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

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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
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.

11. 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.

12. 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.

13. 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 co-tenant upon death—passes to estate
Revised June 2013
For Broker-Dealer Use Only. Not Approved for Client Use.

14. Powers of Attorney(POA)
Types
Durable
- Effective immediately
- Authorization survives the incapacity/mental disability of Principal
Non-Durable
- Effective immediately
- Authorization terminates upon the incapacity/mental disability of Principal
- Generally used for a specific purpose
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.

15. 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 between Trustee and POA
Revised June 2013
For Broker-Dealer Use Only. Not Approved for Client Use.