What to do when a Carter Bank account holder dies

Completed by the named beneficiary. Sent by the institution on request.¹

An account with no beneficiary and no surviving owner is collected by the personal representative with Letters Testamentary or Letters of Administration, or with a small estate affidavit where the estate qualifies.¹

Under Section 6.b the balance belongs to the surviving owner or owners. The death certificate is presented so the deceased owner is removed.²

Under Section 6.e the beneficiary must be living at the owner's death. The named beneficiary claims the funds directly with the death certificate and ID.²

The successor trustee presents the trust instrument or Certification of Trust showing the successor's authority, the death certificate, and photo ID.¹

Under Section 28 (Fiduciary Accounts) a trustee, executor, administrator or conservator may open and maintain an account. The bank states it is not acting as trustee and does not monitor the fiduciary's use of the funds.²

The named beneficiary completes the bank's IRA beneficiary claim and distribution election paperwork. A CD-based IRA keeps its term until the election is made.¹

Under Section 34 the early withdrawal penalty may be imposed on a withdrawal the owner did not initiate, including one caused by setoff or legal process. After a partial early withdrawal the bank may close the account and charge the penalty on the whole balance.²

The agreement's death provisions are at Sections 6.b, 6.e and 27, and Section 34 states no exception for the owner's death.²

Section 27 (Death or Incompetence) requires prompt notice when a person with a right to withdraw dies. Until the bank knows of the death and has had a reasonable opportunity to act on it, it may keep honoring checks, items and instructions.²

The bank may pay or certify checks drawn on or before the date of death for up to ten days after the death, unless someone claiming an interest in the account orders a stop payment.²

Under Section 13 (Direct Deposits), if the bank must reimburse the federal government for a directly deposited benefit payment, it may deduct the amount "from the account or from any other account you have with us, without prior notice and at any time."²

A Social Security payment reclaimed after the death can therefore be taken from a different Carter Bank account than the one it was deposited to.²

Under Section 15 (Setoff) the bank may, without prior notice and when permitted by law, apply funds in the account or any other account to a due and payable debt, so a Carter Bank loan or credit card balance can come out of a deposit account.²

Setoff does not reach an IRA or similar tax-deferred account, a debt created by a consumer credit transaction under a credit card plan, or an account where the right of withdrawal arises only in a representative capacity.²

Under Section 36 the bank may place an administrative hold on an account subject to a claim adverse to the owner, between people claiming as survivors or beneficiaries, or arising by operation of law, until a court decides or it has evidence satisfactory to it that the dispute is resolved.²

The bank is not liable for items dishonored because of that hold.²

Under Section 30, if the bank is served with a subpoena, levy, garnishment or similar order relating to the account, it will comply or may freeze the assets until a final court determination. Its costs of responding, including attorneys' fees and internal expenses, may be charged against the account.²

Under Section 6, joint-survivorship and payable-on-death designations are governed by the statutes of the state where the account was created, Virginia or North Carolina.²

Under Section 26, long-dormant accounts are escheated as unclaimed property to Virginia or North Carolina, after which the funds must be recovered from the state rather than the bank.²