TN 5 (10-14)

PR 07230.008 Connecticut

A. PR 15-008 Access to a Beneficiary’s Conserved Funds held in a Connecticut Wells Fargo Account that is Properly Titled as a Representative Payee Account

DATE: October 7, 2014

1. SYLLABUS

Access to a beneficiary’s conserved funds held in a Connecticut Wells Fargo bank account by a new representative payee after the previous representative dies.

A properly titled bank account establishes that the funds belong to the beneficiary not the representative. In order to replace the former representative payee on the beneficiary’s account, the new representative payee must go to a Wells Fargo branch personally and present: (1) the death certificate of the former representative payee; and (2) a letter of appointment from the agency, SSA, identifying him/her as the new representative payee for the beneficiary.

2. OPINION

I. Question Presented

How can the conserved funds belonging to a beneficiary be retrieved from a Connecticut bank account after the death of the representative payee who established the account on behalf of the beneficiary?

II. Short Answer

In order to access the funds, the new representative payee must go to a Wells Fargo branch personally and present: (1) the death certificate of the former representative payees; and (2) a letter of appointment from the agency identifying him as the new representative payee for the beneficiary.

III. Background

Linda served as the representative payee for Christine until Linda’s death. In that capacity, Linda opened a conserved funds account at Wells Fargo (RTN ~; ACCT ~), which received (and continues to receive) direct deposits of Christine’s Social Security benefits. This bank account is titled “Christine, Linda Representative Payee.” Based on a recent bank statement, that account contained $20,088.98. After Linda’s death, the beneficiary’s brother, Richard, was appointed as her new representative payee.

When contacted by the agency, Wells Fargo refused to release any information concerning the account, citing privacy restrictions, and refused to return the funds to the agency. The beneficiary’s new representative payee has been maintaining the beneficiary without access to her benefits, but cannot continue do so for much longer.

IV. Applicable Law

  1. Federal Law

20 C.F.R. § 404.2045 provides, in pertinent part, that

After the representative payee has used benefit payments consistent with the guidelines in this subpart (see § 404.2040 regarding use of benefits), any remaining amount shall be conserved or invested on behalf of the beneficiary. Conserved funds should be invested in accordance with the rules followed by trustees. Any investment must show clearly that the payee holds the property in trust for the beneficiary.

Agency guidance directs that those conserved funds “must be deposited in an account that is titled to show the payee has only a fiduciary interest in the funds” and that “[f]unds deposited by a fiduciary on behalf of a beneficiary are owned by the beneficiary.” POMS GN 00603.110A.

  1. State Law

Under Connecticut law, share accounts held in trust for another must be established according to certain rules. See Conn. Gen. Stat. Ann. § 36a-296 (2014). For example, the despositor must provide the bank “with the name and a residential address for the beneficiary, upon establishing the deposit or share account or thereafter at the request of the bank.” Conn. Gen. Stat. Ann. § 36a-296(a)(1) (2014). The statute also provides that the despositor “may” provide a writing specifying the terms of the trust and that, unless such writing specifies to the contrary, “it shall be conclusively presumed” that the despositor intends to create a trust that follow certain specified terms. Id. As relevant here:

if the named beneficiary survives the despositor or share account holder, the despositor’s or share account holder’s death shall terminate the trust and title to the deposit account or share account, subject to any membership restrictions for Connecticut credit unions or federal credit unions, shall thereupon vest in the named beneficiary free and clear of the trust.

Conn. Gen. Stat. Ann. § 36a-296(a)(1)(C) (2014). Thus, unless the despositor provided a writing that specified to the contrary, Wells Fargo must conclusively presume that the balance of the account is owned by the named beneficiary on death of the despositor.

V. Analysis

The account in question was established in accordance with POMS GN 00603 because it was titled in the beneficiary’s name and identified Linda as the “represen