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Deposit Check Payable to Trust in Personal Account
Answer by John Burnett, BOL Gurus
Guru Bios

Question:  Can a bank customer deposit a check that is payable to their revocable trust with he or she named as trustee into their personal account?

Answer:  Even though the trust is revocable, it is a separate legal entity. The trustee has a fiduciary responsibility to the trust, and through it, to its beneficiaries. Allowing a trustee to deposit a check payable to the trustee in that capacity, or payable to the trust, is unwise. The teller being asked to complete the transaction is almost never in possession of the facts needed to determine just how ill-advised the transaction might be. Allowing the transaction puts the bank on notice of a breach of fiduciary responsibility. If that breach later is attacked in litigation, the bank can be dragged into the short list of parties responsible for any monetary damages. The check should be deposited to an account in the name of the trust.

First published on 10/09/06

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