Account Types

Question 1

What is the most common account type?

Answer 1

General membership

Question 2

Individual vs. Joint account

Answer 2

Individual- one person has rights to the account and it’s funds

Joint- two or more people who have equal rights to the account and it’s funds

Question 3

What is Sole Proprietorship and what are the requirements?

Answer 3

It is the simplest form of a business account.
(Ex. Consultants, landscapers, shop owners, etc.)
Requirements:
•Valid gov. ID/driver’s license
•business certificate
•EIN letter (if applicable)

Question 4

What are the 3 categories for business accounts?

Answer 4

Partnership- two or more people involved in a joint enterprise

Incorporation- viewed as it’s own entity with it’s own rights

Limited Liability Company (LLC)- combines some aspects of both of the previous types

Question 5

What is an organization?

Answer 5

A group of two or more people formed for some religious, educational, charitable, or social purpose

*Requirements:
Valid ID for each member
Resolution of the board
TIN letter

Question 6

Revocable vs. Irrevocable Trust

Answer 6

Revocable trusts may be altered.

Irrevocable trusts have an agreement that states it may not be altered by anybody.

Question 7

What is the biggest requirement for open an estate account?

Answer 7

The decedent must have been a member prior to passing.

Question 8

What is an UTMA?
(Uniform Transfers to Minor Act)

Answer 8

An account opened for a minor, specifically authorized by state statute
(Commonly used as gifts to children, since it is less formal than a written trust)

Question 9

What is a representative payee?

Answer 9

A person who is given the right by the Social Security Administration to handle the funds of someone who is incapable of doing it themselves

*Checking, savings, and money market can be used

Question 10

What is a Platinum Plus membership and what are the benefits?

Answer 10

An account for members who are 55+
Requirements:
-must be 55 or older
-has a checking account
-has direct deposit

*Benefits:
.50% rate of interest on share certificates
.50% rate decrease for all lending
Free money orders
Free cashier’s/official checks
1 free box of personal checks each year

Question 11

What happens with an account that has rights to survivorship?

Answer 11

When an owner of the account passes away, the other owner(s) still have rights to own and access the funds in the account.

Question 12

What happens when an account is designated without rights to survivorship?

Answer 12

The other owner(s) no longer have rights to the account.

The funds will become part of the decedent’s estate or be given to an existing beneficiary.

Question 13

What is a trust?

Answer 13

A legal agreement where funds/assets are held by a third party for the benefit of another party (beneficiary)

Question 14

What are the benefits of a trust?

Answer 14

1. Avoid probate
2. Carry out charitable intent
3. Reduce income taxes
4. Protect beneficiaries
5. Protect assets from becoming marital property in divorce
6. Protect assets from creditors
7. Provide lifetime income to beneficiaries
8. Provide privacy in transfer of wealth

Question 15

What is a volunteer account?

Answer 15

Any account owned by a board or committee member

Question 16

What is a living trust?

Answer 16

Created during an individual’s lifetime, a designated person (the trustee) is given responsibility of the assets for the eventual beneficiary.