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Cashing Living Trust Account Checks
Question: We are seeing more and more Living Trust accounts being established. Now we are getting checks that are being made payable to the "Trust" and customers are bringing them to the bank to cash. If the Trust account is at my bank, I can verify the trustees and their signatures and therefore COULD cash the check, but should I? If there is no Trust account at my bank, there is no way that I know who the trustees are unless their names are included on the check. I do not think I should cash these. Should these checks be treated as business checks and therefore should only be accepted for deposit? Or can we cash them?
Answer: A Trust, like a corporation, cannot walk through your door. It is an entity in itself. Checks payable to a trust should be treated as checks payable to a corporation - deposited only. If the trustee then wants the cash, they can draw the cash from the trust themselves - it's their money, after all - as long as there is not a trust agreement that says otherwise. And unless you have flagged your accounts to indicate that, it would be cumbersome to look it up for each requested transaction. Get tough! You may have to answer to the other trustees.
Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 3, 4/02
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