What a trust bank account is and why you need one

A trust bank account is a bank account held in the name of a trust rather than in your personal name. The account belongs to the trust itself, and the trustee (the person managing the trust) controls it on behalf of the beneficiaries (the people who will receive the money). The trustee is legally required to keep trust money separate from their own money, which is why a dedicated account exists.

You need a trust bank account when a trust holds cash, receives income, or needs to pay expenses. This might happen when someone creates a living trust to manage their assets during their lifetime, when a will creates a trust after death, or when a trust is set up to manage money for a minor or someone who cannot manage their own finances. Without a separate account, trust money and personal money can get mixed together, which creates tax problems and makes it harder to prove the trustee followed the law.

Key Takeaways

  • You will need the trust document itself, a tax ID number for the trust (an EIN), and proof of the trustee's identity to open the account.
  • The account must be titled in the trust's name, not the trustee's personal name, so banks can see the money belongs to the trust.
  • Most banks require an EIN even for small trusts, though some may accept a Social Security number if the trustee is the only beneficiary.
  • The trustee can deposit and withdraw money, but the account is not their personal account — all transactions must be for trust purposes only.
  • Trust accounts typically earn less interest than personal savings accounts and may have higher minimum balances or monthly fees.

Getting a tax ID number for the trust

Before you open the account, the trust needs an Employer Identification Number (EIN), which is a nine-digit tax ID issued by the IRS. This is different from a Social Security number and tells the IRS and the bank that the account belongs to the trust, not to you personally. You can request an EIN for free from the IRS.

To get an EIN, go to the IRS website (irs.gov) and use the online EIN application, which takes about 15 minutes. You will need the trust document in front of you because you will be asked for the trust's name, the date it was created, and the trustee's name and Social Security number. The IRS will issue the EIN immediately if you apply online. You can also apply by phone (1-800-829-4933) or by mail using Form SS-4, though those routes take longer.

Some banks will open a trust account using the trustee's Social Security number instead of an EIN, but this is rare and usually only happens if the trustee is the sole beneficiary. Most banks require an EIN because it clearly separates the trust's money from the trustee's personal finances. Getting the EIN takes almost no time and costs nothing, so do it before you visit the bank.

Documents you will need to bring to the bank

Banks have different requirements, but most will ask for the same core documents. Call your bank ahead of time and ask what they need for a trust account — do not assume all banks want the same thing.

You will almost always need the original trust document or a certified copy. Some banks accept a "certification of trust," which is a shorter document that proves the trust exists and names the trustee, without revealing the trust's full contents. If the bank will accept a certification instead of the full document, ask your attorney to prepare one — it takes a day or two and costs less than $100.

Bring the EIN letter from the IRS (the letter that shows the nine-digit number), a government-issued photo ID for the trustee, and proof of the trustee's current address (a utility bill or lease dated within the last 60 days). If the trust was created recently, bring the date it was created. Some banks will also ask whether the trust is revocable (can be changed) or irrevocable (cannot be changed), so know this before you go.

Opening the account at the bank

Visit a branch in person if you can, because banks often want to see the trust document and the trustee's ID face-to-face. Call ahead and ask whether you can open a trust account online or by mail — some banks allow it, but many do not.

When you open the account, the title must read something like "Jane Smith, Trustee of the Smith Family Trust" or "Smith Family Trust, Jane Smith, Trustee." The account title must make clear that the money belongs to the trust, not to Jane Smith personally. If the bank titles it as "Jane Smith" or "Jane Smith Trust Account," ask them to correct it — the title matters for tax reporting and for proving the trustee kept the money separate.

Ask the bank about their minimum balance requirement for trust accounts. Trust accounts often have higher minimums than personal savings accounts (sometimes $5,000 or more) and may charge monthly fees. Some banks offer no-fee trust accounts if you maintain a certain balance or have other accounts with them. Compare a few banks before you decide — the fees and minimums vary widely.

How the trustee uses the account

Once the account is open, the trustee can deposit money into it and withdraw money to pay trust expenses. The trustee's name is on the account, but the money does not belong to the trustee — it belongs to the trust and ultimately to the beneficiaries. This is a legal distinction that matters: if the trustee dies or becomes unable to manage the account, the successor trustee (named in the trust document) takes over. The money does not go to the trustee's estate.

The trustee must keep records of every deposit and withdrawal. When money comes into the trust (from the sale of property, an inheritance, or income), it goes into this account. When the trustee pays bills, buys property, or distributes money to beneficiaries, the money comes out of this account. The trustee should never mix trust money with personal money, and should never use the trust account to pay personal expenses.

At the end of each year, the bank will send a 1099 form (or similar tax document) to the trustee and to the IRS, showing how much interest the account earned. The trustee will need this form to file the trust's tax return. Keep all bank statements and deposit slips — they are proof that the trustee managed the money correctly.

What happens if the trustee changes

If the trustee dies, resigns, or is removed, the successor trustee (the person named in the trust document to take over) will need to take control of the account. The successor trustee should contact the bank with a copy of the trust document and a death certificate (if the original trustee died) and ask to be added to or to replace the current trustee on the account.

Some banks make this process simple; others require paperwork and take several weeks. The successor trustee may need to provide their own ID and proof of address. Until the successor trustee is officially on the account, the bank may freeze withdrawals, so contact them as soon as possible after the change happens.

Interest rates and fees on trust accounts

Trust accounts typically earn less interest than personal high-yield savings accounts. A trust savings account might earn 0.01% to 0.5% annual interest, depending on the bank and the current rate environment. Trust money market accounts sometimes pay slightly more, but the difference is usually small.

Monthly maintenance fees for trust accounts range from $0 to $15 or more, depending on the bank. Some banks waive the fee if you keep a high balance (often $10,000 or more) or if you have other accounts with them. A few banks offer no-fee trust accounts. Before you open the account, ask the bank to show you the fee schedule in writing and confirm whether any fees apply to your account.

Because trust accounts are not personal accounts, they do not have the same protections as personal savings accounts. FDIC insurance still covers the account up to $250,000, but the coverage is separate from your personal accounts — so if you have $250,000 in a personal savings account and $250,000 in a trust account at the same bank, both are fully insured. If you have more than $250,000 in trust money, ask the bank how they handle the excess.

Frequently Asked Questions

Can the trustee use the trust account as their personal account?

No. The trustee can use the account only for trust business — paying bills, buying property, or distributing money to beneficiaries. Using trust money for personal expenses is a violation of the trustee's legal duty and can result in the trustee being sued by the beneficiaries. The trustee must keep trust money completely separate from their own.

What if the trust document does not say to open a bank account?

The trust document does not need to explicitly say to open a bank account. If the trust holds money or property, the trustee has the power to open an account to manage it. If you are unsure whether the trust document gives you this power, ask an attorney to review it — most trusts automatically give the trustee this authority.

Do I need a separate account for each type of money the trust holds?

No. One trust account can hold all the trust's cash, whether it came from an inheritance, the sale of property, or income. You do not need separate accounts for different sources of money. However, if the trust holds property (like real estate), that property is not held in the bank account — it is held in the trust's name separately.

What if the bank refuses to open a trust account?

Some smaller banks do not offer trust accounts. If your bank refuses, ask why — they may need a different form of the trust document, or they may simply not provide this service. Try another bank. Most large banks and credit unions offer trust accounts, so you should be able to find one that will work with you.

Can a beneficiary access the trust account?

Only the trustee can access the account. Beneficiaries do not have the right to withdraw money or see the account balance unless the trustee gives them permission. The trustee decides when and how much money to distribute to each beneficiary, based on what the trust document says.