What Can We Learn From Kellogg’s CFO? Estate Planning Insights

Former Kellogg’s CFO, Charles Elliott, passed away in 2022, leaving behind a beautiful estate plan including a gorgeous well-funded trust for his two children. Unfortunately, one Chase checking account with $56K was giving Elliot’s kids (the trust beneficiaries) a hard time.

Encounter at the Bank

When Elliot’s kids went to the bank, they were not given any information regarding:

• Whether a beneficiary was listed on the account
• The total amount in the account
• Why the bank wouldn’t release the funds

It turns out that the account did not include a beneficiary and was therefore not a trust asset. As expected, it took a probate court order for Chase to release the funds.

Key Takeaways

So, what can we learn from this story of cereal proportions?

Impact of Florida House Bill 989

We can discuss the new Florida House Bill 989 that went into effect on July 1, 2024. The new law is intended to extend the protection of clients from unwarranted account termination and suspension by expanding the definition of “financial institutions” to include:

• Banks without offices in Florida
• Any bank that maintains accounts for FL residents

Definition of Unsafe and Unsound Practices

In short, the new rule clarifies what is an “unsafe and unsound practice.” If the bank account suspension, termination, denial, or cancellation decision was made based on:

• Political opinions, speech, or affiliations
• Religious beliefs, religious exercise, or affiliations
• Social credit scores based on certain factors
• Non-quantitative, impartial, and risk-based standards, including factors related to the person’s business sector

…it’s considered an “unsafe and unsound practice” per the new FL rules.

Conclusion

So, there you have it. Florida residents have additional protections when it comes to bank account closures, and the banks are required to follow strict protocols when handling decedent’s accounts. As a general rule, if an account is not specifically designated to a beneficiary or placed in a trust, it will need to be probated.

And now I’m hungry for some granola…..