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Anyone Know Banks That Don't Require SSNs for POD's?
Old 01-01-2019, 08:23 AM   #1
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Anyone Know Banks That Don't Require SSNs for POD's?

Checked with our current banks and both require SSNs of Payable On Death beneficiaries.

Are there banks that won't require this?
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Old 01-01-2019, 08:32 AM   #2
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Our B and M bank (BOA) also requires it.
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Old 01-01-2019, 08:36 AM   #3
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Yes, BOA is one of ours that I contacted. Also Charles Schwab (checking).
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Old 01-01-2019, 10:19 AM   #4
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I wasn't able to find any. Fortunately the people on my list were OK with giving me their SSAN. I suspect there is a way around this that the banks don't want to bother with and might require a lawyer etc etc etc for verification. I didn't have to pursue it though. I couldn't believe how hard they made it to give away my money.
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Old 01-01-2019, 10:57 AM   #5
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There are some pretty strict Treasury "know your customer" and reporting requirements designed to detect money laundering. You may have run into these. Also, the IRS wants 1099s for any future income that might go to your PODs, so that is probably another reason.
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Old 01-01-2019, 11:00 AM   #6
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There are some pretty strict Treasury "know your customer" and reporting requirements designed to detect money laundering. You may have run into these. Also, the IRS wants 1099s for any future income that might go to your PODs, so that is probably another reason.
+1

Many years ago I wrote a bunch of code to help identify financial accounts without a SSN. Thought it was an IRS requirement.
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Old 01-01-2019, 11:01 AM   #7
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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.
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Old 01-01-2019, 11:32 AM   #8
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Minnwest bank in MN did not require SS for POD recipients when my DM set up her new account a few months back
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Old 01-01-2019, 11:40 AM   #9
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So you have to tell people they're your beneficiary and ask them for their SSNs in order to leave your money to them via a POD designation? All of ours are spouse and daughter, so we know the SSNs, but what if I wanted to leave money to a niece or a friend and notify them via letter after I pass?

I'd be shocked if there's an actual law that requires a beneficiary to provide PII (personally identifiable information) to a bank that she isn't a customer of, and I suspect this is just a common bank policy rather than a matter of law. The bank doesn't have to report beneficiary info to the IRS. When someone shows up to claim the account they must collect the SSN in order to transfer it to the new owner and then any tax reporting will happen under the new owner's SSN, but they have no legal need for it before that. I suspect they're just using the SSN to try to avoid liability for transferring the account to your niece Jane Smith when you meant for it to go to your sister Jane Smith.
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Old 01-01-2019, 12:44 PM   #10
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[QUOTE]
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Originally Posted by cathy63 View Post
So you have to tell people they're your beneficiary and ask them for their SSNs in order to leave your money to them via a POD designation?
That's what I had to do. Ask people for their SSANs. To give to a bank they never heard of. Crazy!

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All of ours are spouse and daughter, so we know the SSNs, but what if I wanted to leave money to a niece or a friend and notify them via letter after I pass?

I'd be shocked if there's an actual law that requires a beneficiary to provide PII (personally identifiable information) to a bank that she isn't a customer of, and I suspect this is just a common bank policy rather than a matter of law. The bank doesn't have to report beneficiary info to the IRS. When someone shows up to claim the account they must collect the SSN in order to transfer it to the new owner and then any tax reporting will happen under the new owner's SSN, but they have no legal need for it before that. I suspect they're just using the SSN to try to avoid liability for transferring the account to your niece Jane Smith when you meant for it to go to your sister Jane Smith.
I suspect you are correct. It's like a big CYA tactic they came up with in the past... 10-15 or so years for some reason (Anti-terrorism? I guess that'll do.)

I know I had one person already as a beneficiary for an IRA and some I bonds fore years and years. I just needed to put their name and, I think, relationship on the paperwork. When I went to POD (what's the diff?) I needed the SSAN. They said it was required by law (The Government) but it just smelled too funny.
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Old 01-01-2019, 12:52 PM   #11
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What alternate form of ID do folks propose that positively guarantees the bank will turn over the money to the correct John Doe?
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Old 01-01-2019, 12:55 PM   #12
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What alternate form of ID do folks propose that positively guarantees the bank will turn over the money to the correct John Doe?
+1

That was what I was thinking. Having the SSN on file would help to ensure that the correct person claims the money. Managing identity is not a simple task.
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Old 01-01-2019, 01:02 PM   #13
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Someone's name is ALSO PII.
If your beneficiary's info is not safe at your bank, neither is yours.

You might be able to designate a trust. For me that would not be worth it but YMMV.
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Old 01-01-2019, 01:29 PM   #14
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Someone's name is ALSO PII.
If your beneficiary's info is not safe at your bank, neither is yours.
Correct, but I can decide whether or not to trust someone with my own PII. It's their asking for the information of a 3rd party with whom they do not do business (and may never do business with, if I close the account before I die) that's fishy.

(And perhaps PII is the wrong term. What I mean is that asking for SSN is taking it a step too far as it enables identity theft in a way that knowing someone's name and birth date does not.)
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Old 01-01-2019, 01:32 PM   #15
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Correct, but I can decide whether or not to trust someone with my own PII. It's their asking for the information of a 3rd party with whom they do not do business (and may never do business with, if I close the account before I die) that's fishy.
Again, how do you propose they find a beneficiary without that person being identified?

I do not see the fishiness.
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Old 01-01-2019, 01:42 PM   #16
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What alternate form of ID do folks propose that positively guarantees the bank will turn over the money to the correct John Doe?
Name, birth date, relationship to the deceased should suffice. It's worked for quite a long time. As long as a bank does the basic due diligence to verify name and birth date and requires a copy of the death certificate, I'd be o.k. with a law that says they can't be sued for handing over the money to the wrong person.
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Old 01-01-2019, 01:59 PM   #17
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Several years ago, an employee of mine passed away when he fell asleep behind the wheel after working midnight shift. There were no less than 10 people who showed up within 48 hours to claim his life insurance and pension benefit. They came to HR, and when they didn't like their answer, they went to superintendent, and when they didn't like their answer, they went to corporate. I'm sure all 10 new his name, birth date and their relationship to the deceased.
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Old 01-01-2019, 02:06 PM   #18
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As long as a bank does the basic due diligence
Exactly what many companies, including banks seem incapable of doing.

A little diligence would prevent a lot of fraud and mistakes. I think our world has determined that it’s easier to insure for loss or absorb the cost (and pass it on to you, the consumer), than it is to put reasonable measures in place. Their other favorite tact is to try to find the easy fool proof “thing”, like getting a SS number, and essentially putting the burden on you.
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Old 01-01-2019, 02:12 PM   #19
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I'd be o.k. with a law that says they can't be sued for handing over the money to the wrong person.
Well, get that in place and it changes the discussion. Until then, banks face a lot of heat when they pass out dough to the wrong folks. And those pita legitimate claimants get all emotional about it when they show up and the money is already gone.

The small, community bank I was a customer and stockholder at for decades had a sign up which said something like: "Please don't be offended when we ask you for identification despite the fact you're a well known, valued customer."
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Old 01-01-2019, 02:19 PM   #20
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essentially putting the burden on you.
Well, it is your money. The bank really doesn't give a s*it who gets it when you croak as long as it's a clean, one-and-done transaction they never hear about again. Having John Doe #2 show up and want money already collected by John Doe #1 would be a nightmare for them. Especially if John Doe #1 isn't easy to find or is a "bad boy" in the middle of a ugly family dispute.
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