LATHAM, N.Y. – The difference between trust accounts and accounts held by a trust were the subject of a recent online, refresher question-and-answer format from the New York State Credit Union League. Joan Lannon, league compliance specialist for the league, reminded credit unions that they can indeed set up trust accounts. In New York, with a Totten Trust, the funds in the account are owned and may be used by the member. Funds are made available to the beneficiary only after the member's death. If the member withdraws all the funds and closes the account, the trust is terminated. Lannon said a trust account should not be confused with an account held by a trust. A trust is a separate legal entity that can hold property separately from the member. In the case of a trust, the trust holds a member's personal assets. "When a member requests an account be created under the provisions of a living trust agreement, it is recommended that the credit union's attorney review the trust agreement to ensure that it does not require services that the credit union cannot or does not wish to provide," Lannon said. Above all else, each FCU must review its charter and bylaws (a state-chartered credit union must review only its bylaws) to determine if "organizations of such persons" are eligible for membership in the credit union, Lannon said. "Organizations of such persons' means an organization or organizations composed exclusively of persons who are within the field of membership of this credit union," Lannon clarified. With respect to the taxpayer identification number (TIN), it is not the credit union's responsibility to know whether the member-trustee needs to use his/her own social security number or obtain another TIN from the IRS, Lannon said. If the member-trustee does not know which number to use on the account, direct him/her to the attorney who drafted the trust. "The credit union should never advise the member-trustee which number to use," Lannon said. The trustee must transact all the living trust's business. Any signatures must be made as trustee, in his/her representative capacity, not in the member's original individual capacity. Depending on how the trust is established, one trustee or all may be required to sign all documents. Lannon said credit unions should make sure the trust agreement is clear in this regard and staff is aware of the signature requirements, since the credit union could be held liable for damages if the trust's instructions are not followed properly.