POD Bank Account - Catch 22

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Latest post 04-30-2011 10:45 AM by orangeGrower. 11 replies.
  • 04-29-2011 12:32 AM

    POD Bank Account - Catch 22

    A friend of mine died recently and I'm the personal representative for his estate. He had things set up so that a lot of his net worth passes through POD designations on bank and brokerage accounts. But he didn't leave me clear documentation on who the beneficiaries are, and he did not tell the beneficiaries that their names are on the accounts.

    I went to one national bank today with my Death Certificate and Letter Testamentary. They confirmed that both of his accounts at that bank had POD designations. They will not tell me who the benficiaries are and they say it is not their job to contact the beneficiaries. Catch 22!

    I realize these accounts aren't my legal responsibility because they aren't part of the probated estate, but I want to do right by my friend and get his assets distributed as he intended.Right now my best plan is to send about 12 individuals and charitable foundations into about 6 banks and brokerages all around the country and have them ask if they are named as POD beneficiaries on any of his accounts. That's a terrible plan.

    Is there a way to compel a bank or brokerage company to tell me the names of the beneficiaries? I can't believe this is the first time this has happened, or that the courts would refuse to recognize it as a problem.

  • 04-29-2011 8:06 AM In reply to

    • Drew
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    Re: POD Bank Account - Catch 22

    Actually you do have a legal duty as to these accounts as they are part of the decedants estate for any relevant estate or inheritance tax purposes and as representative you need basic information for filing any tax returns--now I don't know how that helps you shake the information free--its just my lay view .

    While I haven't double checked I think in my state of PA it would be virtually impossible to properly complete the required state tax returns without knowing at least the "class" of the named POD person and I don't think I could compete the forms w/o the names---but I'm not sure what is required in AZ.



  • 04-29-2011 10:23 AM In reply to

    Re: POD Bank Account - Catch 22

    I understand what you mean about the taxes, and I'm not too worried about it. I have some recent account statements, so I know how much money is in the account. I don't expect federal estate tax to be an issue. The estate is probated in New Mexico, and I haven't checked their estate tax rules yet.

    Getting an accurate 1099 at the end of the year may or may not be an issue. I asked that question yesterday, but I got so focused on the POD answer I never did get an answer as to whether they will send me a 1099 at the end of the year.

    I don't understand what you mean about the "class" of the POD person. What does that mean and how will it affect the taxes?

  • 04-29-2011 10:43 AM In reply to

    • Drew
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    Re: POD Bank Account - Catch 22

    Class of person may be unique to PA--we have a nasty inheritance tax that varies by where one is on family tree or not on tree....

    I think NM only imposes a "slack tax" if a federal return is triggered --and in general  taxes inheritance to recipients as income .

    I thought a properly lettered representative stood in decadents shoes and was entitled to any information the decadent would be entitled to have ?



  • 04-29-2011 10:44 AM In reply to

    Re: POD Bank Account - Catch 22

    New Mexico had a type of estate tax that was called a "pick up tax."  It was the amount of the credit for state estate tax allowed for the federal estate tax.  It was essentially a case of, "If the estate is subject to federal estate tax anyway, take the credit allowed for state estate tax on the federal return and send that money to us instead of Washington."  Overall, the estate tax liability did not change.  That federal credit went away at the beginning of 2005.  Therefore, effectively, New Mexico no longer has a state estate tax.

    New Mexico does have an inheritance tax.

     

  • 04-29-2011 10:57 AM In reply to

    Re: POD Bank Account - Catch 22

    I think you would be responsible for the administration of the accounts, regardliess of the tax aspects, simply because they were owned by the deceased.

    As for your Catch 22, all you need is a court order that would compel the banks to reveal the names of the beneficiaries who would, in turn, have to sign the banks' claim forms to get their money.

    You would probably have to file a motion with the probate court and ask that the order be issued.

    If your next question is "How do I do that?", then you are probably going to have to hire a lawyer.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 04-29-2011 11:43 AM In reply to

    • Drew
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    Re: POD Bank Account - Catch 22

    Before I spent a lot of time and money in court to get an order I might try a mass courtesy emailing and even postal followup to 100 of the decedent's closest friends and favorite charities stating that Bank  X,Y or ,Z  may hold a POD on their behalf and said bank has been uncooperative with the executor to assist executor in making sure each POD person is aware of his or her POD bequest--and list bank officers by name, phone number etc.



  • 04-29-2011 8:52 PM In reply to

    Re: POD Bank Account - Catch 22

    I am convinced that banks don't have to talk to me once they have determined that the accounts at their institution are POD's. I am the Personal Representative of the probated estate, but POD's are transferred outside of probate. I don't know if refusing to tell me POD names is a matter of law or a matter of bank policy.

    I wonder about filing a motion to compel the banks to release the names, but I'm not willing to do that without examples of where it has been done by other people. I can make a case for it being unethical because I would be using probated estate funds to pay a lawyer, but the benefits would go to the POD beneficiaries, not to the benefit of the probated estate. Sounds like misuse of funds.

  • 04-29-2011 10:00 PM In reply to

    • Drew
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    Re: POD Bank Account - Catch 22

    so let the bank fend off 100 people looking for answers?



  • 04-29-2011 10:49 PM In reply to

    Re: POD Bank Account - Catch 22

    orangeGrower:

    I am convinced that banks don't have to talk to me once they have determined that the accounts at their institution are POD's. I am the Personal Representative of the probated estate, but POD's are transferred outside of probate. I don't know if refusing to tell me POD names is a matter of law or a matter of bank policy.

    Probably a combination of privacy laws and bank policy.

    orangeGrower:

    I wonder about filing a motion to compel the banks to release the names, but I'm not willing to do that without examples of where it has been done by other people. I can make a case for it being unethical because I would be using probated estate funds to pay a lawyer, but the benefits would go to the POD beneficiaries, not to the benefit of the probated estate. Sounds like misuse of funds.

    Well, if you aren't comfortable with the idea you might try letting your friend's parents, siblings and children about the POD accounts and let them hassle the banks.

    I don't see where you'd be obliged to go any further than than.

    Or you can just ignore the whole POD thing if you want to.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 04-29-2011 11:38 PM In reply to

    Re: POD Bank Account - Catch 22

    I wrote:

    "New Mexico does have an inheritance tax."

    That should be:

    New Mexico does not have an inheritance tax.


    Who exactly did you speak to at the bank?

  • 04-30-2011 10:45 AM In reply to

    Re: POD Bank Account - Catch 22

    I have spoken with two national banks so far. One with the POD accounts, and another with a very small non-POD account. In both cases the customer service person I was talking with was not the person making the decisions. Their job is to collect all the papers and fax them to whoever is making the decisions. They call it their legal department, but I doubt they got an attorney involved.

    So the person making the decision is not available to talk with. The local customer service person receives instructions by telephone or email and tells me what they will or will not do. In the banks defense, dealing with estate issues is uncommon at local branch offices. The woman I was talking with said it had been about two years since the last time she had to deal with an estate issue.

    It might be possible to go into a main office and escalate the issue to a higher level for a few of the accounts, but I also have to deal with some banks and organizations with no local presence.

    Sending a bunch of possible beneficiaries in to ask if their names are on an account may be the answer. The banks will never notice the inconvenience. The people who have to go in and are told that they aren't beneficiaries will notice the inconvenience. It's a terrible solution, but without examples from similar situations it may be the only one available.

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