Print
The latest Q & A on a compliance issue, as provided by the League's General Counsel at Norman, Hanson & DeTroy.
Question: We have a member who died owing the credit union money. The account contained a Payable on Death beneficiary who is to receive the funds in the account. Do we lose our right to take the funds in the account and pay the deceased member's debt?
Answer: No. The Probate Code provides that upon death of an account owner, "the financial institution has a right to set-off against the account in which the party has or had immediately before his death a present right of withdrawal." This statutory right is in addition to any other rights the credit union may have in the account, including any statutory lien right and any consensual security interest. This same result holds true as well when there is no POD named but rather the funds accrue to the deceased member's estate.
For more compliance news, please visit League INFOSight through the Maine CU League's website.