How to Open a Trust Account

Opening a trust account involves drawing up a legal trust agreement, choosing a financial institution where you would like to open your trust account, then presenting all the relevant documents required by your financial institution.

Although trust laws vary by state, here are the basic steps to open a trust account:

1. Decide what type of trust you want. You may want to make your trust revocable (meaning you can change your mind) or irrevocable, for example, or perhaps you want to ensure that the assets support a specific person for a period of time before going to a third person.

2. Create a legally binding trust agreement. You can do this with the help of an estate planning attorney or through an online estate planning service.

3. Choose your beneficiaries and trustee(s). In general, beneficiaries receive the assets; trustees manage the assets.

4. Choose a bank or financial institution. Be sure to ask about fees, minimum balances and required opening balances before making your decision.

5. Give the financial institution the documentation it needs to set up the trust account. Be sure to obtain the required signatures. You can do this at a brick-and-mortar location, online or through the mail, depending on the financial institution. The list may vary depending on the financial institution, but here are some common requirements:

• Two forms of ID to prove you are who you say you are.

• A written description of your trust, including the formal name of the trust.

• The names of the grantor(s) and the trustee(s), along with their addresses/contact information, Social Security numbers, birthdays, citizenship information and employment info.

• The names of the beneficiaries, including their Social Security numbers, addresses/contact information and birthdays.

• The trust’s tax ID number.

• A description of the trustee’s powers and provisions if you (the grantor) die or become incapacitated.

• Notarized signature pages. (Some states may require a separate page that the notary completes.)

• Any amendments to the original trust agreement.

After you open the account, the next step typically is to transfer assets into the account. This may or may not have gift tax implications.

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Many but not all banks or financial institutions offer trust accounts. Some important trust account details to consider include:

• Type of trust accounts available. Be sure the bank or financial institution offers the kind of trust account you want.

• Ease of opening a trust account. Look for a bank or financial institution that keeps the process of opening a trust account user-friendly, whether you prefer to do this live, online or via the mail.

• Minimum deposit and minimum balance. Make sure the bank or financial institution doesn’t require you to deposit or maintain a dollar amount higher than the value of your trust assets (or just one higher than you’re comfortable with).

• Administration fees. These vary greatly and make a significant difference in the overall cost of maintaining your trust account.

• Interest rates. Higher rates might help your cash balance grow more over time.

• Customer service. Find out whether and when you’ll have access to live customer service, should you need it.

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Opening a trust account as part of your estate plan is a big decision. Here are a few other things to consider: