Topic: Joint Accounts
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What is the legal age a person must be to cosign for a loan? We have a 16-year-old who would like to cosign a vehicle loan with their grandparent, but we are not sure if the agreement would be legally binding.
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Generally, a person must be eighteen in Illinois to sign a contract. If a minor cosigns a vehicle loan with their grandparent, the loan agreement would not be enforceable against the minor cosigner until they reach the age of eighteen and ratify the agreement. In Illinois, the general rule is that minors cannot enter into…
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Are we required to use the revised Uniform Residential Loan Application (URLA) instead of the old form 1003, regardless of whether the mortgage loan is being sold on the secondary market or being held in-house? We like the layout of the old form better, so we would like to continue using it for in-house mortgage applications. Additionally, does each borrower need to fill out the URLA for joint applications?
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No, you are not required to use the revised URLA for mortgages you hold in-house, unless you eventually intend to sell those loans to Fannie Mae or Freddie Mac or another secondary market purchaser that requires use of the revised URLA. Additionally, there are a few different options for completing the URLA for joint applications…
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How should we document joint intent to apply at the time of application as required under Regulation B for commercial and agricultural loan applications that are taken over the phone? Is it adequate to document joint intent with a credit memo that states who the borrowers and guarantors are? Additionally, if we properly document joint intent to apply, should we still obtain signatures evidencing the intent at closing?
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We believe that your bank may document joint intent by asking each joint applicant if he or she intends to apply for joint credit and then documenting each joint applicant’s intent once confirmed. Regulation B requires you to evidence each applicant’s intent to be a joint applicant “at the time of application” before requiring their…
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Is an account considered to be a minor account in Illinois if it is jointly owned by a legal guardian or parent over the age of majority? If it is not considered a minor account, can it be used for set off, overdraft privileges, and more? Also, is the age of majority in Illinois age 18 or age 16?
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We believe that you may treat an account that is jointly owned by a minor and an adult as you would any other account — including by enforcing your right of setoff, overdraft privileges, and other items addressed in the account agreement. The Illinois Joint Tenancy Act does not prevent a minor from jointly owning…
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A recently deceased customer owned a joint account with their minor child, aged sixteen. As a joint owner with the right of survivorship, does the minor child have ownership of the account and the funds? We are a federal savings bank.
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Yes, we believe that the minor child would have ownership over the account and the funds, provided that both the parent and the child signed the original joint account agreement. The Illinois Joint Tenancy Act provides that a right of survivorship is created when all joint account owners sign an agreement to that effect, and…
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We mistakenly opened a Uniform Transfers to Minors Act (UTMA) account for an employee and her minor child that should have been opened as a joint savings account. The employee is listed as the custodian on the account and all the deposits into the account have been made through payroll deductions with no indication that they are for UTMA purposes. Can we close the UTMA account and place the funds into a new joint savings account? The owners of the new account would be the employee and her minor child.
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Yes, we believe you may close the UTMA account and transfer the funds to a new account since they would not be considered “custodial property” under the UTMA. The UTMA provides that custodial property is created and transferred when money is paid to a financial institution for credit to “the transferor . . . followed…
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Three customers own a savings and checking account in joint tenancy with right of survivorship. One of the customers had a guardian appointed for their estate and person. The guardian’s letters of office provide for a plenary guardianship of the estate and person of our customer (the ward), with authority for the care, management, and investment of the ward’s estate, under the court’s direction. The order appointing the guardian states that their duties include those set forth in 755 ILCS 5/11a-18, as well as payment of expenses for the care and comfort of the ward and payment of the guardian’s legal fees and expenses. Does this entitle the guardian to have the same access to the joint account as the ward would have if not adjudicated disabled?
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We believe that the guardian must first petition the court before withdrawing any of the joint account funds to determine whether they are necessary for the support and maintenance of your customer. Under the Illinois Probate Act, a court-appointed guardian has “the care, management and investment of the estate,” but only “to the extent…
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Customer A is the sole owner on a dormant account. Customer A also is a co-owner on a joint account that has activity — but the activity is from Customer B, the other co-owner, not Customer A. Is Customer B’s activity an indicator of interest for Customer A’s dormant account? Does it matter if Customer A is the primary tax reporting owner of the joint account?
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No, we do not believe that Customer B’s activity on the joint account should be treated as activity on Customer A’s dormant account. Under the Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA), an inactive deposit account is considered active if “any other accounts” sharing the same mailing address have qualifying activities “directed by an…