Yes, we believe that your bank should be using custodial agreements and other documents instead of trustee documents since your bank is not a trustee with investment authority.

Under the Illinois Trust Code, trustees have a duty to invest and manage trust assets as a prudent investor would. Without investment authority, your bank cannot fulfill this duty. Therefore, your bank’s use of IRA trustee documents may mislead customers into believing that your bank will handle IRAs as a trustee would be obligated to under the Illinois Trust Code. We recommend reviewing the IRA Trustee Documents your bank has been using with bank counsel to determine the level of risk associated with their use.

For resources related to our guidance, please see:

• Illinois Trust Code, 760 ILCS 3/901(a) (“Except as otherwise provided in subsection (b), a trustee administering a trust has a duty to invest and manage the trust assets to comply with the prudent investor rule set forth in this Article.”)

• Illinois Trust Code, 760 ILCS 3/902(a) (“A trustee has a duty to invest and manage trust assets as a prudent investor would, considering the purposes, terms, distribution requirements, and other circumstances of the trust. This standard requires the exercise of reasonable care, skill, and caution and applies not in isolation, but in the context of the trust portfolio as a whole and as a part of an overall investment strategy that incorporates risk and return objectives reasonably suitable to the trust.”)