Topic: Account Titling
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Can we set up a joint checking account owned by two businesses? Should we get Employer Identification Numbers (EIN) from both businesses?
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We are not aware of any laws or regulations that would prevent you from opening a joint checking account owned by two businesses. The Illinois Joint Tenancy Act provides that two or more persons may enter into a joint deposit account. 765 ILCS 1005/2(a). The Illinois Statute on Statutes defines the term “person” to include…
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Does Illinois law prohibit an individual from using multiple “doing business as” trade names on a single deposit account?
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We do not see any problems with allowing a customer to use a single deposit account for multiple businesses. From the facts you have given us, the customer’s businesses are all sole proprietorships—there are no legal entities that have an existence outside of the customer. For that reason, there should not be any issues with…
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Have there been any recent changes regarding the documentation and titling of a sole proprietorship account?
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There have not been any changes in the law regarding sole proprietorships that we know of, but we note that this area of law is somewhat unclear because the federal law differs from Illinois law. For purposes of account titling and documentation, the federal IRS rule — allowing for married couples sole proprietorships — is…
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Can a husband and wife own a jointly owned business as a sole proprietorship?
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There have not been any changes in the law regarding sole proprietorships that we know of, but we note that this area of law is somewhat unclear because the federal law differs from Illinois law. For purposes of account titling and documentation, the federal IRS rule — allowing for married couples sole proprietorships — is…
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How can we title a Roth IRA account for a minor? Can a teenager under the age of eighteen be the owner of an IRA account in Illinois?
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We do not see any problems in setting up an IRA account for a minor, and we recommend titling the account as you would any other IRA account. The Illinois Banking Act states that “the rules and regulations of such bank with respect to each such deposit and account shall be as binding upon such…
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Does Illinois have a specified means of titling Medicare Set Aside Accounts? And, for documentation purposes, would these be similar to a trust account for purposes of verifying a conservator or representative payee?
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We are not aware of any Illinois requirements for Workers Compensation Medicare Set-aside Arrangements (WCMSAs). Medicare requires that WCMSA funds are held in interest-bearing accounts (CMS Memo, July 11, 2005, Q13), but aside from that there are no other requirements on the type of account used. If the beneficiary of the account has a representative…
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How should we be titling trust accounts? Most of our trust accounts include the name of the trustee in the account title, but some do not.
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Other than the IRS requirements for name controls, we are not aware of any legal restrictions on the titling of trust accounts. The IRS has stated that “[t]he name control for a trust or fiduciary account is developed from the name of the person in whose name the trust or fiduciary account was established. For…
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How should we title an escrow account that will hold money on behalf of a business, with an authorized payee?
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Other than the IRS requirements for name controls, which require banks to establish name controls using the first four letters of a customer’s name, we are not aware of any legal restrictions on the titling of escrow accounts. IRS Publication 1220. Because there are not any applicable legal requirements for account titling in this situation…
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We have a customer that wants to open a d/b/a account that will be held in a grantor trust. Is this permissible, and if so, how should we title the account?
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A trust can own an account that contains a “doing business as” name. Under the Illinois Trusts and Trustees Act, a trustee is permitted to continue and manage a business. See 760 ILCS 5/4.23. In this situation, the trust would be a sole proprietorship doing business under an assumed name, so the Illinois Assumed Name…
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One of our customers is a single-member LLC with no employees. It is fully owned by another LLC. The IRS told us that the two LLCs do not need separate taxpayer identification numbers (TINs). How should we title the accounts for each LLC to avoid TIN reporting errors?
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The bank either should develop a way to “flag” the account in its system to indicate that no TIN is needed, or it should develop a policy and practice whereby the bank assigns a type of title to the account that lets it know that no TIN is needed (for example, “LLC 1, a subsidiary…