Tales from the Crypt 2: Fiduciary Denied Access to Credit Union Accounts

In January of 2024, Mr. Holland sued Signal Financial Credit Union when he, the Executor and Financial PoA of his late cousin’s estate, found himself incapable of accessing two accounts she had with the credit union. Today we will review why a failure to plan properly for digital accounts caused Mr. Holland to lose the lawsuit.

In 2022, Evelyn Holland passed away. She had put an estate plan in place to ensure her sole heir and cousin Mr. Holland would not have trouble administering the estate and receiving his inheritance. She had a will and made Mr. Holland her financial power of attorney. Ms. Holland had no reason to believe the plan she had put in place would end up locking Mr. Holland out of her credit union accounts, thus not allowing him to administer the estate properly.

Mr. Holland found himself incapable of accessing Ms. Holland’s home improvement loan and overdraft accounts at Signal Credit Union, despite receiving monthly statements from them. When Signal denied him access, he decided to sue. Unfortunately for Mr. Holland, his cousin’s planning did not meet the standards of MFADAA (RUFADAA amended and adopted in Maryland.) The court found no evidence in the Will or Power of Attorney that Ms. Holland had granted her fiduciary digital access to her accounts in harmony with MFADAA’s requirements.

The courts ruled that under MFADAA and Signal’s terms of service, Mr. Holland would have had to provide at minimum a written request for access alongside proof that Ms. Holland had previously authorized this access. It is common for custodians like Signal to request multiple documents be submitted in succession. For example, a copy of the death certificate followed by planning documents followed by a court order. You can see an example of this process here. Even if Ms. Holland’s documents had been written in accordance with MFADAA, Mr. Holland likely still would have had to jump over various hurdles to gain access.

It is paramount that grantors plan for their digital accounts properly, as most of our important documents, assets, and memories are now available exclusively online. Had Ms. Holland used a tool like Bequest, administration of her entire estate would have been very easy. And her credit union account would have been accessible without her executor needing to contact them.

See you next week for another Tale from the Crypt!