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#46904 - 12/04/02 08:17 PM NOW Account Eligibility - Trusts
jmd Offline
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Joined: May 2002
Posts: 233
In order for a trust to meet Reg D eligibility requirements for a NOW account, all beneficiaries have to meet the eligibility requirements. We do not keep the entire trust document on file. Part of the trust document that is not on file is the listing of beneficiaries. What is the required documentation on this. Is it required that the bank have the listing of beneficiaries on file? If not, what documentation would be appropriate?

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#46905 - 12/04/02 09:35 PM Re: NOW Account Eligibility - Trusts
zaibatsu Offline
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Joined: Jun 2001
Posts: 6,153
The requirement for a fiduciary to open a NOW account is that the beneficiaries have to otherwise be eligible to open a NOW account. (I do not believe that the eligibility requirement applies to residuary beneficiaries.) A copy of the page or pages of the trust document showing the beneficiary or beneficiaries would be the only way to know for sure who all the beneficiaries are for determining whether they are all NOW account eligible. If any of the beneficiaries listed are not individuals, you may have to get more information to determine eligibility.
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#46906 - 12/05/02 01:49 PM Re: NOW Account Eligibility - Trusts
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,095
Cape Cod
One way to handle this situation is to obtain a certificate from the trustee(s) to the effect that all beneficiaries are natural persons or otherwise eligible to hold a NOW account. This will address some customers' concerns about giving you a page of the trust document that they often want kept private. (Although that is becoming moot with increasing need to know our customers)
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John S. Burnett
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#46907 - 12/05/02 01:53 PM Re: NOW Account Eligibility - Trusts
zaibatsu Offline
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Joined: Jun 2001
Posts: 6,153
Good thought John and gets the bank off the hook if they are not qualified. The only problem with this is you have to train the trustee on who is and who isn't qualified for a NOW account. You might require the trustee to describe each beneficiary in the certificate without giving the name. For example: Beneficiary 1: Natural person; Beneficiary 2: 503(c) corporation, etc.... That way the bank can make the NOW account determination and the customer can keep the beneficiaries names private.
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Better a patient man than a warrior, a man who controls his temper than one who takes a city

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#46908 - 12/05/02 02:44 PM Re: NOW Account Eligibility - Trusts
DeeQ Offline
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DeeQ
Joined: Dec 2002
Posts: 40,746
Turnpike Exit 10
Why aren't you getting a complete copy of the trust agreement? Are you
concerned about privacy? Not to beat a dead horse, but if you don't know
who the beneficiaries are, how do you know you are complying with
economic sanctions & the Patriot Act?
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Get your facts first, then you can distort them as you please. - Mark Twain

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#46909 - 12/05/02 03:22 PM Re: NOW Account Eligibility - Trusts
zaibatsu Offline
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Joined: Jun 2001
Posts: 6,153
What sanctions are there and what 'RIOT Act requirements are there for not having the beneficiaries' names? They are not owners of the account--the trustee is. They have no ownership interest in the property in the trust until it is paid or distributed to them? I am not sure--that is why I am asking. Thanks.
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Better a patient man than a warrior, a man who controls his temper than one who takes a city

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