Texas Finance Code 125.309 – Trust Account With Limited Documentation
(a) For a trust account that is purported to be opened under a written trust agreement, the trustee may provide the credit union with a certificate of trust to evidence the trust relationship. The certificate must be an affidavit of the trustee and must include:
(1) the effective date of the trust;
(2) the name of the trustee;
(3) the name of or method for choosing a successor trustee;
(4) the name and address of each beneficiary;
(5) the authority granted to the trustee;
(6) the information needed for disposition of the trust account on the death of the trustee or the last survivor of two or more trustees;
(7) an indemnification of the credit union; and
(8) any other information required by the credit union.
(b) The credit union may accept and administer the trust account, in accordance with the certificate of trust, without requiring a copy of the trust agreement. The credit union is not liable for administering the account as provided by the certificate of trust, unless the credit union has actual knowledge that the certificate of trust is contrary to the terms of the trust agreement.
Terms Used In Texas Finance Code 125.309
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- Trustee: A person or institution holding and administering property in trust.
- Written: includes any representation of words, letters, symbols, or figures. See Texas Government Code 311.005
(c) On the death of the trustee or the last survivor of two or more trustees and notwithstanding Section 125.308, the credit union may pay all or part of the proceeds of the trust account as provided by the certificate of trust. If the trustee did not provide a certificate of trust, the credit union’s right to treat the account as owned by a trustee ceases on the death of the trustee. On the death of the trustee or the last survivor of two or more trustees, the credit union, unless the certificate of trust provides otherwise, shall pay the proceeds of the account in equal shares to each person who survives the trustee, is named as a beneficiary in the certificate of trust, and can be located by the credit union from the credit union’s records. If there is no certificate of trust, payment of the proceeds of an account shall be made as provided by Section 125.308. Payment made under this section for all or part of the proceeds of an account discharges any liability of the credit union to the extent of the payment. The credit union may pay all or part of the proceeds of an account in the manner provided by this section, regardless of whether it has knowledge of a competing claim, unless the credit union receives actual knowledge that payment has been restrained by court order.
(d) This section does not require a credit union to accept an account from a trustee or to search for the location of a named beneficiary that is not named in its records.
(e) This section does not affect a contractual provision to the contrary that otherwise complies with the laws of this state.
(f) For purposes of this section, “actual knowledge” is presumed if a credit union possesses a copy of a trust agreement that is certified as to authenticity by a settlor, trustee, beneficiary, or an attorney for the settlor, trustee, or beneficiary.