Topic: Authorized Signers
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Can we allow a customer to deposit checks made out to his business into his personal deposit account?
In addition to our usual disclaimer (that we cannot provide legal advice), we note that the rules described below would apply only when an authorized signer deposits business checks into a personal account. In other situations (for example, where the authorized signer uses business checks to pay personal debts), other rules will apply. While there…
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One of our customers passed away, and his wife wants to take over several accounts held by the deceased customer’s businesses. However, the wife is not an authorized signer for the accounts—what should we do?
Because the wife is not an authorized signer on the corporate accounts, the bank should not allow her to transact any business with the accounts. Once the ownership of the businesses passes to the new owner or owners, the bank should follow its policies and procedures to establish that the businesses have named the wife…
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Can a trust have an authorized signer in addition to a trustee?
We do not recommend allowing an authorized signer on the trust unless the trust agreement specifically authorizes the individual to hold that power. If a trustee has signing power, the trustee cannot delegate that power to another individual; the Trusts and Trustees Act prohibits trustees from delegating to others “the performance of any acts involving…
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Would we be liable if we allow a business owner to deposit checks made out to Business D into Business E’s account?
Due to a conflict between Illinois laws on this subject, we cannot determine whether you would incur any liability in allowing the individual to deposit checks for one business into another business’s account. Even if the individual is an authorized signer for the “Next Door Storage” business and he properly endorses the checks, there is…
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The trustee of two trust accounts just passed away. Can the authorized signer for the accounts continue to write checks on the accounts?
We do not believe that a check written by the authorized signer after the trustee’s death would be properly payable. You may also want to check your account agreements to see if this situation is covered. The authorized signer’s authority to sign on behalf of the account holder is governed by agency law. Under Illinois…
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The owner of a sole proprietorship business account has died, and the authorized signer on the account wants to write checks on the account funds. Is that permissible?
If the business was truly a sole proprietorship, it had no legal existence outside of the owner. However, it is possible that a representative of the owner’s estate has the authority to operate the sole proprietorship after the owner’s death, either from the owner’s will or as authorized by a probate court. 755 ILCS 5/19-6(a).…
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Can the sole trustee of a living trust give their spouse, who is a beneficiary, signature authority on the trust account?
We do not recommend allowing a trust beneficiary to have signing powers over the trust account in the situation you described, where the living trust agreement does not specifically authorize the use of an authorized signer. Further, Illinois law would prevent the trustee from delegating his power as trustee to his wife; the Trusts and…
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Can we issue a debit card to an individual who is an authorized signer of a personal account, but not a joint account holder? Also, does it make a difference if the account is a personal account or a business account?
Yes, you can issue a debit card to an authorized signor of a personal account, provided that doing so is not inconsistent with your bank’s policies and procedures. Since the person already has access to the funds in the account as an authorized signor, the debit card is merely another means for him or her…
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Can a payable on death (POD) account have an authorized signer?
We see no reason why a Payable on Death (“POD”) account would be restricted from having an authorized signer who is not an account holder, provided that your bank’s policies and procedures allow for it. Under the Illinois Trust and Payable on Death Accounts Act, any person holding a POD account may change the designated…