How to name beneficiaries and fund a trust at Blue FCU

A POD beneficiary designation is available on deposit accounts: checking, savings, money market and term shares. It is added by Account Change Card or Member Services Request.¹

The agreement states that "any POD or trust beneficiary/payee designation shall not apply to Individual Retirement Accounts (IRAs)." An IRA takes the separate IRA beneficiary designation.²

The agreement's POD paragraph "does not apply to an account held on behalf of or in the name of a trust," which is titled to the trust instead.²

A trust may be named as POD beneficiary on a personal deposit account. Blue's agreement treats a trust beneficiary/payee designation the same way it treats a POD designation.²

A trust can be named as IRA beneficiary.¹

With more than one surviving POD beneficiary, the funds are owned "jointly in equal shares without rights of survivorship" unless state law provides otherwise or Blue documents a different split. Primary and contingent beneficiaries are listed.^{2, 1}

Blue "may require that account changes requested by you, or any account owner, such as adding or closing an account or service, be evidenced by a signed Account Change Card, Member Services Request, or other document."²

For payable-on-death accounts. Completed by the account owner. Sent by the institution on request.¹

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For payable-on-death accounts. Provided at a branch.¹

For IRAs. Sent by the institution on request.¹

In Blue's words, a POD designation is "an instruction to the Credit Union that an individual or joint account so designated is payable to the owner(s) during his, her, or their lifetimes and, when the last account owner dies, is payable to all surviving POD or trust beneficiaries/payees."²

Blue is "not obligated to notify any beneficiary/payee of the existence of any account nor the vesting of the beneficiary/payee's interest in any account, except as otherwise provided by law."²

Joint accounts include rights of survivorship by default, "unless otherwise stated on the Account Card or documented through the Credit Union's online application and authentication process." The surviving owner takes before any POD beneficiary.²

A surviving joint owner's interest is still "subject to the Credit Union's statutory lien for the deceased owner's obligations," even if the survivor never consented to the deceased owner's debt.²

Trust titling covers Blue's deposit products: checking, savings, money market and term share certificates.¹

Deposits to Vista High Yield Savings must come from dividends earned on qualified dividend-bearing accounts, so a trust cannot simply fund it with a transfer.¹

IRAs cannot be retitled to a trust.¹

Trust account paperwork is completed in the trust name, and existing accounts are generally closed and reopened under the trust title.¹

The agreement provides that Blue "may require you to close your account and apply for a new account if, for example: (1) there is a change in owners or authorized signers."²

Under "Special Account Instructions," Blue states that "because we do not give legal advice, we cannot counsel you as to which account arrangement most appropriately meets the specific requirements of your trust, will, or court order."²

Under "Special Account Instructions," if asked to follow instructions it believes might expose it to claims, Blue "may refuse to follow your instructions or may require you to indemnify us or post a bond."²

Under "Pledge, Right of Offset and Statutory Lien," Blue takes a lien on all shares and deposits for obligations the member owes it, so debts the grantor owes Blue can reach funds in a trust-titled share.²