Handling the Finances of a Deceased Member

Transcription

1 Handling the Finances of a Deceased Member

2 Table of Contents Denali Investment Services Page 1 Introduction Page 2 Account Settlement Page 3 Deposit Accounts Page 4 Loans, Visa Credit Cards, Lines of Credit Page 5 Additional Information Page 8 Checklist (detachable) Resources State Federal Military

3 Available through CFS* It is never easy to have a friend or loved one pass away. There are often a lot of things to do and think about if you are the one that will be taking care of an estate or inheriting money. Let the experienced CUSO Financial Services, L.P. (CFS)* Financial Advisory team at the Credit Union help you. Their services are just one of the many helpful services available at the Credit Union. In addition to handling all of the funeral arrangements there is often a lot of paperwork to complete from places such as the deceased s employer, other financial institutions, insurance companies and investment companies. Often times that paperwork is complicated and confusing. Save yourself some time and the potential headache of possible penalties or taxes by working with a CFS financial professional here at the Credit Union. They will do their best to guide you through the process and may be able to point out things you had not considered or were unaware of. The CFS Financial Advisory team are available by appointment, Monday through Friday from 9am to 5pm: Southside Financial Center 1501 E. Huffman Rd., Ste. 191, Anchorage, AK (in the Huffman Carrs plaza) Phone: Financial Center 440 E. 36th Ave., 1st floor, Anchorage, AK Phone: Outside of Anchorage or Alaska *Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ( CFS ), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members. CFS and its Registered Representatives do not provide tax advice. For such advice, please consult a qualified tax advisor. Page 1

4 Introduction This can be a difficult and overwhelming time. This guide is designed to answer questions regarding the account settlement process. Once the Credit Union has received a deceased member notification, we will review the account and documentation provided and contact the notifier within two business days. It will be helpful to have the following items when contacting us for account settlement: Certified copy of the death certificate (required) Photo ID (required for claimants and/or estate representatives) Deceased member s Credit Union account number(s) Any applicable court papers; e.g. appointment of executor or representative, letters of testamentary, letters of administration, etc. (The Credit Union cannot accept wills) The contents of this booklet is for informational purposes only. The Credit Union cannot provide legal counsel or advice. If you are the executor or administrator of the estate, please consult with an attorney, financial advisor or probate court official for specific concerns or questions regarding your responsibilities, the probate process or estate settlement. Call us 24/7 at opt. 3, toll free at , opt. 3 or visit your local branch. Page 2

5 Account Settlement What is the first step to processing a deceased member s account? Come in to any branch or call our Member Contact Center at , option 3, or option 3 to let us know of the member s death. What documents are needed to begin settling a deceased member s account? A certified copy of the death certificate and the photo ID of the notifier/claimant. Other documents may be needed based on the account structure. The notifier/claimant will be contacted within two business days after the Credit Union is notified to provide information regarding additional documentation needs. I am the primary account owner and the joint owner has passed away. Do I have to close my account? No, if the surviving account owner is the primary account holder, the account will not be closed. The account card will need to be updated to reflect the changed ownership. How long will the deceased member s account(s) remain open? The deceased member s account needs to be closed as soon as possible. By taking quick action to close the account, complications with year-end tax reporting may be minimized. I am a joint owner with right of survivorship on the account. Will I still be able to access the account? Yes. As the joint account owner, you will retain access to the account until such time that the joint account is closed and a new individual account is established. Page 3

6 I am the designated personal representative of the estate. Will I be able to access information on the account(s)? Yes, upon providing the death certificate and court documentation stating that you are the personal representative, executor or administrator. The deceased member s account has direct deposit set up. What will happen to the funds? Government deposits: financial institutions are required to return funds deposited by government agencies after the date of death, e.g. Social Security and Veterans Administration. Other deposits: Any agency or entity that is depositing benefits into the account should be notified as soon as possible. Please see the Resource page of this guide for helpful contact information. You should also notify any employers who are paying out retirement or pension benefits as well. How do I find out if the deceased member had the Accidental Death & Dismemberment Insurance (AD&D)? Questions regarding this coverage should be directed to: AD&D Program Administrator PO Box Nashville, TN Deposit Accounts What happens to Individual Retirement Accounts? Upon receipt of the death certificate for the deceased owner of an Individual Retirement Account (IRA), the Credit Union will start the IRA death claim process. If the account shows an IRA beneficiary, the beneficiary will be contacted and provided Page 4

7 information regarding claiming the IRA funds. If the account shows no IRA beneficiary, the personal representative, executor or administrator of the estate will be contacted and provided information regarding claiming the IRA funds. How are funds disbursed to beneficiaries listed on Payable on Death accounts? Payable on Death (POD) accounts have beneficiaries designated on the Member Service Agreement. If there is a sole signer on the account, the account is closed and the funds disbursed to the beneficiaries. It is the responsibility of the beneficiary to contact the Credit Union to claim the funds. If there is a joint owner, he or she is entitled to the funds by right of survivorship. How are Trust Accounts handled? Management of trust accounts and disbursement of funds are handled in accordance with the legal trust document. How are Money Market Accounts handled? Money Market accounts are the same as other deposit accounts and are handled in accordance with the Member Service Agreement, account ownership, POD designation, estate or trust as applicable. How are certificate accounts handled? Share Certificates are the same as other deposit accounts and are handled in accordance with the Member Service Agreement, account ownership, POD designation, estate or trust as applicable. Who do I contact if the deceased member has investment accounts? Please contact the Denali Investment Services team. (see Page 1) Loans, Visa Credit Cards, Lines of Credit After the review of the deceased member s Page 5

8 Credit Union consumer loan(s), any voluntary payment protection proceeds will be applied to the outstanding loan balance. In addition, balances in the deceased member s deposit accounts may be applied to the outstanding loan balance. Any loan balances outstanding become the responsibility of the surviving borrower(s) or the deceased member s estate to repay. The estate must directly pay off remaining loan balances or provide the Credit Union with the necessary documentation to properly file a creditor s claim against the estate. If the loans were solely in the deceased member s name, who is responsible for them? The estate is responsible for repaying any outstanding loan balances. If there is an executor appointed to handle the estate, he/she will be responsible for ensuring the loans are paid. If the estate is insolvent and/or there is no joint borrower, please contact the Credit Union for further options. Should the estate find an interested party, that party may apply for a loan to refinance the collateral into their name. If the estate is unable to resolve the loan obligation, the estate may surrender the collateral to the Credit Union. If there is a joint owner/borrower, is he or she now responsible for the loans? Yes. In these cases, the joint owner/borrower will need to apply for a loan to transfer the balance and the collateral into their name. Can the Credit Union use the funds in the deceased member s savings or checking accounts to repay the loans? Yes. By law, financial institutions have the right to the funds (called a lien) in any account on which the decedent was the primary accountholder and may use those funds toward repayment of the loans the decedent held. Can the loan collateral (e.g., a vehicle) be given to another person? Re-assignment or transference of loans and their collateral to a person who is not a joint borrower is not permitted unless the interested party Page 6

9 applies and is approved for a loan transferring the existing loan balance into their name. Executors, administrators and personal representatives cannot grant a security interest in, transfer, or assign any loan collateral to anyone other than the Credit Union without our written consent. I am a co-borrower/cardholder on the deceased member s Visa account. What are the next steps? There are two choices: you can either close the Visa credit line or request to transfer it to your Credit Union account. Please note that you are responsible for repaying any outstanding balances and transferred credit lines may be lesser than the previous joint credit line. What should I do with the deceased member s Visa credit card if he/she was the sole borrower? Please destroy the card or return it to the Credit Union. The credit line will be closed and the plastic card linked to the deceased member s account will be deactivated. If I am an authorized card user on the deceased member s account, am I responsible for repaying the balance? Can I still use the card? Authorized users are not liable for the outstanding balance, nor can they continue to access the credit line. Please destroy the card or return it to the Credit Union. What if there is Payment Protection on the loan or Visa card? Should I continue to make payments? Yes, please continue to make at least the minimum payments as the benefits and outstanding liabilities are determined. A claim will need to be filed to make these determinations and we can assist you with this. Please note that interest will continue to accrue until the balance is paid in full. Any excess of funds paid from the claim will be posted to the savings account. If I am the co-borrower on a Denali credit card, can I continue to use the card? Page 7

10 Yes, you can continue using your card as long as you are a member of the Credit Union. We encourage the closure of the primary account as soon as possible. If you are not a Denali member, you will need to establish a membership by opening an account before using the card. You will need to apply for a new credit card to transfer the balance into your name under your own account number. As the borrower, you are responsible to repay any unpaid balance on the credit card (less any voluntary payment protection settlement). You are also responsible for any charges made after the date of death. Additional Information Who is allowed access to information about the deceased member s accounts and loans? By law we are only permitted to provide account information to joint account holders and courtappointed representatives of the estate. I have a Power of Attorney for the deceased member. Am I allowed to access or receive information on the affected accounts? A Power of Attorney is null and void after the grantor s death. If you are a joint account owner or have been appointed the executor or personal representative of the estate, you will have access. What should be done if automatic payments are being taken from the affected accounts? Please notify the creditors/payees that are debiting the accounts and advise them that the account is being closed and automatic payments must be stopped. If all the affected accounts are in the deceased member s name only, how can they be accessed? If there is no joint owner, the funds will be disbursed as determined by affidavit or by court order according to regulations of the member s home state. A court appointed executor or Page 8

11 personal administrator can open an estate account for the purpose of settling the deceased member s affairs. How do I claim survivor benefits with the Social Security Administration? Call the Social Security Administration as soon as possible. (See Resources) Notes: Page 9

12 Checklist We offer you our service: After the death of a loved one, there are many details to handle. This checklist can help you gather information you may need for the Credit Union as well as other agencies and organizations. This list is not all-inclusive and is not in any particular order of importance. r Talk to a financial professional. This is a good time to review your own life insurance and financial needs including your will. Make sure ownership and beneficiary designations are current. In addition to retirement and investments, the Credit Union Investment Services department offers assistance with inheritances, life insurance and estate planning (see page 1 for contact information). r Call Social Security Administration to stop Social Security payments, if any. Surviving spouses and dependent children may also be eligible for death and for survivor benefits. (800) r Purchase death certificate. Request several certified copies depending on the extent of the deceased member s assets, loans, business and military affiliations. Sometimes photocopies are not accepted. It may be less expensive to order the certificates at once. Check with your funeral director for assistance. r Gather personal information. To report the death and handle business transactions, you will need: a.) Social Security numbers for the deceased member, the surviving spouse and dependent children. b.) The deceased member s full name. c.) Date and cause of death. d.) A copy of the marriage certificate. e.) Copies of birth certificates for any dependent children. r Locate the Will and check for an established trust. Begin probate procedures where applicable.

13 r Contact insurance companies to report the death and to submit claims for possible benefits, including: a. Life insurance b. Property and casualty insurance (auto and homeowners) c. Health insurance r Contact creditors to report the death and to check for credit life insurance or accidental death life insurance benefits the deceasedmember may have, including: a. Home/real estate loans b. Auto loans c. Credit cards r Contact the utilities providers for the deceased member s home to move payments to another account, update account information or terminate service, as needed. r Contact credit unions and other financial institutions to report the death and check for insurance coverage on loans, investments and IRAs. r Review savings and checking accounts for automatic deposits and withdrawals, and stop them if necessary. r Contact current and all former employers to report the death and to check for potential benefits like group insurance, retirement plans, a pension or other benefits. r Contact the deceased member s Native Corporation/Association to report the death and determine possible benefits. r Review income tax forms. File all necessary tax returns. r Contact a lawyer. Complicated estates may require legal help. r Remember: You may need to make financial decisions regarding joint accounts, titles and deeds to vehicles/real estate, and retirement and investment accounts. Please consult a tax or financial professional before taking action. There could be tax implications with ownership changes and asset transfers.

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15 Resources Accidental Death & Dismemberment Insurance (provided through Denali) AD&D Program Administrator, PO Box 41849, Nashville, TN State Resources Alaska Alaska Department of Vital Statistics (Certified copies of death certificate) VitalStats/Pages/death/default.aspx Alaska State Courts State of Alaska Permanent Fund Dividend Division Washington Washington State Department of Health (Certified copies of death certificates) Washington State Courts Federal Resources Social Security Administration to stop Social Security payments, if any. Surviving spouses and dependent children may also be eligible for death and/or survivor benefits You may need to provide the following: Deceased member s Social Security number Name of deceased member s last employer Certified copy of the death certificate Deceased member s most recent w-2 forms or self-employment tax return showing earnings in the year of his or her death Certified copy or original of the birth certificate of the spouse and any minor children Divorce papers if the surviving divorced spouse is applying for benefits

16 Internal Revenue Service: (Obtain an EIN/tax assistance) Military Resources Department of Veterans Affairs: For settlement of veteran insurance programs such as SGLI, VGLI, NSLI, USGLI or DIC. Ask about benefits for the surviving spouse and eligible children. (Survivor, beneficiary and burial benefits) Alaska State Dept. of Veterans Affairs: Anchorage (fax) Washington State Dept. of Veterans Affairs: Casualty Assistance Office at the nearest military installation: For guidance regarding military benefits and entitlements if the deceased member is retired military. To request DD214 military record form: Defense Finance and Accounting Service: For settlement of military retired pay and to start the application process for survivor annuity benefits such as RSFPP, SBP, RCSBP and SSBP Office of Personnel Management: To report the death and check on benefits if the deceased member was a retired Civil Service employee Tragedy Assistance Program for Survivors: Provides a support network for the surviving families of those who have died in service to America TAPS Military OneSource: For military and family support services, information and links to the American Red Cross and other military emergency resources

17 440 E. 36th Avenue, Anchorage, AK Rev. 12/16