Estate Planning and Trust Accounts

[ultrarunner]

Today was my 5th and 6th visit to the Bank still trying to regain access to Mom and Dads two Trust Accounts.

As incredible as it seems the Bank has twice lost all the Trust documents… although they say just misplaced.

Apparently the regulations have changed a lot since 1996 so everything is frozen from the time Social Security notified the bank of moms passing.

I am Successor Trustee both in Trust and by notarized documents when Mom stepped down and I accepted.

Bank says this was in 2021 pandemic and it was a crazy time… I know, while the Bank was physically closed I went to work everyday at the Hospital.

Several advised I should move the Trust money to a joint account when mom was very ill but I said why would I do that?

We are not talking about a lot but there is $600 income each month from a share in a rental and from this I pay pro-rata taxes, licenses, etc.

Today the 5th Face to Face at the Bank was over 3 hours with bank placing many calls to legal and scanning and emailing…. I know more than they do.

I left and had a 45 minute consult with moms lawyer for how to respond to the bank… lawyer bills at $420 per hour and the upshot is to be patient and resubmit all the documents again and moms lawyer is always available… at $420 per hour if I have more questions.

Bank now says it needs information from 25 years ago to comply with new IRS requirements such as original Death Certificates from 2000 etc… they had no problem opening the accounts and accepting deposits while paying .00001 interest in their high yield money market account.

For myself I don’t think I want any part of a Trust and wouldn’t miss not having to file Marital Trust C and Remainder Trust B returns like I have for mom since Dad died 25 years ago…

Mom lived happily on modest Social Security and a $250 monthly pension with a few hundred from the Trust share of rental income.

 

[2manyrocks]

I had similar experience with a particular bank losing their copy of the trust agreement and was glad to see the day when I closed the account with them.

Sounds like very typical estate planning for 25 years ago, but part of the problem is bank officers today have such little understanding of trust documentation that the bank's lawyers have to hand hold the bank personnel.

I doubt whether the bank officers could come close to understanding the trust terms if they were given an open book examination requiring them to explain the trust terms even if it were sitting on the table right in front of them to read.

For that matter, I question if some of them actually understand their own loan documents.

What has changed in the last 25 years is the estate tax exemptions have been raised to the point that for many the hoops and hassles of administering a trust including filing trust tax returns may not be worth the tax savings like they used to be.

 

[ultrarunner]

Bank branch is in California and it’s legal department is in Minnesota… it took over the local bank in 2002?

First at bat is they can’t proceed until I file for Tax ID numbers… I said what do you think the Trusts have been using got 25 years filing Trust Tax returns?

My brother says try a branch in a very affluent area instead of moms sealed with Plexiglass and guards because affluent area would be more knowledgeable.

The Bank Officer admitted she had never seen a Marital and Remainder Trust before yet the checks we have been using for 25 years have this printed.

At one point the Bank Officer said I could close the accounts and have the balance amount payable to all 3 beneficiaries and I said done.

She said let me just clear with Legal who said NO

Hoping others might have suggestions specifically to U.S. Bank.

 

[2manyrocks]

US Bank was the one that asked for another copy of the trust agreement in Tennessee. I don't know what they did with the copy they had when the account was opened.

There were two branches near me. One was easier to deal with than the other one. So it might not be a bad strategy to try another branch.

Totally idiotic , IMO, to reapply for federal tax IDs when the trust has been using same tax ID for 25 years to file tax returns. Isn't the bank sending out 1099s using the same tax ID? And the tax ID has nothing to do with the authority of the trustee to transact business for the trust.

Your authority as trustee would be established by having a copy of the original trust plus any of the documents naming your as successor trustee. Additionally, I presume that the bank has a copy of your signature card over the trust account or they've lost it as well even though that is the banks own internal procedure to have a signature card on file?

Your authority to transact banking business would be specified by the terms of the trust. You might want to be prepared to highlight those terms for the nitwits.

Do not let them take your originals.

What was the reason given by the legal department?

What I suspect is they can't find the trust documents, don't understand them if they have them, and are nervous that somehow they will get sued if the funds are paid out and are no longer under their control. However, if the trust is clear about the identify of the persons to receive those funds and the trust clearly says you have power to transact banking business as trustee, they need to honor your instructions.

A good many bank branch managers are afraid of doing anything "wrong." If legal said no, the manager won't budge against the legal department, but the manager may not be clearly communicating to the legal department because the manager may not have a whit's understanding of the trust and totally depending on legal to tell the manager what to do. Meanwhile, legal may not have a clear understanding of the situation either if they are depending on the branch manager to get the facts.

 

[ultrarunner]

US Bank was the one that asked for another copy of the trust agreement in Tennessee. I don't know what they did with the copy they had when the account was opened.

There were two branches near me. One was easier to deal with than the other one. So it might not be a bad strategy to try another branch.

Totally idiotic , IMO, to reapply for federal tax IDs when the trust has been using same tax ID for 25 years to file tax returns. Isn't the bank sending out 1099s using the same tax ID? And the tax ID has nothing to do with the authority of the trustee to transact business for the trust.

Your authority as trustee would be established by having a copy of the original trust plus any of the documents naming your as successor trustee. Additionally, I presume that the bank has a copy of your signature card over the trust account or they've lost it as well even though that is the banks own internal procedure to have a signature card on file?

Your authority to transact banking business would be specified by the terms of the trust. You might want to be prepared to highlight those terms for the nitwits.

Do not let them take your originals.

What was the reason given by the legal department?

Legal needs to verify Trust(s) are compliant with current IRS requirements.

No time frame for review and several times it was mentioned resources are spread thin due to take over of Union Bank.

The branch Banker is basically allotted 1 question per call to legal so 6 calls during my visit… Branch manager and 3 others at one time in huddle not knowing what to do saying how can these accounts exist with no documentation?

I just read several hundred 1 star reviews and not encouraging.

Years ago my brother applied for a mortgage and the bank ran my credit and sent me a list of documents needed… he and his wife were buying their first home… zero to do with me…

Sometimes it just makes one scratch your head and ponder these people (Collectively) hold the nations money?

I just keep paying the bills with my own money and stopped making Trust deposits pending resolution.

On a side note… as a business customer and personal customer the Banker could not speak with me until I went online to make an appointment… so I did

Everyday for 4 days I received a text to remind me and stating how much US Bank was looking forward to meeting with me.

The kicker is the night before the bank changed my appointment time after confirming 4 days in a row…

Everyone at the branch knows me from the moment I enter… which makes it strange I need a formal appointment to ask for help.

I provided masks and gloves during the pandemic to bank staff and always drop off a holiday basket each Christmas and manage a dozen accounts… through the rentals and family…

 

[Torvy]

Sorry about how this is being done. My folks have an irrevocable trust and wife is pressing for us to do the same. I'm looking for insights.

I'll share what I know from inside the banking world. Wife and I both worked for a huge US bank when we met. 20 years there between us and another 13 for me at another big bank.

Branches tend to give away titles, (everyone above teller is a 'VP') but don't have the higher positions or quality of staff. Despite VP titles, branch management is never more than 2 or 3 steps above teller in real pay grade and are not corporate VPs. Some focus group told them that customers want to deal with someone important, so there you go. To put it in perspective, actual VPs are usually about 6-7 levels above an hourly staff person.

Big banks, like many modern businesses, try to be more efficient by division of labor. As you have observed, 'Legal' tends to be a shared department at a central location. This is great until you get into your situation and the clueless branch managers don't know enough to explain to Legal. My last department handled small business loans and we actually had a lawyer on staff and co-located with us (3 days a week). It really helped him understand what was going on in underwriting and documentation.

I never worked for US Bank, but I am familiar with them. There should (may?) be a Trust department that handles these things. Paperwork beyond signature cards goes to a central location. All of this gets complicated when you have mergers and acquisitions involved. I've been involved in enough of those to know that outgoing staff are often irked and fail to share pertinent information as a 'parting gift'.

Short answer here is it is going to suck. I would avoid the branch and try to get in touch with Wealth Management (what US Bank calls their Trust department). The right kind of Trust and competent employees should have made this easy.

 

[D&D]

Sorry about how this is being done. My folks have an irrevocable trust and wife is pressing for us to do the same. I'm looking for insights.
The right kind of Trust and competent employees should have made this easy.

What is the right kind of trust?

 

[2manyrocks]

What IRS compliance could they possibly be concerned with?

Your trust records at home should have your IRS letter informing the trust of its FEIN, an original of the trust agreement, and an original of your trustee appointment. Once they have copies of this, not the originals that they'd lose again, there really isn't anything else they actually need unless the trust is about to terminate and be distributed and they have some concern that the funds won't be paid to the proper beneficiaries, which arguably isn't any of their business to police the trustee's administration of the trust.

Bank trust department may or may not be helpful because they don't want to get involved in handling bank customer deposit service situations unless they are actually going to serve as trustee and receive fee income. Otherwise, the bank trust department would be fielding customer service issues all the time.

If their resources are stretched thin, they shouldn't be hacking customers off to the point that they get themselves sued and/or lose all of your family deposit business.

There have been so many bank mergers that who knows what they've done with their own records anymore.

 

[ultrarunner]

Free Income for the bank is one aspect… interesting how their Best Money Market Checking limited to 3 checks per cycle morphed into a essentially interest checking as I don’t know how else to describe 27 cents on 54k total deposits?

Their best Savings is 4.75 right now.

I truly appreciate the insight from the TBN brain trust.

A coworker related a similar story where he gave up trying to retrieve a few thousand dollars but eventually got the money relatively easily when the account went dormant to the State and he claimed it…

My inexperience is definitely showing because a few keystroke through online banking would have transferred out all but $1 each.

Two weeks before mom passed a check was written on the account for trash removal and the landscaper sat on the check for 60 days before cashing it… check cleared and last that was the last activity.

What would happen if I backdated a check and deposited into my primary account which Mom is on?

 

[2manyrocks]

Free Income for the bank is on aspect… interesting how their Best Money Market Checking limited to 3 checks per cycle morphed into a no interest checking as I don’t know how else to describe 27 cents on 54k total deposit?

Their best Savings is 4.75 right now!

I truly appreciate the insight from the TBN brain trust.

A coworker related a similar story where he gave up trying to retrieve a few thousand dollars but eventually got the money relatively easily when the account went dormant to the State and he claimed it…

My inexperience is definitely showing because a few keystroke through online banking would have transferred out all but $1 each.

Two weeks before mom passed a check was written on the account for trash removal and the landscaper sat on it for 60 days before cashing it… check cleared and last activity.

What would happen if I backdated a check and deposited into my primary account which Mom is on?

Sounds like the bank flagged the trust account when they received notice from SS that your Mom passed. Who knows what that flag turned off in terms of processing check payments? I suspect their system was setup to show her as trustee, and then the social security death notice triggered something in their system that made it turn off account access because the system wasn't set to show you as successor trustee to continue administration of the trust. Branch manager just needs to update system records and stop sticking head in the sand.

Is the trust supposed to terminate and distribute the balance to the beneficiaries following your Mom's passing (after payment of any trust taxes or expenses)?

I wouldn't do anything that could look like self-dealing (depositing funds in your personal account) trying to work around US Bank's abysmal (IMPO) customer service.