Bamboozled: Family member’s final plans tied up in red tape

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Robert Petersen knew he was going to die soon.

He made plans to enter hospice care on May 14.

He also planned for his brother, Frederick Petersen, to manage his affairs: before his death with a power of attorney, and after his death as his executor. His sister-in-law Joan Petersen would help.

Robert Petersen had no real assets except for his home, Joan Petersen said. He took a reverse mortgage on the home with Champion Mortgage in 2007 so he could access his home’s equity for living expenses.

“He requested that my husband, as his power of attorney, draw $20,000 from this line of credit with Champion Mortgage to help cover his funeral expenses,” Joan Petersen said.

Documents show Champion received the request on May 12, and the funds were to be deposited into Robert Petersen’s Bank of America account.

But the next day — one day before he was to move into hospice care — Robert Petersen died.

Since that time, the surviving Petersens have been deluged with red tape, fighting with Champion and Bank of America over the money.

You see, the money did get to the Bank of America account, but despite receiving all the requested paperwork multiple times, the bank refused to release the money. It’s been locked up for months now, causing Frederick and Joan Petersen to lay out more than $10,000 to cover Robert’s final expenses and other bills, and to waste lots of hours lost in bureaucracy.

At first, the delay didn’t seem like a big deal. The funds posted to the Bank of America account on May 18, the couple said, and they went to their local Bank of America branch on May 22.

Joan Petersen said their rep explained what paperwork was needed to close Robert’s two accounts.

“She advised that before we could establish the accounts for the estate we needed an O-1 certificate from the state of New Jersey, but the bank would release 50 percent of the funds without it,” Joan Petersen said.

To receive the 50 percent, they’d need to present a tax ID for the estate, an original death certificate, the testamentary letter from surrogate court and a letter of instruction advising Bank of America that they’d like access to 50 percent of the funds.

boozle-reversemortgage REMNICK (1).JPG
Frederick Petersen, who is managing his late brother’s estate, says Bank of America refuses to release $20,000 that was transferred from a reverse mortgage to his late brother’s bank account. The money is supposed to pay for burial and final expenses, per the deceased’s wishes.
Alex Remnick/NJ Advance Media

jjThe couple set about collecting the documents, and they returned to the bank on June 5.

At that meeting, the rep reviewed the documents, notarized some and forwarded it all to the bank’s estate management department, Joan Petersen said.

While they waited for news, Frederick Petersen notified Champion of Robert’s death and sent the bank the supporting paperwork.

After two weeks, on June 19, with no word from Bank of America, Frederick Petersen called the bank’s estate management department. It was confirmed that the bank had all the needed paperwork.

But on June 22, the Petersen’s received a letter from the bank requesting additional tax forms and a “Notarized Letter of Instruction and Account Closure Request” form.

The requested forms weren’t necessary, the couple realized, so they called the estate department for clarification. The rep agreed the tax forms were not needed, but said the bank would still need the “Notarized Letter of Instruction and Account Closure Request” form.

So the next day, the Petersens got the form notarized, and they returned it in a postage paid envelope provided by the bank.

Things were quiet for a few weeks, so on July 8, the Petersens called the bank again, and again, the bank confirmed it had what it needed.

BACK AND FORTH AGAIN

On July 13, the couple received another request. Bank of America asked for a letter from Celink, confirming that unspecified deposited funds would remain in the account, plus it wanted a Certificate of Incumbency on the signer of the letter. The certificate would attest that the person writing the letter on Celink’s behalf had the authority to do so.

The Petersens had no idea what Celink was. The only funds that had gone into the account were from Champion, Social Security and a pension, but the latter two were stopped with Robert’s death.

They called Bank of America.

“They would not give us the details on the deposit so the call ended on a sour note,” Joan Petersen said.

The couple did some research and realized, the next day, that Celink was Champion’s loan servicer, and the deposit in question was the $20,000 for Robert’s final expenses.

So the couple called Champion/Celink to request the letter Bank of America said it needed.

“[The rep] investigated, advising us that Champion would not be reversing the funds, but they never had such a request before and would not comply,” Joan Petersen said.

So they called Bank of America, and the rep suggested they return to the branch with all the documentation.

They did that on July 16.

The Bank of America rep reviewed all the documents, called the estate department and faxed the documents again. She then placed a call to Champion, Joan Petersen said.

“[Champion] advised that someone from Bank of America already called them and they emailed their payment processing department for further instructions,” she said. “She also suggested that we put the request in writing to Champion along with Bank of America’s request.”

They faxed a letter the next day.

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An online obituary for Robert Petersen.
Courtesy Frech Funeral Home

On July 20, the couple talked to Champion again.

The rep told the Petersens that Champion would not be taking the funds back, and if they had planned to do so, it would have been done immediately.

“She pointed out that the funds were already in the account over two months and that they have never received requests like this before and they were not in a position to comply,” Joan Petersen said.

So they again called Bank of America, asking what could be done without additional documentation from Champion.

“We were informed that there were no alternatives and that only this letter from Champion would release the funds,” Joan Petersen said.

They also left two messages with the rep at the local branch, but no one returned their calls.

Stumped, the couple filed a complaint with the Consumer Financial Protection Bureau (CFPB) and they reached out to Bamboozled.

“Hiring a lawyer is not an option since we have been trying to keep up with Robert’s bills as they pertain to the house and Champion’s requirements,” Joan Petersen said. “We are talking about $20,000, not millions of dollars, and Bank of America is holding the funds hostage and giving us no recourse.”

CUTTING THE RED TAPE

We reviewed all the Petersens’ documentation and a timeline of their contact with the two financial institutions.

We contacted Bank of America asking for a review, and a rep said it would review the case.

The couple also received a call from a Bank of America rep who referenced the complaint to CFPB and said he was also looking into it.

And on July 30, the Petersens got results.

“We just got a UPS package from Bank of America with two checks totaling 50 percent of the funds,” Joan Petersen said.

The checks were written to the “Estate of Robert C. Petersen,” as they should be. There was no letter of explanation.

We reached out again to Bank of America to see what caused this red tape to happen in the first place.

The rep apologized for the delay.

“Based on our review, it appears that this is now following the routine New Jersey Inheritance and estate tax process,” a spokeswoman said. “We’ll continue to work with the estate representative on the matter.”

That’s lovely, but really? Anyone who has ever managed an estate knows the paperwork can be overwhelming. Even if you do it right, institutions frequently request the same documents multiple times, and even request unnecessary documents. (Yes, we’ve been there. Twice.)

Maybe the reps who handle estate issues need some retraining. They should start with logistics, but they should also include training on how to find a little sensitivity for those who are just trying to take care of their deceased loved ones’ wishes.

“If it wasn’t for Bamboozled, we don’t think we would have received any resolution to our problem,” Joan Petersen said.

Have you been Bamboozled? Reach Karin Price Mueller at Bamboozled@NJAdvanceMedia.com. Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of NJMoneyHelp.com.

 

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