Many people want to avoid their estate going through probate when they pass. Your loved ones can avoid probate through estate planning. They set up a trust account. This is different from a checking account or savings account. The trust assets are administered by trustees with a fiduciary responsibility to monitor the trust funds ethically.
The trustees are in charge of the disbursement of the trust assets. This means that monies are paid out through the trust checking account. But when you receive that disbursement as the payee, how do you cash the check?
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Ways to Cash a Trust Fund Check
If you receive a trust disbursement through a check, the simplest way to cash it from a trust account is to go to the issuer of the trust checking account. Once at the financial institution, endorse the back of the check with your signature. You'll need valid photo identification to cash the check.
You can also go to the bank or credit union where you have a checking account or savings account and cash the check. Once more, you'll need a valid ID and have to endorse the back of the check.
If you want to deposit the trust funds into your checking account or savings account, you'll need a deposit slip with your account number written on it. Have your valid photo ID ready and endorse the back of the check. Another option is to endorse the check with the words "deposit only."
Cashing Checks Written From a Trust Fund
If you are the payee on a check written from a trust fund, you can go to your Federal Deposit Insurance Corporation (FDIC) financial institution (where you have a personal account) and cash it. You can also go to the financial institution that issued the trust fund check.
Cashing Checks Written to a Trust
If a grantor gives you a check with the name of the trust on it, you cannot cash it in your personal account, even if you are the trust beneficiary. A check made out to a trust must be deposited into the trust.
What About Living Trusts, Testamentary Trusts, Revocable Trusts or Irrevocable Trusts?
You may think the type of trust affects a disbursement. But there isn't a real difference in cashing checks from different trusts. For example, a living trust, testamentary trust, revocable living trust and irrevocable trust work the same when it comes to making a disbursement of trust funds.
Checks are written to the trust beneficiary. Or a wire transfer may be made into a personal account. A testamentary trust is tied to insurance.
If you are the payee on a check written from a trust fund, you can go to your FDIC financial institution (where you have a personal account) and cash it.
Who Signs the Back of a Trust Check?
When a disbursement is made, the signatory of a trust check is usually the trust beneficiary.
If you are a trust beneficiary, it's good personal finance to know how and where you can cash a trust check. Here are some frequently asked questions regarding trusts.
Where Can I Cash a Trust Fund Check?
You can cash a trust fund check if you are the payee at the financial institution that issued the check.
Can I Deposit a Check Payable to a Trust Into a Personal Account?
You cannot deposit a check made out to a trust into your personal account. The trust assets, including all checks made out to it, belong to the trust.
How Do I Deposit a Check Into My Trust Fund?
Suppose you have a check that needs to be deposited into your trust checking account. Take the check to the financial institution that holds the trust. If the check is made out to the name of the trust, then the administrator of the trust will need to endorse the check with their name and the word "trustee."
How Long Does It Take for a Check to Clear From a Trust Account?
Based on the amount of the check, a trust fund check can take anywhere from two business days to two weeks to clear.
Do Checks Written From a Trust Expire?
A trust fund check can expire. Typically banks or credit unions have the right to either pay or decline payment after [six months](https://www.lawyersmutualnc.com/risk-management-resources/articles/tips-about-the-trust-account#:~:text=After%20a%20certain%20period%20(typically,it%20is%20considered%20).
- Bankers Online: Depositing a Trust Check Into Individual Account
- WiCourts: Personal Injury and Other Settlements
- Law Office of James F. Roberts: Trustees are Responsible for Depositing Trust Checks During Administration
- Lawyers Mutual: Tips About the Trust Account: Handling Outstanding Checks
- The Burton Law Office: How Can I Cash Check Made Out to My Irrevocable Trust
- Legal Zoom: 10 Things You Should Know About a Testamentary Trust
- American Bar: What is a Revocable Living Trust
- Freewill: What is a Living Trust and How Can You Make One
- Cornell Law School: Irrevocable Trust