Not every bank knows how to properly title a trust account — and not every executor knows what to ask for. This primer covers setup, titling, and day-to-day management.
A trust account is a bank account held in the name of a trust, managed by the trustee for the benefit of the beneficiaries. It sounds simple, but the details matter enormously — and banks don't always set these up correctly the first time.
Not all banks are equally experienced with trust accounts. Look for an institution that has a dedicated trust department or works regularly with fiduciaries. Community banks and credit unions sometimes offer more personalized service, while larger institutions may have better online tools and investment options. Ask specifically about trust account titling and whether they're familiar with your state's requirements.
The account title must reflect the fiduciary relationship. For a trust, it typically reads: "[Trust Name] dated [Date], [Trustee Name], Trustee." For an estate: "[Decedent Name] Estate, [Executor Name], Executor." The bank's records should match this title exactly. An account titled only in the trustee's personal name creates commingling risk and may not be protected in bankruptcy.
Bring the EIN (tax ID) for the trust or estate, a copy of the trust agreement or court appointment, certified death certificate (for estates), your personal government-issued ID, and any letters testamentary or letters of trusteeship issued by the court. Some banks will ask for additional documentation — call ahead to confirm their requirements.
Every transaction needs documentation: date, amount, counterparty, and purpose. Income and principal should be tracked separately from the first transaction. Set up online banking and download monthly statements — don't wait for paper statements that can be lost.
Pay bills on time. Estate debts that go to collections create complications and reflect poorly on the fiduciary. If you're not sure whether a bill should be paid (the estate may have grounds to contest it), hold payment and consult an attorney before the deadline passes.
If the trust holds investment assets, the trustee has an obligation to invest prudently under the Uniform Prudent Investor Act. This doesn't mean the trustee must be a financial expert — it means they must make reasonable decisions, diversify appropriately, and consider the needs of both income and remainder beneficiaries. Many trustees retain a financial advisor and document that decision.
Assets should be transferred to the trust account as soon as practicable after your appointment is confirmed. Leaving assets in the decedent's personal accounts or in your own account (even temporarily) creates commingling risk. Transfer them with documentation that clearly identifies the transaction as an estate or trust receipt.
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