My past experience never allowed for removing names from deposit accounts for any reason. I am now being asked if I see a problem with removing deceased customers from accounts. I do see a problem, but I'm not sure how to verbalize it. I know it is more a legal issue, any suggestions?

we normally close the account and make the survivor open a new one...but we also make exceptions to this.

is the problem something along the lines of "we have always done it that way" and that is why you can't verbalize? What legal issues are you thinking this relates to?

To be truthful I'm not sure. It was always so against the rules previously that my old mind just doesn't want to say yes. I think I'll get legal opinion and go from there, but thanks Happy for making think a little more about it.

The issue regarding just removing someone from an account is more related to the fact that the other person may maintain checks, may want access to past records and you have to determine when the change occurred, etc. and they may be able to access the account under the Bank's radar subjecting the bank to liability. In these cases, that worry I hope, no longer exists.

I would usually argue that removing someone from joint ownership should be done by closing out one account and opening another. And when the joint owners are still alive, I still think that's the only correct advice so that there is a clean break between joint responsibility for the old account and individual responsibility for the new account.

But, if state law or the deposit contract makes an account subject to rights of survivorship, ownership of the account changes, literally and legally, at the moment of death of one of the joint owners. Your account records are supposed to reflect the true ownership of accounts. So theoretically, as soon as you have confirmed notification of death, you could update the ownership, and I'm not so concerned about any need to close account one before opening account two.

Most banks would not react that quickly. Instead, they would flag the account to indicate that the owner has died, and wait a bit to see if the surviving co-owner takes the initiative to take care of this housekeeping matter. Why wait? Out of consideration for the surviving owner, who is often a family member of the decedent. But you should press for wrapping things up within 30 to 60 days (depending on your policy or practice) because this is, after all, a business you're working for.

I'm not sure what the problems might be that you see. If it's a rights-of-survivorship account, the deceased clearly no longer has an interest in the account, nor does the estate of the deceased. Accepting a check for deposit that's payable to the deceased would be wrong, because the account now belongs to the surviving co-owner, and the check belongs to the estate. Ditto on a check payable jointly to the decedent and the survivor.

Of course, as part of the housekeeping, there may be some ACH matters to address.

I agree wholeheartedly with John's points.

As a matter of practice, we do remove deceased owners from JWROS accounts. Our outside timeframe for doing so is 90 days- like John suggests, we give the surviving owner an opportunity to wrap things up first.

There is clearly no one correct answer to this question that will make everyone happy. There are those who feel that it's important for the surviving depositor to take the initiative as part of the process he or she is enduring. There are those surviving depositors who would be delighted if the bank just took care of the matter to save them the bother during the days soon after the death. And there are those who are so emotionally tied to the decedent that they will only agree to have the name removed if you are considerately insistent. But the fact remains that it's a business decision, not an emotional one and it has to be taken care of eventually.

as far as the 1099 goes - if A & B own the the account jointly and "A" dies the last day of June and the bank was using "A's" social sec number the bank could change the primary name/soc security number to "B" right? and the 1099 would go to "B"; therefore no new account....right? Or could this only happen if A & B were married?

It should happen regardless.

And, just as was the case before the death, B and the estate can work out who declares how much of that interest on their tax returns.