Opening Deposit Accounts
2015
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material; however, the accuracy of this information is not guaranteed. The laws are often changed without prior notice from the government.
The publisher and the editor are not engaging in the practice of law or accounting. We are not responsible for the actions of your company's
employees.
©Gettechnical Inc.
1
Instructor
Deborah L Crawford
• Debbie is the President of Gettechnical
Inc, a Baton Rouge based training
company. Her combined banking and
training experience began in 1984 and
she is a deposit side expert. She
received her Bachelors and Masters
degrees from Louisiana State University.
• If you have any questions just call 1-800354-3051 or email us at
gettechnical@msn.com.
• You can find our state law chart at
gettechnicalinc.com under resource tab.
These resources are free and will help
you to locate your state law issues.
©Gettechnical Inc.
2
SINGLE PARTY OR
INDIVIDUAL ACCOUNTS
3
Requirements
1. Required Information on Person or
Entity
(Before opening account):
2. IRS Reporting:
3. Documentary Requirements:
(Reasonable time after opening)
Individual Accounts




Name
Address
For individuals, Date of Birth
Taxpayer identification number
U.S. Person will be Social Security number
Non U.S. Person will use passport number,
ITIN number or other acceptable
document number
Report in SSN of owner


Valid identification on owner
Signature Card signed by owner and
if have an agent the agent must sign.
4
Requirements
4. Suggested nondocument
verification:
(Reasonable time after opening)
5. Account Styling:
Individual or Single Party
A CIP program must also have
nondocumentary verification. Suggestions
include:
 Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous financial institution references
John Smith
6. Consult Government Lists:
 Section 326 List
 OFAC List
7. Insurance:
$250,000 for the individual who owns
5
Sample: Individual or Single Party
1
2
OWNERSHIP
TITLE
John Smith
Individual or Single Party
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
John Smith
SSN
6
CHECKLIST FOR INDIVIDUAL OR
SINGLE PARTY ACCOUNTS








Required information on owner
Report to IRS in SSN of owner
Valid identification on owner
Nondocumentary verification
Signature Card
Account Styling: John Smith
Account Ownership: Individual or Single Party
Government lists
7
If John Smith wants someone to sign on her account
First Option: Agent
1
2
OWNERSHIP
TITLE
John Smith
Individual or Single Party
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
John Smith Signature
SSN
Betty Smith Agent
8
JOINT ACCOUNTS OR MULTIPLE
PARTY
9
Requirements
1.
2.
3.
Required Information on
Persons Account:
(Before opening account)
Joint or Multiple Party





Name
Address
For individuals, date of birth
Taxpayer identification number
U.S. Person will be Social Security
number
 Non U.S. Person will use passport
number, ITIN number or other
acceptable document number
IRS Reporting:
Report in SSN of 1st Owner
Documentary Requirements:  Valid Identification on all owners
(Reasonable period after )
 Signature card signed by all owners
(Some signature cards permit an agent on
a joint account)
10
Requirements
Joint or Multiple Party
4. Suggested nondocument
Verification:
(Reasonable period after )
A CIP program must also have nondocumentary
verification. Suggestions include:
5. Account Styling:
John Smith or Jane Smith
(You should not have “and” in title or mixed
conjunctions in joint/multiple party ownership)
6. Consult Government Lists:
 Section 326 List
 OFAC List
7. Insurance:
$250,000 per joint owner.
8. Miscellaneous:
All joint owners must sign the contract.





Welcome letter
Call to customer to thank for business
Third party verification
Previous financial institution references
Whitepages.com
11
Two or more owners….
1
2
OWNERSHIP
TITLE
John Smith or Jane Smith
Joint or Multiple Party
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
SSN of first owner
Jane Smith
John Smith
12
Example of Joint with Agent
1
2
OWNERSHIP
TITLE
John Smith or Jane Smith
Joint or Multiple Party
WROS
WOROS
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
John’s SSN
Jane Smith
John Smith
Junior’s signature as Agent
13
CHECKLIST FOR JOINT ACCOUNTS







Required information on all owners
IRS reporting on 1st owner’s SSN
Valid identification on all owners
Nondocumentary verification
Signature Card
Account Styling: John Smith or Jane Smith
Government lists
14
TESTAMENTARY
REVOCABLE TRUST OR PAY ON
DEATH (ITF/POD) ACCOUNTS
15
Requirements
1. Required Information on Persons
Account:
(Before opening account)
2. IRS Reporting:
Testamentary Trust/POD Accounts




Name
Address
For individuals, date of birth
Taxpayer identification number
U.S. Person will be Social Security
number
 Non U.S. Person will use passport
number, ITIN number or other
acceptable document number
Report in SSN of 1st Owner
3. Documentary Requirements:

Valid identification on owners
(Reasonable period after )

Signature card signed by all owners
16
Requirements
4. Suggested nondocument
Verification:
(Reasonable period after )
5. Account Styling:
Testamentary Trust/ITF/POD Accounts
A CIP program must also have nondocumentary
verification. Suggestions include:
 Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous financial institution references
POD, ATF or ITF recommended in the account styling
or elsewhere
You must list the beneficiaries on the signature card.
John Smith or Jane Smith, ITF/POD
OR
John Smith ITF/POD Betty Smith, Sally Smith and
Tim Smith
6. Consult Government Lists:
In some states the conjunction between beneficiary
matters so it is best to list beneficiaries elsewhere in
contract if state law permits
 Section 326 List
 OFAC List
17
Requirements
Testamentary Trust/ITF/POD
Accounts
6.. Insurance:
$250,000 per owner per beneficiary.
For example:
Mom or Dad ITF/POD Child 1, Child 2
and Child 3
7. Miscellaneous:
No outside trust documents required
18
CHECKLIST FOR ITF/POD









Required information on owner
Report to IRS in SSN of owner
Valid identification on owner(s)
ITF/POD intention manifested in title or elsewhere
List of Beneficiaries
Nondocumentary verification
Signature Card
Account Styling: John Smith or Jane Smith, ITF/POD
Government lists
19
Example of POD or ITF
1
2
OWNERSHIP
TITLE
John Smith or Jane Smith
POD/ITF
 Pay on Death
Name of Beneficiaries:
Betty Smith
Sally Smith
Tim Smith
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
John’s SSN
Jane Smith
John Smith
20
Options for Children




UTMA
Child owns
Child’s SSN
Custodian Signs
Child has no access
Styling:
Little Johnnie, a minor by
Jane custodian under
UTMA
Ownership:
UTMA





Joint Account
Child owns as co-owner
Use child’s SSN
Child signs
Child has access
WROS or WOROS
ITF/POD
 Adult owns
 Adult’s SSN
 Child receives at death
of owner(s)
 Child no access, no
ownership until death
Styling:
Little Johnnie or
Jane or John
Styling:
Jane or John POD/ ATF/ITF
Little Johnnie
Ownership:
Joint
Ownership:
POD or ITF or ATF
POD = Pay on death
ATF = As trustee for
ITF = In trust for
21
UNIFORM TRANSFER TO MINORS
ACT (UTMA)
22
UNIFORM TRANSFER TO MINORS ACT
• Under the Uniform Transfer to Minors Act (UTMA), a
custodian may want to set money aside for the minor as an
irrevocable gift. In this case, the money belongs to the
child. If the custodian withdraws any of the money it must
be used for the benefit of the child or the child may sue.
Upon the age of majority (18-21), the funds will be turned
over to the child.
• Only one custodian (some states have two custodians) and
one child are allowed per account. In the event of the
death of the child, the child's estate will receive the funds.
In the case of the death of the custodian, the guardian of
the child will name a successor custodian.
23
Requirements
1. Required Information on
Person Account:
Uniform Transfer to Minors




Name
Address
For individuals, date of birth
(Before opening account)
Taxpayer identification number
U.S. Person will be Social Security number
Non U.S. Person will use passport number,
ITIN number or other acceptable document
number
2. IRS Reporting:
Report in child’s SSN
3. Documentary Requirements:  Signature card signed by the custodian
(Reasonable time after
 Valid identification on custodian. Children
opening)
may not have primary identification. You
might accept a Social Security card and a
birth certificate or student identification for
the child.
24
Requirements
4. Documentary
Requirements:
(Reasonable time after
opening)
5. Suggested
nondocument
Verification:
(Reasonable time after
opening)
6. Account Styling:
Uniform Transfer to Minors

Signature card signed by the custodian

Valid identification on custodian. CIP requires you to
identify the person acting for the minor. Some also identify the
minor. Children may not have primary identification. You might
accept a Social Security card and a birth certificate or student
identification for the child.
A CIP program must also have nondocumentary
verification. Suggestions include:




Welcome letter
Call to customer to thank for business
Third party verification
Previous financial institution references
Johnnie Smith a minor by Sally Smith, custodian
under UTMA
OR
Sally Smith as custodian for Johnnie Smith, minor
under UTMA
(You must report in child’s Social Security number )
25
Requirements
6. Consult Government Lists:
7. Insurance:
8. Miscellaneous:
Uniform Transfer to Minors
 Section 326 List
 OFAC List
Insured under child’s individual insurance for up
to $250,000.
 One child and one adult per account in most
states
 You cannot use as collateral for a loan
 At death, there may be a successor
custodian if not and the child is 14 he or she
has 60 days to name a custodian out of
their family, if this time lapses then the
guardian or other parent of the child
becomes the new custodian. See law.
 You cannot have an “agent” on a custodial
account.
 You may not put a ITF/POD on a custodial
account.
26
DEATH
Child Dies
Custodian Dies
Funds go to the Child’s
Estate
1.
2.
Documentation
Death Certificate
Letters of Administration or
Letters of Testamentary
This is subject to state
law. Your state law
links are at
gettechnicalinc.com
under resources
Did Custodian name
Successor?
YES
Successor
Custodian takes
over as Custodian
1.
2.
3.
NO
Child 14? Child
can name
successor or if
child does not act
then legal guardian
Documentation
Death Certificate on Custodian
Identification on new Custodian
New Signature Card
27
CHECKLIST FOR UTMA ACCOUNT
 Required information on custodian
 Report to IRS in SSN of minor
 Valid identification on custodian
 Nondocumentary verification on custodian
 Signature Card
 Account Styling: Johnnie Smith minor by Sally
Smith, custodian under UTMA or Sally Smith as
custodian for Johnnie Smith , Minor under UTMA
 Account Ownership: UTMA
 Government lists
28
Example of UTMA
1
2
OWNERSHIP
TITLE Johnnie Smith minor by
Sally Smith custodian under
UTMA
 UTMA
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
Sally Smith, Custodian
Johnny Smith’s SSN
29
MINOR BY ACCOUNTS
• Many financial institutions over the years have
opened accounts called the "Minor By" Account.
These accounts are not protected or defined in
any state or federal law. The minor by account
has one person as owner and other parties as
signers. IT IS RECOMMENDED THAT YOUR
INSTITUTION NOT OPEN THIS ACCOUNT.
CONSULT YOUR FINANCIAL INSTITUTION'S
ATTORNEY BEFORE CONTINUING THIS PRACTICE.
30
JOINT ACCOUNTS WITH MINORS
• Many institutions allow Joint accounts with minors and
an adult family member. These accounts are often
described in the deposit agreements between financial
institution and their customers. Some financial
institutions have the adult sign an additional form
which states that the adult is responsible for the
account. TALK TO YOUR FINANCIAL INSTITUTION'S
LEGAL COUNSEL BEFORE OFFERING THIS TYPE OF
ACCOUNT TO MAKE SURE YOUR DEPOSIT
AGREEMENT COVERS THIS TYPE OF MINOR ACCOUNT.
31
Requirements
1. Required Information on Persons
Account:
(Before opening account)
Joint Accounts with Minors




Name
Address
For individuals, date of birth
Taxpayer identification number
U.S. Person will be Social Security
number
Non U.S. Person will use passport
number, ITIN number or other
acceptable document number
2. IRS Reporting:
Report in SSN of first owner
3. Documentary Requirements:
(Reasonable time after opening)
 Valid identification on owner
Try to get the Social Security Card
or birth certificate of child
 Signature Card signed by all parties
32
Requirements
4. Suggested nondocument
Verification:
(Reasonable time after opening)
5. Account Styling:
6. Consult Government Lists:
Joint Accounts with Minors
A CIP program must also have
nondocumentary verification. Suggestions
include:
 Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous financial institution
references
Stan Smith or Sally Smith or Johnnie Smith
 Section 326 List
 OFAC List
33
Requirements
6. Insurance:
Joint Accounts with Minors
$250,000 per joint owner. See insurance
Joint accounts.
Remember if the owner does not sign the
account is not insured as a Joint account.
7. Miscellaneous:
Joint accounts with minors are a practice
with many financial institutions. The minor
cannot receive access to the money if he or
she did not sign the signature card.
34
Example of Joint Or Multiple Party with Minor
1
2
OWNERSHIP
TITLE
Stan Smith or Sally Smith or
Johnnie Smith
Joint or Multiple Party
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
Stan Smith’s SSN or whoever is
first on the account
Sally Smith
Stan Smith
Johnnie Smith
35
CHECKLIST FOR JOINT OR MULTIPLE PARTY
ACCOUNTS WITH A MINOR
Required information on owners
Report to IRS in SSN of 1st owner
Valid identification on adult, some kind of
identification on child (SS card, student ID) –
see your CIP on minors
Signature card
Nondocumentary verification
Account Styling: Stan Smith or Sally Smith or
Johnnie Smith
Government lists
36
PARENT FOR CHILD
• A parent or parents can establish either a
individual account or Joint account for
themselves where the funds are "earmarked"
for their child. See single or Joint accounts for
ownership and access information.
37
Requirements
1. Required Information on Person
Account:
(Before opening account)
2. IRS Reporting:
3. Documentary Requirements:
(Reasonable time after opening)
4. Suggested nondocument
Verification:
(Reasonable time after opening)
Parent for Child




Name
Address
For individuals, date of birth
Taxpayer identification number
U.S. Person will be Social Security
number, Non U.S. Person will use
passport number, ITIN number or other
acceptable document number
Report in SSN of first owner
 Valid identification on owner
Signature card
A CIP program must also have
nondocumentary verification. Suggestions
include:





Welcome letter
Call to customer to thank for business
Third party verification
Previous financial institution references
38
Requirements
Parent for Child
5. Account Styling:
John Smith or Mary Smith
6. Consult Government Lists:
For Little Johnnie Smith*
 Section 326 List
 OFAC List
7.
Insured under the ownership of the adult
Insurance:
8. Miscellaneous:
*This is an older type of styling used to
earmark funds for a child.
39
Example of Parent for Child
1
2
OWNERSHIP
TITLE
Betty Smith
Special Account
Individual
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
Betty Smith’s SSN
Betty Smith
40
OTHER FIDUCIARY ACCOUNTS
When one person is named to act for another by contract, by law, by
court or other legal arrangement, they are considered in a fiduciary
capacity.
41
FIDUCIARY ACCOUNTS
TYPE
Set up by
1. Authorized Signers, Agents
In-house Power of Attorney
Signature card or attachments
2. Power of Attorney Outside Document
Outside contract
3. Custodians
On signature card through state law
4. Social Security Representative Payees
On check by Social Security
5. Executors/Administrators
Court
6. Guardians
Court
7. Trustees
Contract
42
General Rules for Fiduciary Accounts
1. No ITF/PODs may be attached to accounts 3-7.
2. No other authorized signers or power of attorneys may
be listed on accounts numbers 3-7.
3. Except for authorized signers, the type of ownership is
not Single-Party or joint but “fiduciary” or the specific
ownership for each category on your platform system.
If you have cards, check the “other” box and list the
type of fiduciary.
4. Fiduciaries should sign name and job title. For example,
“Jane Smith, trustee”.
43
Social Security Representative Payee
• A Social Security account is an account for a
person receiving Social Security benefits who is
unable to act on their own behalf. The Social
Security Administration has named a
representative payee to act for the person. This
can be for minor children or adults who are
unable to act for themselves. The representative
payee is the person with access to the funds and
the other named individual on whose behalf they
are acting is the actual owner of the account.
44
Requirements
Social Security Representative Payee
Accounts
1. Required Information on  Name
Person Account:
 Address
 For individuals, date of birth
(Before opening
 Taxpayer identification number
account)
U.S. Person will be Social Security number
Non U.S. Person will use passport number, ITIN
number or other acceptable document number
2. IRS Reporting:
Report in SSN of beneficiary
3. Documentary
 Valid identification on representative payee
Requirements:
and if possible, the owner
(Reasonable time after
opening)
 Letter from Social Security
 Signature card provided by financial
institution is signed by the representative
payee even though the funds are owned by
the beneficiary and reported in the
beneficiaries SSN.
45
Requirements
4. Suggested
Nondocument
Verification:
(Reasonable time after
opening)
Social Security Representative Payee
Accounts
 A CIP program must also have
Nondocumentary verification. Suggestions
include:
 Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous financial institution references
5. Account Styling:
Sally Smith, Representative Payee For Betty
Smith
Or
Betty Smith, Beneficiary
Sally Smith, Representative Payee
6. Consult Government
Lists:
 Section 326 List
 OFAC List
46
Requirements
Social Security Representative Payee
Accounts
7. Insurance:
Insured under beneficiary individual coverage.
8. Miscellaneous:
 The owner of the funds is not a signer on this
account.
 Funds must be kept separate from the
representative payee personal funds.
 An exception applies for a parent who has
more than one child receiving checks. He or
she may put all those checks into his or her
own individual checking account. See A
Guide for Representative.
 VA Accounts are similar but the person who
is acting for the veteran is called a
“fiduciary”.
47
Example of Social Security Representative Payee
1
2
OWNERSHIP
TITLE
Betty Smith, Beneficiary
Sally Smith, Representative Payee
Social Security Rep Payee
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
Betty Smith’s
Sally Smith, Representative Payee
48
CHECKLIST FOR SOCIAL SECURITY
REPRESENTATIVE PAYEE
 Required information on owner and representative
payee
 Report to IRS in SSN of owner
 Valid identification on representative payee
 Check or letter from Social Security
 Nondocumentary verification
 Signature Card: Ownership is “Representative Payee”
 Account Styling: Sally Smith, Representative Payee
for Betty Smith ,
OR
Betty Smith, Beneficiary
Sally Smith, Representative Payee
 Government lists
49
Guardianship and Conservator
Accounts
• When the court names some one to act for a
child or adult, then they are a guardian or
conservator. Court documents will accompany
the right of the guardian to act for another
person.
50
Guardianship Accounts/Conservator Accounts
• If an adult is ruled incompetent or a minor is
unable to manage his or her affairs, the court will
appoint a guardian. The guardian's authority
ceases at the death of the ward or mentally
incapacitated adult (non compis mentis). If the
person is older, the person named to represent
him or her is called a conservator.
51
Requirements
1. Required Information on
Person the Account:
(Before opening account)
2. IRS Reporting:
3. Documentary Requirements:
(Reasonable time after
opening)
Guardianship Accounts/Conservator
Accounts




Name
Address
For individuals, date of birth
Taxpayer identification number
U.S. Person will be Social Security number
Non U.S. Person will use passport number,
ITIN number or other acceptable
document number
Report in SSN of owner
 Valid identification on guardian or
conservator
 Court order provided by the customer
should be followed exactly as the court
requires and letters of guardianship.
 Signature card signed by the guardian or
conservator.
52
Requirements
4. Suggested Nondocument
Verification:
(Reasonable time after
opening)
5. Account Styling:
Guardianship Accounts/Conservator
Accounts
A CIP program must also have
Nondocumentary verification. Suggestions
include:
 Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous financial institution references
John Smith, Minor
Jane Smith, Guardian
Or
John Smith, Owner
Jane Smith, Conservator
It is signed by the person ordered in the
court order usually the guardian or
conservator. Sometimes however it takes a
court order to remove any money.
53
Requirements
Guardianship Accounts/Conservator
Accounts
6. Consult Government Lists:
 Section 326 List
 OFAC List
7. Insurance:
Insured under the individual coverage of the
owner or person it is for.
8. Miscellaneous:
You can have court ordered accounts for
both young and old. A young person would
be called a Guardianship Account and an
older person is usually called a Conservator
Account.
54
Example of Conservator or Guardian Account
1
2
OWNERSHIP
Conservator or Guardian
TITLE
John Smith, Owner
Jane Smith, Conservator
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
Jane Smith, Conservator
John Smith’s SSN
55
CHECKLIST FOR CONSERVATOR
OR GUARDIANSHIP








Required information on guardian and if possible, owner
Report in SSN of owner
Valid identification on Conservator or Guardian
Letters of Guardianship or Conservatorship
Court Order
Nondocumentary verification
Signature Card
Account Styling: John Smith, Minor
Jane Smith, Guardian
or
John Smith Owner
Jane Smith, Conservator
 Government lists
56
Overview of Probate
Formal Estate
Letters Testamentary
or
Letters of Administration
Close Decedent’s
Accounts
Open Estate
Account
57
REQUIREMENTS: ESTATES
REQUIREMENTS
ESTATES
1. Required Information:
(Before opening account)
On entity:
 Name
 Address
 EIN of Estate (do not use SSN of decedent)
 U.S. Person will be social security number
 Non U.S. Person will use passport number, ITIN
number or other acceptable document number
2.
IRS Reporting:
Report in EIN of estate
3.
Documentary
Requirements:
(Reasonable time after
opening)
 Valid identification on person opening the
account
 Letters of Testamentary/Administration from
the court.
 Signature card
58
REQUIREMENTS
ESTATES
4. Suggested
nondocument Verification:
(Reasonable time after
opening)
A CIP program must also have non documentary
verification. Suggestions include:
 Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous Financial Institution references
5.
Account Styling:
The Estate of Jane Smith
6.
Consult government Lists:
 326 Government Lists
 OFAC List
59
REQUIREMENTS
ESTATES
7.
Insurance:
All funds, belonging to a decedent and invested in one
or more accounts, whether held in the name of the
decedent or in the name of his executor or
administrator, are added together and insured to the
$250,000 maximum. Such funds are insured
separately from the individual accounts of any of the
beneficiaries of the estate or of the executor or
administrator.
8.
Miscellaneous:
Close decedent’s accounts, open estate accounts.
60
Example of Estate Account
1
2
OWNERSHIP
TITLE
Jane Smith Estate Account
Estate Account
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
EIN of Estate
SIGNATURES (Access)
John Smith, Executor
61
Checklist for Estate Accounts









Required information on Estate
Valid identification on Executor/Executrix
Report in EIN of Estate
Letters of Testamentary
Nondocumentary verification on Estate
Signature Card
Account Styling: Jane Smith Estate Account
Account Ownership:Estate
Government lists
62
BANKRUPTCY
63
Types of Bankruptcy
Chapter 7
Chapter 11
Chapter 12
Completely
unable to pay
debts
Reorganization
usually for
businesses
Used for family
farmers, similar
to Chapter 13
Used for individuals
who temporarily are
unable to pay.
Repay debt over
long period
Keep property and
pay over 5 years
Chapter 13
64
FORMAL TRUSTS
65
Customer (Grantor)
creates a trust contract
with an attorney
Grantor
Grantor puts assets in trust
• House
• Land
• Financial Institution
Accounts
• Names Trustee
Trustee takes care of assets
in trust. When trustee dies
successor trustee takes
over.
Trustee
Successor Trustee
Beneficiaries
Upon death of all trustees the
successor trustee takes out assets
and gives to beneficiaries
according to the trust.
66
Requirements
Formal Revocable Trusts (Usually a Living
Trust)
1. Required Information on Entity:  Name
 Address
(Before opening account)
 Taxpayer identification number
U.S. Person will be Social Security number
2. IRS Reporting:
Report in SSN
3. Documentary Requirements:
 Valid identification on trustees
(Reasonable time after
opening)

Customer should provide a Certificate of
Trust, Affidavit of Trust, or entire trust
agreement (you will only maintain front and
back page if he or she brings in the entire
trust).

Signature card provided by the financial
institution should be signed by all trustees.

Trust resolution provided by financial
institution is a new form of documentation
that many forms companies now use to
standardize the information needed to
maintain a trust.
67
Requirements
4. Suggested Nondocument
Verification:
Formal Revocable Trusts (Usually a Living
Trust)
A CIP program must also have Nondocumentary
verification. Suggestions include:
Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous financial institution references
John Smith or Jane Smith Living Trust
OR
John Smith or Jane Smith, trustees
John or Jane Smith Living Trust u/t/d
 Section 326 List
 OFAC List

5. Account Styling:
6. Consult Government Lists:
68
Requirements
Formal Revocable Trusts (Usually a Living
Trust)
7. Insurance:
$250,000 per owner per qualified beneficiary.
8. Miscellaneous:
 It is easiest to close existing accounts and
transferring into the new ownership type.
 Sometimes the title of the trust will say
“and” but either trustee may sign -- refer to
the trust agreement.
69
Example of Revocable Trust
1
2
OWNERSHIP
TITLE
John Smith or Jane Smith, Trustees of
the Jane and John Smith Living
Trust u/t/d 8/15/2002
Formal Trust—Separate
Agreement
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
John Smith’s SSN or whoever is
first on the account
Sally Smith, Trustee
John Smith, Trustee
70
Checklist for Revocable Formal
Trusts








Required information on grantor/trustees
Report in SSN of grantor/trustee
Valid identification on trustees (recommended)
Trust Agreement (front and back page) or Certificate of Trust
Trust resolution (if any)
Nondocumentary verification
Signature Card
Account Styling:
The John Smith and Jane Smith Living Trust
or
John Smith or Jane Smith, Trustees of
the Jane and John Smith Living Trust u/t/d
8/15/2002
 Account Ownership: Formal Trust—Separate Agreement
 Government lists
71
Irrevocable Trust
• The irrevocable trust is one that the creator/settlor of a
trust cannot revoke or alter. The settlor of the trust has
given up the right to change his/her mind and has
relinquished the trust property either permanently or for
some specified period of time. An irrevocable trust may be
created by will or during the lifetime of the settlor. It may
result from a revocable trust, which by its terms becomes
irrevocable upon the death of the settlor. The use of
irrevocable trusts can result in substantial savings in estate
taxes and, to a lesser extent, in income taxes.
72
Requirements
1. Required Information on
Entity:
(Before opening account)
2. IRS Reporting:
3. Documentary
Requirements:
Irrevocable Trusts
 Name
 Address
 Taxpayer identification number—Use EIN
on irrevocable trust.
Report in EIN
 Valid identification on trustees

Customer should provide a Certificate of
Trust, Affidavit of Trust, or entire trust
agreement (you will only maintain front
and back page if he or she brings in the
entire trust).

Signature card provided by the financial
institution should be signed by all
trustees.

Trust resolution provided by financial
institution is a new form of
documentation that forms companies
now use to standardize the information
needed to maintain a trust.
(Reasonable time after
opening)
73
Requirements
4. Account Styling:
5. Suggested nondocument
verification:
(Reasonable time after
opening)
6. Consult Government Lists:
7. Insurance:
8. Miscellaneous:
Irrevocable Trusts
The John Smith or Jane Smith Irrevocable
Trust
A CIP program must also have
Nondocumentary verification. Suggestions
include:
Welcome letter
 Call to customer to thank for business
 Third party verification
 Previous financial institution references
 Section 326 List
 OFAC List
$250,000 per beneficiary
 Some living trusts can become irrevocable
after the grantor/trustees die. At that
time you will request an EIN and change
the status to irrevocable.

 Sometimes the title of the trust will say
“and” but either trustee may sign -- refer
to the trust agreement.
74
Example of Irrevocable Trust
1
2
OWNERSHIP
Formal Trust—Separate
Agreement
TITLE
The John Smith or Jane Smith
Irrevocable Trust
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
EIN on Trust unless Grantor
trust then use SSN
SIGNATURES (Access)
John Smith, Trustee
Sally Smith, Trustee
75
Checklist for Irrevocable Trusts
 Required information on Trust
 Report in EIN of Formal Trust
 Valid identification on trustees
 Trust Agreement (front and back page) or Certificate of
Trust
 Nondocumentary verification
 Signature Card
 Trust resolution (if any)
 Account Styling: The John Smith or Jane Smith
Irrevocable Trust
 Account Ownership: Formal Trust
 Government lists
76
CIP AND CDD
PLUS PROPOSED CHANGES
77
CIP Entity
(If Agent then CIP person
acting for business)
CIP: Identifying and
Verifying the Identity of
Customers
CIP Signatories if in Your
Policy
CIP Exemptions
Open Business Account
4 Elements of CDD
Identifying and Verifying
the Identity of Beneficial
Owners of Legal Entity
Customers
CIP Beneficial Owners of
Legal Entities Customers
CIP Exemptions plus those
for Beneficial ownership
Understanding the Nature
and Purpose of Customer
Relationships
Base transactional
questions and more
detailed questions for
high risk accounts
Assign Risk
Conducting On-Going
Monitoring
78
Element
One
Establish a CIP
Procedure
for all
“customers”
Information Required
(Prior to opening an account)
+
Verification through documents
(Reasonable time after opening account)
+
Nondocumentary verification
(Reasonable time after opening account)
+
CIP Recordkeeping
+
Customer Notice
=
CIP COMPLIANCE
79
Element
Two
Establish
beneficial
ownership on
legal entity
customers
Legal Entity Customers
Ask for 25% Beneficial Owners
+
Ask for Controlling Person
+
Run Your Institution’s CIP
+
CDD Recordkeeping
80
Beneficial Ownership
•
The second element of CDD requires financial institutions to
identify and verify the beneficial owners of legal entity customers.
In this NPRM, FinCEN proposes a new requirement that financial
institutions identify the natural persons who are beneficial owners
of legal entity customers, subject to certain exemptions. The
definition of “beneficial owner” proposed herein requires that the
person identified as a beneficial owner be a natural person (as
opposed to another legal entity).
A financial institution must satisfy this requirement by obtaining at
the time a new account is opened a standard certification form
(attached hereto as Appendix A) directly from the individual
opening the new account on behalf of the legal entity customer.
81
• Financial institutions would be required to verify
the identity of beneficial owners consistent with
their existing CIP practices. However, FinCEN is
not proposing to require that financial
institutions verify that the natural persons
identified on the form are in fact the beneficial
owners. In other words, the requirement focuses
on verifying the identity of the beneficial owners,
but does not require the verification of their
status as beneficial owners. This proposed
requirement states minimum standards.
82
Ownership Prong:
Each individual, if any, who, directly or
indirectly, through any contract, arrangement,
understanding, relationship or otherwise,
owns 25 percent or more of the equity
interests of a legal entity customer;
and
83
Control Prong:
An individual with significant responsibility to control,
manage, or direct a legal entity customer, including
(A) An executive officer or senior manager (e.g., a Chief
Executive Officer, Chief Financial Officer, Chief
Operating Officer, Managing Member, General Partner,
President, Vice President, or Treasurer); or
(B) Any other individual who regularly performs similar
functions.
84
Exemptions from beneficial
ownership requirement
• Customers Exempt from CIP
– Same as CIP except existing customers (financial institutions regulated
by a federal functional regulator, publicly held companies traded on
certain US stock exchanges, domestic government agencies and
instrumentalities and certain legal entities that exercise governmental
authority)
– Plus some new exemptions
• Existing and New Customers
– Applies to legal entity customer that open a new account after the
implementation date
85
Plus these new exemptions…
FinCEN proposes that the following entities also be exempt from the beneficial ownership requirement when
opening a new account because their beneficial ownership information is generally available from other credible
sources:
•
•
•
•
•
•
•
•
•
An issuer of a class of securities registered under Section 12 of the Securities Exchange Act of 1934 or that is
required to file reports under Section 15(d) of that Act;
Any majority-owned domestic subsidiary of any entity whose securities are listed on a U.S. stock exchange;
An investment company, as defined in Section 3 of the Investment Company Act of 1940, that is registered with
the SEC under that Act;
An investment adviser, as defined in Section 202(a)(11) of the Investment Advisers Act of 1940, that is registered
with the SEC under that Act;
An exchange or clearing agency, as defined in Section 3 of the Securities Exchange Act of 1934, that is registered
under Section 6 or 17A of that Act;
Any other entity registered with the Securities and Exchange Commission under the Securities and Exchange Act
of 1934.
A registered entity, commodity pool operator, commodity trading advisor, retail foreign exchange dealer, swap
dealer, or major swap participant, each as defined in section 1a of the Commodity Exchange Act, that is registered
with the CFTC;
A public accounting firm registered under section 102 of the Sarbanes-Oxley Act; and
A charity or nonprofit entity that is described in Sections 501(c), 527, or 4947(a)(1) of the Internal Revenue Code
of 1986, that has not been denied tax exempt status, and that is required to and has filed the most recently
required annual information return with the Internal Revenue Service.
86
Verification of Beneficial Owners
• Standard Certification Form
• Verification of Beneficial Owners
– Do not have to verify status
– Do have to verify identity like CIP
87
Updating Beneficial Ownership
Information
• No specific requirement to update periodically
• Update when open new account
• Update when activity changes with on-going
monitoring
88
89
90
91
Element
Three
Ask Nature,
Purpose and
Transactional
Questions
Applies to all
customers on
a risk basis
Nature and Purpose: Ask Transactional
questions
The third element of CDD requires financial institutions to
understand the nature and purpose of customer relationships
in order to develop a customer risk profile.
A bank should obtain information at account opening sufficient
to develop an understanding of normal and expected activity
for the customer’s occupation or business operations.
In addition, because this is a necessary step to identifying and
reporting suspicious activities, which obligation applies to all
“transactions…conducted or attempted by, at or through” the
covered financial institution, its scope should not be limited to
“customers” for purposes of the CIP rules, but rather should
extend more broadly to encompass all accounts established by
the institution
92
Go further for high risk customers:
MSBs
+
MRBs
+
Cash Intensive Businesses
+
Third Party Payment Processors
+
Embassy, Foreign Missions and Consulates
+
Pay day Lenders
+
Nongovernment Organizations
+
Professional Service Providers
And many more…
93
Monitoring
Element
Four
Conduct on-going monitoring
+
Monitoring
Part of SAR
program
Applies to
everyone
Refresh Customer information when necessary
+
Must apply not only to “customers” for
purposes of the CIP rules, but more broadly to
all account relationships maintained by the
covered financial institution
94
WITHHOLDING AGENT
95
TO AVOID BACKUP
WITHHOLDING ACCOUNT
HOLDERS MUST SIGN:
W-9
U.S. PERSONS, INCLUDING
RESIDENT ALIENS
W-8BEN E
NONRESIDENT ALIEN
ENTITY
EVEN EXEMPT ACCOUNT HOLDERS
SHOULD SIGN
New W-8BEN E
96
Signature Cards
• Most signature cards have six basic
components
1
2
OWNERSHIP
TITLE
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION NUMBER
SIGNATURES (Access)
6
AUTHORIZED SIGNERS OR AGENTS
97
FORM W-9
©Gettechnical Inc.
98
99
100
©Gettechnical Inc.
101
Out of state businesses
• Out-of-state businesses register in each state
the business is in.
• We only take out-of-state documents when
the business has an account with us but
actually does business in another state.
• This happens when your financial institution is
close to a state line or when companies multitier and partner with other companies.
102
Most resolutions have five basic components:
Type of Business
Statement of Business Authority
Who is authorized?
What they are authorized to do?
Signed by critical person in that type of business
Attested to by another
103
Most signature cards have five basic components:
1
2
OWNERSHIP
TITLE
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
104
Signature cards must be consistent.
Ownership
___
___
___
___
___
___
___
Sole Proprietor
Partnership
Corporation
LLC
Nonprofit
Escrow
Other
Must Match
Title
Must Match
Signatures
105
Signature Cards: General Issues
Institution’s agreement with your accountholder.
Purchased from vendors or written by your own
financial institution’s legal or compliance
department.
You must follow your institution’s account
agreement. Do not:
alter, erase, whiteout
delete any parts of the card
type in additions to the card
This is a legal binding contract between you and your
accountholder.
106
SOLE PROPRIETORSHIP
107
• To establish a sole proprietorship all an individual is
required to do is to start conducting business for
profit. There are no formal legal requirements for
establishment. In most states these are owned by one
person and cease at the death of that owner.
Certainly the sole proprietorship can have other
signers on the account.
108
Requirements
Sole Proprietorship
1. Required Information on Entity:  Name
(Before opening account)
 Address
 Taxpayer identification—The account will
use the Social Security number of owner or
employer identification number of owner.
2. IRS Reporting:
Report in SSN or EIN of owner
3. Documentary Requirements:
 Valid identification on sole proprietor
(Reasonable time after
My financial institution does/does not require
opening)
all signers to Complete CIP.
 County issued document such as
Occupational license/Trade Name
The customer applies in the county where he
or she is doing business.
 Resolution: Provided by the financial
institution for sole proprietorships and
signed by the owner of the business. There
may be other signers on the account. These
signers may be changed at any time by the
owner.
 Signature card: Provided by the financial
institution, signed by those authorized in
the Resolution. It is the contract between
the financial institution and the customer.
109
Requirements
4. Suggested Nondocument
Verification:
(Reasonable time after
opening)
5. Account Styling:
6. Consult Government Lists:
7. Insurance:
Sole Proprietorship
A CIP program must also have nondocumentary
verification. Suggestions include:
 Welcome letter
 Call to customer to thank for business
 Delivery of checks to location by account
officer
 Third party verification
 Previous financial institution references
Joe Smith dba Floral Enterprises
 Section 326 List
 OFAC List
A sole proprietorship is insured under individual
coverage for a total of $250,000.
110
Resolution
I, Joe Smith, am the sole owner of Floral Enterprises….
I authorize the following to sign on the account:
Joe Smith
Owner
Mary Smith Authorized Signer
Usually a list of what they can and cannot do
Signed
Joe Smith, Owner
Sample: Sole Proprietorship
1
OWNERSHIP
 Sole Proprietorship
2
TITLE
Joe Smith
dba Floral Enterprises
3
FEDERAL REGULATIONS
5
TAXPAYER IDENTIFICATION
NUMBER
Joe certifies SSN or EIN
(EIN assigned to Joe
personally…either way Joe is
first on title)
4
SIGNATURES (Access)
Joe Smith
Mary Smith
112
Checklist for Sole Proprietorship










Required information on sole proprietorship
Report in SSN or EIN of owner
Valid identification on sole proprietor
Occupational License from county/Trade
Name/Assumed Name
Account Styling: Joe Smith dba Floral Enterprises
Account Ownership: Sole Proprietor
Nondocumentary verification
Resolution
Signature Card
Government Lists
113
3 Kinds of Partnerships in Most States
General
Partnerships
Limited Liability
Partnerships
Limited
Partnerships
County or SOS
SOS
SOS
May have Agreement
Partnership Agreement
Partnership Agreement
EIN
EIN
EIN
Resolution &
Signature Card
Resolution &
Signature Card
Resolution &
Signature Card
114
PARTNERSHIP: ALL THREE FOLLOW
SIMILAR PROCEDURES ALTHOUGH
DOCUMENTS MAY BE DIFFERENT
The Uniform Partnership Act defines a partnership as an association of two or more
persons to carry on a business as co-owners for profit. Partnerships are easily
organized and may or may not have a formal partnership agreement.
115
Requirements
1. Required Information on
Entity:
(Before opening account)
2. IRS Reporting:
Partnership
 Name
 Address
 Taxpayer identification—The account will use the
employer identification number of the
partnership.
Report in EIN of business
116
Requirements
3. Documentary
Requirements:
(Reasonable time after
opening)
Partnership
 Valid Identification on partner(s) opening the
account.
My financial institution does/does not require all
signers to complete CIP
 Partnership Agreement: When it is available it is
helpful to identify all the partners by a copy of the
partnership agreement. The key issue to a
partnership account is to make sure all partners
sign the resolution.
 Government Issued document at county or
secretary of state (Domestic or Foreign)
 Certification of Beneficial Owner(s)
 Resolution: Provided by the financial institution
for partnerships and signed by the partners. There
may be other signers on the account and may be
changed at any time by all of the partners. A
change in the account requires a new resolution
signed by all the partners.
 Signature Card: Provided by the financial
institution, signed by those authorized in the
resolution. It is the contract between the
financial institution and the customer.
117
Requirements
4. Suggested Nondocument
Verification:
(Reasonable time after
opening)
Partnership
5. Account Styling:
A CIP program must also have nondocumentary
verification. Suggestions include:
 Welcome letter
 Call to customer to thank for business
 Delivery of checks to location by account officer
 Third party verification
 Previous financial institution references
Johnson Enterprises
6. Consult Government Lists:

7. Insurance:
8. Miscellaneous:
Section 326 List
 OFAC List
A partnership is separately insured for $250,000 from
the individual accounts of the partners.
No PODs on partnerships.
118
Partnership Resolution
Names the Partnership: Floral Enterprises
Lists who can sign
What their job is
Joe Smith
Mary Smith
Betty Smith
Partner
Partner
Authorized Signer
Usually a list of what they can and cannot do
Make deposits and Withdrawals
Make loans
Other
Joe Smith
Mary Smith
Signed by all the partners unless there is a partnership
agreement with a managing partner named.
119
Sample: Partnership
1
OWNERSHIP
 General Partnership
2
TITLE
Floral Enterprises
3
FEDERAL REGULATIONS
5
TAXPAYER IDENTIFICATION
NUMBER
EIN of Partnership
4
SIGNATURES (Access)
Joe Smith, Partner
Mary Smith, Partner
Betty Smith, Authorized Signer
120
Joe Smith
Floral Enterprises
Joe Smith 8/14/77
Mary Smith 9/15/76
Joe Smith
Joe Smith
8/14/77
Joe Smith
123 Main St
Monroe LA xxxxx
1243 Main St
Monroe, LA xxxxx
123 Main St
Monroe, LA
439-00-9999
439-11-0000
439-00-9999
1/6/2015
121
Checklist for Partnership




Required information on Entity
Report in EIN of Partnership
Valid identification on partner(s) opening the account
Documentary verification
 County document or SOS document






Nondocumentary verification
Signature Card
Resolution
Certification of Beneficial Owner(s)
Account Styling: Johnson Enterprises
Government Lists
122
CORPORATIONS
501c are exempt
123
Corporations
• A corporation is formed when Articles of
Incorporation are filed with the Secretary of
State to approve the new business. Corporations
doing business in more than one state must
register as a "foreign corporation" in each state.
The election of officers, usually contained in the
minutes, is done at the first board meeting. The
opening and closing of an account is authorized
by the Board of Directors and carried out by the
Corporate Secretary.
124
Requirements
1. Required Information on
Entity:
(Before opening account)
2. IRS Reporting:
Corporations
 Name
 Address
 Taxpayer identification— The account will
use the employer identification number
of the corporation.
Report in EIN of business
125
Requirements
3. Documentary Requirements:
(Reasonable time after
opening)
Corporations
 Valid identification on corporate secretary
My financial institution does/does not require all
signers to Complete CIP.
 Domestic: Government issued document
 Foreign: Government issued document
 Fictitious Name: If the corporation is doing
business under another name it must file a
Certificate of Fictitious Name
126
Requirements
3. Con’t - Documentary
Requirements:
(Reasonable time after
opening)
Corporations
 Minutes from Board Meeting: The customer
should provide an excerpt from the minutes of
the last board meeting where officers were
elected—specifically the Secretary of the
corporation since this person must sign the
resolution.
 Certification of Beneficial Owner(s)
4. Suggested Nondocument
Verification:
(Reasonable time after
opening)
 Resolution: Provided by the financial institution
signed by the secretary of the business. There
may be other signers on the account. These
signers may be changed at any time by the
corporation, provided the corporation provides
new minutes, new resolution and new
signature card.
 Signature Card: Provided by the financial
institution signed by those authorized in the
resolution. It is the contract between the
financial institution and the customer.
A CIP program must also have nondocumentary
verification. Suggestions include:
 Welcome letter
 Call to customer to thank for business
 Delivery of checks to location by account officer
 Third party verification
 Contact Secretary of State’s Office
127
Requirements
5. Account Styling:
6. Consult Government Lists:
7. Insurance:
8. Miscellaneous:
Corporations
Johnson Enterprises, Inc.
 Section 326 List
 OFAC List
Each corporation is separately insured for $250,000.
No ITF/PODs on Corporations.
128
Resolution
Be it resolved at the last meeting of Floral Enterprises, Inc on
July 4, 2011 the board of directors the following was decided:
All of these will sign on the corporate account:
Joe Smith
President and Secretary
Mary Smith
Vice President and Treasurer
Usually a list of what they can and cannot do
 Make Deposits and withdrawals
 Make loans
 Other
Signed
Joe Smith, Corporate Secretary
Attested to by another officer
129
Sample: Corporation
1
OWNERSHIP
 Corporation
2
TITLE
Floral Enterprises Inc
3
FEDERAL REGULATIONS
5
TAXPAYER IDENTIFICATION
NUMBER
EIN of Corporation
4
SIGNATURES (Access)
Joe Smith, Pres and Sec
Mary Smith, VP and Treas
130
Joe Smith
Floral Enterprises, Inc
Joe Smith
08/14/1977 123 Main Street
439-00-9999
Monroe, LA xxxxx
Mary Smith 09/15/1976 123 Main Street 439-11-0000
Monroe, LA xxxxx
Joe Smith
08/14/1977 123 Main Street 439-00-9999
Monroe, LA xxxxx
Joe Smith
Joe Smith
01/06/2015
131
Checklist for Corporations




Required information on Corporation
Report to IRS in EIN of Business
Valid identification on Corporate Secretary
Document from Secretary of State


Domestic: Government issued document
Foreign: Government issued document
 Fictitious Name (If required)
 Minutes from Board meeting to determine Corporate Secretary
 Nondocumentary verification (should check with Secretary of State
to see if in good standing)
 Signature Card
 Resolution
 Certification of Beneficial Owner(s)
 Account Styling: Johnson Enterprises, Inc.
 Government lists
132
LIMITED LIABILITY COMPANY
133
Limited Liability Company (LLC)
• A limited liability company offers the owners
limited liability like a corporation with a taxing
structure similar to a partnership. The income
is passed through to the owners of the
business.
134
Requirements
Limited Liability Company
1. Required Information on
Entity:
(Before opening account)
 Name
 Address
 Taxpayer identification— The account can
use the Social Security number of owner if
a one person LLC or employer identification
number of the business.
2. IRS Reporting:
Report in EIN of LLC or may use SSN of member
if the LLC is one person.
135
Requirements
Limited Liability Company
3. Documentary Requirements:  Valid identification on person opening the account
(Reasonable time after
My financial institution does/does not require all
opening)
signers to Complete CIP.
 Operating Agreement, if any: Provided by the
customer, the agreement between the members
of the LLC. It usually names the managing
member.
 Domestic: Government Issued Document
 Foreign: Government Issued Document
 Certification of Beneficial Owner(s)
 Resolution: Provided by financial institution and
signed by managing member authorizing others
in organization to sign on accounts.
 Signature Card: Provided by financial institution;
it is the contract between financial institution
and customer.
136
Requirements
Limited Liability Company
4. Suggested Nondocument
A CIP program must also have nondocumentary
Verification:
verification. Suggestions include:
(Reasonable time after opening)  Welcome letter
 Call to customer to thank for business
 Delivery of checks to location by account
officer
 Third party verification
 Check with Secretary of State’s Office
5. Account Styling:
Name of business:
Examples:
Smith Electronics, LLC
If a one person LLC using a Social Security number
:
Joe Smith
Smith Electronics, LLC
6. Consult Government Lists:
 Section 326 List
 OFAC List
7. Insurance:
$250,000 per LLC
8. Miscellaneous:
No ITF/PODs on Limited Liability Companies
May be a one person LLC
May use a Social Security number
137
Limited Liability Company Resolution
Names the Limited Liability Company: Floral Enterprises, LLC
Lists who can sign
What their job is
Joe Smith
Mary Smith
Betty Smith
Managing Member
Member
Authorized Signer
Usually a list of what they can and cannot do
Make deposits and Withdrawals
Make loans
Other
Joe Smith, Managing Member
Attested to by:
Mary Smith, Member
138
Sample: Multiple Member LLC
1
OWNERSHIP
 Limited Liability Company
2
TITLE
Floral Enterprises, LLC
3
FEDERAL REGULATIONS
5
TAXPAYER IDENTIFICATION
NUMBER
EIN of LLC
4
SIGNATURES (Access)
Joe Smith, Managing member
Mary Smith, Member
Betty Smith, Authorized signer
139
Joe Smith
Floral Enterprises, LLC
Joe Smith
08/14/1977 123 Main Street
439-00-9999
Monroe, LA xxxxx
Mary Smith 09/15/1976 123 Main Street 439-11-0000
Monroe, LA xxxxx
Joe Smith
Joe Smith
08/14/1977 123 Main Street 439-00-9999
Monroe, LA xxxxx
Joe Smith
01/06/2015
140
Limited Liability Company Resolution
Names the Limited Liability Company: Floral Enterprises, LLC
Lists who can sign
What their job is
Joe Smith
Mary Smith
Betty Smith
Managing Member
Authorized Signer
Authorized Signer
Usually a list of what they can and cannot do
Make deposits and Withdrawals
Make loans
Other
Joe Smith, Managing Member
141
Sample: Single Member LLC
1
OWNERSHIP
 Limited Liability Company
2
TITLE
Joe Smith
Floral Enterprises, LLC
3
FEDERAL REGULATIONS
5
TAXPAYER IDENTIFICATION
NUMBER
SSN of Joe Smith
4
SIGNATURES (Access)
Joe Smith, Managing member
Mary Smith, Authorized signer
Betty Smith, Authorized signer
142
Joe Smith
Floral Enterprises, LLC
Joe Smith
08/14/1977 123 Main Street
439-00-9999
Monroe, LA xxxxx
Joe Smith
08/14/1977 123 Main Street 439-00-9999
Monroe, LA xxxxx
Joe Smith
Joe Smith
01/06/2015
143
Checklist for Limited Liability
Company





Required information on LLC
Report to IRS in EIN (or SSN if one person LLC)
Valid identification on managing member
Operating Agreement, if any
Documentation
 Domestic: Government Issued Document
 Foreign: Government Issued Document
 Account Styling: Smith Electronics, LLC OR
Joe Smith, Smith Electronics, LLC
 Nondocumentary verification
 Certification of Beneficial Owner(s)
 Resolution
 Signature Card
 Government lists
144
MULTI TIERED BUSINESSES
145
Trade Name Resolution
I, Floral Enterprises, Inc. am the sole owner of Plumbing
Enterprises….
I authorize the following to sign on the account:
Joe Smith
Sally Smith
Authorized Signer
Authorized Signer
Usually a list of what they can and cannot do
You have to establish Authority…where does the authority come from?
Signed
Floral Enterprises, Inc by Joe Smith Corporate Secretary
146
Resolution (Some will also get a corporate resolution)
Be it resolved at the last meeting of Floral Enterprises, Inc on July
4, 2011 the board of directors the following was decided:
All of these will sign on the corporate account:
Joe Smith
President and Secretary
Carol Smith
Vice President and Treasurer
Usually a list of what they can and cannot do
 Make Deposits and withdrawals
 Make loans
 Other
Signed
Joe Smith, Corporate Secretary
Carol Smith Attested to by another officer
147
Adding the two -- documentation
Start with the trade name:
•
One owner business –Corporate owner
•
May have more that one signer
•
Document usually filed at the county or Secretary of State (Fictitious Name, Trade Name
or Assumed Name)
•
Use EIN of Corporate owner
•
Floral Enterprises, Inc dba Plumbing Enterprises
•
Resolution – Financial institution provided
•
Signature Card – Financial institution provided
•
Ceases at death of owner
Add the corporate paperwork:
• File Articles of Incorporation with Secretary of State
• Usually receive Certificate
• ID Corporate Secretary
• Minutes of Meeting
• Resolution signed by Secretary –Financial institution provided
Don’t forget to CIP signers if that is in your policy!
148
Sample: Corporation dba
1
OWNERSHIP
 Corporation
2
TITLE
Floral Enterprises Inc
Dba Plumbing Enterprises
You will have to figure out how to get
the Trade Name Resolution when you
select Corporate ownership.
3
FEDERAL REGULATIONS
5
TAXPAYER IDENTIFICATION
NUMBER
4
SIGNATURES (Access)
EIN of Corporation
Joe Smith
Carol Smith
149
Sweetheart, LLP
Floral Enterprises, LLC
Who signs for LLC on Partnership
Resolution?
Who is the person in authority
under the operating agreement and
the resolution for the LLC?
Chocolate Surprises,
LLC
Who signs for Chocolate Surprises
on Partnership Resolution?
Who is the person in authority
under the operating agreement and
the resolution for the LLC?
150
Partnership Resolution
Names the Partnership: Sweetheart, LLP
Lists who can sign
What their job is
Chocolate Surprises, LLC
Floral Enterprises, LLC
Betty Smith
Partner
Partner
Authorized Signer
Usually a list of what they can and cannot do
Make deposits and Withdrawals
Make loans
Other
Chocolate Surprises, LLC Partner
by Joe Smith as Managing Member
Floral Enterprises, LLC Partner
by Carol Smith as Managing Member
151
Sample: Limited Liability Partnership
1
OWNERSHIP
 Partnership
5
TAXPAYER IDENTIFICATION
NUMBER
EIN of Partnership
2
TITLE
Sweetheart , LLP
3
FEDERAL REGULATIONS
4
SIGNATURES (Access)
Joe’s Signature
Carol’s Signature
Betty’s Signature as Authorized
Signer
152
Adding the two LLCs– to get partnership
documentation
Start with the partnership documentation:
• Document from secretary of state
• Partnership agreement—this becomes the connecting paperwork
• EIN of Partnership
• Resolution – Provided by financial institution
• Signature Card – Provided by financial institution
• Some financial institutions run CIP on all signers
Add the two LLCs documentation:
• Document from Secretary of State—Certificate or Articles Stamped Filed
• Operating Agreement
• Resolution
Don’t forget to CIP signers if that is in your policy!
153
What else might you need?
• One entity + a second entity = Paperwork on
three entities
• Resolution and documentation on both
partnerships
• Establishes the paperwork and authorization
for the third
154
Agency, Escrows and 1031
Exchange Agreements
When one entity acts as agent for
another, how do you establish
authority…
155
Agency Agreements
• An agreement between one business to act as
“agent” for another business.
• Examples:
Collection Agencies
Property Management
What about Mary Kay? Avon? News paper
Representatives? Are these agency
agreements?
156
IOLTA
•
•
•
•
•
Interest on lawyer’s trust accounts
Use EIN of foundation
Pay reasonable rate of interest
Do not let get overdrawn
Do not connect with lawyer’s personal
account
• Paperwork set up through IOLTA
• Interest sent to the foundation
157
Qualified Intermediary
• 1031 Exchange Accounts
• Exchange Agreement
• Cannot touch money or have to pay capital
gains
• Customer exchanges one piece of property for
another in a like kind exchange.
158
Court Ordered Arrangements
• Bankruptcy, reorganizations
• Court Order—establishes the authority
• One business named to manage assets for
another
159
FORMAL NONPROFIT OR
UNINCORPORATED ASSOCIATION
160
REQUIREMENTS FOR FORMAL NON PROFIT OR UNINCORPORATED ASSOCIATIONS
Requirements
1. Required Information:
(Before opening account)
2. IRS Reporting:
3. Documentary
Requirements:
(Reasonable time after
opening)
Formal Nonprofit Or Unincorporated
Associations
 Name
 Address
 Taxpayer identification— The account will use
the employer identification number of the
organization.
Report in EIN of Organization
 Valid identification on person opening the
account. Sometime financial institutions require
identification on all signatories.
My financial institution does/does not require all
signers to complete CIP
 Charter, By-laws —provided by customer.
 Minutes of Meeting authorizing account
opening
161
Requirements
3. Doc. Requirements
(Continued)
Formal Nonprofit Or Unincorporated
Associations
Financial Institution Provided Resolution
Financial Institution Provided Signature Card
Certification of Beneficial Owner(s)
4. Suggested nondocument
verification:
(Reasonable time after
opening)
5. Account Styling:
A CIP program must also have nondocumentary
verification. Suggestions include:
 Welcome letter
 Call to customer to thank for business
 Delivery of checks to location by account officer
 Third party verification
 Previous financial institution references
Name of organization. Examples:
 Rotary
 Lions Club
 Kiwanis
162
Requirements
Formal Nonprofit Or Unincorporated
Associations
6. Consult Government Lists:
 Section 326 List
 OFAC List
7. Insurance:
$250,000 per Organization
8. Miscellaneous:
Not for profit organizations may not have ITF/POD
163
Nonprofit Resolution
Names the Nonprofit: Baton Rouge Rotary
Lists who can sign
What their job is
Joe Smith
Mary Smith
Betty Jones
President
VP and Treasurer
Secretary
Usually a list of what they can and cannot do
Make deposits and Withdrawals
Make loans
Other
Betty Jones, Secretary
Attested to by:
Mary Smith, VP
164
Example of Formal Nonprofit Organization
1
2
OWNERSHIP
TITLE
Rotary
Nonprofit
3
FEDERAL REGULATIONS
5
4
TAXPAYER IDENTIFICATION
NUMBER
SIGNATURES (Access)
EIN of Rotary
Mary Smith, Treas and VP
Joe Smith, Pres
Betty Jones, Sec
165
Joe Smith
Rotary
Joe Smith
Joe Smith
08/14/1977 123 Main Street 439-00-9999
Monroe, LA xxxxx
Joe Smith
01/06/2015
166
Checklist for Formal Nonprofit
Association












Required information on nonprofit association
Valid identification on signers as required in your CIP
Charter, By-laws
Minutes
Report to IRS in EIN of Association
Account Styling: Rotary
Account Ownership: Nonprofit
Nondocumentary verification
Certification of Beneficial Owner(s)
Resolution
Signature Card
Government lists
167
INFORMAL NONPROFIT OR
UNINCORPORATED ASSOCIATION
168
REQUIREMENTS FOR INFORMAL NONPROFIT OR UNINCORPORATED ASSOCIATIONS
Requirements
1. Required Information:
(Before opening account)
2. IRS Reporting:
3. Documentary
Requirements:
(Reasonable time after
opening)
Informal Nonprofit
 Name
 Address
 Taxpayer identification— The account will use
the employer identification number of the
organization.
Report in EIN of Organization
 Valid identification on all persons opening the
account, since there will be no outside
documents, such as charters or by by-laws
Certification of Beneficial Owner(s)
 Financial Institution Provided Resolution
 Financial Institution Provided Signature Card
169
Requirements
Informal Nonprofit
4. Suggested nondocument
verification:
(Reasonable time after
opening)
A CIP program must also have nondocument
verification. Suggestions include:
 Welcome letter
 Call to customer to thank for business
 Delivery of checks to location by account officer
 Third party verification
 Previous financial institution references
5. Account Styling:
Name of organization. Examples:
 Little League
 Flower Fund
 Hunting Club
 1975 Class Reunion
170
Requirements
Informal Nonprofit
6. Consult Government Lists:
 Section 326 List
 OFAC List
7. Insurance:
$250,000 per Organization
8. Miscellaneous:
Some small organizations will not have outside
documents. You will have to identify all signatories
if your financial institution decides
to open these accounts. Do not set up as a
personal account unless the SSN or the person on
the account is signing and checks will be coming in
made out personally to that person.
171
Nonprofit Resolution
Names the nonprofit: 1975 High School Reunion
Lists who can sign
What their job is
Joe Smith
Mary Smith
President
Secretary
Usually a list of what they can and cannot do
Make deposits and Withdrawals
Make loans
Other
Joe Smith, President
Attested to by:
Mary Smith, Secretary
172
Sample: Nonprofit
1
OWNERSHIP
 Nonprofit
2
TITLE
1975 High School Reunion
3
FEDERAL REGULATIONS
5
TAXPAYER IDENTIFICATION
NUMBER
EIN of High School Reunion
4
SIGNATURES (Access)
Joe Smith
Mary Smith
Gettechnical Inc
173
Joe Smith
1975 High School Reunion
Joe Smith
Joe Smith
08/14/1977 123 Main Street 439-00-9999
Monroe, LA xxxxx
Joe Smith
01/06/2015
174
Checklist for Informal Nonprofit
Association
 Required information on nonprofit association
 Valid identification on all signatories
 Some financial institutions have customer write a “Letter of
Purpose”
 Report to IRS in EIN of Association
 Account Styling: 1975 High School Reunion
 Account Ownership: Nonprofit
 Nondocumentary verification
 Certification of Beneficial Owner(s)
 Resolution
 Signature Card
 Government lists
175
Beneficial Ownership of
Legal Entity Customers
CDD Element #2
176
Example #1
•
•
•
•
•
ABC, Inc.
President: Sally Smith
VP: Bill Lite
Treasurer: Betty Jones
Secretary: Stan Long
• Corporation is owned by Cindy Kass and
Robert Richards 50/50
177
How many CIPs?
• Seven CIPs
• ABC, Inc
• Four signatories (if your institution runs
signers)
• Two beneficial owners
• Controlling person is one of the signatories
178
Example #2
• Floral Enterprises (Partnership)
• Three partners – all sign resolution
– Bill Smith 50% (does not participate in operation
of business)
– Jane Whitmore 25% Signs on account
– Gladys Sizemore 25% Signs on account
– John Betts (office manager signs on account)
179
How many CIPs?
• Five CIP
– Partnership
– 3 Partners
– 1 Signatory
180
Nature and Purpose
CDD Element #3
181
Purpose and Source
• What brought you to the bank today?
• Where are you moving the funds from?
• What is the purpose of this business account?
– Operating, payroll, escrow
• How is the business structured? Sole
Proprietorship, LLC, Partnership, Corporation or
other.
• Do you have beneficial owners on this business
who own 25% or more of this business?
182
Thanks for that information now we can tell you what
documents we will need on the business and the
parties involved…
• CIP Business and Signers
• CIP Beneficial Owners (Proposed)
• Follow check lists on paperwork for the
particular type of business.
183
Geography
• Can you tell me the service area of your
business?
• Do all of the principals live in the same
geographic region?
184
Transactional questions
Now to get you in the right product, we will have to ask a few transactional
questions.
Expected Annual Deposits
_______________________________________________________________
Types of banking services used
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Expected International Services
_______________________________________________________________
_______________________________________________________________
______________________________________________________________
185
Products and Services
• We have several options for the account that might
work for you. Let me go over them with you.
• We have some additional services that I can also offer
you.
–
–
–
–
Remote Deposit Capture
Debit Cards
Online banking
Bill Pay
• Now let’s make sure you understand all the benefits
and fees of the choices you have made….
186
Money Service Business
•
•
•
•
•
•
•
•
•
Does your company cash checks over $1000?
Does your company issue cashier’s checks or money orders over $1000?
Does your company exchange currency over $1000?
Do you transmit currency even virtual currency at any dollar amount?
Do you provide or sell prepaid cards?
-Over $2000 Closed loop
-Not for HSA, Government Benefits or Employee Benefits
-Over $1000
-At any amount if allow for reloads from nonfinancial institutions or
internationally
• -If a seller, if you do not CIP or sell under $10,000
• If yes, then we will need your FinCEN Registration and state registration
when applicable unless you are acting as an agent solely and can provide
proof of the agency status.
187
Unlawful or lawful internet gambling
Does your company have any games or financial
activities on its website? Do you provide
services to companies who provide internet
gambling?
If internet gambling is legal in your state,
provide licensing.
Otherwise have company sign certification that
it is not engaged in unlawful internet gambling.
188
Private ATMs
• Does the business have any private ATM machines
located on the premises? Does your business own or
lease from another contractor? We will need:
• Copy of the ATM agreement with sponsoring entity
• Exact physical location(s) of the ATM(s)
• Copy of state registration (if required by state)
• Copy of three months ATM activity statements
• Description of currency servicing arrangements
including
• How is cash being replenished (store proceeds,
armored car, etc)
189
Funds Availability on Checking
• Here is our funds availability policy. You will
notice that our funds are generally next day
available but cash is available on the same
day.
• You can make a deposit from 9-5 at the teller
window and it will be available generally by
the next morning.
190
Debit Cards
• We do issue debit cards for business accounts.
Is this something that you are interested in?
• You can order these for employees but I want
to take a minute to go over the limits and
what happens if there is an unauthorized
transaction on you business debit card it is a
little different than a personal account.
• Explain
191
Marijuana Related Businesses
•
•
•
•
•
•
•
Are you a producer, processor or retailer of marijuana?
Yes/No If yes, obtain copy of license
What is your annual revenue? ________________________________
If a retailer, you agree that there is:
-No employee under the age of 21 or allow anyone under the age of 21 on the premises
No signage is visible from the public right of way
-No display is visible from the public right of way
-No employee or owner shall use the product on the premises
Is this business a marijuana-related business?
Type of Business ____________________________ (Example Insurance company, landlord,
security systems etc.
Approximate Annual Revenue ____________________________________________
What percentage of your business is directly tied to marijuana business? __________%
What process do you have in place to make sure the marijuana business is licensed?
___________________________________________________________________________
192
Checklist
•
•
•
•
•
•
•
•
•
•
•
•
Customer Profile
Resolution
Signature Card
W-9 or W-8Bene
Documentation on Business
Documentation on Signers and 25% Beneficial owners
OFAC
Business Debit Card Agreement, Online banking and Remote
Deposit Capture
Funds availability and unlawful internet gambling
Registration for MSBs and state law registration
State registration and licensing for marijuana businesses
Risk rating of business
193
Thanks for participating!
Debbie Crawford
Gettechnical Inc
1-800-354-3051
gettechnical@msn.com
www.gettechnicalinc.com
©Gettechnical Inc.
194