Quick poll. What types of accounts do other financial institutions open for trusts & estates? There has been great "discussment" at my bank about whether we will allow an estate or trust to open a 'personal' product type or whether we should require them to open a 'business' product type. What do you all do? Why or why not? Does it make a difference whether they use an EIN or the customer's SSN in what type of accounts you open? (all of our estate accounts do require an EIN, instead of the SSN)

Wow - you are going to get answers all over the board and none of them might be correct for your bank. It is not a matter of personal verses business. It never is.

What you need to do is determine what type of balances and what type of activity these accounts usually have and stick them in an account type at your bank in which the pricing makes sense to turn a profit.

Polling other banks is really a waste of time without knowing the pricing differences between the other bank's personal verse business accounts or how smart the other bank really is when it comes to determining how to actually make a profit. I find banks are a little lacking in that area at times.

Regardless, I would still like to hear what the other institutions have to say about it.

OK - then here is a recommendation.

Once you figure out what pricing you want on these accounts, establish a non-personal account type for trusts/estate accounts, as they are going to be exempt from many of the consumer regulations and you don't want to be providing them with all the consumer disclosures and thus covering them under those protections through your depositor's contract with them.

Trust/estate accounts are opened with a business product here. At previous FI formal trust could be opened as personal account ONLY if trustees certified that all beneficiaries were individuals. Don't recommend you take that approach.

Thanks, Cape Codder. I appreciate your feedback. I agree that opening a trust/estate as a personal account and requiring ttees to certify that all beneficiaries were individuals is an unusual direction to go in.

Here they are opened as personal product types (because transaction-wise they are closer to a personal account) but business account agreement is used (because a fiduciary relationship exists closer to that of a business).

Tax reporting under SSN or EIN makes no difference for account set-up - we are not the IRS and as long as a correct selection is made by the customer(e.g. estates must have an EIN but trusts can pick one or the other), we don't differentiate in how we treat them.

Consider what Randy mentioned about granting consumer protections by placing in a consumer account. The bank is taking on risk it does not have to take.

Wow! Thanks to everyone for all this great feedback! I truly appreciate it because it broadens the perspective to hear how other institutions do stuff. As it turns out, since trusts & estates don't seem to fit quite right in either side of our product offerings and after consulting our bank compliance officers & legal, our bank is going to create specific accounts that we can use for fiduciary relationships (good suggestion, rlcarey ). Thanks everyone!