Compliance Question of the Week

What is a For Benefit Of (FBO) account? How would I set one up?

A For Benefit Of (FBO) account is a form of Totten—or In Trust For (ITF)—account. The trustee owns the account and the funds in it. The other person would be listed as the beneficiary of the account. For example, the titling would look like this: “Jane Doe FBO Janet Doe.” Jane would be the owner, and Janet would be the beneficiary. Jane would negotiate any checks coming into the account and use those funds for the benefit of Jane.

Because these accounts are set up as informal Totten Trusts, there would not be any trust documentation.

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance.