The short answer? Yes, if you manage a trust checking account and handle significant funds, it’s highly recommended that you include the name of your trust on checks. Should I put my trust name on the checks? This strategy helps you avoid complications and ensures compliance with legal requirements in many jurisdictions. An Trust and Estate attorney in NYC can be invaluable in ensuring proper procedures are followed, and your finances are protected.

Managing trust accounts can seem complicated. However, don’t worry. This blog from Miller & Miller Law Group PLLC will explain why it’s important to address checks correctly for trust accounts, how to do it properly, and the potential risks of mishandling them.

Understanding the Importance of Check Writing for Trusts

A trust is a legal entity that holds and manages assets on behalf of a beneficiary or beneficiaries created by the grantor. Trusts are often used to avoid probate, minimize taxes, and ensure the smooth transfer of assets. To maintain the trust’s legal and financial integrity, it’s critical to manage its financial transactions correctly, including writing checks.

Putting your trust name on checks helps maintain transparency and ensures that the funds are used according to the terms of the trust. Mismanagement—such as not using the correct account name—may lead to legal issues, probate complications, or even frozen accounts in critical situations.

If you live in NYC, you must follow New York Banking Law § 9-N, which mandates that proper records, including the address of beneficiaries in trust accounts, must be maintained. This regulation further underscores the importance of correctly titling trust accounts and their checks.

How to Properly Title Checks for Your Trust

When writing a check from a trust account, you need to follow naming conventions to ensure clarity and compliance with financial and legal standards. Here’s how to do it properly:

• Open a Trust-Specific Checking Account: Banks typically require a dedicated account for the trust, titled “[Your Name], Trustee of [Your Trust Name].”
• Include the Trust Name on Checks: Ensure your checks include the full name of the trust to signify that the payments are being made on behalf of the trust.
• Use Proper Signatures: When signing, your signature should reflect your role as a trustee. Example:  

John Doe, Trustee,

The Doe Family Trust

• Follow Bank Requirements:  Some institutions require specific forms or documentation before allowing trust-related check writing. It’s always wise to confirm these requirements with your bank.

Adhering to these practices ensures the legitimacy and traceability of every transaction conducted under the trust, safeguarding both the trustee and the beneficiary.

Potential Risks of Using Your Trust Name on Checks

While including the trusted name on checks is typically a good practice, there are potential risks to be aware of:

Confusion Over Liability 

Using the trustee’s personal signature incorrectly or failing to include the trust name on documents can blur the distinction between personal and trust finances. This mistake could expose the trustee’s personal assets to potential legal liability, which can be costly and time-consuming to resolve. 

Identity Theft Risks 

Checks that display identifying details about the trust may make it easier for fraudsters to gain access to trust accounts. For smaller trusts or household accounts, exercising discretion and limiting exposed information is safer. 

Bank Policy Variations 

Banks often have different requirements for handling trust accounts, such as requiring additional forms, multiple signatures, or even retitling accounts. If these issues aren’t addressed early, they can create delays and complications when accessing funds or conducting transactions. Understanding a bank’s policies upfront can help avoid unexpected problems.

To avoid these pitfalls, always check your financial institution’s requirements and seek guidance from an Elder Law attorney to manage your trust accounts effectively.

Consult an Elder Law Attorney in NYC for Guidance on Managing Trust Accounts!

If you’re a trustee in Brooklyn, NYC, or anywhere in New York State, it’s crucial to understand your legal duties and to ensure the proper management of your trust accounts. Missteps in check writing or trust management can lead to unnecessary legal or financial complications.

At Miller & Miller Law Group PLLC, we specialize in trust law and elder law, providing expert guidance to help you manage trust accounts seamlessly while avoiding common mistakes. Our experienced attorneys can assist you in retitling your accounts, ensuring compliance with New York state laws, and safeguarding your assets. Contact us for a consultation at (718) 875-2191 or visit us at 365 Bridge Street Suite 7 Pro, Brooklyn, NY 11201.