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How important is titling of a CD
Old 02-22-2018, 01:54 PM   #1
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How important is titling of a CD

I am wanting to open a new high yield CD, but after calling the five banks with the best rates NONE was able to title it to my trust. (And I already have FDIC-maxed accounts at the banks who could do it.). The ones who couldnít told me that I could name my trust as beneficiary. I donít claim to be an expert on trust-related issues, so can someone explain to me if having the trust as beni is as good as having account titled to trust?
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Old 02-22-2018, 02:11 PM   #2
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I went to a seminar sponsored by an estate attorney. He stated that its not so important for accounts with beneficiary provision unless there is requirement for a special needs trust or something along those lines.
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Old 02-22-2018, 02:40 PM   #3
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Originally Posted by RenoJay View Post
I am wanting to open a new high yield CD, but after calling the five banks with the best rates NONE was able to title it to my trust. (And I already have FDIC-maxed accounts at the banks who could do it.). The ones who couldnít told me that I could name my trust as beneficiary. I donít claim to be an expert on trust-related issues, so can someone explain to me if having the trust as beni is as good as having account titled to trust?
You can hold multiple CDs from at your FDIC limit from multiple banks in a brokerage account or your trust's brokerage account. Brokers such Schwab, Fidelity, TD Ameritrade allow you to open trust accounts. You are limited to the FDIC limit per issuer ($250K single/$500K joint).
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Old 02-22-2018, 03:14 PM   #4
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Very strange 5 banks cannot put CD title in Trust. Never had that problem.
Usually the hang up is the "banks", need to see copy of Trust. Which is a pain.
(Also, they only need to see 1st page and last, signature page).

My understanding. Trust "FDIC" coverage determined by number of "beneficiaries".

FDIC rule, different if just regular account. ie. single, joint, etc.
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Old 02-22-2018, 03:23 PM   #5
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My parents had a trust. They had some of the money that was in the trust invested at Wells Fargo in a CD. Upon death, the trust stated that it was to be divided up and closed.

Wells Fargo claimed that the trust did not die, thus there was no reason that the CD should be converted to cash. Basically, either leave it alone until maturity (an additional 3 years or so), or cash it out with no interest payments since the money was initially put into the CD. (Basically, they deducted the interest paid on the CD since it was purchased, and deducted that from the principle before paying it back. They returned the principal minus the interest payments that had been made over the previous 7 years.)

Wells Fargo is certainly on our list of companies to never do business with again. Perhaps the challenges with a CD that is owned by a trust were an isolated situation. Perhaps isolated to WF at this specific location.
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Old 02-22-2018, 03:40 PM   #6
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My parents had a trust. They had some of the money that was in the trust invested at Wells Fargo in a CD. Upon death, the trust stated that it was to be divided up and closed.

Wells Fargo claimed that the trust did not die, thus there was no reason that the CD should be converted to cash. Basically, either leave it alone until maturity (an additional 3 years or so), or cash it out with no interest payments since the money was initially put into the CD. (Basically, they deducted the interest paid on the CD since it was purchased, and deducted that from the principle before paying it back. They returned the principal minus the interest payments that had been made over the previous 7 years.)

Wells Fargo is certainly on our list of companies to never do business with again. Perhaps the challenges with a CD that is owned by a trust were an isolated situation. Perhaps isolated to WF at this specific location.
Sorry, hard to understand. 10 year CD. Closed 3 years early. Lost 7 years of interest as a penalty. Is that correct? If so.....WF is bad.
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Old 02-22-2018, 03:46 PM   #7
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Originally Posted by RenoJay View Post
I am wanting to open a new high yield CD, but after calling the five banks with the best rates NONE was able to title it to my trust. (And I already have FDIC-maxed accounts at the banks who could do it.). The ones who couldnít told me that I could name my trust as beneficiary. I donít claim to be an expert on trust-related issues, so can someone explain to me if having the trust as beni is as good as having account titled to trust?
No, it is not as good...

It is a very bad idea.... if it is in your name it is YOURS, not the trusts....

If someone was going to be picky they could claim that it was a distribution from the trust to you.... you naming the trust as beneficiary is meaningless for ownership... and the money is not safe like it could be in the trust...
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Old 02-22-2018, 05:49 PM   #8
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I recently opened a CD at Ally titled to our trust. No big deal, did it online, though since it was a trust there is a manual review step that takes a few days. This was even though we already have a savings account for the trust (though we did not have to resubmit any trust documents again).
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Old 02-22-2018, 06:27 PM   #9
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I also have an account at Ally under my trust. And in that account I have savings, Money Market and various CDs.
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Old 02-22-2018, 09:43 PM   #10
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Sorry, hard to understand. 10 year CD. Closed 3 years early. Lost 7 years of interest as a penalty. Is that correct? If so.....WF is bad.
You have it summarized correctly. Within the trust, they bought a 10 year CD (actually, the trust bought the CD with money that was in the trust). 7 years later, last survivor of the trust died. The trust says that it is to be paid out to heirs. WF refuses to pay out the CD principal. Either wait three years (but the trust was not designed to continue to exist past death), or settle for principle minus the 7 years of interest.

Multiple other CDs were held at banks, in their personal name. All of these were no problem to return the principal.
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