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#2131529 - 05/23/17 05:20 PM Sole Proprietorship DBA
Inquisitive Banker Offline
New Poster
Joined: May 2017
Posts: 2
We're reviewing our sole proprietorship DBA accounts. Since these are somewhat of a hybrid between individual and business, we wanted to know if Illinois allowed beneficiaries on DBA sole proprietorships or how banks handle death disbursements on DBAs.

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#2131569 - 05/23/17 07:55 PM Re: Sole Proprietorship DBA Inquisitive Banker
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
My check of the Illinois statute -- 205 ILCS 625 -- makes no distinction in who the account owner is, as long as it is a mortal person. I interpret that to mean the owner must be an individual or, if you will, a natural person. There appears to be nothing that would prevent an individual who is a sole proprietor from taking advantage of the "Trustee for" or POD provision (both forms are addressed in the statute).

I was surprised to see that Illinois permits the beneficiary of such an account to be "a natural person who is living, a trust, a corporation, a charitable organization, or any other entity that maintains a lawful existence under the state or federal authority pursuant to which it was organized. Of course, if the beneficiary is not a natural person or charitable organization or other non-profit entity recognized as such under the Internal Revenue Code, it would not be afforded the separate FDIC coverage for revocable trust accounts.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#2131573 - 05/23/17 08:26 PM Re: Sole Proprietorship DBA Inquisitive Banker
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
My check of the Illinois statute -- 205 ILCS 625 -- makes no distinction in who the account owner is, as long as it is a mortal person. I interpret that to mean the owner must be an individual or, if you will, a natural person. There appears to be nothing that would prevent an individual who is a sole proprietor from taking advantage of the "Trustee for" or POD provision (both forms are addressed in the statute).

I was surprised to see that Illinois permits the beneficiary of such an account to be "a natural person who is living, a trust, a corporation, a charitable organization, or any other entity that maintains a lawful existence under the state or federal authority pursuant to which it was organized." Of course, if the beneficiary is not a natural person or charitable organization or other non-profit entity recognized as such under the Internal Revenue Code, it would not be afforded the separate FDIC coverage for revocable trust accounts.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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