Compliance Update Wills Trusts Powers of Attorney Revised

Compliance Update Wills, Trusts, & Powers of Attorney Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Wills • Probate: The proceeding by which the document is judicially established to be the last will and testament of the decedent. In every State there is a Probate Court which handles wills. Generally, All Wills must be admitted to Probate. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Executor vs. Personal Representative • Personal Representative (PR): This refers to the person named by the court, to administer the estate. • Executor (E): This refers to the person named in the Will to administer the estate. Duties of the PR and the E are indentical— both are charged with administering the estate. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Admission of Will to Probate • Once admitted to Probate, Letters Testamentary are issued to either the Personal Representative or the Executor of the estate. • Letters Testamentary: Issued by the Probate Court—authorizes the PR or E to take possession of the decedent’s property and to act on behalf of the estate. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

FHC and Wills • Must have Letters Testamentary. • Death Certificate and Will is not enough to allow any action on the account. • Registered Principal must review. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Trusts • Trust: Will substitute Trusts arise by operation of law and are not subject to Probate. ** (unless Testamentary Trust) Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Types • Revocable: Power to revoke the trust is included in the trust document—Also called Inter. Vivos Trust—Sometimes referred to as “Living Trust” • Irrevocable: May not be revoked. • Testamentary: A trust created in a will. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Trustee • Has powers over the trust property. • Trust may have one or more trustees. • Powers may be spelled out in the trust itself or arise by statute. • No Self-Dealing. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Trustee-Continued • If there are 2 trustees, both must consent to the proposed action. • If there are 2 trustees, one may act alone ONLY IF the trust gives them the power to act alone. • Document ALWAYS governs!! Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

FHC and Trusts • FHC will not interpret Trust • Need the following pages of the Trust to process: – – – First and Second pages listing the name, date and grantor of the Trust Signature/Notary/Witness Page which documents who the Trustee is Page detailing investment powers Prefer to have a Certificate of Trust • Always request Trustee Certification of Investment Powers. • Registered Principal must review. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Uniform Transfers to Minors Act Uniform Gift to Minors Act (UTMA/UGMA) • • These are considered a type of irrevocable trust. Legal title to the property transferred (gifted) to the minor is held by the minor. • Custodian charged with using funds for the interest of the minor or investing funds in the best interest of the minor. • 2 main differences between UTMA and UGMA: Age of Majority: UGMA: Typically, 18 years of age UTMA: Typically, 21 years of age Asset Type: UGMA: Typically only cash, securities, annuities, insurance, etc. UTMA: In addition to the above, can also contribute real property, artwork, etc. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

FHC and UTMA/UGMA • Customer Account form must be filled with the Minor as the owner of the account. • FHC will request further information if funds are withdrawn from account for the benefit of the custodian. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Joint Ownership of Accounts • Joint Tenants with Right of Survivorship (JTWROS) Undivided ownership—right to possess whole May not sell/dispose of interest without consent of joint tenant Ownership passes automatically to surviving joint tenant upon death Either party has full access and control over the account. • Tenants in Common: Fractional ownership—right to possess whole Freely transferable—ownership does not pass to cotenant upon death—passes to estate Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

Powers of Attorney(POA) • Types 1. Durable - Effective immediately - Authorization survives the incapacity/mental disability of Principal 2. Non-Durable - Effective immediately - Authorization terminates upon the incapacity/mental disability of Principal - Generally used for a specific purpose 3. Springing - Not effective immediately - “Springs” into existence and effective upon the incapacity/mental disability of the Principal **In all instances, a POA (regardless of the type) is terminated upon the death of the Principal or upon the revocation of the POA by the Principal. Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.

FHC and POAs • FHC will require a copy of the POA • FHC will require that a Power of Attorney Affidavit and Indemnification Form be executed. • Be cautious of differences between Trustee and POA Revised June 2013 For Broker-Dealer Use Only. Not Approved for Client Use.