Topic: Joint Accounts
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An elderly woman and her adult daughter are joint owners on a demand deposit account. The daughter believes that her brother is taking advantage of their mother and would like to prevent her mother from making withdrawals from the account. The daughter also has a power of attorney for the account. What documentation do we need to comply with the daughter’s request? Do we need a court order declaring the mother’s incompetency before we can restrict her access to the account?
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We recommend reviewing the daughter’s power of attorney document and the documentation setting up the account to determine whether the daughter has the authority to completely control the mother’s interest in the account. The Illinois Statutory Short Form Power of Attorney for Property provides the power to execute “financial institution transactions” in line item (b).…
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We have an individual customer who would like to pledge a certificate of deposit (CD) issued by our bank as collateral for a commercial loan. The CD is held in joint tenancy. Do all of the CD’s owners need to sign a security agreement pledging the CD as collateral for the loan?
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Generally, the Illinois Supreme Court has held that a joint deposit account is subject to the provisions of the contract between the bank and its depositors, and one joint depositor may unilaterally pledge the interests of an entire joint account if allowed by the account agreement. Specifically, the Illinois Supreme Court has recognized that jointly…
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Two of our customers recently separated and do not appear to be in communication. The couple have joint deposit accounts and a joint lock box. The wife requested statements for the joint accounts, which we have provided. The wife does not have a key to the lock box and has asked to see the access log. Since this is a joint lock box account, can we provide the wife with the access log without a subpoena?
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Yes, we believe that your bank may provide an access log to the wife, as she continues to be a joint lessor of the lock box. Both federal and Illinois financial privacy laws permits banks to disclose a customer’s financial records to that customer, and both joint lessors should have equal access to account records…
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We had a customer die who held multiple joint accounts with his wife (who is still alive), containing assets in excess of $100,000. The customer also has a savings account in his name only that does not include any beneficiaries. The value of the savings account is less than $100,000. Is a small estate affidavit required for the widow to close the account, or is this unnecessary when a spouse is closing a deceased spouse’s account? What documentation do we need to close the account?
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It depends. When a surviving spouse does not have an ownership interest in their deceased spouse’s account, the surviving spouse should not be permitted to close the account without the proper authority to do so. Such authority may come from a small estate affidavit or from a will or court document appointing the surviving spouse…
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A customer opened a joint account with her daughter, who is younger than one year old. The mother signed the account agreement on behalf of her child as “child’s name by mother’s name, mother.” Is it permissible for a minor to be added as a joint owner on an account with a right of survivorship when the child to too young to sign their name? Does the child technically have transaction authority on the account? Is the account FDIC insured?
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The Illinois Banking Act permits banks to establish deposit accounts for minors with the same terms as if the minor is an adult. However, it is not clear under Illinois law whether a parent’s signature on behalf of a minor would be binding to create a joint tenancy with a right of survivorship for an…
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We have two customers who jointly own a safe deposit box. One of the joint owners executed a statutory short form power of attorney (POA) in which “safe deposit box transactions” has not been stricken. Can we allow the agent authorized in the POA to access the jointly owned safe deposit box? Our safe deposit box agreement allows either owner to access the box.
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Yes, we believe you may allow an agent with an Illinois power of attorney document that includes “safe deposit transactions” to access the principal’s jointly-owned safe deposit box. The Illinois Statutory Short Form Power of Attorney for Property provides the power to execute “safe deposit box transactions” in line item (e) if it has not…
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Are we required to obtain both signatures on a certificate of deposit (CD) when two people open an account jointly? This could be for married or unmarried individuals. Is one signature sufficient as long as we have the necessary CIP information for both individuals?
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We are not aware of any rules requiring signatures from all co-owners when opening a joint certificate of deposit (CD) account. The FDIC expressly excludes CDs from the general rule in its deposit insurance regulations that requires all co-owners of a joint deposit account to sign a signature card. Nonetheless, we do recommend obtaining all…
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Is it necessary to obtain a W-9 form for a secondary owner of a joint deposit account? Any interest earned is reported under the primary owner’s name and social security number (SSN). Our vendor’s account opening forms have a spot for the primary owner to sign the certification, but not the secondary owner.
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No, the general rule is that it is unnecessary to request a W-9 form from a secondary accountholder — unless all of the accountholders are nonresident aliens. This is because secondary accountholders will not be receiving any interest and consequently will not be subject to any IRS withholding or reporting requirements. However, if all of…