Handling Trust and Non-Trust Accounts When The Accountholder Dies
by Mary Beth Guard, BOL Guru
Question: I have (had) a customer who recently passed away. The children of my customer and his now deceased wife had a trust drawn up titled:
The Doe Family Special Needs Trust dated February 1, 1998. The children are co-trustees. An account was established in the name of the trust. In 2001, Mr. Doe opened an account styled:
John Doe by Joe Doe and Suzie Doe Smith DPOA
I am under the impression that the John Doe account is outside of the trust and will need to be handled through the estate. Am I all wet?
Answer: You appear quite dry to me. The account established in the name of the trust will be considered owned by the trust. But the other account -- the one styled "John Doe by Joe Doe and Suzie Doe Smith DPOA" is obviously not owned by the trust.
What did the person establishing the account mean by the acronym "DPOA"? Durable Power of Attorney? Did the bank receive a copy? Were Joe Doe and Suzie Doe Smith joint attorneys-in-fact?
Assuming John Doe had executed a durable power of attorney and an account was opened in his name styled the way you described, it sounds as though he was intended to be the owner and Joe Doe and Suzie Doe Smith were merely signers (as attorneys-in-fact) while he was alive, pursuant to the POA. Once he died, the funds would be considered property of his estate, unless the account had a POD beneficiary. It would not be considered part of the trust.
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