HVCU extends our condolences to your family on the loss of your loved one. We understand this is a difficult and overwhelming time, and our goal is to provide guidance through the account settlement process
The information below is for informational purposes only and not intended to provide legal, tax, financial planning, or investment advice. Please seek the advice from legal, financial, and tax professional advisors with respect to any issue or problem you may encounter during the settlement process.
We recommend that you settle your loved one’s account(s) as soon as possible and request that you close the decedent's primary accounts with us no later than six months following the notification of death. We are required to continue to report to the Internal Revenue Service (IRS) under the decedent’s Social Security Number (SSN) until the account is closed. By taking prompt action, you can avoid complications resulting from continued IRS reporting under the deceased’s SSN. We cannot predict how long it will take for an account to settle without understanding the scope of an individual’s circumstances.
Please keep in mind that Power of Attorney is voided upon death of an individual.
We will need the following during the account settlement process:
- Death Certificate
- Letters of Administration, if applicable
- Letters of Testamentary, if applicable
- Affidavit, if applicable
Important Phone Numbers
Internal Revenue Service (IRS): 800.829.1040
Be prepared to fax the deceased taxpayer’s death certificate, and either copies of Letters Testamentary approved by the court, or IRS Form 56, Notice Concerning Fiduciary Relationship (for estate executors)
SSA (Social Security Administration): 800.772.1213
US Treasury: 202.622.2000
Please reference the information below as applicable to the accounts your loved one had with HVCU.
- Accounts without joint accountholders are closed and funds are distributed to designated beneficiaries once any outstanding loans have been satisfied. If there are no designated beneficiaries funds are distributed to the estate once any outstanding loans have been satisfied.
- Accounts with joint accountholders remain open until we receive all proper documentation regarding the member's death. Surviving joint owners can continue to use the account, but it will be closed eventually. The surviving joint owners cannot choose to have the account retitled in their names.
- Funds can be transferred to an HVCU account, or a new HVCU account can be opened if the joint accountholder is not an HVCU member.
- Visa Debit Cards associated with the account are deactivated to prevent unauthorized use.
- Internet Banking, Mobile Banking, and Bill Pay are deactivated to prevent unauthorized use.
Certificate accounts without joint accountholders are closed and funds are distributed to designated beneficiaries once any outstanding loans have been satisfied. If there are no designated beneficiaries funds are distributed to the estate once any outstanding loans have been satisfied.
Certificate accounts with joint accountholders can be settled as follows:
- Funds can be transferred to a new certificate account that has the same dividend rate and maturity date as the original certificate account. Additional funds may not be added to the new certificate account.
- The certificate account can be closed without penalty. Funds can be transferred to an HVCU account, or a new HVCU account can be opened if the joint accountholder is not an HVCU member.
IRA accounts are closed without a penalty and distributed to the designated beneficiaries. IRA spousal beneficiaries can treat funds as their own. A spousal beneficiary may choose to accept the funds from the IRA account as their own and deposit them directly into an IRA account established in their name. For non-spousal beneficiaries, the funds are placed into an IRA beneficiary account. An HVCU representative provides the beneficiaries with additional information and disbursement options.
Notify companies and services that electronically deduct funds from the decedent's accounts so that they don't continue to make the deductions. Companies include:
- Utility Companies
- Cell Phone Providers
- Cable/Internet Providers
- Credit Card Companies
- Mortgage Holder
- Insurance Companies
- Loan/Leasing Companies
- Gym Memberships
- TV/Video Streaming Services
- Other Subscription Services
Notify any companies that electronically deposit funds to the decedent’s account so that they may stop the deposits. Here are some you may need to notify:
- Social Security or other federal recurring deposit
Note: Electronically deposited funds solely in the decedent’s name presented after the date of death may be returned to the originator.
Any applicable Credit Life Insurance coverage is applied to the date-of-death loan balance. The estate’s point of contact is advised of any outstanding balance. Outstanding loan balances become the responsibility of the co-signer, co-borrower, or member’s estate. The estate executor/ administrator must pay off all existing loan balances or provide us with the necessary documentation to properly file a claim against the member’s estate. All outstanding debts, loans, and credit card balances owed by the deceased will be reviewed by our Collections Department before releasing funds from the deceased individual's accounts, excluding IRA accounts.
How a mortgage or home equity loan is settled is impacted by whether the loan has a coborrower or not.
Loan has coborrowers:
- For mortgages, coborrowers become the primary borrower. A certified copy of the death certificate and documentation validating the property ownership interest under state law is required. Coborrowers are responsible for repayment.
- For home equities, coborrowers are responsible for repayment, and in the case of lines of credit, can continue to use the line.
Loan has no coborrowers:
- For mortgages, we speak with potential successors or heirs to discuss handling of the loan.
- For home equities, the loan is closed, and in the case of lines of credit, no further disbursements are permitted.
New primary borrowers are added to a loan:
- If you are a new primary borrower but are not be able to afford the loan payments, please contact our Collections Department at 845.240.7100 to find out what options are available and how we can work together.
- If the decedent had a joint owner on the checking, savings, or money market account, the payments are cancelled. As the deceased member’s accounts are closed, a different account can be debited, as required.
How a credit card is settled is impacted by whether the card has a joint accountholder and/or an authorized user.
If the deceased was the primary cardholder:
- The credit card account is closed.
- Automatic payments are canceled during the decedent account audit process.
- Authorized users no longer have access to use the credit card. Authorized users only become liable for the balance if they apply for a credit card in their own right and request a transfer of the outstanding balance on the deceased member’s card in their name.
- The actual credit card should be destroyed, along with the cards for any authorized users.
- Merchants occasionally post charges to a credit card account after it has been closed. If such "forced" charges appear after the credit card account has been closed, statements generated are sent to the person handling the estate’s affairs.
If there is a joint cardholder on the card:
- The account can remain open and be retitled in the joint cardholder’s name (as the primary cardholder).
- Any unpaid balance on the card becomes the joint cardholder's responsibility.
- Automatic payments are canceled during the decedent account audit process.
- Joint accountholders are responsible for any charges that post after the date of death.
- Statements continue to be issued and addressed to the joint cardholder as the new primary cardholder.
The settlement of student loans varies based on whether the student loans are private or federal loans.
Private Student Loans
- Private student loans must be repaid by the estate of the deceased and are not discharged due to the death of the borrower. Any outstanding balance becomes the obligation of the co-signer and/or the borrower’s estate. In those instances where there is no co-signer or the borrower’s estate is insolvent, the loan is referred to our Lending area for further action.
- Please contact Collections at 845.240.7100 for additional information.
Federal Student Loans
- Federal student loans are not required to be repaid by the estate. We must receive a copy of the decedent's death certificate or other acceptable documentation to discharge the loan obligation. We send the death certificate copy to our Government Education Loan Servicer, who then forwards it to the Department of Education.
Probate is the process by which the court determines the authenticity and validity of a Will. It is designed to protect the family and ensure that the persons who are entitled to receive the assets do receive them. It also provides a process to ensure that all debts and taxes are paid. The court uses the Will to determine who is to be appointed executor of the estate. If there is no Will, the court appoints a personal representative (e.g., “administrator”), usually a spouse or relative. An attorney or a financial institution may also be appointed as executor or administrator. It is best to go to probate court as soon as possible and check with your local court for specific requirements in your location. This may be a trying time for you, but it is best to settle these matters as quickly and accurately as possible. The size and complexity of the deceased’s estate, plus state probate laws, determines how long the process takes. If the estate is large or complex, the probate process can take months or years to complete. On the other hand, the probate process may not be required if the deceased’s accounts were classified as “Joint Account—With Survivorship.” It is best to consult an attorney to determine what property is or is not subject to probate.
Local laws determine how long probate takes.
The documents required for probate and what they must contain can vary from one probate court to another. In addition to the deceased’s full name and date of birth, most probate courts require, at a minimum, the following documents:
- Certified copy of the death certificate (this can often be filed later)
- Will, if there is one
- Copy of the marriage certificate (or the date and place of marriage) if the deceased was your spouse. If the deceased was previously married, you will need to give this information to the court.
- Names and addresses of all heirs, next of kin, and beneficiaries
- Summary of the deceased’s assets
An HVCU Estate Account provides an efficient solution for holding estate assets in interest-earning accounts while keeping them separate from the executor/ administrator’s own personal accounts. Typically, the deceased member’s assets are deposited into savings, then transferred as needed to checking for easy payment of taxes, debts, and other obligations during the estate settlement process. The HVCU Estate Account gives the executor/administrator an accurate picture of the estate’s finances at any given time—a real benefit when completing tax returns and other documentation.
It is important to keep the estate’s finances separate from your own.
To establish an Estate Account, you need to provide:
- Court documents designating an estate executor/administrator.
- An Employer Identification Number (EIN) for the estate. The EIN can be obtained by filing Form SS-4 with the IRS. This form is available at U.S. Post Offices, at the local library, or online at IRS.gov. The IRS can be reached by phone at 800.829.4933.
- A completed Estate Account application.
All documents above can be sent through our secure email system or be given to a representative at an HVCU branch.
Specific concerns or questions regarding your responsibility as an estate administrator, the probate process, or the estate settlement process should be referred to an attorney, financial advisor, or probate court official.
In the event that the individual was not a member of HVCU at the time of death, HVCU permits the executor/administrator to open an Estate Account, provided all beneficiaries/heirs of the estate are members of the credit union. The estate executor/administrator does not have to be a member of HVCU or be eligible for membership to open an Estate Account.
We’re Here to Help
An executor, also known as a personal representative or administrator, is responsible for carrying out or “executing” the Will’s instructions. Most often, an individual executor can easily settle a simple estate on his or her own. However, a large or complicated estate may require legal advice. The probate court usually requires an executor/administrator to be bonded to protect all interested parties against fraud, embezzlement or negligence by the executor/administrator. If you are named executor/administrator, it is your responsibility to ensure that debts or obligations are paid and that distribution of the remaining assets to heirs are completed.
The following is a checklist of the typical duties of an executor when settling an estate:
- Consult an attorney and a certified public accountant (CPA) about your duties as executor.
While not required, checking with these professionals is helpful because they are familiar with local probate procedures and the steps required to settle an estate.
- File the Will and initiate probate.
As executor/administrator, it is your responsibility to file a Will with the appropriate state probate court and petition the court for “letters testamentary.” These court documents may also be called “letters of administration” or by another name. These documents provide legal proof that you are the executor of the estate. You should get several certified copies of these court documents, as they may be requested when handling certain financial transactions for the estate.
- Request several copies of the death certificate.
You will need certified copies of the death certificate to conduct estate business. These certified copies usually cost between $5 and $25 each, depending on the jurisdiction. They can be obtained from the County Clerk’s Office in the county of the deceased’s death, or the funeral director may order them for you.
- Retitle property if necessary.
If the estate includes property, such as unencumbered automobiles, boats, other vehicles or real estate, you can transfer titles either to the named beneficiary or to yourself as executor. If no beneficiary is designated, you may, as executor, decide to sell the property and add the proceeds to the estate. HVCU will require a certified copy of the death certificate and letters of administration for any real estate actions. You should seek the advice of an attorney before you decide to sell or retitle the property.
- List any indebtedness.
As executor, it is your responsibility to pay off any debts at the time of the deceased’s death. You must notify all creditors of the death so they can stop any deductions and invite them to submit claims to the estate. Usually, each state sets a time limit for creditors to submit claims. Some things to look for are:
- utility payments or bills
- hospital, doctor or other medical expenses
- loan payments or bills
- credit card payments or bills
- cell phone/internet service provider
- Notify Depositors.
Notify any companies that electronically deposit funds to the decedent’s account. Inform them of the account holder’s death so they can stop the deposits. Here are some you may need to notify:
- Social Security or other Federal recurring deposit
- Insurance Companies (i.e. Annuity Payments)
Note: Electronically deposited funds solely in the decedent's name presented after the date of death may be returned to the originator.
- Close credit union, bank and investment accounts, and open an Estate Account.
You should close any account owned solely by the deceased and transfer those assets to an account that will allow you to settle the deceased’s bills and other obligations. An HVCU Estate Account can be used for this purpose. You should seek the advice of an attorney before you open an Estate Account.
- Locate insurance policies and file claims.
Life insurance benefits are usually payable to designated beneficiaries and are not part of the estate. To file claims, you need the policy numbers, full name of the deceased, and certified copies of the death certificate.
- File taxes.
Federal and state taxes for the deceased will need to be filed for the year in which they passed away and for the year the Estate Account is closed. Consult the IRS or a CPA for assistance. You should also seek the advice of an attorney.
- Close the Estate Account and distribute the remaining assets to beneficiaries.
After making sure all estate debts have been paid, you can distribute any remaining assets to the beneficiaries and close the Estate Account. You should seek the advice of an attorney before you close an Estate Account.
Wealth Management at Hudson Valley Credit Union can help you establish estate plans for surviving family members. Planning may begin with a simple will and later develop into a full-fledged strategy that includes joint accounts, beneficiaries, guardians, asset protection, and income tax reduction. To speak to someone about estate planning, schedule a consultation with a Financial Consultant at any of our branches or contact us at 845.463.3366.
Representatives from Wealth Management at Hudson Valley Credit Union can also help you with reinvestment plans for any funds and assets you receive as a result of your loved one's passing. They offer portfolio review, retirement planning, income planning, and more. To speak to someone about estate planning, schedule a consultation with a Wealth Management at Hudson Valley Credit Union Consultant at any of our branches or contact us at 845.463.3366.
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