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Opening a Trust Account for A Will
If you're receiving an inheritance, through a Will, you might discover that your inheritance has to go into a Trust Account until a future date - I'm sure we've all heard this before, but then, one day, you suddenly find you have to open a Trust Account for the funds to be paid into.
This has happened to me. The reason I am writing this hub is to let people know what I did, so that you can do this with a little less stress than I encountered.
This is not financial advice.
I am not a financial advisor, I'm just somebody muddling through and trying to do what's best. Do not take anything in this article as financial advice. It isn't financial advice. I am just trying to explain how I found the process of opening up a Trust Account.
The trouble is, nobody tells you what to do, what to expect.... then suddenly you have to open this account, for money to be paid into it - and it can all come as a short-notice, stress-filled experience.
In my instance there was half a property that, if/when sold, meant the funds had to be paid into a Trust account until the demise of the remaining spouse. We weren't using a financial advisor to do this - we knew we needed to open an account, but we didn't realise this wasn't as straight forward as that sounds.
What You Need, What You Need to Ask to Open up a Trust Fund Account
To open up a trust account, we needed to firstly have the paperwork from the solicitor. This consisted of an original of the death certificate and a sealed copy of the Grant of Probate. We had originally received these and filed them under "will stuff", and hadn't appreciated that we needed these two pieces of paperwork to open the account.
We wanted to open up an account, that had a local branch - the reason for this was so we could go into the branch, armed with paperwork and ID, so they could check/confirm that everything was in order.
The application form had a list of acceptable ID and the two of us who were trustees (executors) had to produce this ID, which ideally meant us both going into the bank together. Acceptable ID changes at each bank, but a good start is a current passport, or a photo driving license.
So, in order to set up this Trust account, we set it up with:
- Original Death Certificate
- A sealed copy of the Grant of Probate
- Both trustees present
- Both trustees with a fistful of ID that could be used
When we walked away from the branch our ID had been checked and they'd confirmed it was all OK - and we had a form in our hand to fill in.
Next step was to take the account form to the solicitor and hand it over. Now, we knew, once the house was sold, the proceeds for the Trust part of the estate would be sent with that form to the branch, who would then "marry" the ID with the application form and the account would be set up.
We did it this way because we decided to tie it up in a high paying 18 month bond. Without a financial advisor, we just wanted "a solution". We didn't have a wide range of banks/building societies - and I simply phoned round them all and asked two questions:
- Do you operate trust accounts?
- What rate of interest do they pay?
In our case, the answer was clear. There were 2-3 banks we couldn't use, so that just left the rest - and we picked the one with the highest interest rate.
We've now got 18 months to sort out a better arrangement if we want to - but we needed a fast solution as the house sale was expected to occur a week later, the two executors can rarely be together and in the same town.
I've written this hub to help give others a clue as to what to do. What I discovered along the way was:
- If you are not using a financial advisor and are doing this yourself, then you have to understand that an account set up like this, a Trust account, is different to a regular current or savings account. When money is put in Trust it is protected. Although the account was set up with two of us as executors/trustees - and the money being effectively 'held' for our future benefit, the money is marked specially as being part of a Trust, so protected against, say, being grabbed to pay debts any one of us runs up, or the Govt deciding it's "our" money and we're hiding it. Setting up a Trust account is a way of ensuring the money can't be touched except for the intended purpose.
- Not all banks have trust accounts available. e.g. Lloyds Bank told me they have none.
- Some banks allow you to open up ANY of their current or savings accounts as a Trust account, then the account is simply "marked" as being a Trust account. e.g. Barclays operate like this.
- If you are choosing to put the money into a Bond, which often will pay a better rate of interest, you open the account WITH the full amount you are putting into the Bond - so you just need to get the ID and paperwork ready and then you can open up the account once the funds come through; in our case we left this with the solicitor, who will send off the cheque and the paperwork.
- If you are wanting to set this up online, be aware that some banks will have Trust accounts available, but not available online.
I hope the above has helped somebody.
At first I thought that we'd have more control over the account than we ended up having. I didn't realise, at first, that a Trust account is a slightly different type of account to a regular account.
Hopefully this will give somebody out there a little more confidence in dealing with opening a Trust account themselves.