FinCEN Requires Collection of Information on Estate Beneficiary

In an administrative ruling, FinCEN clarified that broker-dealers were required to collect information when opening new accounts for customers who receive assets as the beneficiary of an estate.

In an administrative response to a request by a Foundation to further clarify the obligations for broker-dealers that open new accounts for legal entity customers, FinCEN stated that broker-dealers that held an IRA for a deceased individual who named a Foundation as the beneficiary of their IRA must comply with identity verification requirements under the Bank Secrecy Act Rule 1023.220 ("CIP: Customer identification programs for broker-dealers") and Bank Secrecy Act Rule 1010.230 ("CDD: Customer Due Diligence Rule, Beneficial ownership requirements for legal entity customers").

FinCEN said that a broker-dealer must obtain, at a minimum, the name, address and an employer identification number. Additionally, FinCEN said that the broker-dealer would be required under the CDD Rule to obtain identifying information, including, but not limited to, a social security number, for a single individual with significant responsibility to control, manage or direct the organization.