Trust, Retirement and Custodial Account FAQ

Trust Accounts

In general, a trust is a legal entity that is able to own property and other assets, with a legal agreement defining how assets are going to be managed and distributed. Property can legally be transferred into the trust as the owner. Different trusts have different types of classifications in the law and for tax purposes.

To set up a new trust, or transfer an existing account to a trust, you will need to provide the following:

OR

Trust Summary Document (usually prepared by the attorney, this document includes: name of trust, date of trust, trustee information, and signature section)

OR

The pages of the trust that provide the name of the trust, the trustee information, date of trust, and the signatures of the trustees

  • In the case of a transfer from another registration type, we require a Change/Transfer of Ownership Form signed by the current account owners to authorize the transfer. The form must be medallion signature guaranteed.
  • All physical certificates

If a trustee is incapacitated or wishes to resign, we require the following:

A Trustee Certification Form naming the individual or individuals authorized to act on the trust. This form needs to be signed by all remaining or newly named trustees and must bear either a signature validation program or medallion signature guarantee stamp.

If a trustee dies, and the trust name, date, or TIN is not changing, we require the following:

  • Certified copy of the death certificate.
  • A Trustee Certification Form signed by all current trustees, bearing either a signature validation program or medallion signature guarantee stamp.
  • All physical certificates

If the trust name, date, or Tax Identification Number (TIN) is changing, we will require:

  • Certified copy of the death certificate.
  • Change/Transfer of Ownership Form that must include the following:
    • If the final distribution will be in cash or transferred to the new account, and
    • medallion signature guarantees for all current trustee signatures
  • New Account and Service Application
    • Additional documentation may be required to set up certain account types. Please refer to the application for additional requirements.
  • A Trustee Certification Form signed by all current trustees, bearing either a signature validation program or medallion signature guarantee stamp.
  • All physical certificates

Traditional/Roth IRA

The IRS defines an Individual Retirement Account (IRA) as a personal savings plan which allows you to set aside money for retirement, while offering you tax advantages (including deducting your contributions in some cases). The contributions and earnings in most IRAs are generally not taxed until they are distributed to you.

IRA account owners who need to establish a beneficiary, or wish to change a current designation, must complete the IRA Beneficiary Designation Form. In cases involving multiple beneficiaries, allocations must equal 100%.

Account owners wishing to transfer assets to Columbia Threadneedle must provide the following forms:

  • An IRA Transfer Form- used to request a transfer of IRA assets
  • Direct Rollover Form- used to transfer an employer sponsored retirement plan into an IRA
    • Depending on the requirements of the previous company, this may require a medallion signature guarantee. Please consult your current IRA custodian for clarification
  • An IRA Application (if you don’t currently have an IRA with Columbia Threadneedle)

To transfer assets from Columbia Threadneedle:

  • To another IRA:
    • The account owner should fill out paperwork with the receiving custodian to transfer the assets directly from Columbia Threadneedle. Consult the account’s current custodian for clarification. A medallion signature guarantee is required if the transfer of assets is over $100,000.
    • If that is not an option, the account owner can request a direct rollover by completing an IRA Distribution Form, with the payee information for the final distribution check. If this request is medallion signature guaranteed, we will mail the check directly to the new custodian.
  • As a direct rollover to a qualified plan, for example a non-IRA such as a 401(k):
    • Complete an IRA Distribution Form with the payee information for the final distribution check. If this request is medallion signature guaranteed, we can mail the check directly to the new custodian.

IRA account owners have two options to satisfy RMD requirements:

  1. Call Shareholder Services for assistance in making the distribution
  2. Complete and mail an IRA Distribution Form. This option provides the opportunity to set up recurring payments from your IRA accounts. We will calculate the amount that you need each year going forward and send it to you at a date that you specify

UGMA/UTMA Accounts

A UGMA account allows a donor to give cash or securities to a minor. The minor is the legal account owner, and a custodian is appointed to act as the responsible individual for the minor in financial matters involving this account.

A UTMA account is similar to an UGMA but extends the definition of gift to include real estate, paintings, royalties, and patents.

Qualification for a Uniform Gift to Minors Act or Uniform Transfer to Minors Act account depends upon the investor’s state of residence.

In all cases, there can be only one custodian and one minor on the account. Ownership of property is strictly the minor’s, and the custodian acts as a responsible individual (which is why all UTMA/UGMA accounts are reported under the minor’s Social Security number). Some states will allow the custodian to designate the age (usually between 18 and 25) when the minor can take the assets as their own.

In order to change the custodian on an account, we require (by mail):

  • A letter of instruction signed by the existing custodian, stating their intent to resign as custodian and appoint another adult as the new custodian. The signatures of the resigning custodian and newly appointed custodian must bear a signature validation program or medallion signature guarantee stamp
  • A New Account and Services Application completed and signed by the new custodian
  • Any outstanding certificates issued on the account
  • Please contact Shareholder Services at 800.345.6611, Monday through Friday 8 a.m. to 7 p.m. ET., for instructions on changing the custodian due to death or incapacitation (Please have your account number and social security number available when calling.)

When a former minor reaches majority age, the UTMA/UGMA funds must be transferred to their name individually, with no fiduciary custodian. This process does not happen automatically. To process this transfer request, we require:

Medallion Signature Guarantee

The purpose of a medallion signature guarantee is to authenticate an individual’s signature. The medallion signature guarantee also carries with it certain statutory warranties that we rely on. Only a person who has been formally authorized may execute a medallion signature guarantee on behalf of their organization.

A medallion signature guarantee generally may be obtained from a bank, savings and loan association, or a member of these recognized stock exchanges: Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP), and New York Stock Exchange Medallion Signature Program (MSP). Individuals may also be able to obtain a medallion signature guarantee from a credit union, provided it is authorized to guarantee signatures. We are unable to accept notarizations.