Not trust account which one is right for you? What Is a Bank Trust Account? Most banks offer trust accounts as an optional service.
In a trust account, a trustee controls funds for the benefit of another party – an individual or a group. The bank trust account is a useful way to convey and control assets on behalf of a third-party owner. Trustees and Assets With a bank trust account, the bank serves as custodian and a trustee keeps legal control of assets in the account. A trustee may be a family member or a professional such as a lawyer or accountant who has accepted responsibility for handling the trust account. Account Name On the directions of the trustee, the bank sets up the trust account with a name and trustee designation. A minor child who has inherited from a parent, for example, may not yet be competent to handle money on his own behalf. Beneficiaries and Totten Trusts The trust account may also carry the name of a beneficiary.
These trust accounts are also known as “Totten trusts,” after an important case that settled their legality in the early 20th century. Legal Authorities While handling a bank trust account, a trustee may make changes to the account. He may name another beneficiary or a successor trustee. He may close the account or open a sub-account to which he may transfer some or all of the assets.