What happens when a SACCO member dies?

Savings and Credit Cooperative Organizations (SACCOs) are not just platforms for savings and loans but also provide substantial support in times of need, including the unfortunate event of a member’s death. They act as social welfare groups, ensuring that the present and future needs of their members are met, even beyond their lifetime.

Death of a SACCO Member

There is no universal policy for handling the death of a SACCO member, as each SACCO may have its own specific procedures. However, most SACCOs have detailed plans and regulations in place to deal with such occurrences. Typically, new members are provided with comprehensive information, including guidelines that remain applicable even after their death. This crucial information is often captured in a document known as the Next of Kin Form.

The Next of Kin Form

The Next of Kin Form includes the details of the names, contacts, and relationship between the member and their beneficiary or nominee. This form is instrumental in settling burial expenses, final dues, and any necessary adjustments.

Required Documentation for Beneficiaries

In the event of a member’s death, beneficiaries or nominees must produce the following documents:

1. Filled Benevolent Request Form: This form is specific to each SACCO but serves a similar purpose. Members make monthly contributions to cover their burial expenses and support their dependents upon their death. The beneficiary must fill out this form and submit it to the SACCO to process the funds.
2. Original Copy of Burial Permit: To prevent fraud, such as faking a death, beneficiaries must provide an original burial permit. This, along with the benevolent request form, helps in processing the necessary funds for the funeral and burial.
3. Copy of Death Certificate (Original): An original death certificate is needed to process the deceased member’s dues, which could include savings or other financial benefits. Unlike benevolent funds processed immediately after death, final dues are usually settled after the burial, often within a month. The follow-up for these payments is done by the beneficiary or nominee listed in the Next of Kin Form.

Handling Dues When the Dependent Is a Minor

In Kenya, a minor is defined as an individual below 18 years old. Minors are prohibited from maintaining bank accounts in their names. Therefore, the SACCO must hold the funds until the minor reaches 18. Alternatively, the SACCO may deposit the money with Public Trustees, depending on the governing laws.

Avoiding Legal Tussles

Funds and properties associated with deceased individuals often attract legal disputes. SACCO funds are no exception, with many families spending years in court to resolve financial dues trapped in SACCOs.

To save your beneficiaries from such chaos, ensure all required documents are provided to the SACCO while you are still alive. Regularly update and confirm your beneficiary or nominee information with your SACCO. If you have multiple beneficiaries or nominees, indicate percentage allocations for each to avoid conflicts.

By ST