We have a customer (Jane Doe) who wants to open a living trust account and has given us her declaration of trust document. The document lists the trustee/grantor's 4 sons as beneficiaries and names one (John Doe) to be the successor trustee once the owner passes away. The trustee/owner wants to have the successor trustee listed as an authorized signer on the account. Is there anything to pay special attention to when opening this account? For example, how would we need to title the account? Do the beneficiaries, other than John Doe, need to be listed in the account records for FDIC insurance purposes?

For FDIC purposes the account should be opened in the name of the living trust (ex Joe Doe Living Trust). The Grantor is typically a trustee and would sign and operate the account. Typically the name of the successor trustee is noted in account documentation.

The issue of an authorized signer for a trust account seems odd to me - and I suggest you defer this question to legal. Unless the trust agreement allows for an authorized signer - I'd say you shouldn't allow for one. Again - I'm not a lawyer and would suggest you seek legal advice. My bank does not allow for authorized signer on any account.The Successor Trustee would become the signer only in the event something happens to the Trustee which would be in compliance with the trust agreement.

For purposes of FDIC coverage the bennys of a formal trust do not have to be named on the account documentation. (This is not true in the case of an informal trust - aka POD account.) In the event the bank should fail - FDIC will require current documentation of the trust to determine coverage.

Hope this helps.

Thanks for your insight ComplyWithMe!