed up for sexist language these days, though. Are you a lawyer?

NOPE. Just trying to help someone that expressed interest and does not want to use a lawyer. I only mentioned this because the OP mentioned specifically that they wish to avoid probate. The individual I am trying to help stated that avoiding probate was their #1 priority.

[gooddog]

Just did this at Chase, and they did not require SSN, but had to know birth date.

[mexexpat]

@gooddog...thanks for the tip.

[meleana]

One of my on line banks does not even allow POD- which is very annoying to me. It is a joint account with my husband and I don't want to put our adult son's name on it yet as to have it tied in with his assets. He could get married in the future or whatever, etc.



POD would be perfect, but they just don't allow it, I don't know why. We don't have a revocable living trust set up yet either. Just a will.

[jazz4cash]

Quote:

Originally Posted by meleana One of my on line banks does not even allow POD- which is very annoying to me. It is a joint account with my husband and I don't want to put our adult son's name on it yet as to have it tied in with his assets. He could get married in the future or whatever, etc. POD would be perfect, but they just don't allow it, I don't know why. We don't have a revocable living trust set up yet either. Just a will.

Are you willing to share which bank this is? I would like to avoid using it.

I opened a regional brokerage account and realized afterwards that they never offered to establish a beneficiary for the account. It was like pulling teeth to get it done and left a bad taste in my mouth. I moved the funds to Fido after a year or so due to this and some other concerns. Now I can't figure out if I have any beneficiaries for my Bank of America account. No info on thier website. Fido and Vanguard send reminders constantly about verifying beneficiary info.