Credit Union beneficiary question

StereoSound

Mother recently passed away and she had nominated my sister as beneficiary to her account. From what I understand of this she is entitled to keep all the funds in the account for her own personal use ? There was almost 10k in the account, are any of the other siblings entitled to any of this ? Great for her if she gets to pocket 10k like that

Thanks

coylemj

It's a nomination under S.21 of the Credit Union Act 1997. The limit has been raised over the years and I believe now stands at €23,000.

The facility is a throwback to the laws which governed the operation of industrial and provident societies, the forerunners of modern day credit unions. On the death of a member, those friendly societies were allowed to immediately release money to a nominee (typically a family member) in order to pay for the funeral.

From what you say, the sister will get the money as the sole nominee and nobody else has any claim over it. The CU can give her a cheque straight away, the money is ring-fenced from probate or anything your mother said in her will. Even if your mother attempted to explicitly revoke the nomination by a clause in her will, it wouldn't count and the nomination would stand...

.... such a nomination shall not be revocable or variable by the will of the nominator or by any codicil to his will.

The limit was £10,000 (punts) in the original act, it was raised to €13,000 (euros) when we adopted the Euro and it has been raised by ministerial order (SI) since then to (I believe) €23,000. So 10K euros is well within the limit.

http://www.irishstatutebook.ie/eli/1997/act/15/section/21/enacted/en/html#sec21

StereoSound

coylemj wrote: »

It's a nomination under S.21 of the Credit Union Act 1997. The limit has been raised over the years and I believe now stands at €23,000.

The facility is a throwback to the laws which governed the operation of industrial and provident societies, the forerunners of modern day credit unions. On the death of a member, those friendly societies were allowed to immediately release money to a nominee (typically a family member) in order to pay for the funeral.

From what you say, the sister will get the money as the sole nominee and nobody else has any claim over it. The CU can give her a cheque straight away, the money is ring-fenced from probate or anything your mother said in her will. Even if your mother attempted to explicitly revoke the nomination by a clause in her will, it wouldn't count and the nomination would stand...



The limit was £10,000 (punts) in the original act, it was raised to €13,000 (euros) when we adopted the Euro and it has been raised by ministerial order (SI) since then to (I believe) €23,000. So 10K euros is well within the limit.

http://www.irishstatutebook.ie/eli/1997/act/15/section/21/enacted/en/html#sec21

Great for her then, she is 10 grand up for doing sod all.

phormium

I presume though if your mother nominated her as the beneficiary then she wanted her to have it, I think it's made fairly clear by CU how the system works when they ask someone to choose a beneficiary.

Jim2007

@coylemj

Do you know if there any provisions to prevent people from availing of this provision to avoid their creditors?

Let’s say someone who is terminally ill racks up debts of 20k, but at the same time moves the 15k savings has to a CU, nominating his buddy as the beneficiary... are the creditors out of luck?

coylemj

Jim2007 wrote: »

@coylemj

Do you know if there any provisions to prevent people from availing of this provision to avoid their creditors?

Let’s say someone who is terminally ill racks up debts of 20k, but at the same time moves the 15k savings has to a CU, nominating his buddy as the beneficiary... are the creditors out of luck?

Interesting one. S.22 of the act authorises the directors of the CU to pay the money to the nominee which would seem to cover them from any potential action by a creditor.

Could a creditor chase the nominee if there was no other assets? I don't know but I find it strange that the act didn't explicitly close the door on such an outcome by declaring the proceeds of the nomination to be entirely unencumbered i.e. free from any claims on the estate.

Spocker

Jim2007 wrote: »

Let’s say someone who is terminally ill racks up debts of 20k, but at the same time moves the 15k savings has to a CU, nominating his buddy as the beneficiary... are the creditors out of luck?

A reasonably uncommon situation I guess, and depending on the age of the person, they may not be able to move in 15k in a single tranche?

StereoSound

My father is still alive so it would have made sense that he would have gotten the 10k at the very least, but my sister seems to get it instead ? Is there something wrong here ?

Spocker

Unfortunately not, a nomination does not have to be to a spouse, unless the marriage occurs after the nomination is made

AndrewJRenko

StereoSound wrote: »

My father is still alive so it would have made sense that he would have gotten the 10k at the very least, but my sister seems to get it instead ? Is there something wrong here ?

Isn't that really a family issue to sort out? If that was your mother's decision, then that was her decision.

coylemj

Spocker wrote: »

Unfortunately not, a nomination does not have to be to a spouse, unless the marriage occurs after the nomination is made

That 'unless' suggests that your spouse has certain rights after you marry which is not the case when it comes to a CU nomination.

As with a will, a CU nomination is voided by marriage. Once you get married, you can make a new nomination in favour of anyone.

Spocker

coylemj wrote: »

As with a will, a CU nomination is voided by marriage.

You are correct, thanks for clarifying