What to do when a City National account holder dies

An account in one name with no beneficiary is settled through probate. The bank asks for Letters Testamentary or Letters of Administration so it can identify the successor owner.¹

The funds belong to the surviving owner or owners automatically. An account held in joint tenancy is presumed to carry right of survivorship unless the agreement says otherwise.¹

On a tenancy-in-common account the deceased owner's interest passes as part of the estate, under the will or by intestacy. The surviving owners are not entitled to that share by reason of the account ownership.¹

A community property account does not pass automatically to the surviving spouse or registered domestic partner, because the deceased spouse or partner can leave that interest by will to someone else. City National requires the account agreement to say "Community Property" expressly.¹

The beneficiary presents the death certificate and government-issued photo ID, and the assets transfer without probate into a new account in the beneficiary's name. Several beneficiaries are paid in equal shares unless the owner gave other written instructions before death.¹

A "Bank Account Trust" (Totten trust) is an "in trust for" account with no written trust agreement. The balance is paid to the surviving named beneficiary only when the last trustee dies.¹

City National "may permit one early withdrawal without a penalty following the death or court-declared incapacity of an account owner."¹

The survivor on a joint brokerage account must "immediately give written notice." Until the brokerage and NFS have written notice of the death, they may keep operating the account as though the owner were alive and may liquidate it without prior notice to the successors.²

Before releasing the account the brokerage may require papers and inheritance or estate tax waivers, and may restrain or retain part of it. On a transfer-on-death account it may ask the beneficiaries for additional documents.²

Brokerage accounts (formerly City National Securities)³

Clearing and custody of RBC Securities brokerage accounts²

Investment management for wealth and trust portfolios³

City National can serve as executor or administrator when named in the will or appointed by the court, in any state. Its services include estate settlement, probate administration, conservatorships, testamentary trust administration, and income and estate tax returns.³

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The deposit agreement says: "You agree to notify us at once in writing of the death or incapacity of an account owner or any Authorized Signer or of any designated beneficiary of your account."¹

Until City National receives notice of the death, it "may continue to handle the account as if such person is alive and competent."¹

Once notified, City National "may place a hold on the account and refuse to accept deposits or permit withdrawals," and "may hold any funds in the account until we know the identity of the successor owner(s) of the account."¹

If a deposit payable to the deceased owner, such as salary, pension, Social Security or Supplemental Security Income, is credited to the account and City National believes the payer is entitled to it back, the bank may debit the account and return it.¹

If those funds were already withdrawn or transferred, the bank may debit any account of the person who received them, for the lesser of the withdrawal amount or the payment amount.¹