I am thinking that Trust accounts are really about verification of the trustees and not the trust itself??? How would you verify the identity of the trust besides having a copy of the Trust docs? Can anyone enlighten me as to how they're handling this in their CIP???

The CIP requirements are a minimum requirement, we are getting a copy of the trust, trust TIN, and ID'ing any trustees. IMHO it maybe a conservative approach, but that's what's going to happen.

I'm sure you've already looked at this but, if not, this is from the Supplementary Information that accompanied the final rule:

"Treasury and the Agencies agree with the view expressed by some commenters that the statute should be construed to ensure that banks design procedures to determine
the identity of only those persons who open accounts. Accordingly, the final rule defines a "customer" as "a person that opens a new account." For example, in the case of a trust account, the “customer” would be the trust. For purposes of this rule, a bank will not be required to look through trust, escrow, or similar accounts to verify the identities of beneficiaries and instead will only be required to verify the identity of the named accountholder."

Footnote 14 to that section goes on to say: "However, based on a bank’s risk assessment of a new account opened by a customer that is not an individual, a bank may need to take additional steps to verify the identity of the customer by seeking information about individuals with ownership or control over the account in order to identify the customer, as described in § 103.121(b)(2)(ii)(C), or may need to look through the account in connection with the customer due diligence procedures required under other provisions of its BSA compliance program."

I think it all boils down to how you assess the risks.

It will depend on what type of account you are opening.

If you are opening say a checking account for a revocable trust with the grantor as the trustee, the minimum requirements as stated in the rule suggest you only need obtain a copy of the trust instrument. If you choose to add additional requirements, you might want to obtain personally identifiable information on the grantor/trustee.


But if you are opening a trust account where your bank is serving as trustee for the trust (under fiduciary powers as may have been granted by the OCC), then you will be obtaining an original of the trust instrument, but that does nothing for verification for identity purposes. You would still need to obtain information on the person that is actually opening the trust account with you. (example: Kate Doe Trust, RST Bank Trustee - you would not verify your own identity, you would verify the identity of the person opening the account. That could be Kate Doe, or Kate Does survivor or successor trustee if Kate Doe is deceased or incompetent.)

But if it were something like the Kate Doe Trust, Robert Doe Trustee wanting to purchase a CD or another deposit product from your bank, in addition to a copy of the trust document, you may want to verify the identity of Robert Doe since he would be one that is opening the account and therefore the only one that meets the definition of customer under the rules.

I suggest you break it down and "eat the elephant in small bites" This is what you do for a grantor trust opening a checking account. This is what you do for a revocable trust with a 3rd party trustee opening a checking account. This is what you do for an individual opening a trust account naming your bank as the trustee or successor trustee.

CIP indicates the customer is the "person" opening the account. BSA's previously existing definition of "person" includes "a trust or estate."

The trust is the customer, not the trustee. The regulation requires you to verify the identity of the trust. Only prudence requires you to verifty the identity of the trustee(s).

You could verify the existence of the trust by requiring a copy of the instrument, as the regulation suggests. However, that leaves you with significant storage issues and charges the bank with knowledge of the trust's contents. An alternative is to require a synopsis of the trust signed by the attorney who drafted it. Some forward thinking legislatures, California and Texas, have created statutory exceptions along this general line which allow the bank to document an account without getting a copy of the instrument.

Obviously, if the bank is the trustee or is contemplating a lending transaction, it will require a copy of the instrument.