Bank won't give Medallion Signature Guarantee for anything related to savings bonds

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doraemon
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Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by doraemon » Mon Jun 17, 2019 5:48 pm

Was wondering if anyone else has encountered this issue, and whether there's a reason for it.

My late mother left a bunch of savings bonds that are either in her name or my late father's name. They all specify that they are payable on death to either my father (my mother's bonds) or my mother (my father's bonds). Accordingly, per the estate attorney, we must complete and submit to the Treasury a form FS 1522 (Special Form of Request for Payment of United States Savings and Retirement Securities). This requires a Medallion Signature Guarantee for me as personal representative of my mother's estate.

Anyway, long story short, I went to my bank (Capital One) to get the MSG, and was told that they have a policy prohibiting them for doing MSGs for anything related to savings bonds. (I have gotten MSGs from Capital One for other things, such as certain transactions related to my mother's IRAs.)

My questions are:
(1) Has anyone else encountered this issue?
(2) Does anyone know the reason(s) for such a prohibition (and, if so, what are they)?

My understanding was that the MSG requirement is essentially to minimize the risk that the subject signature is a forgery (i.e., that if I'm signing the document as the personal representative of my mother's estate, I am who I say I am, and that I am actually the estate's personal representative). If so, why does it matter whether the document pertains to savings bonds or something else?

I am thinking of complaining to Capital One (I've been a customer for years), but I thought I should check with Bogleheads first.

Thanks.

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8foot7
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by 8foot7 » Mon Jun 17, 2019 5:51 pm

Can’t speak to that although our nearest Wells Fargo refuses to notarize any legal document. I asked what other types of documents generally needed notarizing and there was no answer, just a “that’s now our policy.” I suspect a branch manager is reading a rule too stringently but it was what it was.


So the only thing I can tell you to do is what we did — close your accounts because a MSG is essentially the only thing left one really needs a brick and mortar bank for, Ndnif they can’t even deliver that then why do you want to do business with them?

Gill
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Gill » Mon Jun 17, 2019 6:07 pm

You are reading the form incorrectly. It does not require a medallion guarantee. Also, why are you redeeming the bonds?
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

MtnTraveler
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by MtnTraveler » Mon Jun 17, 2019 6:11 pm

So I kind-of ran into that issue. Basically didn't realize that a MSG was needed and just assumed that it needed to be notarized. When my number was called the lady at the credit union told me right away that it needed a MSG and very few people at the credit union have it. Thankfully for me the person in the cube next to her had it and could help me. I understand why a MSG could be needed in certain situations but this was for a savings bond worth less than $500 but rules are rules I guess.

Gill
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Gill » Mon Jun 17, 2019 6:14 pm

MtnTraveler wrote:
Mon Jun 17, 2019 6:11 pm
So I kind-of ran into that issue. Basically didn't realize that a MSG was needed and just assumed that it needed to be notarized. When my number was called the lady at the credit union told me right away that it needed a MSG and very few people at the credit union have it. Thankfully for me the person in the cube next to her had it and could help me. I understand why a MSG could be needed in certain situations but this was for a savings bond worth less than $500 but rules are rules I guess.
It does not require a MSG. Read the instructions with the form.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

Topic Author
doraemon
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by doraemon » Mon Jun 17, 2019 6:20 pm

Gill wrote:
Mon Jun 17, 2019 6:07 pm
You are reading the form incorrectly. It does not require a medallion guarantee. Also, why are you redeeming the bonds?
Gill
Almost all the bonds have matured, or nearly so. One dates back to the late 1950's or early 60's. The form states, on page 4: "Certification by a notary isn't acceptable."

Gill
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Gill » Mon Jun 17, 2019 6:22 pm

doraemon wrote:
Mon Jun 17, 2019 6:20 pm
Gill wrote:
Mon Jun 17, 2019 6:07 pm
You are reading the form incorrectly. It does not require a medallion guarantee. Also, why are you redeeming the bonds?
Gill
Almost all the bonds have matured, or nearly so. One dates back to the late 1950's or early 60's. The form states, on page 4: "Certification by a notary isn't acceptable."
Read all the instructions. Banks act as certifying officers for Savings Bonds. This is not notarization nor is it a MSG. Ask the bank to use their savings bond certification stamp or their signature guarantee. A broker could also do the signature guarantee.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

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Flobes
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Flobes » Mon Jun 17, 2019 6:43 pm

doraemon wrote:
Mon Jun 17, 2019 5:48 pm
My late mother left a bunch of savings bonds that are either in her name or my late father's name.

... This requires a Medallion Signature Guarantee for me as personal representative of my mother's estate.

...Has anyone else encountered this issue?
I went through this process.

A bank officer at my local brick & mortar bank provided the official Signature Guarantee. A Medallion Signature Guarantee is not required. (These are two different forms of signature guarantee. Medallion is more restricted.)

I was personal representative for my Aunt's estate. Uncle had predeceased. Bonds were titled to Aunt or Uncle.

I filed FS1522. Treasury contacted me about additional requirements.

I had to provide Treasury with documents relating to Aunt's death and my appointment as personal representative.

And I had to send a copy of Uncle's death certificate as well.

They have no way to know that your father predeceased your mother and that you are indeed entitled to collect all your father's holdings from your mother's estate. Without proof of his prior death, they assume that all of the bonds are his, and not your mother's beneficiary's.

As an alternative, Treasury will accept copy of your mother's will if it declares her as a widow of Father. (Was your estate attorney smart enough to include that simple language? My Aunt's attorney was not.)

Wild Indigo
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Wild Indigo » Mon Jun 17, 2019 6:47 pm

I went through this last year with inherited savings bonds. On the advice of a local credit union officer, I had the form notarized and then attached a letter explaining I had attempted to obtain the MSG at three different banks without success. I received the funds without any further trouble.

Big Dog
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Big Dog » Mon Jun 17, 2019 6:51 pm

1. Yes, it is common as more and more banks are refusing to sign a medallion.

2. The Treasury understands this, so I called them and they said to include a short letter to the effect, 'I tried to obtain a medallion signature but could not as the bank no longer performs them, so obtained a notary signature instead'. Bond transfers went thru with no problem.

Topic Author
doraemon
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by doraemon » Mon Jun 17, 2019 6:58 pm

Flobes wrote:
Mon Jun 17, 2019 6:43 pm
doraemon wrote:
Mon Jun 17, 2019 5:48 pm
My late mother left a bunch of savings bonds that are either in her name or my late father's name.

... This requires a Medallion Signature Guarantee for me as personal representative of my mother's estate.

...Has anyone else encountered this issue?
I went through this process.

A bank officer at my local brick & mortar bank provided the official Signature Guarantee. A Medallion Signature Guarantee is not required. (These are two different forms of signature guarantee. Medallion is more restricted.)

I was personal representative for my Aunt's estate. Uncle had predeceased. Bonds were titled to Aunt or Uncle.

I filed FS1522. Treasury contacted me about additional requirements.

I had to provide Treasury with documents relating to Aunt's death and my appointment as personal representative.

And I had to send a copy of Uncle's death certificate as well.

They have no way to know that your father predeceased your mother and that you are indeed entitled to collect all your father's holdings from your mother's estate. Without proof of his prior death, they assume that all of the bonds are his, and not your mother's beneficiary's.

As an alternative, Treasury will accept copy of your mother's will if it declares her as a widow of Father. (Was your estate attorney smart enough to include that simple language? My Aunt's attorney was not.)
Thanks. I wasn't aware of the existence of a Signature Guarantee. Basically, I've thrown up my hands and left the disposition/redemption of the bonds to the estate attorney -- although obviously that entails additional legal fees. But I still don't understand my bank's refusal to do an MSG -- regardless of whether it was required. They didn't say, "We won't do this, because you don't need it." They just said, "This involves savings bonds. Hence, no." Why?

In other words, I'm not so much interested in what other ways I could have tackled the matter of redemption. I want to know the reason that my bank won't give an MSG for anything related to savings bonds.

bayview
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by bayview » Mon Jun 17, 2019 7:06 pm

Big Dog wrote:
Mon Jun 17, 2019 6:51 pm
1. Yes, it is common as more and more banks are refusing to sign a medallion.

2. The Treasury understands this, so I called them and they said to include a short letter to the effect, 'I tried to obtain a medallion signature but could not as the bank no longer performs them, so obtained a notary signature instead'. Bond transfers went thru with no problem.
God bless the BH forum. Thanks for your post.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

Gill
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Gill » Mon Jun 17, 2019 7:15 pm

I believe the reason banks won’t do a MSG for savings bonds is that they are not required for transfer of those bonds. Why should they take the risk of a MSG when it is not required? Also, MSG’s are very time consuming and can take half an hour of an officer’s time with no compensation to the bank.
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

NotWhoYouThink
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by NotWhoYouThink » Mon Jun 17, 2019 7:22 pm

A shame the bank couldn't tell you that it wasn't necessary. Maybe you need better bankers.

I didn't know the difference, but I am an engineer not a banker. A banker should know.

Horsefly
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by Horsefly » Mon Jun 17, 2019 7:42 pm

My siblings and I recently needed to ask Fidelity to make a rather sizeable distribution from a Partnership. My Private Client rep at Fidelity told me we needed Medallion Signature Guarantees due to the amount of the distribution. I can get mine at the local Fidelity office, but my siblings both live in a smaller town. They went to the bank they have accounts with (Wells Fargo) and asked what would be required to get a Medallion. They were told that WF would not provide any Medallion Sig Guarantee except on documents that involve WF transactions. I contacted my Fidelity guy, and after a couple of days he called and said that the powers that be reluctantly agreed to accept their signatures without guarantee, but that I needed to get mine done by Fidelity.

This sounds like it is a variation on a recurring theme: Banks have the authority to do them, but are choosing not to. Reason #2000 not to bank with Wells Fargo. I left them a few years ago after getting sick of reading about their crimes every week.

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joe8d
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by joe8d » Mon Jun 17, 2019 8:48 pm

I just had to go to the bank regarding my cashing in of HH Bonds. I had to download a form from the Treasury, fill it out and and take it to the bank, sign in their presence and have them affix a BOND STAMP ( not Medallion) to the form.
All the Best, | Joe

othermike27
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by othermike27 » Tue Jun 18, 2019 7:06 am

Other posters have noted up-thread that a MSG is not required for savings bonds, so this is a bit off-topic. I had to get a MSG in connection with a recent transfer of a security. Had to make an appointment with my bank's Medallion officer. She specifically asked the value of the security in question, saying that her Medallion was limited to a specific amount. Bigger amounts would require a different person, I guess. Limits the bank's liability in case a signature turns out to be a forgery. Here is more info from the SEC on MSG programs:

https://www.investor.gov/additional-res ... preventing

chemocean
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Re: Bank won't give Medallion Signature Guarantee for anything related to savings bonds

Post by chemocean » Wed Jun 26, 2019 9:16 pm

To alleviate the issue of needing some kind of guarantee signature for co-owners or beneficiaries in the future, have the owner convert them to an electronic bond in a newly opened Treasury Direct account. This requires the owner to create a manifest in their Treasury Direct Account, SIGN the manifest, and send the paper bonds to the Treasury Office (in MN now I think).
The instruction for creating a Manifest in your Treasury account is:
Step 4 - Creating a Manifest From Your Cart to Mail With Your Bonds
On the Conversion Cart page, click "Create a Manifest" to continue with the conversion request. A numbered manifest lists the bonds that you put in the cart. (If you have saved a cart in a previous session, you access your cart from the View My Cart option in ManageDirect.)
Print and sign the manifest. Keep a copy of the manifest.
Mail the manifest with your bonds to the address shown on the form. Please don't sign the back of your savings bonds.

Then the owner needs to assign co-owners or beneficiaries in their on-line Treasury direct account

Once the owner dies and the death certificate is submitted to Treasury Direct, the co-owner or beneficiaries can open a Treasury direct account, and using SECURED MAIL INSIDE THEIR Treasury Direct Account Tell treasury:
1) There is a bond in an account AXXXXX of a deceased bond owner (John Doe) for which I am named co-owner or beneficiary,
2) Please transfer that bond to my Treasury Direct account.

and viola, 2-3 days later the bond (face value accrued interest that is likely taxable to the new owner upon redemption) appears in new owners Treasury Direct Account as the sole owner. Six beneficiaries in my family easily converted 8 bonds to their account last year. It is prudent at that time to assign a new co-owner or beneficiary so the bond does not have to go through probate upon the death of the new owner.

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