What a trust account is and why you might need one
A trust account is a bank account held in the name of a trust rather than in your personal name. The trust is a legal document that names you (or someone else) as the person who controls the money, and it says who will receive that money when you die or if you become unable to manage it yourself.
You might open a trust account to keep money separate from your personal finances, to avoid probate (the court process that distributes your money after death), or to make sure money goes to specific people without going through the court system. Some people also use trust accounts to manage money for minor children or to keep finances private.
The account itself works like any other bank account — you deposit money, write checks, use a debit card. The difference is in the paperwork behind it and what happens to the money later.
Key Takeaways
- You need a signed trust document before you can open a trust account; the bank will not create the trust for you.
- Bring your trust document, government ID, Social Security number, and initial deposit to the bank in person.
- The bank will ask you to sign signature cards and may require the trust document to be notarized or certified.
- Trust accounts work like regular accounts but may have higher minimum balances or monthly fees than personal accounts.
- You can name yourself as trustee (the person who controls the money) or name someone else to take over after you.
Creating a trust document before opening the account
The bank will not create a trust for you. You must have a signed trust document in place before you walk in to open the account. This document is a legal contract that spells out who controls the money, who receives it, and under what conditions.
You have three main ways to create a trust document. You can work with an attorney, who will draft a custom document tailored to your situation — this costs money but gives you a document specific to your needs. You can use an online legal service like LegalZoom or Nolo, which provides templates and guidance at lower cost. Or you can buy a trust kit from an office supply store or read a template from your state bar association website, though this route requires you to understand the legal language yourself.
The trust document must be signed and dated. Some banks require it to be notarized (signed in front of a notary public who verifies your identity), while others do not. Call your bank before you finalize the document to ask what they require.
Documents and information you need to bring
Bring your original trust document (or a certified copy if the bank requires it) and a government-issued photo ID such as a driver's license or passport. You will also need your Social Security number and the initial deposit amount you plan to make.
If you are naming someone other than yourself as trustee, bring that person's ID and Social Security number as well. If the trust names a minor as a beneficiary (the person who will receive the money), the bank may ask for the child's Social Security number, though they will not open a separate account for the child.
Some banks ask for a copy of the trust document to keep on file. Others ask for a certification letter from an attorney stating that the trust is valid and you are authorized to open the account. Check with your specific bank about what they need before you visit.
Steps to open the account at the bank
Call or visit your bank and tell them you want to open a trust account. Ask whether they offer trust accounts and what documents they require. Some smaller banks do not offer them, so this step saves you a wasted trip.
Go to the bank in person with all your documents. You will meet with a banker or account officer who will review your trust document, verify your identity, and ask you questions about the trust and how you plan to use the account. Be prepared to explain who the beneficiaries are and what you want the money to do after you die or become unable to manage it.
You will sign signature cards, which are forms that show the bank your signature and confirm you are authorized to sign checks and make withdrawals from the account. The banker will explain the account terms, including the minimum balance required, monthly fees, and what happens if the balance drops below the minimum.
Make your initial deposit. This can be a check, cash, or a transfer from another account. The bank will give you a receipt and account number. You may receive a debit card and checks in the mail within one to two weeks.
Costs and account requirements
Trust accounts often have higher minimum balance requirements than personal checking or savings accounts. Some banks require a minimum of $1,000 to $10,000 to open a trust account, though this varies by bank. If your balance drops below the minimum, the bank may charge a monthly fee or close the account.
Monthly maintenance fees are common and may range from $10 to $25 per month, depending on the bank and account type. Some banks waive the fee if you keep a certain balance or set up direct deposit. Ask about all fees before you open the account.
Trust accounts may have limits on the number of withdrawals or transfers you can make per month, similar to savings accounts. Check and debit card access are usually unlimited. Ask your banker about any restrictions specific to the account type you are opening.
What happens to the account after you die
When you die, the person you named as successor trustee in your trust document takes over the account. They do not need to go to court or wait for probate — they can access the money and distribute it according to the instructions in the trust document.
The successor trustee will need to show the bank a death certificate and proof that they are authorized to act as trustee. The bank will ask them to sign new signature cards and may require a certified copy of the trust document. After that, they can withdraw money and close the account when the trust's work is done.
This is one of the main reasons people open trust accounts: the money passes directly to the people named in the trust without the delay and cost of probate court.
Changing or closing a trust account
You can change the beneficiaries or terms of a trust account by amending the trust document itself, not by changing the account at the bank. You will need to work with an attorney or legal service to create an amendment, sign it, and have it notarized if required. Then bring the amendment to the bank so they have the updated information on file.
To close a trust account, withdraw all the money and tell the bank you want to close it. You can do this in person, by mail, or sometimes online, depending on your bank. The bank will send you a confirmation that the account is closed.
If you want to move the money to a different bank, you can transfer it electronically or withdraw it as a check and deposit it into a new trust account elsewhere. The process is the same as moving money between personal accounts.
Frequently Asked Questions
Do I need an attorney to create a trust?
No, but an attorney can help you avoid mistakes. Online legal services and templates are cheaper and work for straightforward situations. If your finances are complex, you have minor children, or you own a business, an attorney is worth the cost.
Can I be the trustee and the beneficiary at the same time?
Yes. You can control the account during your lifetime and name someone else to take over after you die. This is the most common setup for a revocable living trust.
What is the difference between a trust account and a joint account?
A joint account is owned by two people who both have full access. A trust account is owned by the trust, and only the trustee can access it. With a trust, you control who gets the money after you die; with a joint account, the surviving owner automatically gets everything.
Can I open a trust account online?
Most banks require you to open a trust account in person because they need to verify your identity and review the trust document. Some online banks may offer trust accounts, but you will still need to provide the trust document and may need to mail in a notarized copy.
What if my bank says they do not offer trust accounts?
Smaller banks and credit unions sometimes do not offer them. Call other banks in your area or ask your attorney for a recommendation. Larger national banks almost always offer trust accounts.