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What you don't know about Discover Cards!
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If you are planning for your estate, don't make things difficult for your personal representative/executrix. Close your Discover Card. If you have any other type of credit card, check to make sure you understand what powers of authority you have granted by virtue of being a member of their credit card service, at the time of your death.

Why? Well, imagine that you set up automatic payments to your Discover Card. This is such a common thing to do. In my instance, there was car insurance being charged to the card. The car being covered subsequently became part of the estate. I don't have to spell out what the implications and hassles are.

Or, image that you are winding things down, simplifying your bills and you thought that you would hang onto just one credit card. You also thought this would be a convenience for your personal representative who could then pay some bills while the estate is going though probate. Won't happen if you have a Discover Card.

What you don't know is that Discover uses a service provided by Social Security which notifies them whenever anyone passes away. Upon notification, they cancel the card. They do this with no authorization from the person legally responsible for the estate and they do not notify you that they did it.

When someone you loves passes away, the last thing you need is more hassles and Discover creates them. Even though automatic payments are resolveable and probate doesn't take that long anymore, it doesn't come as a pleasant surprise when Discover closes the card without notification.

I am certain that my family member did not read the small print, if there is any, which supposedly authorizes this upon applying for the card. (This is yet to be seen as they say they are sending it. Adding to this, for some reason, the card was closed, without authorization from anyone, well before this family member died. Very strange indeed.)

Regardless, unless you have gone through the mechanics of managing an estate, this isn't something you might think about. Even the most organized estates require time and effort by the person who has fiduciary responsibility. So, you don't need unnecessary tasks to take care of.

Finally, like most mega companies all you will get when you call are people who read scripts and can't really help you anyway.

I will never be a customer.
     
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User Replies:

jktshff1 on 2007-09-11:
I have made it simple for my wife & kids (both grown and on their own)...spending all the money on them while I'm alive.
No insurance...when I die I want it to be a sad day for everybody!lol
Slimjim on 2007-09-11:
LMAO JK! Cleaning, I'm not sure I'm following this. Why is it a problem if my card is closed say if I passed? The card is in my name so Discover, or any bank, wouldn't permit it to be used anyway by others, especially with the one responsible for paying it dead. It would seem having the line closed would make things easier, especially if there were automatic monthly charges authorized on it for whatever purpose. I can see where auto payments could be a problem but anyone handling my estate would close my bank accounts anyway.
Anonymous on 2007-09-11:
Thanks for the heads up on Discover. Now I'm wondering if all the cards do this when someone passes away? When my mom could no longer pay her bills, my name was put on her checking account so that I could take care of her bills through bill-pay. After she passed away, I was still able to pay any bills that were due. I just made sure we always had enough in the account to cover any unforeseen expenses. I also might mention that I had POA. I agree that it is good to have a plan. Thank you for the post.
Suusan B. on 2007-09-11:
"You also thought this would be a convenience for your personal representative who could then pay some bills while the estate is going through probate."

Sorry, but from a legal standpoint, Discover card is doing exactly what they should do in a case such as this . . . their customer, the person responsible for payment on the account dies and they can cancel the card. You are suggesting that they should leave the account open so an heir or representative can use it prior to the distribution of the estate? This just isn't how it's done.

You may be legally responsible for the estate but you are not the cardmember and Discover does not need any authorization to close the account of a deceased customer.
Suusan B. on 2007-09-11:
dianec: It sounds like your situation is a little different because your name was put on your mother's checking account. This is a different situation than letting someone use a credit card unless they are added to the account which it doesn't sound like was done in the letter writer's case with Discover. And, you had power of attorney.

The answer to your question is yes - - All Credit Card Companies (and banks) have a team of people assigned to cancel accounts the minute they find out that the person (their customer of record) is deceased.
Anonymous on 2007-09-11:
suusan b--I realized it was a different situation, but was trying to give a suggestion for others who may find themselves in this predicament--so they don't have to use a credit card. Thanks for the answer to the credit card question. It definitely makes sense (and I sort of had a feeling it may work like that). We canceled my mother's credit cards before she passed as they weren't used anyway. We went to an elder-law attorney to make sure we were doing everything correctly. That was the best thing we could have done--looking back. It saved a lot of headaches and was well worth the cost.
Anonymous on 2007-09-11:
Cleaning up the mess: Good information.
I voted your review 'Very Helpful'.
Cleaning up the mess on 2007-09-11:
Just to address a couple of points: When my power of attorney was in effect, I was paying the Discover bills. However, once someone dies the power of attorney is null and void. The estate then takes over and the person with fiduciary responsibility (personal representative)is responsible for all assets and liabilities. Banks and credit card companies do not have any automatic "right" to do anything with the estate's assets or liabilities. If that were true, then banks could close accounts belonging to the beneficiaries and credit card companies and other creditors could rush to place liens on accounts with assets before the estate had a chance to establish itself with the courts. So, of course this is nonsense.

To do something like Discover does, my family member must sign-off on it at the time of getting the card and perhaps that is the case. I have been dealing with several banks and credit card companies. None take this approach. My main objection was the lack of notification. Plus, I do want proof that this authority was given.

Why don't I see it as a convenience to have the card automatically closed? The reason is there was unfinished estate business being charged to the card. If I had none, it wouldn't have mattered but in principle it wouldn't have been OK - just not the most important headache.

It isn't at all illegal to take care of estate business using a credit card which was the deceased cardholder's, if you are the legal fiduciary. It's easier if you are on the account but most often that step isn't taken or can't be depending on the situation. Credit card companies understandably want to protect against fraud so they are happy to let you think that it is.

If you think that credit card companies and banks always know what they are talking about when it comes to estates because they have a "team of people", they don't. Many of these people are also just reading scripts and have no grounding in probate or trust laws. In every instance, even with the best organizations like USAA, I initially got someone who didn't know what they were talking about and had to go up another level. In one instance, my attorney had to go personally to a bank to educate them and get the matter handled in a legal manner.

What's the point? It's important to step back to understand what will happen when you die and someone else has to take over. Some companies and banks are easier than others and no relative intends to make it difficult for those who are performing a service after they are gone. My opinion is that Discover is not a company you should saddle someone with.

The best idea has already been given - spend it now and I will add - don't have any liabilities!
*Brenda* on 2007-09-12:
Did you have an estate attorney? Estate business really should not be charged to the decedent's credit card after the date of death.

When a person dies the credit card company doesn't even know if they will be paid the date of death balance of the card. Letting an executor/rix add to the debt would just be silly.
aquasue on 2008-04-14:
So they closed a DC without your consent. You weren't on the card and any charges wouldve been fraud. Now think of it this way. Say you didn't know there was a DC out there...then after paying all the money to all the other accounts you knew of 5 years later you find out someone has been using the DC!! Its a fraud liability and I think DC is awesome for doing that. That is a top fraud issue in this country ... idenities being stolen after a person dies. I think they saved you from a lot more than could've happened.
CreditCardAdvice on 2008-05-01:
Yup I agree with aquasue on that 90% of fraud happens because of that.
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