Trusts, POA & Custodial Accounts

To open a Custodial Account, either the Custodian or Principal must be eligible for membership. The following documents are required:

• Estate Accounts require a Grant of Probate (for an executor) or Grant Letter of Administration (for an administrator appointed where there is no will).
• Other accounts may or may not require legal documents, depending on the circumstances. If the custodian intends to deposit checks into the account made out to the principal, then we will need to ascertain that individual’s legal authority to do so.
  
  

Application Instructions:

In order for a power of attorney to remain in effect despite the subsequent incapacity or incompetency of the principal or the passage of time, it must be a durable POA. A durable POA is one that states that it shall remain in effect in those circumstances. If a POA is not durable, its effectiveness will cease when the principal is adjudged to be incompetent or incapacitated.

The principal may revoke the POA at any time for any reason. All powers of attorney terminate automatically upon the death of the principal. Any language quoted to the contrary will not extend the effectiveness of the POA beyond the principal’s death.

Application Instructions:

1. Download the Convenience Person Application (pdf format).
You may either print the application and complete it by hand or fill in the application electronically and print it after you have completed it. We require an original signature on the form. Please make sure your application is completed fully and legibly.

This form should be completed by the Principal. If the Attorney-in-Fact asserts that the Principal is incompetent and unable to complete the form, the Attorney-in-Fact may complete it on behalf of the Principal

2. Provide a copy of the Power of Attorney signed by the Principal and notarized.

3. The Convenience Person must bring valid government-issued identification to any credit union branch. To find a branch location near you, click here.

All Convenience Person applications must be reviewed and approved by an authorized staff member. Please be aware that the Convenience Person will not be permitted access to the account until the application is approved.

Types of Trust Accounts

Totten Trust
A Totten Trust is just another name for the usual payable-on-death type of account. Testamentary trusts, tentative or Totten trust accounts, payable-on-death accounts, and other similar accounts are accounts that evidence the owner’s intent to have funds in the account transferred to named beneficiaries at the time of the owner’s death. Unlike more complicated trusts, Totten or payable-on-death trusts can be created at the credit union merely by indicating that intent in the title of the account.

A testamentary account in which the named beneficiary is the spouse, child, or grandchild of the owner, is "insured up to $100,000 in the aggregate as to each such beneficiary, separately from any other accounts of the owner or beneficiary, regardless of the membership status of the beneficiary." If the named beneficiary is not the owner's spouse, child, or grandchild, then the funds in the account "shall be added to any individual accounts of such owner and insured by $100,000 in the aggregate."

Living Trust
A Living Trust can be set up by an attorney, or by the individual(s) themselves (a Grantor/Trustor). Legal documentation, the Trust Instrument, must exist to establish a Trust Account. They are always created outside the credit union.

Application Instructions:

1. Download the Trust Account Application (pdf format).
You may either print the application and complete it by hand or fill in the application electronically and print it after you have completed it. We require an original signature on the form. Please make sure your application is completed fully and legibly.

2. Write a check (payable to Lafayette Federal Credit Union) or provide cash (if applying in person only) for your initial deposit of at least $50.

3. Bring your valid government-issued identification and initial deposit to any credit union financial service center. Find a financial service center location near you.

The custodian can be any adult over the age of 21. The custodian manages the money in the account, and authorizes all deposit and withdrawal transactions. Although withdrawals can only be for the benefit of the minor child, it is not the responsibility of the credit union to monitor these transactions. The minor child cannot withdraw funds from this account.

It's important to understand that funds held in a custodial account are owned by the child. Even though the child will not have control of the property until later, the child is the owner as soon as funds are transferred to the account. This fact has important consequences:

• A gift is legally complete when cash or other property is transferred to a custodial account, not when the account terminates. The contributor is not allowed to change his/her mind and take the property back.
• Income generated by assets in the account is the child's income.
  
  

The account must be titled as a UTMA account. For example the primary member of an account for Sally Doe (minor) would be "Sally Doe, Beneficiary UTMA, John Doe, Custodian”.

The account terminates when the child reaches a specified age. The age depends on the state's law and can range from 18 to 25. In some states the custodian can choose to designate a different age than the one that automatically applies, but the law will impose a limit on the age the custodian can choose. In the District of Columbia the age is 18, in Maryland it is 21, and in Virginia you may set the age from 18 through 21.

To open a Uniform Trust to Minors Account, complete the Uniform Trust to Minors Accounts application. We will verify the identity of the adult custodian. If you are already a member, additional verification will not be necessary.

Application Instructions:

1. Download the Uniform Trust to Minors Accounts Application (pdf format).
You may either print the application and complete it by hand or fill in the application electronically and print it after you have completed it. We require an original signature on the form. Please make sure your application is completed fully and legibly.

2. Write a check (payable to Lafayette Federal Credit Union) or provide cash (if applying in person only) for your initial deposit of at least $50.

3. Bring your valid government-issued identification and initial deposit to any credit union financial service center. Find a financial service center location near you.