How to Set Up a Trust Fund Bank Account
Estate or trust accounts are set up to provide a safe haven for assets as they are being passed on or used on the behalf of the account beneficiaries. The estate account holds funds for a short period of time while settling an estate after the death of the owner of the assets making up the account. A trust contains specific assets, held on behalf of the individual establishing the trust for the use of the beneficiaries of the trust. Setting up each account type can be complicated, often requiring the services of financial or legal professionals, but each serves the same basic purpose: keeping the assets safely intact for the use of those chosen by the asset owners to benefit from those assets.
Taxpayer Identification Requirements
To set up an estate account, you'll first need to apply to the IRS for a taxpayer ID number in the estate's name. Apply online through the IRS website, or by mail or fax by filling out a Form SS-4, the Application for Employer Identification Number. The mailing address and fax number information for your area of the country are listed on the IRS website. Take the taxpayer ID number, a copy of the deceased's death certificate and a list of bank accounts with account numbers held by the deceased to the bank where you wish to establish the estate bank account.
Setting Up an Estate Account
Fill out the required forms to open the estate account, presenting the proof required to establish you as the legal entity accountable for the account. The precise forms required differ according to the specific bank, but generally require the same information as that needed to open a personal bank account, except that the account uses the name of the executor of the estate acting in the name of the estate as the account holder. The letters given you by the estate attorney establishing you as executor plus two forms of identification should be proof enough of your authority to open the account. Contact the deceased's bank where the accounts are held and present them with your proof as executor to authorize the transfer of account funds for the estate, instructs AllLaw. Give the bank the account number of the newly established estate account to have the funds transferred.
Choose the Correct Type of Trust
To set up a trust account, start by establishing the nature of the trust that you are creating. Choose to create either an after-death "testamentary" trust or a living "inter woos" trust. The after-death trust comes into effect after your death, with assets transferred into the trust through probate, and is usually included in your will. The living trust comes into effect during your lifetime and transfers the assets into the fund when established, with you usually serving as one of the trustees overseeing the fund. Set the living fund as either revocable or irrevocable. The primary difference is that you can dissolve or change a revocable trust, because you retain some ownership rights over the assets involved, while assets in an irrevocable trust have their ownership transferred to the trust, which serves as legal owner for the assets. Make a list of beneficiaries for the trust. These individuals will receive the proceeds from the trust as determined by the nature of the trust specifications.
Appoint a Trustee
All trustee trusts require the appointment of a trustee or group of trustees to oversee the fund. Pick trusted individuals who will manage the assets for the trust, and follow through on your wishes in establishing the trust, advises Securion Pay. You can choose yourself as a trustee over a living trust, but must also choose a replacement trustee in the event of your death. Make a specific list of the powers of the trustees over the trust assets. For example, does the trustee have the power to invest liquid assets to grow the trust, or control the use of trust funds spent on the beneficiaries?
Complete the Trustee Account Formalities
List the assets used to fund the trust. Most trust assets are income-bearing or cash assets, but can include such items as stocks and bonds and real estate. Then have an estate attorney draw up a trust document containing all of the information you provide. Sign the document and transfer the assets to the trust fund. File the document with your state if required to do so. Ask the attorney if your state has such requirements. Finally, take the agreement to the bank selected to hold the trust fund bank account. Present the agreement to the banker and open a trust account in the name of the trust. Present the names and identifying information of the trustees as those authorized to access the trust bank account.
How to Set Up a Trust Fund Bank Account
Source: https://homeguides.sfgate.com/set-up-estate-trust-bank-account-6685.html