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Can a sole proprietorship account have a payable-on-death beneficiary? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Can a sole proprietorship account have a payable-on-death beneficiary?

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Yes, a sole proprietor may name a payable-on-death beneficiary for their account.

The Illinois Trust and Payable on Death Account Act provides that accountholders may designate payable-on-death beneficiaries for “any account, deposit, certificate of deposit, withdrawable capital account or credit union share in any institution.” There is no exclusion for sole proprietorship accounts or other business purpose accounts. 

For resources related to our guidance, please see:

  • Illinois Trust and Payable on Death Accounts Act, 205 ILCS 625/4 (“If one or more persons opening or holding an account sign an agreement with the institution providing that on the death of the last surviving person designated as holder the account shall be paid to or held by one or more designated beneficiaries, the account . . . .”)
  • Illinois Trust and Payable on Death Accounts Act, 205 ILCS 625/2(b) (“‘Account’ includes any account, deposit, certificate of deposit, withdrawable capital account or credit union share in any institution.”)