Preparing for the death of a member

Generally, people die. It happens. It’s something that we all need to prepare for. Even credit unions need to prepare for the death of its members. If a member died today, would your staff know what to do? Unfortunately, the law governing death and the treatment of a deceased’s property is mostly a mish mash of state law. There is no one size fits all for dealing with a deceased member and credit unions may need to rely on local counsel when issues arise. While NAFCU cannot provide a comprehensive guide for credit unions, here are some common issues credit unions face when dealing with a deceased member and their accounts.

Share Accounts

Generally, NCUA is largely silent on issues regarding share accounts and deceased members when compared to the problems that arise from a member’s passing. However, the current model bylaws are clear on how long a credit union should keep a deceased member’s account open. Article III, section 5 of the bylaws permits a share account of a deceased member (no joint owner) to be continued until “the close of the dividend period in which the administration of the deceased’s estate is completed.”

Unfortunately, judging by the number of questions we get regarding the treatment of a deceased’s account, there are many more issues than how long to keep a deceased’s account open. Generally, probate, trust and estate, rights of survivorship, and agency issues are governed under state law. Ultimately, credit unions may need to rely on local counsel as issues arise with a deceased member’s accounts. However, rather than taking a wait and see approach, credit unions may want to proactively head off issues. Here are some issues that NAFCU members have faced:


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