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#2236543 - 05/12/20 04:09 PM Transfer on Death (TOD) accounts
GrannieTwo Offline
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Joined: Nov 2010
Posts: 180
Central IL
Can anyone advise me what documentation we would need regarding a TOD? We have a sole proprietorship customer who is gravely ill. An attorney is helping with estate planning and asked what we need for documentation. We do not have a trust department or a financial planner on staff. Has anyone had any experience with this and could help me out? Thanks!!
Last edited by John Burnett; 05/12/20 08:54 PM.
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#2236545 - 05/12/20 04:15 PM Re: Transfer on Death (TOD) accounts GrannieTwo
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,277
Galveston, TX
I do not understand - they want to set up a TOD? If the person is incapacitated and does not have a POA that would be broad enough to allow someone to take that action (after review by your legal counsel) I am not sure there is a solution at this point. You should tell them what you would require - other than that, they need their own legal counsel. The fact that the account is for a sole proprietorship really has no impact on the situation - it is just the person.
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#2236546 - 05/12/20 04:17 PM Re: Transfer on Death (TOD) accounts GrannieTwo
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,017
Illinois
It sounds like they're trying to name a beneficiary on the account.

Have legal counsel review the applicable Illinois statute to verify that unlike a corporation or partnership, a sole proprietor can name a beneficiary.

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1194&ChapterID=20

If it is permissible under state law, wouldn't you just need a new signature card?
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#2236566 - 05/12/20 06:18 PM Re: Transfer on Death (TOD) accounts BrianC
GrannieTwo Offline
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Joined: Nov 2010
Posts: 180
Central IL
Thank you both. Yes, we have been discussing with our attorney and yes we are going to need updated signature cards for the checking and savings. We have questions for our customer's attorney and are waiting to hear back. Thank you again for your input!
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For when I am weak, then I am strong. 2Cor 12:10

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#2236593 - 05/12/20 09:01 PM Re: Transfer on Death (TOD) accounts GrannieTwo
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,336
Cape Cod
Just a note FYI: "Transfer on Death" (TOD) is a term normally associated with registered securities and brokerage accounts. Bank accounts that call for the balance to be paid to a beneficiary upon the death of the last surviving account owner are typically called "Payable on Death" or "Pay on Death" (POD) accounts or Totten Trust (Trustee for) accounts. When you click on the link Brian provided, you'll see that Illinois uses both "Trustee" and "Payable on Death" terms.
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#2245172 - 11/05/20 04:48 PM Re: Transfer on Death (TOD) accounts rlcarey
lilbo52 Offline
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Joined: Feb 2011
Posts: 9
Illinois
I have always been told that an account a sole proprietor can NOT have a POD?

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#2245173 - 11/05/20 05:11 PM Re: Transfer on Death (TOD) accounts GrannieTwo
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,277
Galveston, TX
A sole prop account is held by an individual. There is no mention of sole prop accounts in the IL statutes. I would be asking whoever is always telling you that for their source of their information.

https://ilga.gov/legislation/ILCS/ilcs3.asp?ActID=1194&ChapterID=20
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