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CindiWass

beneficiaries with bank

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we are presently living in the state of Pennsylvania and have our bank accounts here. We belong to a credit union, my husband is the member and I am the "other person" (however they designate it, because it apparently seems they don't have joint accounts). However, it was told to me that he is the member and I have privileges of withdrawal except that I may not close the account. That being said, we want to leave whatever money is left in the account to a charitable organization. The bank manager said that I cannot do this without a will. I am not quite ready to make a will because we need to decide on an executor. So! I guess the first question must be: can a lawyer be the executor? (We don't have that much, but I don't want to leave it up for grabs.)

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1 hour ago, CindiWass said:

can a lawyer be the executor?

 

Generally speaking, any competent adult may serve as executor of an estate.  Keep in mind that your will won't really matter (in terms of the stated preference about donating the money to charity) unless your husband dies first.  If you die first, he'll get the money, and then his will determines what happens to the money after he dies.  You also need to carefully read the account agreement because bank and credit union accounts typically have pay-on-death beneficiary designations that essentially trump whatever the account owner's will says.

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In general, there's nothing wrong with a lawyer being the executor of a will.

 

However, if what you're really asking is whether the lawyer who writes (or helps you write) the will could be named as executor, that gets a little more complicated.  There are some professional ethics issues that could arise for the lawyer in that scenario and accordingly some lawyers just won't do it. Other lawyers might agree to be an executor of a will that they helped write, but only after some extensive disclosures, additional fees, and some additional language in the document that at least tries to avoid some of the potential conflicts of interest that could arise.

 

 

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3 hours ago, CindiWass said:

We belong to a credit union, my husband is the member and I am the "other person" (however they designate it, because it apparently seems they don't have joint accounts).

 

That doesn't make any sense. Well, maybe the member thing might. Why aren't you both members?

 

I suggest you start looking at other banks.

 

Joint accounts should be readily available where you both have control over the account and the survivor gets the money.

 

You should also be able to designate a secondary beneficiary in case you both get killed in a common accident.

 

It's nice to have a will but, at this point, you can accomplish the same thing with beneficiary accounts.

 

 

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3 hours ago, pg1067 said:

 

 

Generally speaking, any competent adult may serve as executor of an estate.  Keep in mind that your will won't really matter (in terms of the stated preference about donating the money to charity) unless your husband dies first.  If you die first, he'll get the money, and then his will determines what happens to the money after he dies.  You also need to carefully read the account agreement because bank and credit union accounts typically have pay-on-death beneficiary designations that essentially trump whatever the account owner's will says.

So it seems from the conversation I had today with the bank manager, who had to call the vice president to make sure she was right about beneficiaries. According to her, in order for the account not to be dropped into the "estate" box, where a relative can grab it, we'd have to have a will and an executor. 

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1 hour ago, adjusterjack said:

 

That doesn't make any sense. Well, maybe the member thing might. Why aren't you both members?

 

I suggest you start looking at other banks.

 

Joint accounts should be readily available where you both have control over the account and the survivor gets the money.

 

You should also be able to designate a secondary beneficiary in case you both get killed in a common accident.

 

It's nice to have a will but, at this point, you can accomplish the same thing with beneficiary accounts.

 

 

I'll ask about a second beneficiary, but complications arise. We want to give the money in case of our deaths to a charity, HOWEVER, the bank manager was telling us something about inheritance tax in the state of PA, I can't go any further in reasoning about it with her. (Meaning I don't understand everything -- or much -- of what she told me.) Also, it seems that while the only thing I can't do is to close the account, I can take as much out as I desire. Again, not that this makes any sense to me, and yes, I have thought about changing banks. But then there's my hubby to convince. He likes that bank so I will now have to have the anxiety of comparing interest rates. All very annoying, but -- I agree that it doesn't make sense that only one in a joint account (if they call it that technically) in the credit union is the "member." I might pursue an explanation if I care to annoy the manager a bit. (Which I don't mind doing.) The manager said that if my husband dies first I become the member. It's ridiculous but -- they're not going to break their rules (if they even know them) for me, I suppose. And I don't want them to. Thanks for your thoughts. P.S. I get the account in my name if he dies first.

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4 hours ago, MiddlePart said:

In general, there's nothing wrong with a lawyer being the executor of a will.

 

However, if what you're really asking is whether the lawyer who writes (or helps you write) the will could be named as executor, that gets a little more complicated.  There are some professional ethics issues that could arise for the lawyer in that scenario and accordingly some lawyers just won't do it. Other lawyers might agree to be an executor of a will that they helped write, but only after some extensive disclosures, additional fees, and some additional language in the document that at least tries to avoid some of the potential conflicts of interest that could arise.

 

 

OK, yes, I understand. I realize we need an executor other than a lawyer so we'll have to figure who we will ask. Thanks.

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4 hours ago, pg1067 said:

 

 

Generally speaking, any competent adult may serve as executor of an estate.  Keep in mind that your will won't really matter (in terms of the stated preference about donating the money to charity) unless your husband dies first.  If you die first, he'll get the money, and then his will determines what happens to the money after he dies.  You also need to carefully read the account agreement because bank and credit union accounts typically have pay-on-death beneficiary designations that essentially trump whatever the account owner's will says.

Which presents a problem insofar as inheritance tax goes for the beneficiary, since we would want to designate a small amount for the executor, but the bulk for the charitable institution. So I guess the option would be to make sure that the beneficiary does not run into additional cost since he would know we'd want the money to go to a charity. This is getting complicated. ?

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4 hours ago, MiddlePart said:

However, if what you're really asking is whether the lawyer who writes (or helps you write) the will could be named as executor, that gets a little more complicated.  There are some professional ethics issues that could arise for the lawyer in that scenario and accordingly some lawyers just won't do it. Other lawyers might agree to be an executor of a will that they helped write, but only after some extensive disclosures, additional fees, and some additional language in the document that at least tries to avoid some of the potential conflicts of interest that could arise.

 

I'm curious what you're getting at here.  In my experience and to my knowledge, it is quite common for a lawyer who drafts a will to serve as executor and can't think of any ethical issue that would require disclosure or create conflicts, etc.  Where problems can arise is where the testator wants to leave something to the lawyer who drafts the will, but it doesn't sound like that's what you're talking about.

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11 minutes ago, pg1067 said:

 

I'm curious what you're getting at here.  In my experience and to my knowledge, it is quite common for a lawyer who drafts a will to serve as executor and can't think of any ethical issue that would require disclosure or create conflicts, etc.  Where problems can arise is where the testator wants to leave something to the lawyer who drafts the will, but it doesn't sound like that's what you're talking about.

Well, I do want to consult with a lawyer, I guess that could cost me money, BUT -- the question arises about the cars we have. We have two old cars in good condition and would like to leave them to someone. (We have no children, and our relatives don't need a car.) Therefore, we'd like to either donate them to a charitable organization upon our deaths, OR give them to a friend in need. But then the question comes up about inheritance tax. How does this apply to property such as our old but serviceable cars? (This is complicated -- we don't have that much, but it's almost better to have nothing -- I'm beginning to see the benefit of that.) Part of the problem is making the decision before we see the lawyer as to who the executor will be, and what we intend to do with the property we have. We have a cheap enough condo but it's worth maybe $30,000, plus a crummy trailer which I don't think we'll get much if anything for. We can't keep both, and I'm inclined to try to get rid of both places and move into a comprehensive place for the elderly, with meals and such.

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2 hours ago, CindiWass said:

I'll ask about a second beneficiary, but complications arise. We want to give the money in case of our deaths to a charity, HOWEVER, the bank manager was telling us something about inheritance tax in the state of PA

 

Here's a link to inheritance tax information for PA. No tax if you inherit from each other and it appears that charitable organizations are exempt from inheritance tax:

 

http://www.revenue.pa.gov/GeneralTaxInformation/Tax Types and Information/InheritanceTax/Pages/default.aspx

 

1 hour ago, CindiWass said:

the question arises about the cars we have. We have two old cars in good condition and would like to leave them to someone

 

Here is info from the DMV about inheriting cars.

 

http://www.dot.state.pa.us/Public/DVSPubsForms/BMV/BMV Fact Sheets/fs-vehtrans.pdf

 

1 hour ago, CindiWass said:

We have a cheap enough condo but it's worth maybe $30,000, plus a crummy trailer which I don't think we'll get much if anything for. We can't keep both, and I'm inclined to try to get rid of both places and move into a comprehensive place for the elderly, with meals and such.

 

Just how old are you two?

 

 

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32 minutes ago, adjusterjack said:

 

Here's a link to inheritance tax information for PA. No tax if you inherit from each other and it appears that charitable organizations are exempt from inheritance tax:

 

http://www.revenue.pa.gov/GeneralTaxInformation/Tax Types and Information/InheritanceTax/Pages/default.aspx

 

 

Here is info from the DMV about inheriting cars.

 

http://www.dot.state.pa.us/Public/DVSPubsForms/BMV/BMV Fact Sheets/fs-vehtrans.pdf

 

 

Just how old are you two?

 

 

LOL, I am 74, he is 73. The condo we have is for 55+, BUT -- it has its drawbacks, although well run now, we live on the 4th floor and if anything happens to the elevator we're stuck. Meaning if it needs to be fixed or changed, it could take a week or two. We can't handle four flights of steps. Plus we are responsible for everything in the condo. So we talked tonight and I think we're going to stay in the trailer and sell the condo for the time being. Maybe later we'll figure out about a comprehensive community. More expensive but maybe worth it in the long run. Thanks for the links about PA inheritance laws, that will be helpful. I checked, however, with the condo management, and they do not allow for businesses, that includes charitable organizations. It must go to persons. As for the bank accounts, yes I know whoever dies first, the other will get the account, no questions I guess. Well, I guess if my husband goes before I do, I have to show them a death certificate so "I" can be the member. ? Thanks for asking.

I'll let you know more about what I found out in reference to the bank. Who knows if she gave me the right info about beneficiary. I'll look into it, thanks. OK, I checked the PA inheritance tax link, and will bring it to the credit union and see what she says. Then I'll bring it to another banking institution and see what they say. (Thanks again.)

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13 hours ago, pg1067 said:

I'm curious what you're getting at here.  In my experience and to my knowledge, it is quite common for a lawyer who drafts a will to serve as executor and can't think of any ethical issue that would require disclosure or create conflicts, etc.

 

A couple of points:

 

--The appointment of a lawyer as executor is seen by courts and the lawyer disciplinary bodies / attorney grievance committees as a kind of business transaction between lawyer and client, which implicates Rules of Professional Conduct (1.8) requiring informed consent by the client before entry into the arrangement. Insofar as the lawyer serving as executor is also compensated by the estate for his/her service as executor, and thus is receiving a benefit from the estate for services other than legal services (although obviously there are some aspects of being an executor that would constitute or require legal services).

 

--lawyer as will drafter has access to privileged information from the testator that could be important in case of a will contest

 

--if beneficiaries believe that lawyer engaged in malpractice with respect to drafting the will, then the executor may be wearing two hats in the resulting proceeding (representing the interest of the estate as executor but also as an individual defendant/witness).

 

--how the lawyer as executor handles the estate could also give rise to issues -- one example that has arisen is if the sale of estate assets is to another client of the same lawyer and the price is (arguably) below market.

 

There may be other examples -- those were the major ones that I was thinking about when I wrote what I wrote.

Again -- lawyers who drafted the will can serve as executors of the will.  It's not against the rules to do so. But there are some additional hurdles and potential risks that some lawyers may not want to take on.

 

 

 

 

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2 hours ago, MiddlePart said:

A couple of points

 

Interesting, but I have to say that the notion of a lawyer serving as executor being a business transaction with the client seems like an awful stretch (especially since I'm not sure who the "client" would be).  As a point of reference, I don't practice in a state that uses the ABA model rules, but I did look at the comments to Rule 1.8, and the only reference to executors suggests this is a case-by-case situation and that conflict waivers are only required in unusual circumstances.

 

In the case of a will contest, I agree that the drafting lawyer could have relevant testimony.  However, since the executor typically advocates for the will to remain in place, I don't see a conflict here.

 

The other things you mentioned are extremely uncommon, and the first of which would virtually require that the court remove the lawyer as executor.

 

Sounds like you and I have vastly different experiences when it comes to drafting lawyers being willing to serve as executor.  As I previously mentioned, in my experience and knowledge, it's quite common.

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10 hours ago, pg1067 said:

 

Interesting, but I have to say that the notion of a lawyer serving as executor being a business transaction with the client seems like an awful stretch (especially since I'm not sure who the "client" would be).  As a point of reference, I don't practice in a state that uses the ABA model rules, but I did look at the comments to Rule 1.8, and the only reference to executors suggests this is a case-by-case situation and that conflict waivers are only required in unusual circumstances.

 

In the case of a will contest, I agree that the drafting lawyer could have relevant testimony.  However, since the executor typically advocates for the will to remain in place, I don't see a conflict here.

 

The other things you mentioned are extremely uncommon, and the first of which would virtually require that the court remove the lawyer as executor.

 

Sounds like you and I have vastly different experiences when it comes to drafting lawyers being willing to serve as executor.  As I previously mentioned, in my experience and knowledge, it's quite common.

Thanks for all your answers, but we don't have that much for a conflict of interest. In fact we really have little in comparison with a "rich person." But I don't want to leave it up in the air and we have no children and no close fleshly relatives that we care to leave anything to in particular, except maybe a small sum. I will let you all know about the bank account as soon as I find an authoritative answer from the bank when I give her (1) the information and (2) check with other banks.

Which leads me to another question about gifting individuals (friends and/or relatives), which I may ask on another thread. For informational purposes, because we may need the money as time passes. Gotta figure this out.

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And now -- there's more. So I figured out that the credit union apparently needs a revocable trust in order to give the money to a charitable institution rather than a person. That's what they finally told me. They also said they don't have the papers or forms for this and I will have to go to an attorney, which I am loathe to do because I'd like to do it myself. It shouldn't be complicated, but I was reading up on revocable trusts and the forms do seem to be complicated and long. What a mess. I checked the government's website for credit union rules. https://www.ncua.gov/Legal/GuidesEtc/GuidesManuals/NCUAShareInsuranceAndYou.pdf

There is a section there about revocable trusts, and so I am assuming that needs (?) to be set up by an outside agent, not the bank. That is a question. The credit union manager (and the bank president -- can you believe it? -- virtually had no idea what I was talking about -- then the manager started to assail me by saying, "We are not lawyers -- you need to see a lawyer." Really? Well, maybe. But I told her that she could have told me that from the start instead of saying they can't change the beneficiary to a charitable institution. (Still I don't believe her...) Later, after several phone calls, she finally said I need to get a will done, etc., and then give the papers to the bank. My, oh my, what a situation.

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LOL, I already told my husband that tonight, he had no contest. I'm not going (even though we don't have that much) without a few polite words to the captains there. And yet the other bank (not a credit union) has also to look it up. Interestingly, Wells Fargo has info about living trust POD so -- I might contact them also about it. I mean, what could possibly be so complicated about this all? 

I did not mention that it's a small town. ? Yes, a Florida big-time bank would probably have more answers. 

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2 hours ago, adjusterjack said:

You need to get as far away from that credit union as possible.

Upon some further research, even on the government's credit union website, it says that credit unions do not have to offer trust accounts, but a letter indicated that it would be unusual for them not to do so. So -- I hope hope hope I can say goodbye to that stupid credit union we have been banking at soon. I'd rather take a cut in interest than stay with that dumb bank with dumb people working in management. I'll be calling other banks tomorrow.

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I found a bank, not a credit union, in the area that will make out a beneficiary for a charitable organization. The employees were very friendly, the manager got back to me as soon as she asked the legal dept. I appreciate that. I guess this does not come up very often since she wasn't sure, but I am happy she was diligent in finding out and letting me know, so we'll be switching banks soon. As I said, there is something on the ncua website by the government that says a credit union does not have to offer Totten trust accounts, but they made it sound like something is missing if they do not. And the credit union we are members of sounds like a hokum operation after speaking to the manager who was so reluctant to answer questions, so we'll be switching anyway. The manager of the local branch is a friend of the bank president, I know this because a friend used to be a teller there. The manager doesn't sound too keen, she virtually hung up on me -- after saying a quick"bye." ? Anyway, we'll be moving our funds out of that bank. Thanks for all your replies, that'll keep that part simple at least as far as that property goes.

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