Topic: Joint Accounts
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One of our customers died, leaving one CD held in joint tenancy and one CD with a payable on death beneficiary. The joint tenant and POD beneficiary want us to pay the CD funds out to a family business instead of paying the beneficiaries directly. Is that permissible?
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We believe that it would be a best practice to pay the certificate of deposit (CD) funds directly to the beneficiaries of the accounts, instead of distributing the funds to a business entity that is not a beneficiary or owner of the accounts. Distributing CD funds directly to the account beneficiaries will create a clean…
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How does the right of setoff work under Illinois law? Which types of accounts are subject to our right of setoff? If a deposit account is held jointly, could we setoff the account funds against a loan made to one of the individuals who owns the joint account?
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We believe that the bank can exercise its right of setoff against any deposit account, if it is provided for in the account agreement with the customer. And, depending on the language in your deposit agreements, Illinois law may also permit the bank to exercise a right of setoff against a jointly-held deposit account, even…
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If a joint account owner dies, can we provide information about the account to the executor of the estate?
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The bank should be able to provide appropriate account information to the executor for the deceased joint accountholder’s estate, but it must be careful not to violate the privacy rights of the current account owner. The executor should have access to information about the account up until the date of death but would not have…
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Can we allow two customers, both of whom have an individual trust account, to combine their trust accounts into one trust account?
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It may be possible to combine the trust funds into one account, but it may not be advisable. If the only beneficiaries of the trusts are the two customers themselves, then they would be considered to be joint owners of the trusts’ funds. See 12 CFR 330.10(f) (stating that if the only beneficiaries of a…
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Can a joint owner of an account add a third joint owner without the consent of the other joint owner?
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We do not believe that one joint owner of an account could add an additional joint owner without the consent of all joint owners. The Joint Tenancy Act requires that all account owners sign the account agreement to create a joint account. 765 ILCS 1005/2(a)
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Two joint deposit account customers came in with a trust document and said that their attorney told them to add all trust funds to the joint deposit account. Is that a good idea?
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It may be possible to combine trust funds with the deposit account, if the ownership is the same for all funds, but it may not be advisable. If the only beneficiaries of the trust are the two customers themselves, then they would be considered to be joint owners of the trust funds. See 12 CFR…