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OD Exemption for Trust/Estate Accounts

I understand that businesses are exempt from the overdraft protection opt-in requirements but, am uncertain if the exemption covers Trust accounts and Estate accounts in that "personal, family or household" exemption?

by Randy Carey: Since it would be a breach of fiduciary duties by any trustee or executor to allow such an account to go overdraft in the first place and by paying such an account into the overdraft the bank would become culpable in that fiduciary breach, offering such a service on these types of accounts by the bank is not the best of ideas.


by John Burnett: I'll second Randy's comments and suggest that such accounts should be flagged to return any item that would create an overdraft.


by Ken Golliher: "Exempt" is the wrong word. It would be more accurate to say that business and fiduciary accounts should never be included in "overdraft protection" programs because it's a really dumb thing to do.

Fiduciary accounts should never be overdrawn, period.

"Business" accounts include corporations, partnerships, LLC's and other types of legal entities. An overdraft would be a loan to that entity. The fact that Bubba can sign on the corporation's account does not mean Bubba is allowed to borrow money on behalf of the corporation.

First published on 10/21/2018

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