The reason I ask is because we had a customer purchase a CD through the trust. Normally we charge early withdrawel penalties for anyone who requests the CD's funds early. However, we charge no penalty if the purson requesting the funds is doing so because the original purchaser died. But a Trust does not die.

Any thoughts???

A trust is a legal entitiy, but depending on the state you're in, its rights will vary. And while true a trust does not die, it may (and most likely will) terminate.

If the trust is the only owner of the account, you cannot waive the statutory early withdrawal penalty based on the death of a trustor, trustee or beneficiary of the trust. You can waive your own bank's early withdrawal penalty if the account is beyond the 6-day penalty period, however.

John,

I know very little about trust accounts. Do you know of any good sources I can use to learn more?

Thanks

One source I can recommend is Mary Beth Guard's webinar on Accommodating your Customer's Living Trust. It's available on CD-ROM in the Banker Store. Here is a LINK.