Capital Credits
Capital Credit Retirements to Estates
Policy VII-A-2
I. Objective
To establish and define the terms and conditions under which the cooperative will retire capital credits of decedents keeping in mind what is fair to both the estates and to the remaining patrons of the Cooperative.
II. Policy
Capital credits shall be retired at the discretion of the Board of Trustees when the financial condition of the Cooperative permits as allowed by Article VII of the Bylaws of the Cooperative.
A. Options Available to Estates
- The personal representative of the estate, or the heirs of a deceased patron where no personal representative has been appointed, may elect to receive payment for the capital credits in a one-time lump sum payment. In such event the capital credits shall be discounted. The discount basis will assume that normal general retirements are on a fifteen (15) year rotation and that the value of money is 5%.
The unpaid portion of the capital credits shall be credited on the Cooperative’s books to the Retired Capital Credits-Gain account as a condition of early retirement. - As an alternative to the above, the estate may assign the capital credit account to one individual so that retirements may be made on the same basis as other general retirements of capital credits.
B. Joint Membership
In the event of death of either spouse where joint membership was held, one-half of the accumulated unretired capital credits will be paid to the surviving spouse on the same terms as defined above in Options 1 or 2.
C. Indemnity
Any person making application for and accepting early retirement of capital credits as the personal representative of an estate, as an heir of the decedent or as the surviving spouse where joint membership was held, shall indemnify the Cooperative if payment of capital credits is improperly made by reason of such application.
D. Partial Year Earnings
In the event decedent may have partial year capital credit earnings for the final year, applicant must determine and indicate to the Cooperative whether to wait for payment until the year’s margins are determined and allocated (early in the following year) or waive the partial year’s capital credits to the Cooperative in consideration for immediate and final settlement.
III. Responsibility
The manager shall be accountable for the interpretation and implementation of this policy.
IV. Termination or Review Date
This policy shall be reviewed at the first Board of Trustees’ meeting two years after the last revision or review.