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Bank POD Issue
Old 06-08-2018, 07:34 PM   #1
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Bank POD Issue

I am just curious if anyone has experienced this before. My mother recently died. I am her only child and the sole heir in her will as well as being executor. I am scheduled to consult with an attorney on that aspect of her estate . I am an attorney myself but probate is not my field. My mother was not a wealthy woman and her estate is simple with basically a bank account, a small IRA, a paid for house and her personal belongings (and car).

I was the beneficiary of the bank account in that it was payable on death to me. I am also beneficiary of the IRA.

I got her death certificate so I went down to the bank. I knew (I thought) that the bank account would simply go to me as the beneficiary. There are a number of utility bills being paid out of the bank account and I wanted to make sure those continued to be paid.

Well.

Because the bank account was above a certain amount the bank basically said that I had to so through probate in order to get the money transferred to me. And, since my mom was now deceased the bank would pay nothing more out of her account to things like the automatic utility payments. So, within a few minutes I found out that the bank wouldn't transfer the money to me and wouldn't let the existing account pay the bills coming to it (even though I was willing for them to be paid).

I must admit I was very surprised about the probate thing. I mean, I thought the whole point of POD was that the funds in the account were transferred outside of probate.

I do plan to do what is necessary probate-wise so that I can sell my mom's house and car. And, I am the only child so it all comes to me in the end anyway. But, I was wanting to get access to the funds so that I could continue to pay the bills related to the house and could do any other work needed to get the house ready for sale.

Yes, it will get done. But, what was the point of my mom making it POD if the bank won't transfer the money. The bank officer did call the "back office" of the bank and confirmed that this was what was required.

As far as the utilities and other house related bills, I had already set up some online accounts to make payments when I was POA for my mom. I was able to set up some others and just go and make payments out of my checking account. I did that as I knew that some of the automatic payments were to be made in the next few days before it is possible for me to get a court order as to me being the executor.

At this point, these payments are not a huge amount of money and I can front them out of my existing checking account. But, it annoys me to have to do that.

Anyway - is this common that bank accounts above $X won't pay under the POD beneficiary designation without some sort of probate (the bank would also accept a small estate affidavit but that doesn't apply here). FWIW, my mom's account wasn't much above the limit and the limit wasn't all that high.
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Old 06-08-2018, 08:01 PM   #2
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MIL passed early last year in the midwest. DH was an only child and all assets held under POD/TOD/beneficiary designations. PODs at several banks were her checking account, savings account, and a couple of CDs. We took the death cert, obit and will docs around to the banks and they issued checks to DH on the spot. Balances were in the range of ~5K to $35K in each account.
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Old 06-08-2018, 08:02 PM   #3
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I never heard of this. What was the amount that the bank would not pay the POD above?
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Old 06-08-2018, 08:16 PM   #4
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Sorry for your loss. If you have copies of the POD paperwork properly executed by your mom that should be sufficient for the bank to release the funds. After all that's what the POD acronym means. Contact someone higher up, and if the bank continues to be unhelpful, I'd get their refusal in writing plus advise them you'll have to treat any expenses you have to cover in the meantime as a loan to the bank with interest due.
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Old 06-08-2018, 08:54 PM   #5
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Personally, I think the bank just wants to keep the money as long as it can. When my MIL died, she had a CD worth over 50 K. They just cut a check to my wife for the balance.
After my wife passed away, I emptied out her checking account, then went to the bank to close the account. They gave me some BS about probate, but since there was no money in the account they closed it.
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Old 06-08-2018, 10:18 PM   #6
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Yes, this is all why I'm ticked off. The bank acknowledges that I am the beneficiary. I do plan to get what I need to be able to sell the house. So, in the end it may be a moot point. But, it is annoying. I am consulting with an attorney who -- unlike me -- does this type of law for a living. So, we'll see what he says. As long as I only have to advance a few hundred dollars for utility bills it isn't that big an issue in the long run. But, it still annoys me since this is exactly what POD is supposed to prevent.....
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Old 06-08-2018, 10:30 PM   #7
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My feeling is banks want to hold onto the cash forever.
When I was executor, I saw the bank had many accounts of dead people, who had died years ago, and they still were holding the money.

When my mom died, I had POA, I went to the bank, emptied the safety deposit box, and returned to the bank the next week with the death certificate. They promptly told me they would seal the safety deposit box. I told them no need as I saw it was empty last week, and returned the keys.
The same bank had well over 100 safety deposit boxes that were "sealed" and had been that way for years...

Banks are not your friend.
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Old 06-08-2018, 10:31 PM   #8
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Hey, it would help us if we knew the name of the bank and their POD limit, as it could easily affect others.
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Old 06-08-2018, 11:13 PM   #9
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Originally Posted by Katsmeow View Post
Yes, this is all why I'm ticked off. The bank acknowledges that I am the beneficiary. I do plan to get what I need to be able to sell the house. So, in the end it may be a moot point. But, it is annoying. I am consulting with an attorney who -- unlike me -- does this type of law for a living. So, we'll see what he says. As long as I only have to advance a few hundred dollars for utility bills it isn't that big an issue in the long run. But, it still annoys me since this is exactly what POD is supposed to prevent.....



I would call the legal dept ASAP along with the cashier of the bank (not the teller, but the high level officer)....



If they refuse to do what is required of them go to the federal or state agency that is over them.... there are banks that put some stupid things in place that are just not legal...


As an example I remember a guy who had a check made out to cash... the teller was saying he needed to put his name etc. on the check... he refused and made them call the cashier... the cashier told the teller that if the signature was real to pay it... a check made out to cash does not (well, not sure now-a-day) need an endorsement to be cashed...
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Old 06-09-2018, 05:13 AM   #10
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Glad my dad has my brother and me on the account and safety deposit box.
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Old 06-09-2018, 06:10 AM   #11
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I would think the estate lawyer the OP is using would know if the bank's policies are compliant with state law for accounts with a POD designation.

If not, a demand letter from to the bank should suffice to get the funds released.
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Old 06-09-2018, 07:36 AM   #12
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I would think the estate lawyer the OP is using would know if the bank's policies are compliant with state law for accounts with a POD designation.

If not, a demand letter from to the bank should suffice to get the funds released.

Agreed a letter from the estate lawyer to the General Counsel of the bank will get attention.
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Old 06-09-2018, 07:58 AM   #13
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This is terrible that you're going through this. I don't see how the bank can refuse to pay the money to you. As a named beneficiary, that money legally became yours upon the death of your mother.

I was a beneficiary of my father's TSP and a life insurance policy. All contact was via phone and mail. Upon notifying them via phone of my father's death, they sent me claim forms to fill out. I returned the completed forms with certified copies of the death certificate. It really should be that simple. No probate is required to release funds to a named beneficiary. As you said, that would defeat the purpose.

Disclaimer: I am not a lawyer. Just going by personal experience plus the myriad of info anyone can find on the Internet. Here is one resource:

Claiming Money From a Payable-on-Death Bank Account - AllLaw.com
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Old 06-09-2018, 08:06 AM   #14
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Glad my dad has my brother and me on the account and safety deposit box.

Yes, this is what I had done also (with my dad's accounts, before some time before he passed away), to avoid any problems like the OP has experienced.
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Old 06-09-2018, 08:19 AM   #15
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I believe that POA and probate laws can differ between states. In Florida I had the exact same experience as the OP when my DF died and I had POA. I was told by the bank that all bank assets are "frozen" until the completion of probate, which took a little more than a year.

I believe that if my DF had put me on his accounts as a joint owner, I could use the accounts for his expenses and still go through probate. The POA authority was not very useful once he was gone.
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Old 06-09-2018, 08:22 AM   #16
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I believe that POA and probate laws can differ between states. In Florida I had the exact same experience as the OP when my DF died and I had POA. I was told by the bank that all bank assets are "frozen" until the completion of probate, which took a little more than a year.

I believe that if my DF had put me on his accounts as a joint owner, I could use the accounts for his expenses and still go through probate. The POA authority was not very useful once he was gone.
Notice that the OP had POD - payable on death - which bypasses probate, and which is the whole point of a POD. That has nothing to do with a POA (power of attorney).
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Old 06-09-2018, 08:24 AM   #17
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Notice that the OP had POD - payable on death - which bypasses probate, and which is the whole point of a POD. That has nothing to do with a POA (power of attorney).
Yes....but the POD appears to have acted the same as the POA I had.
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Old 06-09-2018, 08:24 AM   #18
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I would think the estate lawyer the OP is using would know if the bank's policies are compliant with state law for accounts with a POD designation.
My understanding is that bank POD "features" are authorized by law on a state by state basis.

As such, I would probably lookup the law that governs this in my state to see if indeed I held a non-compliant POD account.

Perhaps the bank came up with some type of "50 state" POD registration form and then realized it was not compatible with your state.

As others have mentioned you will probably have to either jump through the bank's hoops or go up the chain of command our consult a qualified attorney.

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Old 06-09-2018, 08:25 AM   #19
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I was my mom's legal guardian and am now in the process of becoming the administrator of her estate. I am no expert but here is what I understand. Probate laws are different by state. In WI, generally probate is required if the assets are greater than $50,000. There are exceptions based on how the assets are titled and if PODs and TODs are in place.

I have also learned that you are not recognized as the administrator of the estate until you are appointed by the court even though you were named as such in the will. The degree of difficulty of going through probate depends on the complexity of the assets and the relationships among family members. Being an only child, this process should not be lengthy for you.

I've learned the importance of making sure all asset titles, PODs, and TODs have been kept up to date. When my dad died, his estate didn't need to go through probate since all assets were in both his and mom's names. Everything simply transferred to my mom by filling out some forms and showing dad's death certificate. My mom died recently and we discovered that she never added my stepdad to the real estate deed. This is forcing the estate in to probate even though her husband is the sole beneficiary.
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Old 06-09-2018, 08:36 AM   #20
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Yes....but the POD appears to have acted the same as the POA I had.
No relationship.

If your parents account had you listed as a POD beneficiary, then it should have bypassed probate.
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