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  1. #1

    Bank Account=Trust?

    So I was doing some reading trying to correlate the details in this section of the forum to get a better grasp. Correct me if I am misunderstanding.

    Is a bank account a trust, the trustee is the bank, the bank account name/trust is FIRST M LAST, and the beneficiary is First Middle and the property is what is being deposited/withdrawn?

  2. #2
    Hello Doskias!
    I will take a stab at this for you with apologies to Michael Joseph and David Merrill if I screw it up. The BANK AND TRUST is, as you indicated, just that. The bank acts as trustee or its agent, while the TRUST- FIRST MIDDLE LAST is the beneficiary.
    So, we have:
    Grantor - First Middle Last as trustee for FIRST MIDDLE LAST
    Beneficiary - FIRST MIDDLE LAST
    corpus - FRN or lawful money as appropriate
    Trustee or agent of- Banker
    First Middle - doing business as First Middle Last as appropriate (and no more)

    Oh what tangled webs we weave...I'm quite certain there are posts within threads that speak to this subject.

  3. #3
    Senior Member Brian's Avatar
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    I thought we were being treated as unsecured creditors to the banks...ala Cyprus?

  4. #4
    JohnnyCash
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    Yes, unsecured creditors.
    Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price?
    http://www.globalresearch.ca/it-can-...sitors/5328954

    Australian & Canadian depositors are in the same boat: http://barnabyisright.com/2013/07/10...013-14-budget/

    I don't keep much $ in the bank.

  5. #5
    Quote Originally Posted by JohnnyCash View Post
    Yes, unsecured creditors.
    http://www.globalresearch.ca/it-can-...sitors/5328954

    Australian & Canadian depositors are in the same boat: http://barnabyisright.com/2013/07/10...013-14-budget/

    I don't keep much $ in the bank.
    You shouldn't! Private banking is the way to go .

  6. #6
    Goldi
    Guest
    There is a discussion in title to the money of a depositor in the infamous Senate Document 43 / Contracts payable in gold found here http://www.mediafire.com/view/fe3s3d...LE_IN_GOLD.pdf and Dennis Kucinich brought a bill to reform banking to that of a bailor/bailee relation http://www.mediafire.com/?dks98hkdeaq3mie . Guess he knew what was coming {bail ns/theft} and that retaining title to your money on deposit was a good thing. I believe that the muni funds on deposit aka CAFR account funds are most definitely on deposit as either trust funds or bailed funds and are NOT your run of the mill debtor/creditor deposits.
    Last edited by Goldi; 07-31-13 at 08:37 PM.

  7. #7
    Perhaps it would behoove us to study the roots of banking which is bailment.

  8. #8
    Thanks for the link. From the article, "deposit account" classified as a type of bailment:

    "Although restrictions placed on access depend upon the terms and conditions of the account and the provider, the account holder retains rights to have their funds repaid on demand. The customer may or may not be able to pay the funds in the account by cheque, internet banking, EFTPOS or other channels depending on those provided by the bank and offered or activated in respect of the account.

    The banking terms "deposit" and "withdrawal" tend to obscure the economic substance and legal essence of transactions in a deposit account. From a legal and financial accounting standpoint, the term "deposit" is used by the banking industry in financial statements to describe the liability owed by the bank to its depositor, and not the funds that the bank holds as a result of the deposit, which are shown as assets of the bank.

    For example, a depositor opening a checking account at a bank in the United States with $100 in cash surrenders legal title to the $100 in cash, which becomes an asset of the bank. On the bank's books, the bank debits its currency and coin on hand account for the $100 in cash, and credits a liability account (called a demand deposit account, checking account, etc.) for an equal amount. (See double-entry bookkeeping system.)"

    Also,
    "The bank's financial statement reflects the economic substance of the transaction—which is that the bank has actually borrowed $100 from its depositor and has contractually obliged itself to repay the customer according to the terms of the demand deposit account agreement. To offset this deposit liability, the bank now owns the actual, physical funds deposited, and the bank shows those funds as an asset of the bank."

  9. #9
    Quote Originally Posted by hobgoblin View Post
    Thanks for the link. From the article, "deposit account" classified as a type of bailment:

    "Although restrictions placed on access depend upon the terms and conditions of the account and the provider, the account holder retains rights to have their funds repaid on demand. The customer may or may not be able to pay the funds in the account by cheque, internet banking, EFTPOS or other channels depending on those provided by the bank and offered or activated in respect of the account.

    The banking terms "deposit" and "withdrawal" tend to obscure the economic substance and legal essence of transactions in a deposit account. From a legal and financial accounting standpoint, the term "deposit" is used by the banking industry in financial statements to describe the liability owed by the bank to its depositor, and not the funds that the bank holds as a result of the deposit, which are shown as assets of the bank.

    For example, a depositor opening a checking account at a bank in the United States with $100 in cash surrenders legal title to the $100 in cash, which becomes an asset of the bank. On the bank's books, the bank debits its currency and coin on hand account for the $100 in cash, and credits a liability account (called a demand deposit account, checking account, etc.) for an equal amount. (See double-entry bookkeeping system.)"

    Also,
    "The bank's financial statement reflects the economic substance of the transaction—which is that the bank has actually borrowed $100 from its depositor and has contractually obliged itself to repay the customer according to the terms of the demand deposit account agreement. To offset this deposit liability, the bank now owns the actual, physical funds deposited, and the bank shows those funds as an asset of the bank."

    Makes total sense. Thanks for the reply.

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