Testamentary trusts

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Question:

I have a customer who would like to set up his account to transfer to a trust upon his death. He has provided us a copy of a will, which is not valid until approved by the court. Is this something that we can do?

Answer:

Your bank should avoid doing estate planning for your customer. Naming the trust as a payable-on-death beneficiary could, if the customer has other accounts with your bank, result in some of the customer’s funds not being FDIC insured, even if state law allows the POD designation. If the customer already has a trust established, his or her trust attorney can provide the necessary guidance for the customer. If your customer has executed a valid testamentary trust, the probate court, in the course of probating his will, will oversee the transfer of assets to the trust.

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Learn more about John Burnett’s When a Customer Dies webinar.