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#1428800 - 08/13/10 03:23 PM Online Bill Payment from Trust Account?
Deena Offline
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Deena
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We have a customer who has a checking account that is set up as an ITF account. The customer would like this account set up for online bill payment. We currently don't allow this type of account to be set up for bill payment, but no one seems to know why "we've always done it that way." Is there any reason we shouldn't allow it?
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eBanking / Technology
#1428817 - 08/13/10 03:36 PM Re: Online Bill Payment from Trust Account? Deena
Doug Hendrickson Offline
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Doug Hendrickson
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As far as I'm aware the ITF acount is similar to a Payable on Death and represents a recovable trust account where the funds will belong to a named beneficiary upon the owner's death. The account owner is the person who owns the funds and there is no reason why he/she can't be set up for online bill payment.

I'm presuming it is the owner of the account and not the beneficiary, who is asking for the bill payment. The beneficiary should have no access to the account.
Last edited by Doug Hendrickson; 08/13/10 03:38 PM. Reason: presumption
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#1429073 - 08/13/10 06:05 PM Re: Online Bill Payment from Trust Account? Doug Hendrickson
Deena Offline
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Deena
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Thanks for your reply, Doug.

I think the potential problem for us comes in because in order to have access to bill pay, they must have access to online banking first and it's possible for them to give access to online banking (and therefore bill pay) to someone who has no signing authority on the account. If the account is just a simple ITF (POD) account, it's probably ok to allow it since the funds belong to the account owners until they die - i.e., the beneficiary has no rights to the funds and the owners have no fiduciary duty to the beneficiary. In other cases where it's a custodial or other type of fiduciary account, I would think we need to keep it view only because we don't want to facilitate someone w/no signing authority being able to transfer funds and/or pay bills from that type of account. Would you agree?
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#1429150 - 08/13/10 07:06 PM Re: Online Bill Payment from Trust Account? Deena
Doug Hendrickson Offline
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Doug Hendrickson
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Yes, I would agree. The difficulty does come when there is a (valid) difference between who owns the funds in the account and who can legally transact through the account.
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I hear and I forget. I see and I remember. I do and I understand.--Confucius

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#1430177 - 08/17/10 05:47 PM Re: Online Bill Payment from Trust Account? Deena
Mocha's Mom Offline
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Mocha's Mom
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Western MA
I think your problem here, Deena, is that you would allow a beneficiary on the ITF account to have view access. Technically speaking they should not even know about the account as they are only listed as a beneficiary in the event the principal(s) die. They can be added or removed at any time (at least in MA) and should not even be able to inquire about the account. The true owner(s) of the account should have all transaction rights and should be able to process bill pay transactions as they are the true owners. We view the ownership rights to all accounts before granting access to them through online banking. If someone is only a beneficiary they are not allowed any access at all including viewing the account online.

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#1430225 - 08/17/10 06:27 PM Re: Online Bill Payment from Trust Account? Mocha's Mom
Deena Offline
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Deena
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Well, the account owner would have to give access (view only or otherwise) to anyone else and as long as the account owner authorizes it, we allow it. As of now, we allow view only but not transaction ability. We're considering changing that for ITF accounts.
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#1430365 - 08/17/10 08:24 PM Re: Online Bill Payment from Trust Account? Deena
Mocha's Mom Offline
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Mocha's Mom
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Western MA
That's interesting - we only grant online access to someone with the fiduciary capacity on the account. We don't allow anyone else access without the capacity just with permission of the owner. The proper access level needs to exist on the account level.

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#1430540 - 08/18/10 01:12 PM Re: Online Bill Payment from Trust Account? Mocha's Mom
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Ditto Mocha's Mom

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#1430610 - 08/18/10 02:14 PM Re: Online Bill Payment from Trust Account?
Deena Offline
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Deena
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We don't have many situations where someone who doesn't have signature authority has access to the account through online banking, but for example, we may have parents' account and they would like their daughter (who is not a signer on the account) to have access to online banking (and therefore bill pay) so she can balance their checkbook, pay their bills, etc. If the account owners request it, we allow it. For trust accounts, we don't allow transactions if they're not an account owner, but will allow them to view if the owner wants it.
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