How to Set Trust Checking Accounts

A trust checking account is one way to ensure certain funds will be kept safe and used for their intended purposes. It also helps to ensure your trust is, in fact, funded with your assets, or at least the assets you choose to put in the checking account.

Checking Account vs. Trust

The checking account itself is not a trust. A trust is a legal agreement under which a trustee manages assets provided by the grantor for trust beneficiaries. The checking account for a trust just holds trust assets.

The trustee uses the checking account to pay for various expenses he might incur in managing the trust, and according to the terms of the trust, distributes assets from the checking account to the beneficiaries. The trust checking account must be kept separate from any of the trustee’s own accounts to ensure that trust money is kept separate from the trustee’s personal funds.

Requirements to Open Trust Account

Requirements for opening a trust come from the trust itself and the bank at which you’ll be opening the account. Check the trust and talk to the bank ahead of time so that you can bring all of the required documents with you the first time.

Requirements from Trust. Prior to opening an account, the trustee should first review the trust itself and follow any applicable instructions such as terms that require a certain bank or set up with a specific amount of trust money.

Limits on Who Can Open. Only the grantor (in the case of a living trust) or the trustee (if the grantor has passed away) can open a checking account on behalf of the trust.

Documents Required. The trustee will need the trust agreement, called a Certification of Trust, which is a document that summarizes the trust or contains trust agreement excerpts and proves the trust has been created, to set up an account.

The trustee will also need to provide the bank with personal identification to show that he is, in fact, the trustee. Requirements vary by bank but generally he will need to provide at least two valid forms of identification. Check with the bank to determine which additional documents it may require to set up a trust account. You should also determine what is the minimum opening deposit as well as the minimum balance requirements and fees.

Also, banks will often expect a copy of the Internal Revenue Service (IRS) Request for Employer Identification Number (Form SS4). You can apply for a tax identification number with the IRS online.

Account Records

After you have set up the account, keep the checking account documentation with the original trust agreement. The grantor or trustee should also add the account information, including the bank name and account number, to the trust’s asset list.

Alternative Option

If you are the grantor under a trust, you can convert an existing checking account to a trust account as part of your living trust. You will need to bring your Certification of Trust and or the trust agreement itself. The bank will have you complete a new signature card for the account, and the account will be held in your name “as trustee,” for the trust. The bank will also require a tax identification number for the trust. Generally, in the case of a living trust, this will consist of your social security number.

Trusts are often just one piece of a comprehensive estate plan, a legal service provider or estate planning attorney can help you develop your estate plan.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

Like it? Share it with your friends!