This is a two part question.

1. If a customer requests to open an account as joint w/ rights of survivorship but further requests that the joint party not be told of the account, does your institution open the account under these circumstances?

2. If you do open the account, what do you do when the joint account holder calls in to inquire about their accounts, the teller informs them of the CD, they immediately come to the bank and want to cash it? Do you redeem the certificate even though the customer opening the CD didn't want the joint party to have knowledge of the item?

Thank You

We advise the customer that they may want to seek legal counsel on how to establish their deposit accounts in a way that meets their goals. In the future, under the new CIP, you would need the identification of all joint parties so it won't be an issue. Any joint account holder can cash a CD in at anytime. I don't think you can refuse.

I can understand that an account holder might designate a POD and not tell the "beneficiary" about the account, but I really don't understand how a joint account holder (who presumably signed the signature card) does not know that the account exists. Were they blindfolded at the New Accounts desk so they didn't know what they were signing?

When opening a joint account we require both signatures on the signature card as well as ID for both, so there is no way a "joint" owner would not know of the account. However, the question you need to ask is what is your customer's intent? Do they want that other person to only have access to the funds after their death (then it would be best to set it up as a POD), or do they want the other person to be able to have access should they become sick and unable to handle their finances - if that were the case you can educate them about POAs and how they are used. Our CSRs used to be quick to add joint owners, before we slowed them down and had them discuss with the customer how they really wanted the account to work. If they don't want this "joint owner" to know about the account because they don't want them to take their money than give them some alternatives....

Opinions are mine and mine alone.

There is only one caution regarding advising customers on how to set up the ownership of their accounts: make sure you don't cross the line between decribing the differences in the types of account arrangements that are available and dispensing legal advice to the customer.

I wouldn't want to try to explain to a judge why we were seeking recourse against an individual who was not even aware that they are the joint owner of an account at our bank.

I also would love to see the face of the person opening the account when Customer B's tax levy arrives!

I would not open it without the customer knowing we can not take liablitiy if the joint account holder finds out. I would not even stipulate his/her request on the contract. That would cause to much burden and possible liability to the bank.

Based on the scenario and the potential opening amount of the account, I would consider a SAR filing! To me it just seems suspicious for one person to open a "joint" account and not want the joint account holder to know about it.

SAR Reason: box (s) Other: No reasonable justification exists for this transaction.

JMTC (just my two cents!)

I suspect that the person making this request is trying to provide funds (Surprise!! You just got $50,000!! ) directly to the joint owner in the event of his demise, under the rules of joint tenancy with survivorship. There may be nothing nefarious about the request (but you should ask why).

If that is the reason for the applicant's request, it might be better -- and it would avoid all of the levy and attachment questions raised earlier in this string -- to use a POD structure for the account. And that wouldn't look at all suspicious, right?