Can An Estate Have A NOW Account?

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Question:

Would an account set up for an estate qualify for a NOW account? If it does qualify would it make a difference if the SSN of the deceased is used or the SSN of the executor? We have some accounts that attorneys insist that we use the SSN of the deceased, even though the IRS specifically states that the SSN no longer exists when the owner of the SSN is deceased and that a EIN would be required. We could classify an estate as a fiduciary account, would that have any relevance as to the qualification for a NOW account?

Answer:

Do not under any circumstances use the SSN of the estate representative. Do insist that the estate obtain its own EIN before opening or converting accounts to the estate's name. (If it comes down to a "difference of opinion" between a local attorney and the IRS, I just know I'm agreeing with the IRS.) The estate account could be eligible for NOW account status if it can be determined that all beneficial owners of the funds are entitled to NOW accounts.

First published on BankersOnline.com 05/5/03