Answer:
Answer by Brian Crow: You still have a valid contract with the joint owner so the surviving owner can continue to use the account for as long as they like. It is advisable to have the surviving owner sign a new signature card as soon as reasonably possible to remove the deceased owner. Any checks payable to the deceased owner now belong to the owner's estate and should not be accepted for deposit to this account. The bank could find itself liable to a creditor or heir of the deceased if the bank allows the joint owner to take possession of these funds by depositing it to the joint checking account instead of an estate account.
Answer:
Answer by John Burnett: Your use of the term "member" indicates that the deposit is held at a credit union, which may have membership rules that affect whether or not the surviving owner will be able to continue his or her membership, and for how long. If that is not an issue, many financial institutions make an exception to their "new signature card" requirement for instances when a joint account owner has died. Instead, the institution documents the death and annotates the signature card, then updates its account records to drop the name of the decedent from the account and change (when required) the SSN that will be used for interest-reporting purposes.Brian's warning about checks payable to the deceased owner is important. You should also ensure that any Treasury direct deposits in the name of the deceased are discontinued and/or returned, in accordance with Treasury's regulations.
First published on BankersOnline.com 1/9/12
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