What to do when a HSBC account holder dies

Because U.S. Treasury regulations require one before property is transferred to the beneficiaries or foreign fiduciaries of a nonresident decedent, and HSBC enforces it as a hard gate. Its guidance for transfers from nonresident decedent accounts applies to a nonresident who was a U.S. citizen (including dual citizens) and to a decedent who was neither a U.S. citizen nor a U.S. resident. "Affected accounts" include individual, joint, transfer-on-death, trust, qualified, sole proprietorship, and custodial accounts -- traditional IRA, Roth IRA, and 529. The IRS says it takes six to nine months to issue a transfer certificate once it has all the documentation, so start that filing immediately. HSBC will also want a certified death certificate, Letters Testamentary or the legal equivalent from the country of the decedent's tax residence, and a letter of instruction signed by the executor; foreign documents need an accredited English translation and an Apostille.

There are two narrow exceptions in HSBC's own guidance. First, no transfer certificate is required for probate property being administered by an executor or administrator duly appointed, qualified, and acting within the United States -- but non-probate property such as a joint account or a transfer-on-death account still requires one, even in that estate. Second, HSBC may in its discretion release the assets of a nonresident non-U.S.-citizen decedent without a transfer certificate when the estate held only non-U.S.-situs assets, or held less than $60,000 in U.S.-situs assets. That path requires a notarized affidavit in lieu of a transfer certificate, completed by the executor or another person familiar with the decedent's financial affairs (with an Apostille if it is signed outside the U.S.), and HSBC may ask for an opinion of the estate's counsel to confirm the U.S.-situs figure. Granting the exception is at HSBC's discretion.

Not through HSBC's deposit beneficiary form. HSBC deposit beneficiaries are "In Trust For" (ITF) designations -- a Totten trust, also called pay-on-death -- and the Fiduciary Account Change Beneficiary Form has no share-percentage field. The Fiduciary Deposit Agreement states that on the death of the last surviving account owner, ownership transfers to the ITF beneficiaries in EQUAL shares and is not part of the owner's estate. If your plan calls for unequal shares, staged distributions, or a minor beneficiary, the account has to be titled in your revocable living trust instead. Note also that if every ITF beneficiary predeceases the last account owner, the account is handled under the rules of the relevant state, which can pull it back into probate.