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#1858022 - 10/03/13 02:51 PM CIP & Grantor Trusts
CantBeShocked Offline
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Has anyone opened a Grantor Trust account? The trust has to have it's own EIN right? I have a situation where a father wants to open three grantor trusts for his three children and there are three co-trustees (he's not one of them) but he wants to use HIS SSN on the trusts. His name is nowhere on the trust at all so there are CIP and B-notice implications. Help!!

Any guidance or help will be greatly appreciated !!!
Last edited by The Real Mobo; 10/03/13 03:23 PM.
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#1858052 - 10/03/13 03:19 PM Re: CIP & Guarantor Trusts CantBeShocked
John Burnett Offline
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Candidly I have never heard of a guarantor trust. Could you be asking about grantor trusts?
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#1858055 - 10/03/13 03:22 PM Re: CIP & Guarantor Trusts CantBeShocked
CantBeShocked Offline
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Yes - typo - sorry!!1
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#1858070 - 10/03/13 03:36 PM Re: CIP & Guarantor Trusts CantBeShocked
John Burnett Offline
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A grantor trust is a formal trust agreement under which the grantor/trustor retains the right to rescind or cancel the trust and recapture assets placed in the trust. Typically, although I imagine there are exceptions, the grantor is the trustee of such a trust.

If the trusts you are looking at meet the IRS's requirements for a grantor trust that can be ignored for reporting purposes (so it uses the grantor's TIN instead of getting its own), you can accept such a trust. The trust would be your customer under CIP rules, and I don't see a CIP problem.

To avoid name/TIN mismatch problems if the account earns reportable interest, you'd probably consider setting them up with the grantor's name as part of the account title.

If you have any concerns about whether the trusts meet the grantor trust definition, you should ask bank legal counsel.
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#1858343 - 10/03/13 10:00 PM Re: CIP & Guarantor Trusts CantBeShocked
CantBeShocked Offline
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I have and they state it can be done - in the child's name using the grantor's SSN - and the grantor is NOT a trustee nor is he a part of the account styling.

Not sure if legal is looking at it from the IRS Info Reporting or BSA/CIP standpoint however.

Which doesn't meet the B-Notice qualifications and confuses CIP Policy.

Last edited by The Real Mobo; 10/03/13 10:01 PM.
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#1858365 - 10/04/13 11:20 AM Re: CIP & Guarantor Trusts John Burnett
Elwood P. Dowd Offline
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As John said, the trust is the customer, so there is no CIP problem. As far as information reporting, as long as the children have the same last name as the grantor and it appears in the account title, the grantor's SSN will not cause a mismatch.

Not a vanilla situation...
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