How to Set Up a Revocable Trust Account
Once a revocable trust is established, the trustee bears the responsibility of setting up a revocable trust account at an appropriate financial institution. Some states define by law in what type of financial institution a trust account must be maintained. As opposed to an irrevocable trust, a revocable trust can be changed or terminated by the grantor at any time. Typically, the institution must be a state or federally chartered bank or savings and loan. If you are designated as the trustee, you need to understand the basic procedures involved in opening up a revocable trust account.
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Instructions
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Familiarize yourself with the trust agreement. Understand that the grantor is the individual who has the revocable trust established in the first place. The trustee oversees and manages the trust. The beneficiary obtains the benefits of the trust as directed by the grantor. Note any restrictions on payments to a beneficiary (although such restrictions are not relevant to opening a trust bank account, it is helpful to know if any exist).
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Go to a bank or savings and loan. Ideally select one that historically transacted business for the grantor.
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Provide a representative of the bank charged with opening new accounts or dealing with trust matters the original trust agreement. The bank officer needs to make a copy of the document for the institution's records.
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Explain that you need to open up a revocable trust account. You likely will need a checking account at minimum to deal with payments from the trust.
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Caption the account in the name of the trust: "John Doe Revocable Trust; Sidney Doe, Trustee," for example.
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Deposit funds into the account. Keep in mind that you must only place funds belonging initially to the grantor into this account. You must never commingle funds of the trust with your own money or that belonging to anyone else. Doing so is a serious breach of the law governing a trustee's duties to a revocable trust.
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Tips & Warnings
Establishing a revocable trust and a companion revocable trust account is a complicated process. You must comply with all legal requirements or the revocable trust will fail. Therefore, your interests likely are best served by retaining a trust attorney to assist in both creating the revocable trust in the first instance and in setting up a revocable trust account.
Make certain that you undertake appropriate due diligence in examining the background and experience of a proposed trustee for a revocable trust. The person appointed to oversee a revocable trust--and a revocable trust account--is vested with significant authority and must be a trustworthy and experienced individual.
