I had a run-in recently with a major national bank. Although I suppose by “run in” I really mean that I complained and they ignored me. I’m still pretty ticked off about it, so you’ll have to forgive me if this becomes a rant.
Here’s what it was about: In Alaska there is a statute which says you can have a short version of your living trust called a “certification of trust,” and if there is not a specific reason why they need to see the whole trust, they must accept the certification. That is a nice convenience, since the certification is about two pages and the trust declaration is invariably going to be a lot longer. It also helps to preserve your privacy. You don’t necessarily want all these junior bankers to see the part of the trust that talks about your alcoholic granddaughter or the kid you’re disinheriting because he’s in prison.
So when I do a trust, I always do a certification to go with it. And if it is a married couple who are doing this as a joint trust, I have both sign the certification, and I notarize it.
Which has worked fine for years. Until recently a certain bank—I don’t want to identify them so let’s call them Western Financial, and say they have a stagecoach as part of their logo—decided that if there are two people signing the certification, there must be two separate notary stamps. In other words, I can’t have a husband and wife sign, and then I notarize both of them together.
Their new policy makes no sense whatsoever. Every other bank, credit union, brokerage, and insurance company had been willing to accept one stamp for both names. That included, up until now, Wells—oops, Western Financial—until all of a sudden it didn’t.
I spent some time on the telephone. Nobody there could give me a reason, they just said it was a new company policy. I finally threw up my hands and changed my documents to make it two separate stamps for each certification.
But it got me to thinking about all the other little quirks that some of the financial institutions have. There is one national brokerage which won’t let clients designate pay on death beneficiaries on joint accounts. Why? They can’t seem to tell me. The only person at the company I could get to talk to me, suggested that when one of the couple died, the survivor could then designate a beneficiary, because it would now be a single account. As if couples never die together or one dies but the other is incompetent.
Here’s one that really gets under my skin. Let’s say you have a savings account and quite a bit of cash in it, so you decide to take some of that cash and buy a CD (not a CD you listen to music on, a certificate of deposit). And let us say that when you set up the savings account, you carefully designated your children as the POD (payment on death) beneficiaries on the account.
Will that POD designation apply to the CD as well? Or do you have to do a new designation specifically for that CD? Guess what, it depends on the company. Some of them say that if you have beneficiaries designated on the underlying account, that will apply to all CDs as well. But others want you to designate beneficiaries on each specific CD. You have to make sure that any time you purchase a CD out of one of your accounts, you ask the bank or credit union whether your POD designation will apply.
Speaking of banks and credit unions, if you have a living trust and want to put your account in the trust, some of them will let you do that and you can keep the same account number you had before (assuming this is a revocable living trust). But others will make you get a new account number, which would mean throwing out your checks and changing your direct deposits, automated bill pay, and so forth. Fortunately, there’s a work-around (make the trust the POD on the account instead) but why complicate things? Obviously, it’s not a requirement that there be a new account number, or all of them would insist on that. And not all of them do.
Or this one: there is a national company, let’s call them—oh heck, I’m done being cute, it’s ComputerShare—where the trustee or executor must submit a bunch of paperwork for each stock you’re holding. Not one bunch of paperwork for all of them, separate paperwork for each and every different stock you have with them. Some require notary stamps; some require medallion signatures that have to be done at the bank. What a headache.
There’s not really a moral to this story—I just wanted to rant. Well, OK, maybe there is a moral. Make sure you know what each company where you park your money with requires. Most people have multiple financial institutions they deal with. Don’t just assume that what works at one of them will work at the others.
Kenneth Kirk is an Anchorage estate planning attorney. Nothing in this article should be taken as legal advice for a specific situation; for specific advice you should consult a professional who can take all the facts into account. Thank you for letting me get that off my chest; I feel better now.
