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

[mexexpat]

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

Are there banks that won't require this?

 

[Dtail]

Our B and M bank (BOA) also requires it.

 

[mexexpat]

Yes, BOA is one of ours that I contacted. Also Charles Schwab (checking).

 

[razztazz]

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.

 

[OldShooter]

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.

 

[MRG]

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.

 

[mexexpat]

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.

 

[bizlady]

Minnwest bank in MN did not require SS for POD recipients when my DM set up her new account a few months back

 

[cathy63]

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.

 

[razztazz]

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!

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.

 

[youbet]

What alternate form of ID do folks propose that positively guarantees the bank will turn over the money to the correct John Doe?

 

[gauss]

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.

 

[Montecfo]

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.

 

[cathy63]

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.)

 

[Montecfo]

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.

 

[cathy63]

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.

 

[Winemaker]

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.

 

[Jerry1]

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.

 

[youbet]

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."

 

[youbet]

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.

 

[cathy63]

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.

It's not the name and birth date of the deceased they'd have to know. It's that the deceased needed to put down the name and birth date of the beneficiary when he signed up for the company's life insurance. I had to do this on day 1 at every job I ever had. It wouldn't have been hard at all for my DH and DD to show up and say "we're the beneficiaries of wife/mother's life insurance, here's our ID and her death cert". If cousins, uncles, whatever had tried that, then HR would have just said "sorry, you are not listed as a beneficiary". I guess if your employee had 10 relatives who all had the same name and were all born on the same day, then that would be a problem -- also a pretty weird family!

 

[jazz4cash]

I thought name address and maybe relationship to account holder would suffice. Survivor should be able to identify themself and prove they live or lived at address on file. Anyone coming out of the woodwork would need to go to a legal authority to get proceeds. Other than VG and similar places, most of my financial institutions don’t seem to care if POD instructions are filed and I wonder how much effort they would put forth to locate a beneficiary. This was an issue in the MetLife pension screw up recently.

 

[cathy63]

Again, how do you propose they find a beneficiary without that person being identified?

I do not see the fishiness.

Do banks actually make an effort to find a beneficiary though? It's my understanding that if a beneficiary doesn't show up and claim an account then it just escheats to the state after some period of dormancy. The bank will try to reach the account holder by mail, but if nobody responds, how would they even know the person is dead?

Also, even if you know someone's SSN, how do you locate that person? Are you allowed to pull their credit report without their permission? Or can you ask the government to provide you with the last known address from their tax return (or parents' tax return for a minor)?

 

[gauss]

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.

So the rightful recipient of the money is left holding the bag (or actually not holding the bag) if your law gets passed and a fraud on the bank is committed.

Why not just setup a will with an executor that you trust if you don't want to disclose PII of other parties to the bank? This would keep the POD option secure, or at least as secure as it can be, for the rest of us.

Were you even going to tell these POD recipients that they were scheduled to receive funds upon your death? If not, I don't think the bank will go looking for them.

When my father passed with an active life insurance policy with me as beneficiary, I don't think my SSN was on the account. They did, however, require me to send in the actual policy for the payout. Fortunately I had the policy in hand, but I suspect if I didn't, it may have gotten tricky.

-gauss

 

[gauss]

Do banks actually make an effort to find a beneficiary though? It's my understanding that if a beneficiary doesn't show up and claim an account then it just escheats to the state after some period of dormancy. The bank will try to reach the account holder by mail, but if nobody responds, how would they even know the person is dead?

Also, even if you know someone's SSN, how do you locate that person? Are you allowed to pull their credit report without their permission? Or can you ask the government to provide you with the last known address from their tax return (or parents' tax return for a minor)?

I agree with most of your points here.

To answer your question about how to know if someone is dead, the Social Security "Death Master File", I believe, is used for this purpose by organizations.