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Three WCUL account forms updated

News Compliance Courier

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NEWS:  The League has released updated versions of three account-related forms. Current subscribers to these forms will automatically receive the new updated versions in the coming days as part of their annual maintenance license agreement:

Two significant changes have been made:
 
First, a line has been added to the area for naming payable on death (P.O.D.) beneficiaries on all three forms. It says, “Members should consult an attorney before naming minors as P.O.D. beneficiaries.”
 
Second, a box labeled “Agent Designation under Wis. Stats. §705.05 (optional)” has been deleted from the Credit Union Share Certificate and the Account Ownership Agreement.
 

New notice about naming minors as P.O.D. beneficiaries

 
The League has added a line to the forms’ P.O.D. designation areas, saying “Members should consult an attorney before naming minors as P.O.D. beneficiaries.” We added this notice after credit unions relayed stories of members frustrated by the legalities involved when a member has left a sizeable account balance to a young P.O.D. beneficiary. Families are often surprised that a credit union may not be able to simply cut a check to a child in this situation.
 
The League’s ii Release No. 0004 explains the process, starting on p. 3 and saying: “When a POD beneficiary is under age 18, the credit union cannot simply pay over the funds in the account to the minor, as it would with an adult POD beneficiary. The Wisconsin Statutes govern how the funds should be handled. See Wis. Stats. §705.04(2) and Chap. 54. How should this be done? It depends on several factors.”
 
The ii Release goes on to explain the statutory provisions, which are lengthy and can be complicated. We will not repeat that material. Suffice it to say that if account holders want to leave their account balances to minors, simply naming those minors as P.O.D. beneficiaries may not be a sound plan. Members may want to consult with an attorney or estate planning professional to discuss alternatives. Or, they may want to consider simply naming a custodian for the minor, as discussed next.
 
One option: Naming a custodian for the funds
 
Account owners who want to leave an account to a minor can consider stipulating that the funds are to be paid to the minor in accordance with Wisconsin’s Uniform Transfers to Minors Act (UTMA). In other words, account owners can designate an adult to hold the funds for the child in a custodial account.
 
To accomplish this, account owners need to use certain language. Since League forms #81057, #82012, or #82024 do not offer adequate space for that language, credit unions may need to create a short addendum page they can add to the forms for a particular account.
 
Consider using language like this on that addendum:

For individual accounts

If [name of minor], a P.O.D. beneficiary named on account no. ___________ at ____________ Credit Union, is a minor on the date of my death, ownership passes to [name of adult] as custodian for [name of minor] under the Wisconsin Uniform Transfers to Minors Act.

________________________________        ______________
Member/Owner’s Signature                           Date


For joint accounts

If [name of minor], a P.O.D. beneficiary named on account no. ___________ at ____________ Credit Union, is a minor on the date of death of the last surviving depositor, ownership passes to [name of adult] as custodian for [name of minor] under the Wisconsin Uniform Transfers to Minors Act.

________________________________        ______________
Member/Owner’s Signature                           Date

________________________________        ______________
Joint Owner’s Signature                                 Date

Credit unions should collect adequate information to properly identify the named custodian and contact them.

After the death of the account owner(s), the custodian may open a new custodial account at the credit union to hold the funds, signing a Custodial Account Ownership Agreement (WCUL #81036) or similar account agreement form from another vendor. If the custodian chooses, instead, to withdraw the funds from the credit union, the check should be made payable to the custodian “as custodian” for the child under the Wisconsin UTMA, such as: “Pay to the order of Amanda Adult, custodian for Mary Minor under Wis. UTMA.” This helps ensure that the funds will be deposited into a custodial account elsewhere.

The League covers the UTMA in its ii Release No. 0012.That release, along with others that cover League forms and the deaths of account holders, are being revised to reflect this change to the forms.

Removal of agent designation box

The agent designation that used to appear on The League’s Credit Union Share Certificate and the Account Ownership Agreement was not used often. In addition, it seemed to cause confusion among members and credit union staff.

By signing the agent designation, account owners could create a limited, durable power of attorney (POA.) In fact, the designation was very limited: It only authorized withdrawals and only from the account or sub-account the WCUL form applied to. The League advised credit unions: “Don’t be misled by the language on the card that seems to authorize virtually any ‘transactions regarding this account.’ Wis. Stats. Chap. 705 requires this language but later states that withdrawals are the only transactions authorized.”

As a result of these limits, the agent designation was not popular among members, who are typically better served by completing a power of attorney document that grants a POA agent authority to handle all sorts of matters – not just withdrawals from a particular account. For details on POAs, please see The League’s ii Release No. 0168. That release, along with others that include material about these forms, are being revised to reflect that we removed the agent designation boxes from our forms.

The ii Release will still include material to explain how the agent designations work and the limits on their scope. So, if your members have already signed agent designations on WCUL account forms, the credit union may still honor them. The League has simply made the decision to remove them because they are seldom used and often misunderstood.

Forms 101

League forms are only available in .pdf format, by annual subscription. Other than a few fillable fields, League forms are not customizable. Credit unions must review the forms to make their own determinations of whether the forms are suitable for their use, consistent with their own policies and procedures. Accuracy is important. If any WCUL form is not suitable, the credit union should utilize the services of one of the national form companies that have some ability to customize their forms.

Please be sure that one person, authorized by your credit union, reviews the current Credit Union Forms Terms & Conditions and submits an acknowledgment electronically as soon as possible.

Current subscribers to the updated WCUL forms will automatically receive the new versions in the coming weeks as part of their annual maintenance license agreement.

Credit unions that are not currently subscribed to these forms may purchase them from The League online at theleague.coop > Solutions > Credit Union Forms. Please review the instructions on how to purchase & download new forms on the storefront page. To avoid errors, you must log into our website with your member credentials before attempting to make any purchase(s). Prices for each form are indicated in your shopping cart at the time of purchase.

Descriptions and samples for all League forms are available on our website and in the online store. A summary listing of all League forms and their latest revision dates can be downloaded here.

For questions about use of the forms, please call The League’s Compliance Hotline at (608) 640-4050 or email the Compliance Mailbox. For questions or issues with purchasing and downloading the forms on our website, please contact Jeff Bonk.

Compliance Roundtable – September 10 (In-Person)

Join The League’s compliance team as they lead a discussion on the latest changes in regulations and need to know information to keep your credit union in compliance. You can find more information or register on our website.

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