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Investment Accounts
In
General
Opening/Closing of Accounts
Printing the
Name of the Trust on Checks
Automatic
Electronic Deposits/Withdrawals
Tax Payer Identification
Number
Medallion Signature Guaranty
IMPORTANT NOTICE TO USERS:
The information contained in this legal bulletin is general in nature and
does
not constitute legal advice. Non-attorneys should consult
with a qualified estate planning attorney regarding any trust funding matter.
Issues of state law may contradict any information contained herein.
Accordingly, the information contained in this legal bulletin and on our web
site should not be relied upon without first confirming with a qualified
attorney that the legal requirements in a particular state are satisfied.
This web site, our products and services, and any accompanying resources
are
not intended to be a substitute for research, continuing legal education, or a
thorough knowledge of the law. In using any aspect of this
web site, the user, whether attorney or non-attorney, agrees to assume all
responsibility for the validity of the information contained herein.
In General: Investment
Accounts would include mutual funds, cash management accounts, and the like.
They are
funded by initially contacting the financial institution and requesting that title to the
account be changed to the name of the living trust. Although each institution has
different internal procedures for changing title, most institutions will
require submitting a change of ownership form to the institution to complete
change of ownership. This form may be a pre-printed,
institutional form issued and required by the financial company or it may
simply be a letter of instruction from the client. No matter what the format, most institutions will
require the form be either witnessed, notarized, or medallion signature guaranteed.
Institutional change of ownership forms are often confusing or complicated to
complete. CAUTION: Investment accounts
held with financial institutions can be complex due to the unique funding
requirements of each institution. Should you need any assistance in completing change of ownership
forms that are issued and required by the financial institution, we recommend
that you contact your estate planning attorney for help.
Opening/Closing of
Accounts: Note that some institutions may require that the original account
be closed and a new account be opened, while other financial institutions will simply change the
name on the original account to reflect the new ownership in the trust.
NOTE:
For help with ascertaining each institution's procedures, contact your estate
planning attorney for assistance.
Printing the
Name of the Trust on Checks: Most financial institutions will provide their customers
with a substantial degree of latitude as to what information is printed on the face of
their checks. There is no legal requirement that the name of the trust be printed on the
checks. Additionally, many trustmakers would prefer not to disclose the nature of their
estate planning by printing the name of the trust on their checks. People in the business
world may become confused as to whether they can accept a check that reflects the
ownership as a trust. If an institution insists that the name of the trust be printed on
the face of the check, consider having an estate planning attorney with trust
funding experience contact institution's legal department to resolve the
matter.
Automatic
Electronic Deposits/Withdrawals: Before funding any accounts, you should
inquire as to whether there are any automatic electronic deposits or withdrawals
associated to the account. These would include direct deposit of Social Security, Pension
and Payroll checks, loan repayments, and the like. Should any of these types of transfers
occur, consider opening a new account and change the electronic transfers to the new
account number. You may wish to consider keeping the both accounts open concurrently for
30 to 60 days until the new electronic transfers are established.
Tax Payer
Identification Number: Occasionally, institutions will ask for verification
of the tax payer identification number prior to effectuating the change of ownership.
Under the Treasury Regulations [Tres. Reg. 1.671-4], the trustmaker is required to use
their social security number as their tax payer identification number
provided the trust
is revocable, the trustmaker is one of the trustees, and the trustmaker is not disabled.
If all of these conditions are met, the trustmaker can satisfy the transfer agent by
completing a W-9 form. NOTE: For assistance with
tax payer identification, we recommend that
you contact your estate planning attorney.
Medallion Signature
Guaranty: Some institutions will require any change of ownership forms or
instruction letters be Medallion Signature Guaranteed. Only financial institutions can
participate in the Medallion Signature Guaranty program. If this is a requirement, you
should take the following actions:
1. Contact your bank, savings and loan, or stockbroker to
ascertain whether they participate in the Medallion Signature
Guaranty Program;
2. Ascertain what days and times the Signature Guaranty is available;
3. Obtain the necessary forms that need to be
Signature Guaranteed, but do not to sign them until you are in the presence of
the Signature Guaranty;
4. Take the forms and a photo ID to the
institution when the Signature Guaranty is available.
Once the change forms have been Signature Guaranteed, they can be sent to the financial
institution for processing. CAUTION:
Should you need assistance in locating a
qualified Signature Guaranty and completing the forms accurately, contact your
estate planning attorney for
help.
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