Pay on Death Account–I Want My Money!!!!

Dear Mr. Miller:

My great aunt died last month in California.  I live in Italy and could not attend the funeral or return to the USA.  My brother, the one handling her affairs, notified me that my aunt had a $250,000 USD account naming me as the sole “Pay on Death” beneficiary.  That came as a shock to me since I hadn’t seen my aunt in quite some time and we really were not that close.  My brother and I are the only heirs.

My brother was nice enough to call the bank and they told him that I needed to physically present myself at the bank with the account number, certified copy of the death certificate, and my identification document.

I can’t get there any time soon so how do I get the money?

Great Niece

Pay on Death Account
What About the Physical Presentation
How Do You Handle the Identification Document Issue
Send Your Driver’s License or Passport by Mail or Fed Ex
Authenticity of Document

Dear Niece:

A Pay on Death Account is one that avoids formal probate court proceedings when the owner passes.  It is often referred to as a “Probate Substitute.”  Typically, all that is needed to obtain the money is as the bank told your brother.  As I am sure you are aware, the account number and death certificate should not be a problem. The issue is how do you present yourself to the bank and how do you provide them a driver’s license or passport from abroad since they probably want the original.

What About the Physical Presentation.  It is unlikely that you really have to present yourself physically at the bank branch.  After all, how would you do that with an “on line” bank unless it had a physical office in your city or what if you were hospitalized long term.  I guess in the latter case, you could appoint your brother as “power of attorney” to handle this transaction physically at the bank branch but they would still want your identification document (as well as his).

So How Do You Handle the Identification Document Issue? It is certainly understandable that a bank would require this document before releasing the money.  After all, they do not want to pay the person identifying as the beneficiary, only to have another person demand the money at a later time alleging that they paid out to the incorrect party.

Obviously, you can Send Your Driver’s License or Passport by Mail or Fed Ex, etc. but that is something you probably don’t want to do.  After all, as good as the mail service or Fed Ex touts themselves, they are not perfect and packages do get lost from time to time.  Further, you would be without the document for a period of time–not something advisable for a passport when you live in a foreign country.  So you will send them a copy of the document.  But you still need to somehow certify the authenticity of the document.

Authenticity of Document:  First, you need to understand that every bank’s policies and procedures are different, every branch interprets those policies and procedures differently, and, seemingly, those interpretations change from week to week.  So whatever you do, it is most important that you come to agreement with the bank as to your process before you go forward so that you do not have to retrace your steps and redo everything.

The first approach would be to sign an affidavit (basically a letter sworn to in front of a Notary Public that its contents are true and correct) as to your identity and the  authenticity of the copy of the identification document attached.  Swear to the truthfulness of the statement and have the notary sign and seal the affidavit.  You can use a notary at the US embassy or consulate–advisable.  If a foreign notary (one appointed under Italian law) is used you will probably need to authenticate their seal.  Subject to some exceptions, this is done by obtaining an “apostille” ( essentially a seal placed on the notary page)  from the appropriate department of the Italian government.

Another approach which might be acceptable to the bank would be a signature guarantee.  This is a guarantee by a financial institution as to the signer’s identity and the corresponding acceptance of liability by the bank if forgeries are involved.  So you can’t just walk into a bank with whom you have no or limited relationship and expect them to do this for you.  Further, your Aunt’s bank will probably need to have a correspondent banking relationship with the bank guaranteeing your identity.  Your Aunt’s bank may insist on a “medallion” signature guarantee which can only be issued by select financial institutions that are members of certain common organizations.

The bank may also have other procedures as whatever the representative on the phone tells you, this is undoubtedly not the first time they have dealt with this issue.

If we can be of assistance to you or your brother in your Aunt’s estate, please give us a call at 760-436-8832.