Special Relationship Accounts
Table of Contents:
Representative Payee -2Power of Attorney -4Guardian & Conservator -6Estate Account -8Club and Associations -10Definition of a Trust, Trust Roles -11Trust Terminology -12Trust Membership Requirements -13Key Items, Opening a Revocable Trust Account -14Trust Membership Card -16Trust Credit Union Services -19Trust NCUA Share Insurance -20Closing Trust Accounts, Deceased Trustee(s) -21Trust as Beneficiary -26Trust Samples of Account Labeling -27Trust Frequently Asked Questions -37-
Special Relationship Account Titles and Ownership
The ownership and control of the account is established at the time an account is opened. The
type of account determines how the account is titled, what identification and what documentation
is required at account establishment. The documentation will establish the capacity and authority
of the person opening the account. The type of account also determines the rights, obligations
and liabilities of the parties to the account.
Definition of Special Accounts: Special Accounts all involve a Fiduciary Relationship
Definition of a Fiduciary Relationship: A Fiduciary relationship is one in which a person is
authorized to manage and control property but does not have any ownership interest in the
property.
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Special Relationship Accounts
A Representative Payee is an individual appointed by the Social Security Administration to
receive benefits on behalf of a beneficiary. Benefits are paid out for Social Security and/or SSI
on behalf of someone who cannot manage or direct the management of his/her money. The Rep
Payees first duty is to use the funds for the beneficiaries comfort and care. SSAs priority list goes
as follows: food and shelter, medical and dental care not covered by insurance, for a child
education and training, clothing and recreation.
A person must contact the SSA office nearest them to apply to be a payee; the payee is the only
person allowed to access account funds. They must submit an application, requesting to be
selected as payee, and documents to prove their identity. SSA requires that the payee application
must be completed in a face-to-face interview (with certain exceptions). A POA is not
recognized by Social Security for the purposes of handling benefit payments. The following lists
the required duties of the payee:
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Determine the beneficiary’s needs and use his or her payment to meet those needs;
Save any money left after meeting the beneficiary’s current needs in an interest bearing account or savings
bonds for the beneficiary’s future needs;
Report any changes or events which could affect the beneficiary’s eligibility for benefits or payment
amount;
Keep records of all payments received and how they are spent and/or saved;
Provide benefit information to social service agencies or medical facilities that serve the beneficiary;
Help the beneficiary get medical treatment when necessary;
Notify SSA of any changes in your (the payee’s) circumstances that would affect your performance or
continuing as payee;
Complete written reports accounting for the use of funds; and
Return any payments to which the beneficiary is not entitled to SSA.
NOTE: If the Rep Payee resides in the same household as the individual that is entitled to
the money and is their parent or legal guardian a separate account is not required for the
individual entitled to the funds. IF the Rep Payee is not the parent or legal guardian and/or does
not reside in the same household a separate account must be opened for the individual entitled to
the funds.
Representative Payee
The funds on deposit are for
the benefit of the Primary
Name on the Account
Beneficiary – the person that is entitled to or who the money in the
account belongs to. The Beneficiary cannot transact on the account
including but not limited to: cash checks, withdraw funds, transfer
funds and make changes to the account.
The Representative Payee is
the only one able to Transact
on the Account
Representative Payee (title in the Name Type field) – the authorized
signer on the account. The Rep Payee is the only person who can
manage the funds in the account or present the check from the Social
Security Administration to be cashed; as long as the Beneficiary is
still living. The Rep Payee cannot use the account for personal
transactions.
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Special Relationship Accounts
Representative Payee
Legal Documentation
Award Letter from Social Security Administration or copy of a paper
check if not direct deposit (not a Petition Letter)
Account Type
Individual Account
SS#/Tax ID
Use the Beneficiary’s Social Security Number
Account Beneficiary
The Estate of (Beneficiary Name)
Signature
(Beneficiary Name) by (Rep Payee Name), Rep Payee
ex: John Doe by Jane Doe, Rep Payee
(Rep Payee Name), Rep Payee for (Beneficiary Name)
ex: Jane Doe, Rep Payee for John Doe
New Account Documentation
Account Card (in the Account Designations section: (1) select the
Other Box and type in Representative Payee Account)
Account Card signed by Representative Payee as stated above
Change Required
Documentation
With a new Award Letter (not a Petition Letter) from the Social
Security Administration or a copy of a paper check if not direct
deposit; Account Change Card (in the Account Designations section:
(1) select the Other Box and type in Representative Payee Account)
Account Change Card signed by Representative Payee as stated
above.
In the event of Death
of the Beneficiary:
A death certificate for the Beneficiary is required. Add a
comment to the account as follows:
Beneficiary Name DECEASED 01.01.11 (actual date of death)
The responsibilities of the Rep Payee will cease and account will
then be converted to an Estate Account with additional court
documentation.
of the Representative Payee:
A new Award Letter (not a Petition Letter) from the Social
Security Administration naming the new Representative Payee.
Products & Services
A Representative Payee account is eligible for a draft account; but
not a debit card, VISA or loans. Checks would be ordered as
follows:
(Rep Payee Name)
Representative Payee for (Beneficiary Name)
Address Information
ex: Jane Doe
Representative Payee for John Doe
102 Main St.
Anywhere, USA 12345
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Special Relationship Accounts
A Power of Attorney (POA) is an individual who has legal authority to act on another person’s
behalf. Power of Attorney authorizes a person to act on behalf of the owner of the account,
allowing them the ability to do anything (unless stated differently in the POA documentation) the
owner can do, including make withdrawals or closing the account. Power of Attorney ceases at
the death of the individual who has granted authority for another to act on their behalf.
Executing a Power of Attorney does not mean that the member can no longer make decisions; it
just means that another person can act for the member also. The member is simply sharing their
power with someone else. The member can revoke the agents’ authority under the Power of
Attorney at any time he/she becomes dissatisfied with what they are doing.
A Power of Attorney is authorized to only conduct business on an individual/joint account; not
on a fiduciary account (Trust, Custodian, Guardian, etc) unless it is specifically permitted in the
legal documentation.
Note: Military POA – It is common for an individual in active military service to authorize
certain actions on his/her behalf. In most instances a “special” POA is used and provides very
specific, but limited, powers. A typical Military POA will have a limited term of one year. The
designated POA will have the expiration date placed in the name record and a comment will be
placed on the account indicating the POA expiration date (ex: designated POA name expires on
00/00/0000).
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Special Relationship Accounts
The Primary / Joint Member
Names on the Account are the
Account Owner(s)
Authorized Individual
(aka Agent)
Able to Transact on Account
Legal Documentation
Power of Attorney
The person authorizing another individual to transact on their behalf
Note: If a Military POA the name record of the designated POA must
be set to expire on the date authority stops and a comment must be
placed (POA name stops on 00/00/0000).
The named Power of Attorney (title in the Name Type field)
NOTE: POA always ceases at death
The POA cannot use the account for personal transactions.
Member or Power of Attorney
POA Designation – must authorize Power of Attorney over financial
transactions
Account Type
Individual or Joint Account
The Power of Attorney does not have rights to account proceeds in
the event of death of the person they are Power of Attorney over
SS#/Tax ID
Use the Primary Members
Account Beneficiary
Is named by the account owners
Signature
(Member authorizing POA)
By (POA) as attorney in fact
ex: John Doe
By Jane Doe as attorney in fact
New Account Documentation
Account Card (in the Account Designations section: (1) select the
Other Box and type in Power or Attorney followed by named
individual)
Account Card signed by Member* and/or Power of Attorney as
stated above
Change Required
Documentation
New Power of Attorney Designation; Account Change Card (in the
Account Designations section: (1) select the Other Box and type in
Representative Payee Account)
Account Change Card signed by Member* and/or Power of Attorney
as stated above
In the event of Death
Power of Attorney ceases at the death of the member who has
granted authority for another to act on their behalf.
No restrictions on products and services. A POA cannot initiate
and sign for a VISA or lending if not specifically stated in the
POA agreement.
*If possible you should get a notarized signature at a minimum; even if it consists of their ‘mark’
Products & Services
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Special Relationship Accounts
Guardian & Conservators
Guardians & Conservators are individuals appointed by a court to assume responsibility for
another person’s care and/or finances. A Ward (a minor child or adult) is the person under the
care of a Guardian or Conservator.
Guardians are involuntarily appointed by the court; one person may be appointed to manage the
Wards financial matters and another person may be appointed to manage medical decisions.
Most Guardianships are established because of a developmental disability usually from birth.
Conservators are appointed upon the request of the Ward to manage their finances. Lending or
pledging of shares must have special court approval. Most Conservators are established because
of a physical/metal disability or due to old age.
Guardian & Conservator
The funds on deposit are for
the benefit of the Primary
Name on the Account
Ward – the person that is entitled to or who the money in the account
belongs to. The Ward cannot transact on the account including but
not limited to: cash checks, withdraw funds, transfer funds and make
changes to the account.
The Responsible Individual;
the Guardian or Conservator is
the only one able to Transact
on the Account
Responsible Individual (title in the Name Type field) – the authorized
signer on the account. The Guardian or Conservator is the only
person who can manage the funds in the account; as long as the Ward
is still living. The Guardian or Conservator cannot use the account
for personal transactions.
Create a Comment at the Account Level to display every access as
follows: (Guardian/Conservator Name), Guardian/Conservator
ex: Jane Doe, Guardian
Legal Documentation
Court Appointed Letter of Guardianship or Conservatorship (a
Petition for Appointment of Guardianship or Conservatorship is not
acceptable)
Account Type
Individual Account
SS#/Tax ID
Use the Ward’s Social Security Number
Account Beneficiary
Signature
The Estate of the Ward
(Ward Name) by (Guardian/Conservator Name), Guardian/Conservator
ex: John Doe by Jane Doe, Guardian
(Guardian/Conservator Name), Guardian/Conservator for (Ward Name)
ex: Jane Doe, Guardian for John Doe
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Special Relationship Accounts
Guardian & Conservator
New Account Documentation
Account Card (in the Account Designations section: (1) select the
Other Box and type in Guardian/Conservator Account)
Account Card signed by Guardian/Conservator as stated above
Change Required
Documentation
In the event of Death
With a new Court Appointed Letter of Guardianship or
Conservatorship (not a Petition Letter); Account Change Card (in the
Account Designations section: (1) select the Other Box and type in
Guardian/Conservator Account)
Account Change Card signed by Guardian/Conservator as stated
above
of the Ward:
A death certificate for the Ward is required. Add a comment to
the account as follows:
Ward Name DECEASED 01.01.11 (actual date of death)
The responsibilities of the Guardian/Conservator will cease and
account will then be converted to an Estate Account with
additional court documentation.
of the Guardian/Conservator:
A new Court Appointed Letter of Guardianship or
Conservatorship (not a Petition Letter)
Products & Services
A Guardian or Conservator account is eligible for a draft account; but
not a debit card, VISA or loans. Checks would be ordered as
follows:
(Guardian/Conservator Name)
Guardian (Conservator for (Ward Name)
Address Information
ex: Jane Doe
Guardian for John Doe
102 Main St.
Anywhere, USA 12345
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Special Relationship Accounts
An Estate Account has a court appointed Executor/Personal Representative that administers
and disperses a deceased member’s estate. A new account must be established using a Tax ID
(www.irs.gov); you cannot just complete a W9 and add the information to an existing
membership.
The Executor/Personal Rep will act on behalf of the deceased primary member and has authority
over the funds on deposit. If there is a joint owner; the joint owner and the Executor/Personal
Rep have equal rights to the funds on deposit. Once we are notified all funds that indicate
Payable on Deposit (POD) to someone specific must be paid out to the named person(s). We will
attempt to contact the listed account Beneficiary (ies) for funds to be paid out to the
Executor/Personal Rep. If the Beneficiary (ies) object funds will be made payable to the
Beneficiary (ies).
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Special Relationship Accounts
Estate Account
The funds on deposit belonged
to the deceased Primary Name
on the Account
The Responsible Individual;
the Executor is the only one
able to Transact on the
Account
Deceased Member
Account will be titled: Estate of (deceased individual name)
Responsible Individual (title in the Name Type field) – the authorized
signer on the account. The Executor/Personal Rep is the only
person who can manage the funds in the account. The
Executor/Personal Rep cannot use the account for personal
transactions.
Create a Comment at the Account Level to display every access as
follows: (Executor Name), Executor
ex: Jane Doe, Executor
Legal Documentation
Death Certificate and A Court Order showing who has been
appointed as Executor/Personal Rep
SS#/Tax ID
Tax ID
Signature
(Executor Name), Executor for the Estate of (Deceased Name)
ex: Jane Doe, Executor for the Estate of John Doe
New Account Documentation
Account Card (in the Account Designations section: (1) select the
Other Box and type in Estate Account)
Account Card signed by Executor/Personal Rep as stated above
Change Required
Documentation
A new Court order; Account Change Card (in the Account
Designations section: (1) select the Other Box and type in Estate
Account)
Account Change Card signed by Executor/Personal Rep as stated
above
Products & Services
An Executor account is eligible for a draft account; but not a debit
card or loans. Checks would be ordered as follows:
(Executor Name)
Executor for the Estate of (Deceased Name)
Address Information
ex: Jane Doe
Executor for the Estate of John Doe
102 Main St.
Anywhere, USA 12345
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Special Relationship Accounts
A Club/Association is also known as an entity. An entity is something that has a distinct,
separate existence; for example an organization, area chamber or volunteer association. The
club/association elects officials, authorized signers, who are responsible for handling the
financial matters for the club/association.
The Primary Name on the
Account is the club, or
association
Authorized Signer(s)
Able to Transact on Account
Legal Documentation
Clubs & Associations
The entity that the funds on deposit belong to.
The named Authorized Signer(s) (title in the Name Type field) who are
appointed to transact on behalf of the club or association. The
Authorized Signer(s) cannot use the account for personal
transactions.
The Authorized Signer  the account documentation will indicate
the number of signers required for each transaction
Tax ID issued in the club or associations name and a copy of the
meeting minutes where officials were elected to represent the entity.
Account Type
Organizational
SS#/Tax ID
Tax ID assigned to the club or association
Account Beneficiary
None, the account will continue with new Authorized Signers unless
it is terminated.
Signature
Authorized Signers will not use any specific format
New Account Documentation
Account Card (in the Account Designations section: (1) select the
Other Box and type in Club/Association and mark the box see
Account Authorization Card) and complete the Authorization
Designation Card (in the Form of Organization section mark the
Association/Club box on the second page be sure to indicate the
number of authorized signers needed to conduct transitions)
Account Card and Authorization Designation Card signed by
Authorized Signers opening the account.
Change Required
Documentation
An Authorization Designation card signed by all elected officials
along with the Meeting Minutes declaring newly elected officials.
Products & Services
Eligible for most products and services unless the account must have
two signers; see Loan and Service Pro Manager or Supervisor if a
request is made. Checks would be ordered as follows:
(Club or Association Name)
Address Information*
Note: You do not have to identify the Authorized Signers*
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Special Relationship Accounts
A Trust is a legal entity that is able to own property and other assets. It is established by a legal
agreement defining how assets are going to be managed and distributed. Property can legally be
transferred into the trust and have the trust own it. Different trusts have different types of classifications in
the law and for tax purposes. Trusts come in a variety of forms. The two major categories are Revocable
Trusts and Irrevocable Trusts.
Revocable Trust: A Revocable Living Trust (also known as a Family Trust or Living Trust) is used
primarily to avoid probate, reduce estate taxes, preserve your privacy and manage your financial affairs.
A Revocable Living Trust is established while you are living. It is revocable, so you are able to make
changes whenever you want, as well as reclaim the property transferred into it. It describes how your
property should be managed while you are alive, and how it should be distributed upon your death. The
successor trustee(s) the person(s) you appoint to handle the trust after your death simply transfer
ownership to the beneficiaries you name in the trust. It is often called a Family Trust.
Avoiding Probate and Protecting Privacy with a Trust:
Normally, if a person without a trust passes, there must be a probate process to determine how to distribute
all of the property held solely in the deceased’s name. A will can help the probate court to determine where the
property should go, but does not avoid the probate process. One primary purpose of probate is to validate the
“last will” if one exists. Probate is a public procedure and opens up an estate’s distribution to the public’s eye.
When you have correctly set up and used a Revocable Living Trust, upon your death there will be no probate
process. This is because the owner of the property (the Trust) did not die; just the person in the role of the
grantor (you) and most likely the trustee (usually you while you are alive).
Irrevocable Trust: An Irrevocable Trust is a trust that once established, cannot be revoked, terminated or
changed in any way. This means that upon transferring assets into an irrevocable trust, the grantor can
reserve no right to amend or abolish irrevocable trust proceeds. Furthermore, the grantor of an irrevocable
trust is not permitted to make withdrawals from the trust principle. In some cases changes can be made to
an irrevocable trust account upon consent of a beneficiary. PFCU will not establish Irrevocable Trust
accounts.
NOTE: A trust never dies. All of the provisions of a trust are only effective at the time of death and do not
have any effect on their account at PFCU while all the trustee(s) are living. When all the trustee(s) have passed
the account does not have to be closed, the successor trustee(s) will manage the account and pay out to any
beneficiary (ies) as stated in the trust. The information contained in the trust account is not our responsibility;
the responsibility belongs to the trustee(s) and the parties drawing up the trust. If any information contained in
the trust changes it is the trustee(s) responsibility to contact the credit union.
Trust Roles
One person (the “grantor”) gives up property or “grants” property to another person (the “trustee”), who
is “trusted” by the grantor. The trustee is trusted to take care of the property and use the property, not for
himself, but for the “benefit” of a third person (the beneficiary). The terms “trustee” and “beneficiary” are
standard in every trust. The term “grantor” is often times replaced by “settler”, “creator” or “trustor”.
Often times, one person takes on more than one role in the trust. In a revocable living trust the same
person will probably be the grantor, the trustee and the beneficiary all at the same time.
The trust document tells the trustee what he or she is suppose to do with the property, and the trustee is
bound by law to follow the exact instructions given by the trust. The trustee is bound by a “fiduciary
duty” to handle the property exactly as the trust directs.
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Special Relationship Accounts
Trust Terminology
Trustor/Grantor
The individual(s)
who set up the
trust converting
personal assets to
trust assets
Trustee
The person(s)
named by the
Trustor to manage
trust assets. The
trustor may name
himself as trustee
Revocable or
Irrevocable
Trust
Beneficiary
The named
person(s) named
by the Trustor to
receive trust funds
and property once
the Trustor passes
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Successor Trustee
The person(s) who
succeeds the
trustee(s) upon his
death, resignation
or inability to act
as the trustee
Special Relationship Accounts
Membership Requirements
Credit unions can generally only serve members. Therefore, an individual or other entity (such as a trust)
must become a member before it can receive services from the credit union. If a member wishes for a
trust to receive services, such as being able to open a draft account, the trust must also become a member
of the credit union. The people, not the trust its self must qualify for membership.
NOTE: Once all the original trustees of a Revocable Trust pass the trust becomes an Irrevocable Trust.
PFCU will establish a new account for Revocable Trusts.
Federally Insured Credit Unions (PFCU): For a revocable trust to join a Michigan federally chartered
credit union, it must either (1) be specifically be named in the credit union’s field of membership or (2) be
an organization of such persons the credit union has elected to include in its field of membership. For
federal credit union membership purposed, a trust qualifies as “an organization of such persons” if it is
composed exclusively of such persons. Such persons: a trust is composed of its trustors, trustees and
beneficiaries. Note NOT all of the persons must actually be members, but they must be eligible for
membership.
State Insured Credit Unions: For a revocable trust to join a Michigan state chartered credit union, at least
one of the parties to the trust must be a member.
NOTE: Credit union membership is not transferable and the trustor membership criteria must be
met
Q. Can a trust have an account at the credit union?
A. Yes, provided that it meets the eligibility requirements related to the trustors, trustees and
beneficiaries.
Q. Can members retitle or transfer their accounts to a living trust?
A. No. The membership requirements for credit unions state that member accounts cannot be retitled.
This contrasts with banks, which can retitle accounts because they do not need to be concerned with
membership and eligibility for service.
Q. Who can transact day to day business on a trust account?
A. The named trustee(s) in the trust agreement are the only ones allowed to transact business. Successor
trustee(s) transact business only when the original trustee(s) are no longer able to conduct business and
the trust becomes irrevocable.
Q. Can a trust be named as beneficiary on an account?
A. Yes. You should get the Certificate of Trust, Abstract of Trust, Memorandum of Trust or letter from
the trustor(s) attorney which tells who the trustor(s), trustee(s), successor trustee(s) and beneficiary (ies)
are, including the name of the trust and date the trust was established at the time of beneficiary
designation to help facilitate in the death of the account owner(s). (how account is handled upon death of
primary and/or all joint owners is found on page 21)
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Special Relationship Accounts
Key Items to Remember About Trust Accounts:
 The credit union is not setting up the trust; we are only setting up an account to hold the funds
belonging to the trust.
 All trust accounts are individual accounts.
 The trust is the account owner (member), not the trustee(s).
 When setting up a trust account you will use the Living Trust Account Card not the standard
Membership Card.
 All trustee(s) labeled in the original trust agreement will have access to the account funds unless
an amendment to the original trust agreement is made changing the trustee(s). We cannot just
remove a trustee.
 If changes need to be made, it is recommended that a new Living Trust Account Card is
completed.
 The trust must obtain and use a TIN. A trust may be set up under the trustor(s) social security
number only if: The same person is both the trustor(s) and trustee(s). OR The member and
spouse are trustees, one (1) or both is a trustee and one (1) or both may revoke the trust.
What is needed to Open a Revocable Trust Account?
 Trust membership eligibility must be established with its own account number
 Certificate of Trust, Abstract of Trust, Memorandum of Trust or letter from the trustor(s) attorney
which tells who the trustor(s), trustee(s), and successor trustee(s) are, including the name of the
trust, date the trust was established and how many trustees it takes to transact business. Do not
take a copy of the original Trust agreement; a copy on file could possibly hold the credit union
liable if non-permissible activity (ies) occur. If the trustor does not want the beneficiary (ies)
listed on the membership agreement put “See Trust” where beneficiary (ies) is to be listed. The
Certificate of Trust, Abstract of Trust, Memorandum of Trust or letter from attorney is to be
scanned with the Living Trust Account Card (Membership Card) once complete.
 OFAC the trustor(s), trustee(s) and beneficiary(ies) before account opening unless they are
PRIMARY members on an established account
 At the Account Level the Account Type will be Revocable Trust
 For tax reporting purposes so not to cause a name & Social Security/Federal ID Number
mismatch at the Name Prime:
 If using a Social Security Number (example on page 27):
1. At the Name Prime level type in the first Trustees name (leave the title and suffix
fields blank). For example if Gerald J Spitzley is a Trustee: Gerald (first name
field) J (middle name field) and Spitzley (last name field)
2. At the Name Prime level (mailing only, etc.) in the Extra Address field type in
the name of the Trust so that it will print on all mailings to the member.
 If using a Federal Tax ID (example on page 30):
1. At the Name Prime change the Name Format to Non Individual.
2. In the Non Indiv Name field type in the Trust name. For example if it is the Janet
C. Fedewa Trust;in the Non Indiv Name field enter Janet C. Fedewa Trust. Make
sure to change the SSN/TIN Type to Organization EIN.
 Add all remaining trustees at the Account Level as Trustees; do not put them in the system as
joint owners. Do not add successor trustee(s) to the system, the successor trustee(s) can not
transact on the account until all trustee(s) are deceased, become incapacitated or relinquish the
authority in a trust addendum.
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Special Relationship Accounts
 If using a Social Security Number or a Federal Tax ID add one comment to the account:
 Comment: make the comment type display at every access and in the Comment field put
in the date the trust was established using all / no decimals or dashes Ex: U/D/A 01/06/08
(use 2 digits for month/date/year)
 Give the trustee(s) a copy of the Living Trust Account Card and all disclosures
Q. Why do we need to list the beneficiaries on the Trust Membership Agreement?
A. The benefit of having the beneficiaries listed on the trust card is for NCUA Share Insurance purposes.
See page 20 for specifics regarding NCUA Share Insurance
Trust Abbreviations
Trust Words
Abbreviation
under dated agreement
U/D/A
Living
L
Family
F
Revocable
R
Irrevocable (do not open new account that is Irrevocable)
I
Testimonial
T
Trust
Tr
Ex: L/R/Tr = Living Revocable Trust
Account Relationships
Relationship to Acct, not Member
Trustee
Trust
Trustee
Successor Trustee (after their last name)
Trust
SCTRE
*only after all trustee(s) have passed are the successor trustee(s) put in the system
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Special Relationship Accounts
Trust Membership Card
Card Front
NOTE: Indicate somewhere on the card if the trust is Revocable or Irrevocable
 Account Type: this section documents the account type(s) being established and the share ID assigned to
each of the accounts.
 Living Trust Membership: this section documents the information pertinent to the trust.
◊ Member No: The base # for the trust without suffixes or letters that identify a specific account type
◊ Account Title: The trust title according to the certificate of trust
◊ Input contact information for the trust: statement mailing address and phone number(s)
◊ SSN/TIN: tax identification number of the dividend payee (NOTE: if a TIN is used the Trust cannot be
garnished)
◊ Password: Security word
 Trustee Information: this section documents information pertinent to the trustee(s).
◊ Trustee: the name of the trustee as designated by the trust agreement
◊ Date of Birth: birth date of trustee
◊ Eligibility for Membership: trustee’s membership eligibility
◊ SSN: trustee Social Security number
◊ Driver’s Lic. No.: drivers license number of the trustee
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 Grantor Information: this section documents information pertinent to the grantor(s)/trustor(s). Document
the name of the trustor(s) and indicate if the trustor(s) are the same as the trustee(s). If the trustor(s) are
different than the trustee(s), then document the membership eligibility of the trustor(s).
 Successor Trustee(s): if there are successor trustee(s) indicate names in this section
Beneficiary Information: If the beneficiary (ies) have been named for the account, provide the appropriate
information in this section including the relationship to the trustor(s) for NCUA share insurance purposes. For
a revocable trust membership eligibility does not have to be established for the beneficiary (ies).
 Account Services: complete this section based on the additional services the trustee(s) elect
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Card Back
 TIN Certification and Backup Withholding Information: This certification is drafted to confirm that the
dividend payee is subject to backup withholding unless otherwise indicated. If the trust is not subject to backup
withholding, nothing in the section should be marked. If the trust has received notification that it is subject to
backup withholding, the trustee should cross off item 2b.
 Trustee Certifications: the trustee(s) certify that they are authorized by the trust agreement to establish
accounts and conduct transactions on behalf of the trust. The trustee(s) also certify that any one (1) trustee will
act in a fiduciary capacity for all trustees. When they sign in the “Agreement and Authorization” section, the
trustees are certifying that this section is true and accurate.
 Agreement and Authorization: this section indemnifies the credit union and acknowledges receipt, by the
trustee(s) of the required account disclosures. By signing the section, the trustee(s) are agreeing to everything
mentioned. Prior to signing the document, they must receive a membership agreement, Truth-in-Savings
Disclosure, Privacy Notice Disclosure and all other applicable disclosures based on services provided at the
time of account opening.
Trustee Signature/Date: the trustee(s) will sign in this space and fill in the current date.
 For Credit Union Use Only: the member service representative will initial in the Opened/App’d by
section, date in the Date of Membership section and in the Member Verification section the member service
representative will indicate OFACed
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Credit Union Services
Credit union services offered to a trust are identical to those offered to a non-trust account with the
following exceptions:
 ATM/Debit Cards: If the trust document stipulates that “All trustees must sign for withdrawals”
than ATM/Debit card privileges’ are not permissible. If a card is issued the credit union would be
taking on additional risk and would have a difficult time holding the trustee(s) accountable for
problems that result from the trust transacting business via an ATM/Debit card. If the trust does
permit withdrawals without a signature have the trustee(s) sign the application indicating so.
 Finance Central: Trust accounts will be able to have finance central. If the trust document
stipulates that “All trustees must sign for withdrawals” than Finance Central and Bill Central
privileges’ are not permissible.
 IRAs: Trusts are not permitted to own IRAs. An IRA can only be owned by a person. It is
permissible for the trust to be the beneficiary of an IRA
 Lending: The trust agreement should clearly indicate who must authorize borrowing activity and
has the ability to pledge assets; the trustee will provide us with the information to review, but do
not keep a copy. The power to “borrow” does not automatically include the power to “guarantee”
or to pledge assets to debts owed by or incurred for the benefit of another. It will be best practice
of PFCU loan officers to issue loans to members with a trust account on a personal membership
basis. If the trustee(s) want the loan issued under the trust account documentation provided must
be reviewed by the Loan Manager, Assistant Loan Manager, CEO, Executive VP or Compliance
Officer before the loan is approved and issued. If a loan is issued under a trust account the
trustee(s) will sign for the loan and then personally guarantee the loan.
For example: John Doe, trustee for the Doe Revocable Living Trust
John Doe
The Trustee must Guarantee the loan (make sure to add the name pledge), print and complete the
Guarantee Agreement form. If security is being used verify that the security is in the Trust or owned
personally by the member. If owned personally the member must sign as owner of the collateral.
 NCUA Share Insurance: see the next page
 Safety Deposit Boxes: Are allowed to be issued under a trust account if the trust document
contains the appropriate authority to enter into a safe deposit box contract.
 Share Certificate: There is not a problem permitting a trust to own a share certificate or CD. The
share certificate will simply reflect the name of the trust as owner. A trust CD cannot have a
beneficiary listed on it; the beneficiary is identical to the one listed in the Trust Documentation.
For example: John Doe Revocable Trust
Dated (date trust was signed)
Include the trusts social security number or Tax ID# for positive identification of the trust the
certificate belongs to on the share certificate
 Share Draft: There may be an issue of the trusts name being printed on the drafts instead to the
name of the trustee(s) may cause a problem of acceptance for personal debt payment. Have the
member sign the draft order form indicating to imprint the drafts with the names trustee(s).
 The PLAN: A trust account cannot have a PLAN
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NCUA Share Insurance
The NCUSIF (National Credit Union Share Insurance Fund) provides separate coverage for both
revocable and irrevocable trusts.
Revocable Trust Accounts: May qualify for insurance coverage of up to $250,000* per beneficiary
named by the owner that is separate from the individual coverage available to the trust owner. For
example, if a person with a revocable trust for $300,000 names a spouse and two children as beneficiaries,
the entire $300,000 would have separate NCUSIF coverage ($250,000* per beneficiary). This coverage is
separate from the coverage provided to other types of accounts held by the trust’s owner at the same
federally insured credit union.
Two basic documentation standards must be followed in order for revocable trust accounts to be
separately insured:**
1. The account title must clearly indicate that the owner intends to create a revocable trust. The
words “in trust for” (ITF) or “pay upon death” (POD) or some similar designation must be
included in the account title.
2. The trust signature card or some other record within the institution must indicate who the
beneficiary (ies) are so they can be identified. If possible record an address and relationship to the
owner.
Irrevocable Trust Accounts: Funds placed in an account by a trustee under an irrevocable trust have
separate coverage based on the beneficial interest under such trust. The interest of each beneficiary in an
account(s) established as an irrevocable trust has separate NCUSIF coverage of $250,000*. In cases
where a beneficiary has an interest in more than one trust arrangement created by the same owner, the
interests of the beneficiary in all accounts established under such trusts are added together for insurance
purposes and insured for a total of $250,000* that is separate from and in addition to the coverage the
NCUSIF provides other types of accounts.
NCUA Share Insurance Estimator: NCUA has a Share Insurance Estimator on its website to help
members better understand the protection offered by the NCUSIF. This interactive site allows users to
input hypothetical data to compute the amount of NCUSIF coverage available under different account
structure scenarios. This resource is available at the link http://webapps.ncua.gov/ins/.
*Permanent increase from $100,000 due to the passage of the Emergency Economic Stabilization Act of
2008 released October 3, 2008; protection is increased on all types of accounts in 2009.
**Effective October 3, 2008 the NCUA Board adopted changes to simplify coverage available on living
trust accounts. Applying to existing and future revocable trust accounts at all federally insured credit
unions, the rule change eliminates the concept of qualifying beneficiaries, coverage is based on the
naming of virtually any beneficiary. Previously beneficiaries had to qualify as immediate family; each
beneficiary was to be the owner’s spouse, child, grandchild, parent or sibling to qualify for NCUA Share
Insurance coverage.
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Trust Account Closing Procedures
A trustee(s) can close an account at any time.
Closing the Entire Account or a Suffix(s)
 If there is more than one signature required for withdrawals all required signatures are
mandatory for account closing.
 If there are any loans issued under the account they must be paid-in-full or the 0001 share ID
must remain open with a minimum of $5
 If there was payroll being direct deposited make sure it has stopped coming in before the account
is closed. If it continues to be directed to this account once the account is closed it will be
returned to the payroll company ‘account closed’
 If automatic transfers or ACH transactions are deducted from the account make sure they have
stopped or they will be returned ‘account closed’ causing possible fees for the member. Some
insurances come out once a year or quarterly as a courtesy check the history
 Before a draft account is closed make sure all drafts have cleared and there are no more
transactions scheduled to debit or credit to the account. Drafts that come in after the account is
closed will be returned. Complete a Voluntary Draft Closing Notice and save in Imaging with the
draft account agreement
 If the account is closed all CDs must be payed out subject to penalties
 ATM or Debit Card: complete a Plastic Change Card and place in Imaging
 VISA: contact the VISA department to make sure the balance is zero or to find out the balance
payoff and complete a Plastic Change Card and place in Imaging.
 Finance Central: under the Preference Record in the account tree remove the HB User Name
and HB Password fields
 e*Statements &/or Bill Central: contact the IT Dept
 Close the account in the system making sure to put in the reason why the account was
closed (moved from area, needed funds, etcetera). The Marketing Dept tracks monthly why
accounts are closed and reports the findings to the Board of Directors.
How is the account handled when the Trustee(s) are deceased?
Upon the death of the trustee(s), the assets in the trust will be controlled by the successor trustee(s). The
successor trustee(s) have the responsibility of disbursing the trust assets to the named beneficiary (ies)
and performing any other duties identified in the trust agreement or specified by law.
The main concern of the credit union is that the funds in the account are paid to the true successor
trustee(s). The identity of any person claiming to be the successor trustee(s) must be verified. In addition,
the death certificate that the successor trustee(s) present must also be verified.
Tellers that are approached by individuals claiming to be the successor trustee(s) of a member’s revocable
trust should immediately contact the Loans/Member Service Manager or Loans/Member Service
Assistant Manager. The Manager or Assistant Manager can then proceed with verification procedures,
which may involve contacting the member’s attorney, the credit union’s attorney, or both.
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The following items summarize the procedure to follow before paying out funds to any person(s)
claiming to be the successor trustee(s):
1. Employee contacts Loan/Member Service Manager or Assistant Manager to alert him/her to the
claim of the successor trustee(s)
2. Manager or Assistant Manager will look up the file on Imaging
3. Manager or Assistant Manager matches the name(s) of the person(s) claiming to the successor
trustee(s) to the name(s) that appears on the trust document, certification of trust, memorandum of
trust, abstract of trust or letter from the attorney.
4. If name(s) match the Manager or Assistant Manager will verify that the identification of the
successor trustee(s) is valid NOTE: If the name does not match, the Manager or Assistant
Manager is advised to contact the attorney listed on the Certificate of Trust or letter as well as the
credit union’s attorney. Proceed upon the advice of contacted counsel. It is recommended that the
credit union obtain the counsel’s instructions in writing.
5. The Manager or Assistant Manager verifies the validity of the death certificate presented.
6. If the trust is to be closed move to step 7, closing procedures can be found on page 23. If the trust
will remain open and after the successor trustee(s) is identified the following steps will occur:
If the Trust has a Social Security Number:
 The successor trustee(s) will get a Federal Tax ID if the account was not established with
one. (www.irs.gov)
 OFAC all successor trustee(s) if they are not a PRIMARY member on an established
account at PFCU.
 If the deceased Trustees name is located at the Name Prime level duplicate and place at
the secondary level as a Trustee; place a Death Date and Expiration Date in the Name
Record.
 In the Name Prime field change the Name Format to Non Individual and enter the name
of the Trust in the Non Indiv Name field. Change the Social Security Number to the
Federal Tax ID number and change the SSN/TIN Type to Organization EIN.
 Add the successor trustee(s) placing the abbreviation SCTRE after their last name in the
last name field and change the Name Type to Trustee.
 Complete a new Living Trust Account Card.
If the Trust has a Federal Tax ID:
 OFAC all successor trustee(s) if they are not a PRIMARY member on an established
account at PFCU.
 Place a Death Date and Expiration Date in the deceased Trustees Name Record.
 Add the successor trustee(s) placing the abbreviation SCTRE after their last name in the
last name field and change the Name Type to Trustee.
 Complete a new Living Trust Account Card.
7. The Manager or Assistant Manager authorizes the pay out of funds.
NOTE: Trusts holding large sums of money may be reviewed by the credit unions attorney
before funds are paid out. There is no specific dollar amount determined by PFCU that must be
reviewed by the credit unions attorney we will determine on a case-by-case basis.
The above stated steps do not have to be completed on the same day. The credit union may need time to
verify the death certificate presented, as well as other items. Payout of funds from the trust account does
not have to be immediate; the account can remain open until all matters concerning the trust are resolved.
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Record Retention: Upon paying out the funds from a trust account, the credit union must retain the
records used to establish the account for an indefinite time period. It is important for the records to be
kept in case the credit union is sued or challenged for distributing trust proceeds improperly. It is
recommended that the Living Trust Account card, Certification of Trust or attorney’s letter used to
establish the account and any other related information be stored in a reliable source.
Q. Does the name of the trust change upon the death of all trustee(s)?
A. No. The trust remains the same entity that it was before the passing of the trustee(s). The only change
is that it is the successor trustee(s) responsibility to manage and pay out all funds to the beneficiary (ies).
Deceased Trustee Procedures
NOTE: The name of the trust never changes
NOTE: If the deceased trustee has a separate account w/ IRA funds where the trust is the
beneficiary payout IRA funds to the trust account
Primary or Joint Trustee Deceased
 If the deceased Trustee is the Primary member add their information as a secondary record. (only if
using Social Security Numbers)
 Within the deceased Trustees Name Record input the Death Date and an Expiration Date.(if using
Social Security Number or Tax ID Number)
 The remaining trustees name will be placed in the Name Prime Record in the system with their
social security number so the taxpayer identification number matches for tax reporting purposes. (only
if using Social Security Numbers)
 Scan a copy of the death certificate into Imaging
 If the member was requested to bring in a Certified copy of the death certificate forward it to
collections for claim processing
 If there are loans with life insurance collections will process the claim
 If the deceased was a recipient of Social Security and passed before the end of the month their next
Social Security payment will be debited back out of the account and re-credited with a prorated
payment
 If the deceased has bonds with a beneficiary listed, the beneficiary can redeem with a copy of the
death certificate. The beneficiary will sign their name with POD after (payable upon death)
ex: Joe Member POD
 Close the deceased trustees ATM or Debit Card
 Close the deceased trustees VISA
 Check all accounts that the deceased trustee as joint on to make sure there name will no longer print
on monthly statements.
All Trustees Deceased – Account Remaining Open
 The Successor Trustees must apply for a Federal Tax ID (www.irs.gov) if the account will not be
paid out by the end of the year. Complete a W9 form having the successor trustee sign and update the
system with the Tax ID number changing the SSN/TIN Type to Organization EIN.
 Duplicate a Name Record for the deceased Trustee. Within the deceased Trustees Name Record input
the Death date and an Expiration Date.
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In the Name Prime Field change the Name Format to Non Individual and place the Trust Name in the Non
Indiv Name field in the system so the Taxpayer ID matches the name.
 When we receive a copy of the death certificate scan into Imaging
 Follow step 6 on page 22 to add successor trustee(s) to the account
 If the member was requested to bring in a Certified copy of the death certificate forward it to
collections for claim processing
 If there are loans with life insurance collections will process the claim
 Collections will check for Life Savings insurance on the account
 If the deceased was a recipient of Social Security and passed before the end of the month their next
Social Security payment will be debited back out of the account and re-credited with a prorated
payment
 If automatic transfers or ACH transactions will continue notify successor trustees of current
payments debiting account. Look for yearly and quarterly debits also
 Before the draft account is closed make sure all drafts have cleared and there are no more
transactions scheduled to debit or credit to the account
 Any CDs on the deceased Trust account will remain opened unless the account will be closed. CDs
will be redeemed without penalty
 If the deceased has bonds with a beneficiary listed, the beneficiary can redeem with a copy of the
death certificate. The beneficiary will sign their name with POD after (payable upon death) ex: Joe
Member POD
 Close the deceased trustees ATM or Debit Card
 Close the deceased trustees VISA
 If the successor trustee will use Finance Central set up or reset the HB Password so they can access
 If the account has Bill Central contact IT to close
 If the successor trustee will use LUCY reset to change the PIN
 Check all accounts that the deceased member was joint on to make sure there name will no longer
print on monthly statements.
 Update the address, phone number and additional information of the successor trustee who will be
receiving all account information. Update the e-mail address if receiving e*statements. Sign up for
e*statements if prefers.
All Trustees Deceased – Account Closing
 Within the deceased Trustees Name Record input the Death Date; only add an Expiration Date if it is
not the Primary Name Record
 When we receive a copy of the death certificate scan into Imaging
 Follow step 6 on page 22 to add successor trustee(s) to the account if necessary until the account is
closed
 The Successor Trustees must apply for a Federal Tax ID (www.irs.gov) if the account will not be
paid out by the end of the year. Complete a W9 form having the successor trustee sign and update the
system with the Tax ID number changing the SSN/TIN Type to Organization EIN. Duplicate a Name
Record for the deceased Trustee. Within the deceased Trustees Name Record input the Death date and
an Expiration Date. In the Name Prime Field change the Name Format to Non Individual and place
the Trust Name in the Non Indiv Name field in the system so the Taxpayer ID matches the name.
 If the member was requested to bring in a Certified copy of the death certificate forward it to
collections for claim processing
 If there are loans with life insurance collections will process the claim
 Collections will check for Life Savings insurance on the account
 If the deceased was a recipient of Social Security and passed before the end of the month their next
Social Security payment will be debited back out of the account and re-credited with a prorated
payment
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 If automatic transfers or ACH transactions notify successor trustee of what is coming out so they
can stop. Look for yearly and quarterly debits also
 Before the draft account is closed make sure all drafts have cleared and there are no more
transactions scheduled to debit or credit to the account
 Any CDs on the deceased Trust account will be redeemed without penalty
 If the deceased has bonds with a beneficiary listed, the beneficiary can redeem with a copy of the






death certificate. The beneficiary will sign their name with POD after (payable upon death) ex: Joe
Member POD
Close the deceased trustees ATM or Debit Card
Close the deceased trustees VISA
Finance Central: under the Preference Record in the account tree remove the HB User Name and HB
Password fields
If the account has Bill Central contact IT to close
Check all accounts that the deceased member was joint on to make sure there name will no longer
print on monthly statements.
Update the address, phone number and additional information of the successor trustee who will be
receiving all account information. Update the e-mail address if receiving e*statements. Sign up for
e*statements if prefers.
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How is an account handled that names a Trust as the beneficiary?
If the remaining member is:
a) The primary member: Follow normal member service procedures for removing a joint owner.
Procedures can be found in the Member Services Manual. The primary member can continue
with current account unless they would like to open a trust account then follow procedures to
open. If we do not have a Certificate of Trust, Memorandum of Trust, Abstract of Trust or letter
from the attorney on file which tells who the trustor(s), trustee(s), successor trustee(s) and
beneficiary (ies) are, including the name of the trust, date the trust was established and how many
trustees it takes to transact business get a copy and scan with current or newly established
membership information.
b) The joint member: follow normal member service procedures that are found in the Member
Services Manual. The remaining joint owner can establish a new account in their primary name,
open an account in the trust name and/or move assets to an account they are primary on.
All owners deceased:
a) If we do not have a Certificate of Trust, Memorandum of Trust, Abstract of Trust or letter from
the attorney on file which tells who the trustor(s), trustee(s), successor trustee(s) and beneficiary
(ies) are, including the name of the trust, date the trust was established and how many trustees it
takes to transact business get a copy and scan with current membership information.
b) If any remaining joint owners are on the account funds will be paid out directly to them; unless
they remove themselves so that the Trust will become the account Beneficiary then the funds will
become property of the Trust.
c) If there are not any remaining joint owners funds will be paid out to the name of the Trust follow
procedures on page 23.
d) If the successor trustee(s) want to establish a Trust account at PFCU follow the new Trust account
procedures as established on page. A Federal Tax ID number must be issued before the trust
account is established. (www.irs.gov)
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Frequently Asked Questions
Q. Can joint owners be added to a trust account?
A. No. The only people authorized to transact business on a trust account are those listed in the Trust.
While living that would be the trustee(s) and upon death of the trustee(s) it would be the successor
trustee(s).
Q. Can a trust be a joint owner on an account?
A. No. Depending on the specific facts of the situation (including the state the member lives in at the time
of death), it could create problems with determining when the trust actually became the owner of the
funds. If it’s determined the trust really only gained rights at death, there may be legal consequences. This
could land the matter in Probate Court, and the credit union might end up being held responsible for
creating a variety of problems. The trust would not be actively using the account while the other party is
still alive, so using joint ownership will serve no useful purpose. The likely goal can be much better
achieved by designating the trust as the beneficiary of the account.
Q. What if a person comes into the credit union showing documents that (s)he held power of attorney
for a member who is a trustee on a credit union account owned by a trust. Can the person holding the
power of attorney make decisions regarding the trust?
A. No. A trustee cannot authorize someone else to act on behalf of the trust unless the trust document
specifically provide for such a power. Such a power would be exercised by a document relating to the
trust, such as an amendment or a designation by the trustor(s) of additional trustee(s) that references the
trust. In no event would the document used be titled as “power of attorney” and in no event could such a
document be used if it does not make specific reference to the trust.
Q. A member wants to transfer money from a business account to an account owned by a trust. Is this
allowed?
A. A business should never be allowed to transfer money to an account at the credit union that isn’t
owned by the same business. If a business issues a check payable to a trust, that check can be accepted
like any other check payable to the trust. The use of an instrument is needed to ensure a clear separation
of the identities of the two parties involved should litigation arise concerning either party (or the IRS
conduct an audit) in the future.
Q. Can a trust account be closed?
A. Yes. There are no transactional limitations; the trust account can be closed at any point by authorized
trustee(s) or successor trustee(s) if all the trustee(s) have passed.
Q. If you are living why would you establish an irrevocable trust?
A. An irrevocable trust is a separate legal entity that pays its own taxes, has its own tax return and may
decrease an individual’s tax bracket. An irrevocable trust is usually established when a person is
extremely wealthy. Funds in an irrevocable trust cannot be part of a law suit, have a lien placed against
them, be garnished, etcetera.
Q. Who will pay the funds to the beneficiary(ies) when all trustees pass?
A. The credit union will not payout funds to the beneficiary(ies); the trust will then be managed by the
successor trustee(s) who will disperse all assets according to the Trust.
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Q. How should the credit union handle a check payable to a trust that is presented to the credit union?
What if the name doesn’t exactly match the name we have on our account records?
A. Like any negotiable instrument made payable to a non-natural person, the credit union should require
the instrument to be deposited in full and not cashed. A separate instrument should be used for a
withdrawal if the trustee wants to receive cash back. The credit union should insist on a exact match
between the name of the payee as shown on the negotiable instrument and the name on the account. If
there are any discrepancies or anything about the check the credit union doesn’t understand, it should
decline to accept the item and suggest that the presenter have the check reissued with a payee name that
exactly matches the credit union records. Since many trusts have similar names, the credit union may
want to require that such a check, particularly if it is for a large amount, contain some sort of unique
identifier (such as a TIN) in addition to an exact name match.
Q. What if the question arises concerning specific features of the trust?
A. Depending on the circumstances a credit union may want to contact the attorney who drafted the trust
for written information or may want to get an opinion from its own attorney. The more money that is
involved, the more important it is that the credit union speak with its own attorney. Advice is most likely
to be needed when one of the trustors pass.
Resources:




CUNA Mutual Special Account Relationships Training & Job Aid
www.bankersonline.com
representativepayee.com
www.franklincountyohio.gov/probate/departments/guardianship
Trust Resources:




MCUL Revocable Trust training package
CUNA Mutual Group Deposit Account Documents referring to Living Trust Account Card
Wolters Kluwer compliance article (www.complianceheadquarters.com/ComplianceArticles/Deposit_072508.aspx)
CUNA & Affiliates Basic Trust & Advanced Trust webinars (2008)
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