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#974892 - 06/13/08 04:41 PM CIP on Successor Custodian
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Wyoming, USA
Our new accounts department does an excellent job in collecting CIP data, but they want to know if they are required to collect CIP information for Successor Custodians for UGMA/UTMA savings accounts. So far I've had no luck finding a clear answer.

I appreciate your help in advance!
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#974901 - 06/13/08 04:46 PM Re: CIP on Successor Custodian Trainee
#Just Jay Online
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You will need to refer to your own CIP procedures to determine if you do or not.

Our CIP procedures dictate that anyone with owership or transaction rights/access to an account must be CIP'd.
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#975094 - 06/13/08 07:28 PM Re: CIP on Successor Custodian Trainee
Elwood P. Dowd Offline
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As the initial custodian was opening the account for a person under a disability, he or she was the "customer" and CIP was mandatory. The CIP FAQ's do not address your question directly, but Question 2 on page 4 indicates a co-owner being added to an existing deposit account is a "customer" and question 3 on the same page indicates that a new borrower who is substituted for an existing borrower is also a "customer" and CIP must be performed on both.

Accordingly, I think that if they had been asked your question I think their answer would have been: Yes, a successor custodian should be treated as a customer opening a new account and CIP would be required.
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#975344 - 06/14/08 01:26 AM Re: CIP on Successor Custodian Elwood P. Dowd
JacF Offline

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Originally Posted By: Ken_Pegasus
As the initial custodian was opening the account for a person under a disability, he or she was the "customer" and CIP was mandatory. The CIP FAQ's do not address your question directly, but Question 2 on page 4 indicates a co-owner being added to an existing deposit account is a "customer" and question 3 on the same page indicates that a new borrower who is substituted for an existing borrower is also a "customer" and CIP must be performed on both.

Ken, While I agree with your thought process and conclusion here, I don't think it applies to the successor custodian scenario.

In PA (and other states may be similar), an UTMA account can only have on custodian at a time. A successor custodian may be named, but the successor has zero authority to manage the account unless the original custodian dies or is incapacitated. So, the successor doesn't fit the regulatory definition of "customer". However, in the event that the custodian dies, and the successor takes over, the successor would become a customer, subject to CIP, at that point.

That said, you may certainly require that a successor custodian be CIPed at the time they are designated as the successor. And this is probably an efficient move, since it eliminates tracking of a separate trigger event later in the account cycle.

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#975368 - 06/14/08 11:11 AM Re: CIP on Successor Custodian JacF
Elwood P. Dowd Offline
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A successor custodian on a UTMA in any state is like the successor trustee on a trust or any other fiduciary relationship, they have no legal role until the original fiduciary no longer serves. Then, like the two examples in the Q & A, they would become signatories and "customers" at that time; i.e. when they become the actual custodian.

The timing requirement for CIP is "prior to opening the account." Any time prior to adding the successor custodian as an actual signatory would be fine.
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#979120 - 06/20/08 05:43 PM Re: CIP on Successor Custodian Elwood P. Dowd
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Wyoming, USA
Thanks for your input!
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