44 THE NAFCU JOURNAL January–February 2023 If a member died today, would your staff know what to do? Unfortunately, the law governing death and the treatment of a deceased person’s property is mostly a mish-mash of state law. However, here are some common issues credit unions face when dealing with a deceased member and their accounts. Share Accounts Generally, NCUA is silent on issues regarding share accounts and deceased members. However, Article III, Section 5 of the current model bylaws are clear that a share account of a deceased member (with no joint owner) may be continued until “the close of the dividend period in which the administration of the deceased’s estate is completed.” But there are many more issues than how long to keep a deceased’s account open. Probate, trust and estate, rights of survivorship and agency issues are generally governed under state law and credit unions may need to rely on local counsel as issues arise with a deceased member’s accounts. Here are some questions that NAFCU members have asked on this topic that may be helpful when discussing this with legal counsel: COMPLIANCE CENTRAL SERVING THE DEARLY DEPARTED: ACCOUNTS OF DECEASED MEMBERS By Keith Schostag, NAFCU Senior Regulatory Compliance Counsel ■ Does a member’s agent have authority to make transactions or withdrawals after the member has died; ■ Does a joint owner have ownership over remaining funds in an account after a joint owner dies (in some states, joint owners do not have an automatic right to all remaining funds in an account); ■ Who has authority to obtain information on and/or access to a deceased member’s accounts; ■ What documents, under state law, prove a person has authority to access a deceased member’s accounts; and ■ What is a credit union’s potential liability for mishandling a deceased member’s accounts? These are just some of the issues that may come up when a member dies. Credit unions may consider performing a comprehensive review of their policies, procedures and account agreements followed by a review by their local counsel to ensure compliance with applicable state law. This would allow credit union staff to more easily deal with issues as they arise rather than the credit union dealing with angry relatives and no answers. Estate Accounts Sometimes, federal credit unions (FCUs) are approached to open a new account for the administration of an estate. When this happens, FCUs should look to the membership status of the individuals involved with the estate—such as the administrator, decedent and beneficiaries—to see if the FCU may open an account. An NCUA legal opinion letter provides potential scenarios and discusses whether a FCU may open an account: Decedent was a member. Account may be opened. Administrator is a member, but decedent and beneficiaries are not members. Account may not be maintained. Neither the decedent nor administrator are members, but beneficiaries are members. Account may be opened and maintained if all beneficiaries of an estate are members of the FCU, even if the decedent was not a member. If only some of the beneficiaries are members and the decedent was not a member, then an account cannot be opened.
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