Fiduciary Accounts Information Sheet RVSD Fri, 02/20/ :15 AM

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1 Fiduciary Accounts Information Sheet RVSD Fri, 02/20/ :15 AM Show all Hide all Points of Interest A fiduciary account is an account of which the funds are owned by one party, but are managed by another party (such as a custodian, representative, or trustee) for the owner's, or a beneficiary's, benefit. A fiduciary is a person legally appointed and authorized to hold assets in confidence for another person. The fiduciary manages the assets for the benefit of the other person rather than for his or her own profit. Fiduciaries are not assigned to specific account types in the Associations FSP tool. To view authorized signers, review "All Associations" in Member Overview FSP tool, or the Associations FSP tool. This resource is best printed in landscape orientation. Fiduciary Account Types

2 Estate An estate represents all the assets a person possesses at the time of death; such as securities, real estate, interest in businesses, physical possessions, and cash. The estate is distributed to heirs according to the dictates of the person's will or, if there is no will, a court ruling. A person who dies leaving a valid will may designate one or more individuals or corporate fiduciaries as Executor(s). The executor has the responsibility to settle the decedent's estate. Executors (male) and/or Executrixes (female) are designated by the probate courts by issuance of "Letters Testamentary." If a person dies without a valid will, and if there is a need for administration of the estate, the probate court will appoint a qualified person to settle the estate. Administrators (male) and/or Administratrixes (female) are designated by the probate courts by issuance of "Letters of Administration." If more than 60 days has passed since letters were granted. It is advised to call the county clerk with representative in the office to verify they can still serve. (It is possible estate has been closed.) Open an Estate Account Checklist Deceased Member Situations Forms Chart Dormant/Deceased Resource Page Account Name Style Authorized Signers Ownership Estate of [Name of Only the personal representative (i.e. executor, executrix, The estate owns the funds Deceased], Deceased administrator, administratrix) is allowed to conduct business. in the account. (Ex. Estate of John Doe, Deceased) Personal representatives may not delegate his/her authority by naming an attorney-in-fact, and he/she may not name additional signers to the account. Death Certificate Letters Testamentary, or Letters of Administration TIN Certificate If court-issued document provides for co-executors or coadministrators, either co-executor or co-administrator may make withdrawals on the account unless the representatives agree that all signatures will be required. The death of the personal representative has no effect on the account. The court will appoint a replacement personal representative evidenced, generally, by the issuance of "Letters of Administration." If replacement Letters are not issued, CUTX will respond to a valid court order instructing how to distribute any remaining funds in the account(s). The funds are aggregated with other accounts belonging to the decedent at CUTX and insured to $250,000. Special Account Application and Authorization

3 Guardianship A guardian is someone who is appointed by the probate court to manage the affairs of either a minor or an adult who has been determined incapable to handle his/her affairs. The minor or other incapacitated person is known as the "ward." "Letters of Guardianship" prove the guardian's authority to act on behalf of the ward. There are two types of guardians in the State of Texas: A "guardian of the estate" is appointed to manage financial affairs of the ward. A "guardian of the person" is appointed to manage the physical well-being of the ward. Often, a sole guardian is appointed for both capacities. All letters of guardianship expire one year and four months after the date of issuance unless renewed. CUTX may become involved in a guardianship when someone presents paperwork establishing a guardian of the estate. When a minor reaches 18, the guardianship will eventually terminate. It is not appropriate for CUTX to pay funds directly to the minor unless authorized to do so by the guardian or by the probate court. Checklist Coming Soon Legal Guardian Information Sheet Fiduciary Accounts Folder Account Name Style Authorized Signers Ownership [Guardian's name], Only the guardian can conduct business. The guardian may not Funds are owned by the guardian of [ward's name] delegate authority by naming an attorney-in-fact, and he/she may not name additional signers. ward. (Ex. Jane Doe, guardian of John Doe) Letters of Guardianship of the Estate (with court seal) Special Account Application and Authorization Death of Ward: The authority of the guardian ceases at the death of the true owner. Funds are generally paid to the ward's estate. CUTX will rely on proper documents to ascertain to whom the funds can be relinquished. Deceased Member Situations Forms Chart Death of Guardian: The death of the guardian has no impact on the ownership of the funds. The court will appoint a successor guardian. Replacement signature cards will be executed upon proper authorization from the court. Funds are aggregated with other single-ownership accounts belonging to the ward at CUTX, and insured up to $250,000.

4 Social Security Representative Payee A representative payee is an individual or organization that receives Social Security and/or SSI payments for someone who cannot manage or direct the management of his/her money. Payees should use the funds for the current and foreseeable needs of the beneficiary and save any remaining funds for the beneficiary's future use. The representative payee has the responsibility to: Provide for the beneficiary's current maintenance, food, shelter, clothing, medical care, and personal needs Pay prior debts of the beneficiary only if his current and foreseeable needs are provided for Conserve and invest funds not needed for current expenses Report promptly to the SSA any occurrence which might affect eligibility for benefits and changes in the beneficiary's circumstances Submit an annual accounting to the Social Security Administration. A payee is prohibited from entering into binding contracts for a beneficiary, unless the payee is the beneficiary's parent or legal guardian, or the beneficiary has granted the payee a power of attorney. SSA Representative Payee Account Checklist Fiduciary Accounts Folder Account Name Style Authorized Signers Ownership [Representative's name], Only the SSA Rep Payee conducts business, including: SSA Rep Payee for [Beneficiary's name] (Ex. Jane Doe, SSA Rep Payee for John Doe) completing transactions updating beneficiary's information receiving statements receiving account information via Online Banking, Telephone Teller, Branch, or Phone. The representative payee may not delegate authority by naming an attorney-in-fact, and he/she may not name additional signers. Beneficiary is not allowed to withdraw funds, have an ATM card, or request account balances. Refer beneficiary to his/her representative payee. Funds in the account are owned by the minor or legally incapacitated person. Representative payee letter from SSA -or- US Treasury check issued by SSA and payable to the rep payee for the benefit of the beneficiary. Special Account Application and Authorization Death of Owner: The authority of the representative payee ceases at the death of the true owner. Funds are generally paid to the owner's estate. CUTX will rely on proper documents to ascertain to whom the funds can be relinquished. Deceased Member Situations Forms Chart Death of Representative Payee: The death of the representative payee has no impact on the ownership of the funds. The SSA will appoint a successor representative. Replacement signature cards will be executed upon proper authorization from the SSA. Funds are aggregated with other single-ownership accounts belonging to the minor or incapacitated adult at CUTX, and insured up to $250,000.

5 Trust A trust is a fiduciary relationship in which a person, called a trustee, holds title to property for the benefit of another person, called a beneficiary. The person creating the trust is the creator, settler, grantor, or donor; the property itself is called the corpus, trust res, trust fund, or trust estate - which is distinguished from any income earned by it. There are two categories of trust accounts: A revocable trust whereby the creator of the trust retains the right to revoke the trust and get the property back. An irrevocable trust whereby the terms of the trust cannot be amended or revised until the terms or purposes of the trust have been completed. All revocable trusts become irrevocable at the death of the last surviving creator. There are many different styles of trusts; to learn more, view the Trust Glossary. Per Texas Finance Code , credit unions may issue shares or receive a deposit... in a revocable trust, if... A. a settlor is a member of the credit union; or B. a trustee or a beneficiary is a member of the credit union and the settlor is a member of the trustee's or beneficiary's family; or in an irrevocable trust, if a settlor, trustee, or beneficiary is a member of the credit union. Trust Account Checklist Trust Glossary. Fiduciary Accounts Folder Account Name Style Authorized Signers Ownership Opened with Trustee SS#: [Trustee's name], trustee (Ex. Molly Member, Trustee) Opened with Trust TIN: Exact name of trust Section of the Trust document that provides the date created and the names of settlors and trustees, and signed last page. or Trust Certificate or Trust Summary Trust Application, and Trust Account Agreement Only trustees can conduct business for the trust. The trustee(s) may not delegate his/her authority by naming an attorney-infact, and he/she may not name additional signers to the account unless specifically allowed in the trust papers. Successor trustee(s) named in the document may sign only if the initial trustee(s) cease to serve, as evidenced by a death certification or signed and notarized letter of resignation. The death of a trustee does not affect the ownership of the trust account. At the death of a trustee... The successor trustee provides CUTX with a certified copy of the death certificate The successor trustee's authority is verified by reviewing the trust papers or trust certificate The successor trustee's identification is confirmed and appropriate USA Patriot Act requirements are satisfied A new signature card is executed, and new Trust Account Agreement. Successor trustee can also assume responsibility of the Trust if original trustee becomes incapacitated or resigns If trustee is incapacitated, a doctor's written and signed statement is required. If trustee resigns, a written, notarized statement is required. The trust itself owns the funds in the account - they no longer belong to the creator as he/she has transferred the funds from their ownership to the trust. Revocable Living Trusts: Insured up to $250,000 per qualifying beneficiary or as a single ownership account of the grantor if no qualified beneficiary is recognized. Irrevocable Trusts: Each beneficiary's noncontingent trust interest in each trust established by a different grantor is separately insured to $250,000. If there is more than one grantor, other guidelines will apply.

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7 TUTMA TUTMA stands for Texas Uniform Transfer to Minors Act. TUTMA provides a way to legally transfer ownership of funds to a minor without giving the minor immediate access to the account funds. The transfer and all additional deposits to the account are irrevocable gifts to the minor. For tax purposes, TUTMAs are set up under the minor's social security number. There is no maximum amount of dollars that can be transferred to minors under TUTMA. Transfers by one donor in excess of the federal gift tax exclusion will be subject to federal gift taxes. It is the custodian's responsibility to transfer control of the funds to the minor upon reaching age 21. All funds withdrawn from the account by the custodian must be for the sole benefit of the minor. TUTMA Account Checklist TUTMA Account Successor Custodian Checklist Fiduciary Accounts Folder Account It Name is not Style CUTX's responsibility Authorized Signers to monitor the use of the funds. Ownership On Account in FSP: Only the custodian conducts business, including: [Minor's name], a minor (Ex. Doe, a Minor, John) On Special Account App: [Custodian's name], as custodian for [Minor's name], under TUTMA (Ex. Jane Doe as Custodian for John Doe under TUTMA) There is no formal form for establishing a TUTMA account. A personal representative. request in writing only makes the account more legally binding if acquired. Special Account Application and Authorization W-9 if custodian is not parent Successor Custodian form (if applicable ) completing transactions updating custodian's or minor's information receiving statements receiving account information via Online Banking, Telephone Teller, Branch, or Phone There can only be one custodian per account. The custodian may not delegate authority by naming an attorney-in-fact. The custodian may name a successor custodian to serve in the event of his/her death, incapacity, or resignation. An adult member of the minor's family, a legal guardian, and/or the minor (if at least 14 years old), may petition the court to remove a custodian and designate a successor custodian. Death of Minor: Funds are generally paid to the minor's estate. The custodian is responsible for paying the remaining funds to the estate's Death of Custodian: The successor custodian assumes fiduciary responsibilities. If successor was not previously named and minor is at least 14 years old, the minor may select the successor provided that the successor is an adult member of the minor's family (21 or older), a legal guardian, or a trust company. The minor only has 60 days after the custodian dies to make this designation. If no successor is named within 60 days, or the minor is less than 14 years old, then the minor's guardian becomes successor custodian. Funds are owned by the minor, even though the minor cannot access the account. Funds are aggregated with other single-ownership accounts belonging to the minor at CUTX, and insured up to $250,000. For Successor:

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9 Veterans Affairs Custodial A Veterans Affairs (VA) custodian is a person or legal entity designated by VA to manage VA funds on behalf of a beneficiary unable to manage his or her financial affairs. The VA recognizes the recipient of beneficiary payment as a Federal Fiduciary. The two most common are Spouse Payee and Legal Custodian. Checks received for deposit will be payable to the Federal Fiduciary for the beneficiary. Examples: "John Doe Spouse Payee of Jane Doe" or "John Doe Custodian of Jane Doe" Custodians must use the funds exclusively for the beneficiary and his or her VArecognized dependents, if any, and as specifically authorized by VA, and may not mix the beneficiary's funds with his/her own personal funds. Custodians must keep complete and accurate records of income received, expenditures, savings, and investments, and may be required by VA to submit periodic accountings. A custodian is prohibited from entering into binding contracts for a beneficiary, unless the payee is the beneficiary's parent or legal guardian, or the beneficiary has granted the payee a power of attorney. VA Custodial Account Checklist Fiduciary Accounts Folder Account Name Style Authorized Signers Ownership Custodian's name, Federal Fiduciary for Beneficiary's name Only the Legal Custodian conducts business, including: (Ex. Jane Doe, Federal Fiduciary for John Doe) completing transactions updating beneficiary's information receiving statements receiving account information via Online Banking, Telephone Teller, Branch, or Phone The custodian may not delegate authority by naming an attorney-in-fact, and he/she may not name additional signers. Beneficiary is not allowed to withdraw funds, have an ATM card, or request account balances. Refer beneficiary to his/her custodian. Funds in the account are owned by the beneficiary. Federal Fiduciary letter from VA -or- US Treasury check issued by VA and payable to the custodian of the beneficiary -or- A signed copy of the Fiduciary Agreement Special Account Application and Death of Owner: The authority of the custodian ceases at the death of the true owner. Funds are generally paid to the owner's estate. CUTX will rely on proper documents to ascertain to whom the funds can be relinquished. Deceased Member Situations Forms Chart Death of Custodian: The death of the custodian has no impact on the ownership of the funds. The VA will appoint a successor Federal Fiduciary. Replacement signature cards will be executed upon proper authorization from the VA. Funds are aggregated with other single-ownership accounts belonging to the beneficiary at CUTX, and insured up to $250,000.

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