Living Trusts & Sole Proprietorships
by Sam Ott, BOL Guru Guru bios
QUESTION: I have a customer who is in the process of changing all of her assets over to a Living Trust. She has a sole proprietorship checking account that she wants to switch over too. Can we put the Trust' name and then on the second line still put DBA: Jane Doe Motel. I could not find anything
that says either way.
ANSWER: Unless your state law provides otherwise, it is permissible for a Trustee to establish and operate business entities on behalf of the Trust and for the benefit of the beneficiaries. However the authorization for such activities must be contained in the Trust document or state law.
If the customer has executed a Trust Agreement that transfers her assets to the Trust and the Trust Agreement authorizes the Trustee to continue the business or to establish the business, the correct styling for the account would be:
Jane Doe Living Trust, (name of Trustee), DBA Jane Doe Motel
The customer may or may not be designated the Trustee of the Living Trust. You should require the customer to provide you a copy of the Trust document or at least the first page (which shows the legal name of the trust), the signature pages (showing the document was properly executed), the page containing the designation of the Trustee and any successor Trustees, and all pages which contain the powers of the Trustee.
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