What to do when a Mission Fed account holder dies

Yes, and this is the term that most often surprises heirs. Mission Fed's Account Agreement gives it both a consensual lien and a statutory lien (12 U.S.C. § 1757) on ALL of a member's share accounts — savings, checking, money market, and certificates — securing any obligation that member owes it, whether direct, indirect, contingent, or secondary. On default, the member authorizes Mission Fed to apply the share funds to the debt WITHOUT NOTICE OR LEGAL PROCESS, and it may place an administrative freeze on the accounts. Certificate funds applied this way are still subject to the early withdrawal penalty. Practically: an unpaid Mission Fed auto loan, credit card, or line of credit can be settled out of the deposit balance before an heir or POD beneficiary receives anything. There is one carve-out that matters — retirement accounts. IRA shares are expressly excluded from the lien, so a Mission Fed IRA cannot be applied to the member's other Mission Fed debts. The mortgage is also outside the collateral clause (loans secured by a primary residence are excluded).

The account freezes. Under the General Terms of the Account Agreement, if Mission Fed believes there is a dispute about the ownership or control of an account, it may place a hold and NOT release the funds until it receives a court order and/or instructions signed and notarized by every person claiming an interest in the account. It may also withhold payment to any party until proper evidence of authority is provided. Nobody has to have done anything wrong for this to happen — a POD beneficiary and an executor asserting the funds belong to the estate is enough. The practical consequences are that unanimity or a court order becomes the only way out, and that the one-year limitation clause is running: any action to enforce a right relating to the account must be commenced within one year after the claim accrues, and all litigation and arbitration is held in the County of San Diego under California law.

Mission Fed calls a trust-titled account a Formal Trust Account, and its agreement is specific about the handover. Before a successor trustee may act, they must provide, as applicable: a notarized letter of resignation from the resigning trustee; a certified copy of the death certificate for a deceased trustee; a NEW Certification of Trust; and any other documentation Mission Fed requests. Two related terms are worth knowing going in. Mission Fed may rely on the direction of any ONE trustee — a single trustee's signature is valid and discharges the credit union — so co-trustee requirements written into the trust are not policed at the teller line. And a trust amendment is effective as to Mission Fed only after it receives a new Certification of Trust in writing, so an amendment the credit union has never seen does not change how it treats the account. The trustees, trustor, successor trustees, and beneficiaries also agree to indemnify and hold Mission Fed harmless for claims arising from the account, including from the unauthorized acts of a former trustee.

They can inherit the money anywhere; they just cannot necessarily keep it at Mission Fed. Membership is limited to people who live, work, worship, or attend school in San Diego County, and their immediate family. A named POD beneficiary, a surviving joint owner, or a trust beneficiary can claim a deceased member's funds regardless of where they live. But to hold the inherited money in a new Mission Fed account in their own name, the claimant has to independently qualify for membership — which an out-of-state heir usually does only through the immediate-family channel. Heirs who do not qualify are paid out and must move the funds to an institution where they have an account. One more Mission Fed-specific point for executors: membership itself rests on a $1 share held in the savings account, so closing that savings account closes the membership.