Recently we have had customers that have a Revocable Trust request that we open an account, joint, with right of survivorship and name the Trust as the POD. I have been in banking for 25 years and have never heard of this. I thought the whole point of the Trust was to avoid probate.....
Another concern I have is how is it insured? Has anyone in Florida come across this situation?

FDIC rules indicate that the beneficiary can be individuals or non-profit organizations or charitable organizations - not personal trusts. I would think that it would not be separately insured under FDIC rules. I have no idea how FL law would treat this.

We have had several customers requesting the Trust as POD. They wish to open an account with someone who may or may not be covered by the Trust, but want them to receive the funds as Joint Tenants, but if both die, funds go to the Trust. (They may have funds that they don't want the other Trustee's to know about or just an easy way to allow the Joint Tenant to have $$).
If you exclude the Trust as a qualifed beneficary, then the account would just be covered as a Joint Account for insurance.

The customer I refer to is a husband and wife. And they insisted on not titling it in the Trust, but insisted on naming the Trust as the Bene. They told me the attorney did not know what he was doing when he told them to open bank account in the name of the Trust and that they are doing the "correct" thing by opening joint accounts with the Trust as the beneficiary. It was a large amount, so my Manager told me to do what they wanted.

This can be done under certain conditions. You don't see it very often. The FDIC will recognize this as a qualified beneficiary if it meets the following criteria:

1. Has to be revocable
2. The name on the account Jane Doe POD or
Jane Doe
Jack Doe POD

Matches the titling of the trust exactly.

The Jane Doe LRT or
The Jane and Jack Doe LRT

They will then look to see how many beneficiarie(s)are listed and calculate coverage accordingly.

If the name on the account does not match the titling of the Revocable Trust it will fall into the single ownership category.

Hope this helps

The real issue here is not deposit insurance. I don't know that your bank is going to fail. I do know that these people are both going to die and, on the death of the latter, someone will have to figure out whether they can turn the money over to the trust or it will instead go to the decedent's estate because there was no POD beneficiary effectively named on the account.

The issue will turn on these definitions from the Florida Multiple Party Account Statute:

(b) "Beneficiary" means a person named as one to whom sums on deposit in an account are payable on request after death of all parties or for whom a party is named as trustee.

and

(h) "Pay-on-death designation" means the designation of:

1. A beneficiary in an account payable on request to one party during the party's lifetime and on the party's death to one or more beneficiaries, or to one or more parties during their lifetimes and on death of all of them to one or more beneficiaries; or

2. A beneficiary in an account in the name of one or more parties as trustee for one or more beneficiaries if the relationship is established by the terms of the account and there is no subject of the trust other than the sums on deposit in the account, whether or not payment to the beneficiary is mentioned.


The question is simple: Is a trust a "person" under the Florida statute. I looked, and I do not find the term defined in this chapter. (Someone being paid to look, your bank's attorney, might well look a little harder.) The risk for the bank is that it has opened an account using terminology supplied by the customer. It simply may not work when the time comes.

As an aside, there are two quotes here that are priceless:

They told me the attorney did not know what he was doing when he told them to open bank account in the name of the Trust and that they are doing the "correct" thing by opening joint accounts with the Trust as the beneficiary.

It was a large amount, so my Manager told me to do what they wanted.

The first speaks for itself.

As to the second, if a large amount of money is involved, well, that's when you [censored] well better make certain you know what you are doing. Routing the money to the decedent's estate will completely foil the objective of avoiding probate, delay the process, generate thousands of dollars in fees, etc.

Ditto on the REAL issue. Ken brings up an extremely important point. Whether or not the transfer of ownership of the property to the trust after death of grantor(s)is possible.

" The real issue here is not deposit insurance. I don't know that your bank is going to fail. I do know that these people are both going to die and, on the death of the latter, someone will have to figure out whether they can turn the money over to the trust or it will instead go to the decedent's estate because there was no POD beneficiary effectively named on the account."

Even though FDIC may not have a problem with this, it doesn't mean the property will be able to be transferred to the trust upon the death of the account owner(s)/grantor(s). Unless there is special provision included within the trust,or perhaps a pour over will,additional property may not be able to be added.