I recently had the following question asked of me: When you are opening a trust account can/would you add the beneficiaries to the system and the signature card. I said no because the trust document is the ruling document and shows who will benefit from the trust. Am I correct in this in this thought process?

I agree with your thought process. Putting the beneficiaries on the system could mislead an employee into thinking the account is set up as a POD and releasing the funds incorrectly. In many cases a trust can specify that the trustee must distribute the funds to the beneficiaries when certain conditions are met. (Example, Johnny gets $5000 on his 18th birthday, $5000 on his 21st birthday, and the balance on his 25th birthday.)

Simply listing him "on the system or on a signature card" could be very misleading.

In a true trust environment where the trust is currently in distribution to the beneficiaries, it would be appropriate to have them added with the beneficiary capacity/relationship noted. This is more restrictive than a typical retail environment and the proper controls would be in place. This enables the bank to conduct ongoing OFAC screening of active beneficiaries.