Topic: Trusts
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We had a check payable to a trustee deposited into a personal checking account. Is that permitted? We reviewed UCC Section 3-307, but this instructs us to also consult Illinois law.
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A definitive answer to your question would require a review of the trust instrument, which could authorize the trustee to deposit trust funds into a personal account (though it is not common for a trust to specifically authorize this practice). It is possible that the trustee’s actions are appropriate, depending on the circumstances, but there…
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Can we order debit cards and checks for trust and estate accounts? How should we print the names on the checks and on the debit cards?
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As to your question on debit cards for trust and estate accounts, we are not aware of any laws that would prevent a bank from issuing a debit card for such accounts. For example, if a customer has the authority under a trust agreement to use the trust funds for any purpose, we do not…
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A customer asked that we set up a “premium fund trust account,” and we are not comfortable with this type of account; can you give us any guidance on what requirements this type of account might impose on the bank?
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Premium fund trust accounts are fiduciary accounts (similar in that respect to lawyers’ IOLTA accounts). The Illinois Insurance Code regulations require any entity that has to be licensed under Title XXXI of the Insurance Code to hold most insurance premium payments in premium fund trust accounts. 50 Ill. Adm. Code 3113.40(c). The regulations impose several…
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Should we comply with a customer’s request to open an irrevocable trust account, when the customer’s nursing home told him to do so in order to stay under the Medicaid asset threshold?
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First, we believe that the bank should not get involved with the customer’s choice of account or planning for public assistance payments, and the bank should avoid giving any legal advice. With that said, we believe that the Illinois Medicaid eligibility rules generally include assets held in a trust as part of an individual’s available…
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Can we allow trust accounts to use online billpay?
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If the customer has the authority under the trust agreement to use the trust funds for any purpose, we do not see any problem in allowing the customer to use an online bill pay account feature.
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Should we apply a different record retention period to land trusts than we do to other types of trusts?
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We are not aware of reasons to apply a different record retention period to land trust documents than you would to ordinary trust documents. The main legal difference between an ordinary trust and a land trust is that in an ordinary trust, there is a split between the legal title in the trustee and the…
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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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If we receive a subpoena for trust documents, can we provide the requested information without violating any laws?
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In responding to a subpoena, customer privacy is generally not an issue because both federal and Illinois privacy laws allow banks to disclose customer financial records in response to a subpoena. 205 ILCS 5/48.1