Question & Answer

Question: When we are presented with a death certificate to close out a burial reserve account, should we require a signature on the withdrawal?

Answer: The quick answer is "no", but let's go a little further on this.

A burial reserve account is an irrevocable agreement to deposit "X" number of dollars into an account to take care of the named depositor's funeral. State law covers exactly how much can be in the account so that it is not considered to be part of the depositor's assets.

When the funeral director or a family member (survivor) presents you with a death certificate for a burial reserve account closing, you would not require anyone to sign the withdrawal. But you may want to change the way you're paying out the funds.

Usually, on the top of the funeral bill, is the name of the survivor who has made the arrangements for the funeral, and, in so doing, has assumed responsibility for the funeral bill. When the financial institution closes out the burial reserve account, instead of making the check out only to the funeral director, the most prudent method is to make the check payable to both the funeral director AND the survivor, requiring that both endorse the check in order to negotiate it.

This method ensures the fact that both the funeral director and the survivor know exactly how much was paid on the funeral bill. If there are funds still due, the survivor knows the balance. If there is a balance left over, the funeral director can refund the correct amount to the survivor.

Copyright © 1997 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 7, No. 4, 3/97