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We have a situation with an irrevocable trust. The bank is a…

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Hello.We have a situation...

Hello.We have a situation with an irrevocable trust. The bank is a co-trustee and national.. The money has been in a money market account that has been FDIC insured. The bank is dissolving these and notified of us this 3 weeks before it was going to occur. The are moving them into non-insured funds (investment based). We have options of treasury notes or CDs. This bank does not offer the range of options other do (e.g. investing in multiple money market accounts that are insured). Require independent advise: 1. Since protection is important - do we go with Treasury notes? 2. Is this legally allowable for a national bank to do, e.g. not offer FDIC options of money markets once the trust was arranged that way? 3. Not sure how much involved legally with moving the trust - is that what we should move toward? In general, the bank has not been a very good co-trustee through the years. 4. Does this need to go to a federal level for advise?

Accountant's Assistant: Since estate law varies from place to place, can you tell me what state this is in?

Missour

Accountant's Assistant: Has anything been filed or reported?

No

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

Would like an attorney vs a legal assistant

Submitted: 7 months ago.Category: Finance
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Answered in 3 minutes by:
11/19/2017
Financial Professional: Richard, Tax Attorney replied 7 months ago
Richard
Richard, Tax Attorney
Category: Finance
Satisfied Customers: 57,023
Experience: 29 years of experience as a tax, real estate, and business attorney.
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Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

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Financial Professional: Richard, Tax Attorney replied 7 months ago

Good morning. Could you clarify the facts for me just a bit? Am I understanding correctly that your trust agreement only allows investment of the trust assets into FDIC insured money market accounts? When you say you have options of treasury notes or CD's....is this what the trust agreement only allows? or, are these the only options the current trustee is giving you? Thanks.

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Customer reply replied 7 months ago
The trust does not specify these things. It is how it has always been - a decision with the cotrustees (the bank and daughter). Now the option of fdic insured is no longer being provided - outside of CDs (which would be very hard to manage). Does that help?
Financial Professional: Richard, Tax Attorney replied 7 months ago

Thank you for your quick reply. That is helpful. First, the bank is within its rights to discontinue investment options; but, then the trust assets may be moved to another bank that provides the desired investment options; there is little or no cost to this; rather, it's just a process of finding the replacement bank and then having that bank replace the current bank as co-trustee. Treasury notes/bonds are really a better option than money market accounts generally as they would typically offer a bit higher rate of return while also being insured by the government. So, I would not dismiss that option. But, if you decide you want what you've had but the bank you're with no longer offers those options, then you can simply move the assets to a bank that does and replace the old bank as co-trustee with the new bank.

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Financial Professional: Richard, Tax Attorney replied 7 months ago

Just following up. My screen indicates that you have not reviewed my response. Please let me know if you did not receive it so I can re-send it if necessary. Thank you! Richard

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Financial Professional: Richard, Tax Attorney replied 7 months ago

Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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