What to do when a 1st Source account holder dies

A joint account carries a right of survivorship unless the bank's records show a joint depositor is a fiduciary or beneficiary. At one owner's death the funds pass to the surviving owners, subject to the bank's setoff right.¹

1st Source does not hold accounts as tenants by the entireties.¹

An "in trust for" account is payable to its beneficiaries at the death of the trustee, or of the last surviving trustee. No separate trust agreement governs it.¹

A pay-on-death account is payable to its named payee at the death of the depositor or the last surviving joint depositor. The payee has no interest in it before then.¹

The bank may waive the early withdrawal penalty on a certificate of deposit in limited circumstances, such as the death of its owner.¹

When the only signer on a business organization's account dies, the bank may freeze the balance and hold the funds until it has documents verifying the death and showing who now has authority over the account.²

A loan may carry 1st Source's optional Payment Protection Plan. If a borrower who kept current on payments dies before the debt is paid, the plan pays off the unpaid balance, subject to the policy limits.³

Estates where the bank serves as personal representative and trusts it administers^{4, 5}

The bank's authority over the account continues until it receives written notice of the death, and it is not liable for items it handles before it knows of the death and has a reasonable chance to act.¹

Even after notice, the bank can pay checks the owner wrote before the death, as law permits. The agreement says that in some states all of the deceased person's accounts may be frozen until released.¹

Direct deposits and other electronic credits may be returned when the person or government agency that sent them tells the bank to return them.¹

1st Source may charge any account for amounts any owner owes it. The right does not reach an IRA, a credit-card debt, funds the debtor can withdraw only as a representative, or an HSA.¹

Once the bank accepts a power of attorney, it may keep recognizing the agent until it receives written notice that the power was revoked or ended and has had a reasonable time to act.¹

A checking account becomes dormant after one year with no customer activity, and savings and money market accounts after three. Dormant balances are turned over to the state when its law requires.¹

The personal fee schedule charges a dormant account $5 a month and charges $20 an hour for help balancing an account.⁶

The personal deposit agreement is governed by federal law and, where federal law does not apply, by Indiana law.¹