Estate Planning Isn’t Just For The Elderly

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The Titling of an “In Trust for” Account at a Large Bank May Pose a Challenge!

By: Anthony J. Enea, Esq.

In recent years many major banks have become more restrictive on how they will allow accounts to be opened and the title of said accounts. For example, many clients have advised that some large banks will not allow accounts for a trust to be opened where there are two or more Co-Trustees. They also have decided not to honor a Power of Attorney that requires the agents to act together even though it is explicitly permitted by law. I recently personally experienced a major bank not being able to title an account in trust for three (3) children in each of their names … “in equal shares per stirpes.” Thus, allowing that if a child did not survive the owner of the account that the child’s share would be distributed to their surviving “issue”, being, children and/or grandchildren, outright, in equal shares. I was advised by the bank officer that their computer system did not permit the designation… “in equal share per stirpes” to be entered.

When I explained to the bank officer that without such a designation being made, if a child did not survive the account owner their share may not go to their children, but, to their “estate” or to their surviving siblings, I was advised that on the death of the account owner, the issue of account beneficiaries would be handled by the banks… “decedent processing team.”

This did not give me a great deal of comfort, especially, since the client wanted the account to pass to her bloodline and not to the spouses of her children.  She was concerned  that if the account only went to her surviving children, there was no guarantee they would give a pre-deceased child’s share to his or her children surviving.

Interestingly, have not encountered these issues with the smaller regional banks that we work with or brokerage firms. They regularly open the accounts titled the way the client wishes, if legally permissible.

In conclusion, as I have said many times the details are very important and clearly when opening an “in trust for” or “payable on death” account at a large bank, the details are critical.

* Anthony J. Enea is the managing partner of Enea, Scanlan and Sirignano, LLP of White Plains, New York. He focuses his practice on Wills, Trusts, Estates and Elder Law.  Anthony is the Past Chair of the Elder Law and Special Needs Section of the New York State Bar Association (NYSBA), and is the past Chair of the 50+ Section of the NYSBA.  He is a Past President and Founding member of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA).  Anthony is also the Immediate Past President of the Westchester County Bar Foundation and a Past President of the Westchester County Bar Association. He is also fluent in Italian. He can be reached at (914) 948-1500 or at [email protected]


Enea, Scanlan & Sirignano, LLP