ITF Deposit Accounts

Question: A question has come up within our Bank regarding "In Trust For" accounts. We consider these accounts to be owned by the account holder and we have that individual's information on file. However, we have not made a practice of obtaining information on the beneficiary. Is there any reason to be obtaining any other information, other than the name, on the beneficiary of a revocable "In Trust For" deposit account? Some of our staff feel we are obligated to obtain a social security number of the beneficiary under the USA Patriot Act.

Answer: The confusion about ITF accounts comes from the requirements of the Patriot Act, which say we must have the identification of all owners and/or signers of personal accounts. The key is "Owner" and "Signer". The fact that the beneficiary is neither owner nor signer on ITF accounts means you don't need to record their information. The trustee on that Totten Trust account is the owner/signer, and that person's identification is what you are required to verify and record when you open the account. If you can obtain the number, it helps to have the social security number of the beneficiary when it comes time to pay out on the account, but is not a requirement for opening.

Copyright © 2004 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 10, 12/04