QUESTION
Is it legal for the bank to ask for my social security info to be a beneficiary?
Asked on Oct 18th, 2013 on Estate Planning - Michigan
More details to this question:
Are individuals named as beneficiary to bank accounts (IRA, etc.) of testators required to submit social security number up front ( i.e., at the time such individuals are added as a new beneficiary)? I understand name, date of birth, address, phone and other identifier information is required, but social security info too? Would the bank dismiss a named individual as beneficiary without social security info up front? Is this not a violation of privacy laws to protect the individual against fraud and impersonation? If any disbursements did eventually occur, clearly social security number of said individual would be required and verified first. But until this happens which could be a very long time, is social security number info legally required and if so, for what purpose, given all the other identifier info presented when an individual is added as a new beneficiary? This social security number requirement seems to be redundant and if a beneficiary form with such info was ever made public, could be serious breach of privacy. This is especially so given the increasing frequency at which financial institutions "lose" client information.
8 ANSWERS
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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If you are the beneficiary to an IRA and the bank is the plan administrator of that account they have the right to ask for your Social Security number because they are obligated to report any distributions to the beneficiaries these distributions out of an IRA are taxable income. When the owner of an IRA dies proof of death will be required as well as Social Security numbers of the designated beneficiaries.
Answered on Nov 13th, 2013 at 4:09 AM
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Yes. It is how they insure it will pass to the correct person.
Answered on Oct 21st, 2013 at 11:35 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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Yes, because the bank has to report the distribution to the IRS.
Answered on Oct 21st, 2013 at 6:06 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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I suspect (but do not know for sure) that the answer is that the bank is required to have your SSN. If not before, I bet the Patriot Act requires it. If you're old school, you have a Social Security card that says "not to be used for purposes of identification," but that's just a sad joke. EVERY financial institution relies on the SSN for identification.
Answered on Oct 21st, 2013 at 6:05 PM
It is common for the social security number of a named beneficiary to be included on any document that creates or revises a bank account. This information is kept very private and redacted on all print-outs and screens. Instead of having to roove who you are at the time you inherit the account, all you have to do is present your social security number and if it matches the one on the account, the funds are released to you, subject to any taxes, liens, or other claims on the account.
Answered on Oct 21st, 2013 at 6:05 PM
Edwin K. Niles
The bank makes the rules, and good luck on changing them.
Answered on Oct 21st, 2013 at 6:04 PM
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Yes, it is legal and required.
Answered on Oct 21st, 2013 at 1:58 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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It is not legally required, as far as I am aware. But they often will ask for this information, for various reasons. If you do not provide it, they are within their rights to refuse to establish the account.
Answered on Oct 21st, 2013 at 12:52 PM