Bank accounts for trust

[padraig]

I have a number of administration queries relating to trusts.

I have created a hybrid trust for property investment. The settlor was an accountant. Settlement sum was $100.00. The accountant has advised me that I MUST open a dedicated bank account to hold this settlement sum for the duration of the trust (80 odd years), and that this bank account should be separate from the "trading" account for the trust. This seems a bit over the top to me.

How do other investors organise bank account(s) for their trusts?.

How should I document payment of initial deposit and other expenses from my personal account for purchase of the trust properties?. Is a simple log sufficient along with retention of receipts?. Do the receipts need to be made out to the trust?

Thanks in advance

Padraig



MUST

 

[DaleGG]

Originally posted by padraig
I have a number of administration queries relating to trusts.

I have created a hybrid trust for property investment. The settlor was an accountant. Settlement sum was $100.00. The accountant has advised me that I MUST open a dedicated bank account to hold this settlement sum for the duration of the trust (80 odd years), and that this bank account should be separate from the "trading" account for the trust. This seems a bit over the top to me.

How do other investors organise bank account(s) for their trusts?.

How should I document payment of initial deposit and other expenses from my personal account for purchase of the trust properties?. Is a simple log sufficient along with retention of receipts?. Do the receipts need to be made out to the trust?

Hi!

To the very letter of the law, your accountant is right. However, from a practical point of view he/she is not being entirely realistic in today's world of bank fees . . .

One way is for the cheque to be cashed and a $100 note to be stapled inside the original trust deed. Banks can't eat it away (moths can though!!)

It is common for people to pay expenses on behalf of a trust. An accounting journal will show the trust paying the expenses via a loan from you to do so. Yes, keep the receipts and let your accountant know what you have bought and why.

Alternatively, when the trust has money in its bank account, it can draw a cheque for you to reimburse you for the expenses that you have paid on its behalf.

Have fun

Dale

 

[padraig]

Many thanks for the reply, Dale. A $100 bill it will be.

Padraig

 

[Macca]

padraig,
may I suggest that you go to a bank and ask for uncirculated notes. Something like 3 uncirc $20 and 4 uncirc $10, you want the serial numbers to be in sequence.
Place them in a paper envelope, keep them flat and in as good as condition as possible.
When the trust is wound up these will be collectors items and may even have kept up with inflation.

Macca

ps. it is important that the numbers are in sequence, a set of 3 like this is much more valuable than 3 random notes