You wanted information on banks' responsibility for collecting information on deposit or share accounts when the account holder wants to move the funds to another institution.

Generally, banks are not required to inquire about the destination or uses of funds withdrawn from an account by a trustee unless the bank is serving as a co-trustee. Under Connecticut law, if a deposit or share account is established by a trustee (1) under a will or trust agreement or some other written document or (2) pursuant to statute or court order, the trustee must provide a writing identifying the relevant document or order. If the trustee is named by a written document, he must file a certified copy of the instrument if the institution so requests. (However, the institution will not be considered to be “on notice” about the document's provisions by virtue of the filing. ) The bank or credit union is protected in paying out money from the trust to or on order of the trustee and has no duty to ask about the intended use of the funds (CGS § 36a-296. )

A cursory review of the laws of several states revealed no states that require banks or credit unions to obtain information from trustees about the destination of funds when a trust account is closed by a trustee. In fact, it appears as if many bank deposit account agreements (the controlling document between the bank and account holder), indemnify the institution against the actions of the trustee. Thomas Mongellow, of the Connecticut Bankers Association, is not aware of any state with such a requirement. In his opinion, passing legislation to impose such a requirement may have the effect of increasing the costs associated with establishing a trust in the state. Additionally, depending on the language of any such legislation, it may be unenforceable as to national banks due to federal preemption issues, giving national banks an advantage over state banks. Federal regulations give national banks broad authority over their deposit taking activities and state laws that obstruct, impair, or condition a national bank's ability to fully exercise its deposit taking powers are preempted by federal law.

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