we have our land in a trust. Monthly checks come in our name and trustee. We always deposited check into our regular bank account. This month two banks refused to let us deposit our check. The trust is about the property not the financial aspects. Bank wants a trust account. Anyone else have this problem? We’ve never had a problem in 3 years ..
now all of a sudden it’s an issue
Banks are changing their policies all the time,and the new ones usually are designed to benefit their operations,not the customers. Just may have to get use to it.
I have an Oil and Gas Trust separate from our Family Trust. My Bonus check was in my name but also had notice of the Oil and Gas Trust. My bank had me open a separate account in the name of the Trust in order to cash this check. These may be newer rules or some banks are just catching up because a few years ago when I went in to open another account they had me do new paperwork for all my current accounts . They said this was in order to update to their new rules and regulations.
Thank you Bo & Dott for your input. Idk about opening another bank account, I have 4 already. Been with a few of them for over 25 years. Idk bc I wasn’t there but according to my husband they made it sound like it was a tax purpose issue. Which our money is taxed as personal income so idk why it’s their business. I’m with Bo and think they want to charge more for a trust account. Just another way to make more money for them. I will see how the next few months go and figure it out from there.
How is the check issued, if it is to you personally AND the trustee, then the bank should accept it if all parties have signed. I have been researching land trusts for other property issues. If checks, deeds, etc are written to XYZ Trust then then trust needs an account to cash/deposit checks, but if it is worded as "Joe Smith, Trustee for XYZ Trust" then Joe can sign and deposit the check anywhere (since the check is to the trustee, not the trust).
I believe if the Oil and Gas Rights are in a Trust the reason you need a separate account has to do with having a beneficiary of the trust if the owner (usually the trustee when living) dies. Let's say you have proceeds in the O&G Trust account of $50,000. Yes you can just spend that money and report on your personal income tax return now, but if the owner of the Rights dies and there happens to be money in the O&G Trust account that you didn't yet spend then it is treated differently with the Trust having to do separate income tax reporting and it may even be taxed at a different rate because it is in a Trust. And it is ensured that it will also be distributed to the heirs properly. There are all kind of rules once a Trust is formed for assets. Your CPA or Lawyer can better explain this to you.
I have 4 accounts at the same bank and the bank adds the amounts at the end of the month of all accounts for the purpose to know whether I qualify for the "No Fee Account Status" which I do. So in other words the bank may not charge you for this Trust Account if you have enough money in all of your accounts combined. Ask them. That is also a good reason to have all of your accounts at one bank.