After someone dies with a California living trust, the successor trustee will need to set up a trust bank account. A trust bank account is a new account, specifically for the trust administration.
The trust bank account is the operating account for the trust administration. It will receive trust income, pay expenses, and keep the trust's money separate from everyone else's. Setting up the trust account is one of the first tasks in a California trust administration, and it should be done in the same early window covered in our guide to The First 30 Days as a California Successor Trustee.
What you should not do is deposit trust money into a personal account or pay trust expenses from personal funds because it seems easier. A trust account creates a clean record and makes the trust accounting far simpler.California law requires a trustee to keep trust property separate and clearly identified as trust property. Mixing trust funds with personal money, even temporarily, is not allowed. A dedicated account lets you receive the trust's income, pay its expenses, hold a reserve for taxes, and make documented distributions, all while building a reliable record of every dollar in and out. The account statements support the trust accounting and will provide evidence to the beneficiaries that you handled the money responsibly.
In most cases, you will need to set up a new trust account. Every bank account needs a tax identification number. When the decedent was alive, the tax identification number for the trust account was her Social Security number. But when she died, her Social Security number was locked down and can no longer be used. The bank will need a new tax identification number for the account – an EIN – see below. Because the existing trust account used the decedent’s Social Security as its tax ID #, the bank will most likely require a new trust account with the new tax ID #.
Each institution has its own list, but the trustee is commonly asked for some combination of:
Opening the trust account may be easy or hard, depending on the bank and the person you are dealing with. Present the documents above and it should go smoothly. But as I tell my trustee clients, don't be shocked if the bank makes it difficult. And by the way, if the bank turns what should be a simple task into a hard one, go to a different bank. You don't have to put up with bad customer service.
Yes. While the grantor is alive, a revocable living trust uses the grantor's Social Security number. When the grantor dies and the trust becomes irrevocable, the continuing trust ordinarily needs its own employer identification number, or EIN. Get the EIN before opening the new account so it is titled and reported correctly from the start.
The title should name the trust and show that the trustee is acting in a fiduciary capacity. A common format is:
Jane Smith, Trustee of the Robert Smith Living Trust dated May 10, 2012
If the trust is to be divided into subtrusts, such as asset protection trusts for the beneficiaries, the title of the account will need to indicate that. Your attorney can help with this.
Under the FDIC trust-account rules effective April 1, 2024, trust deposits are generally insured up to $250,000 per eligible beneficiary, subject to a maximum of $1,250,000 per owner at each insured bank when five or more eligible beneficiaries are named. Deposits at different FDIC-insured banks are insured separately, so a trustee may obtain additional coverage by dividing trust funds among separately chartered insured banks. Opening accounts at different branches of the same bank does not increase coverage.
Deposit money that belongs to the trust: cash from existing trust accounts, proceeds from selling trust property (like the decedent’s home), rent, interest and dividends, and insurance or refund checks payable to the trust. Whenever possible, have checks made payable to the trust.
Out of the account, pay the legitimate expenses of the administration: mortgage, property taxes, insurance and repairs on trust property, professional fees, taxes, and distributions the trust authorizes. Review unfamiliar or substantial charges before paying. The fact that the grantor regularly paid someone does not mean the trust still has to. And keep enough cash on hand for foreseeable expenses rather than distributing every dollar the moment it clears.
Never treat the trust account as a personal checking account. Groceries, travel, household bills, loans, and gifts do not belong there. If you pay a legitimate trust expense out of your own pocket, you may be entitled to reimbursement, but keep the invoice, proof of payment, and a short note explaining it, and reimburse yourself in a way that ties back to that record rather than as an unexplained lump sum.
Start keeping records the day you take control of the funds, not months later when someone asks for an accounting. For every transaction, capture the date and amount, who was paid or where the deposit came from, the purpose, and the supporting invoice or receipt. Retain monthly statements, canceled-check images, deposit records, and tax documents. A simple bookkeeping system works for a modest administration if the entries are complete and consistent. More involved administrations, especially those with rental property, a business, or multiple trusts, often benefit from professional bookkeeping. The account is one piece of the larger process described in California Trust Administration: What To Do When Your Loved One Dies with a Living Trust.
Usually. A revocable living trust generally uses the grantor's Social Security number while the grantor is alive. Once the grantor dies and the trust becomes irrevocable, the continuing trust ordinarily needs its own EIN. Get it before opening the new account so everything is titled and reported correctly from day one.
Name the trust and show that you are acting as trustee, for example, "Jane Smith, Trustee of the Robert Smith Living Trust dated May 10, 2012."
Yes, within limits. Under the rules effective April 1, 2024, trust deposits are insured up to $250,000 per eligible beneficiary, up to $1,250,000 per owner at each bank when five or more beneficiaries are named.
Opening a trust bank account in California is one of the successor trustee's first tasks. Handled correctly, the account tells a clean story: what came in, what went out, what remains, and what was distributed. That record is your proof text to prepare an accurate accounting, answer reasonable questions, and show you kept the trust's money separate and handled it well.
Clark Allison LLP is a team of experienced California estate planning and trust administration attorneys who work directly with you, not through a rotating cast of assistants. We are based in El Dorado Hills, with offices in Roseville, San Luis Obispo, and San Diego, and we work with families throughout the state. Wherever you are in California, we can help you open the right accounts and administer the trust correctly from the first deadline forward. Conact Us for an inital call with one of our attorneys.
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