Changing Joint Account into a Trust

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Question:

Have there been any recent regulatory changes which state that an account (CD, checking, savings etc), held in the names of husband and wife jointly, cannot be retitled and placed into a trust? Do these accounts have to be closed and a new account opened? Are there issues we should be aware of due to the retitling? If so, please specify.

Answer:

Answer by John Burnett:You won't find specific regulatory direction. However, because it's important that individuals who create living trusts show the funding of those trusts and document transfers to it, it's always recommended that a new account be established for the trust or trusts and that the customer transfer the funds from his/her personal account into the trust account. Opening the new account also makes sure that your CIP is triggered for the new customer (the trust), so that you don't forget that important step.

Answer:

Answer by Ken Golliher:The Nimrod Family Trust is a person. Joe Nimrod, it's grantor, is also a person, but he's a different person.

If John wanted his bank to transfer ownership of his accounts to me (a different person) I don't think its personnel would say, "Sure, we'll just file maintenance the name, address, SSN, etc. and avoid all that extra work." Close account A, open account B.

First published on BankersOnline.com 9/27/10