§412:4-106 Fiduciary accounts. A financial institution may open accounts and accept deposits therein in the name of a person as a trustee, personal representative, guardian, conservator, agent, custodian or other fiduciary for one or more other persons. Such accounts shall be subject to the following treatment:

(1) If a financial institution has not received written notice and is not on actual notice that a fiduciary named on a deposit account has been removed, resigned, died or adjudicated an incapacitated person by a court of competent jurisdiction under applicable law, it may make payments or allow transfers or withdrawals from the account to or on the order of the fiduciary in accordance with the provisions of its contract with the account holder;

(2) Any fiduciary who withdraws funds from a fiduciary account and whose name appears as a fiduciary on such account shall be presumed by the financial institution to be acting within the scope of any authority granted or belonging to the fiduciary. A payment, transfer or withdrawal from the account made by or on the order of the fiduciary payable to or for the benefit or account of the fiduciary or credited to the personal account of the fiduciary shall not be sufficient in the absence of actual knowledge on the part of the financial institution to charge it with a duty of inquiry or notice of any infirmity or defect in the right or title of the fiduciary to the funds paid, transferred or withdrawn;

(3) If a financial institution pays funds or allows the transfer or withdrawal of funds from a fiduciary account according to the provisions of this section or other applicable law of this State, such payment, withdrawal or transfer shall operate to release and discharge the financial institution of any further liability to any person with respect to the funds so paid, transferred or withdrawn, and no action at law or equity may be maintained against the financial institution for payment, transfer or withdrawal made in accordance with this section;

(4) A financial institution which pays or allows any transfer or withdrawal from a fiduciary account pursuant to this section shall not be liable for any estate taxes that may be due with respect to said account;

(5) Notwithstanding the foregoing, trust accounts established by the financial institution meeting the definition of "trust account" in section 560:6-101 shall be subject to the treatment provided in article VI of chapter 560. [L 1993, c 350, pt of §1]

Cross References

Uniform Fiduciaries Act, see chapter 556.