Should Trustee Always Include "Trustee" After Signature?

It depends upon what your intent is. If you're talking about your signature card and deposit agreement, it is important for it to be clear that the trustee is signing on the account in his capacity as trustee and that the account itself is a trust account.

If you're talking about the way checks are signed on the account, that's a different matter. If the intent is merely to make it clear that the trustee is not the person personally obligated on the instrument, that should already be clear from the account name that appears on the check, which would be the name of the trust.

Take a look at UCC 3-402.

It provides that on a check, "if a representative signs the name of the representative as drawer of a check without indication of the representative status and the check is payable from an account of the represented person who is identified on the check, the signer is not liable on the check if the signature is an authorized signature of the represented person."

What does that mean? If John is the trustee of the "CIP Rules Waiting Victims Trust", John's signature would be an authorized signature on the trust's account. If John signs one of the trust's checks in his own name, without indicating his representative capacity, he will not be personally liable on the instrument if the check shows that it is drawn on the account of the trust. Only the trust will be on the hook for the amount of the check.

First published on BankersOnline.com 05/19/03