The key purpose of estate planning is to ensure the financial security of your family after your death. As a recent article explains, one way to ensure the financial security of your family is through establishing a trust bank account.
Many bank accounts are well suited for trusts, these accounts offer multiple benefits:
- Trust assets may be transferred immediately to beneficiaries without additional costs
- If an account for trust is established at a Member FDIC bank, it will be insured for, at minimum, up to $250,000
- Financial institutions that offer deposit for trust accounts allow clients to establish these accounts through converting existing accounts such as savings, money market, or Certificate of Deposit
- A person can name any individual or organization as the trustee of his or her account for trust
The process of setting up an account for trust is simple. First, you must set up a living trust agreement. This agreement transfers the selected type and amount of assets to the trustee, who will manage the trust. Often, people name themselves as the trustee of their account. This way, they can maintain control of their account. The other important part of the trust agreement is naming a beneficiary, who is the person that will inherit the trust assets.
After setting up the living trust agreement, the next step is to select the financial institution that you would like your account to be through. Contact different banks to determine which offer the type of account you are looking for, and provide the bank with your trust documentation.