02 Jan 2016

New Year’s How-To: Properly Coding Escrow Deposits in Your Estate Accounts

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Selecting the correct transaction code for funds within escrow accounts can be confusing, and many clients have been incorrectly choosing the 9999 UTC for “Account Transfers.”

If you are transferring funds from an outside bank account into a Rabobank account for the estate, you may be wondering how to properly code them. The USDOJ released an updated version of the Uniform Transaction Code (UTC) Reference Guide (effective November 16, 2015) that provides guidance on how to choose the correct code.

Generally, when you receive disputed funds and a judge needs to determine whether to include them as part of the estate, you will open an escrow account. Since these funds are pending confirmation as part of the estate, they must be coded as non-estate receipts rather than an account transfer.

Upon their initial transfer into Rabobank, use either the 1180 (scheduled) or 1280 (not originally scheduled) UTC codes to delineate these escrow funds as “Non-estate Receipts.” When some or all of these funds are confirmed to be estate funds, you may then code the appropriate portion accordingly as part of the estate.

Note: The 9999 UTC for “Account Transfers” is reserved only for transferring funds between accounts within the same bank.

If you have any questions regarding this process, please contact the BMS Banking Center at banking@bmsadvantage.com or 800-634-7734.