Dealing with bank processes is a struggle, and more so if the account is for a trust, estate, or LLC (Limited Liability Company). These accounts, unlike regular bank accounts for individuals, have added challenges related to documentation, banking policies, and legal requirements. However, these dedicated accounts are essential for proper financial management, complete legal protection, and simplified tax reporting.

Our experience with questions from our clients prompted us to create this guide, walking you through the process and empowering you with the knowledge to confidently open the right bank account for your entity.

Why You Need a Separate Bank Account

Let’s begin with the most common question: Why do you need to open a separate account for your trust, estate, or business? Whether you are a trustee, executor, business owner, or managing an LLC, keeping finances separate from personal funds is crucial for:

Legal Protection - Having a separate bank account prevents personal liability by maintaining a clear separation of assets.
Tax Compliance - These accounts make tax reporting easier and avoid IRS scrutiny.
Simplified Accounting - Separate accounts help streamline record-keeping and financial management.
Estate & Trust Management - Separate funds ensure that trustees, executors, and business managers perform their responsibilities, preventing mismanagement.

Why Opening Trust, Estate, or LLC Bank Accounts is Difficult

Next, let’s discuss why it can be frustrating to open a bank account for a trust, estate, LLC, or business. Here are the most common reasons:

Complex Documentation Requirements

Every entity has specific documents required by banks, and missing even one can delay the process. Trusts, for example, require a Trust Agreement or Certification of Trust, which not all trustees have readily available. Accounts for estates may need Letters Testamentary, which are often difficult to obtain due to probate delays. For LLCs and businesses, banks often look for EINs, operating agreements, and incorporation documents, which business owners may not have organized or on hand.

Variation in Bank Policies

Banks differ widely in their policies. Even the same bank in different locations may follow different rules due to varying state laws and regulations. Some banks require additional documentation, while others won’t even open accounts for certain trusts or estates. This inconsistency means you might have to visit multiple banks before finding one that can accommodate your needs.

Strict Compliance & Risk Management

Banks are highly regulated and must follow AML (anti-money laundering) laws and KYC (Know Your Customer) regulations. This leads to extra scrutiny, especially for trusts and estates. If something in the paperwork doesn’t align, for example, an outdated trust document or missing EIN, banks can easily delay or deny your account opening.

Lack of Bank Staff Knowledge

Bank staff and personnel may be knowledgeable about their bank account products but not about how these are used in trusts, estates, or businesses. This unfamiliarity often leads to conflicting or incorrect information. Ultimately, this results in repeated visits, unnecessary paperwork requests, and overall frustration.

Complexity of IRS Processes

Bank account opening for trusts or estates involves obtaining an EIN (Employer Identification Number) from the IRS (Internal Revenue Service). This process can be confusing, especially for those unfamiliar with tax filings. Delays in EIN issuance can hold up account setup.

Authorized Signer Issues

Bank accounts for trusts, estates, LLCs, and similar entities often involve multiple authorized signers, resulting in issues that may affect the opening process. Banks may require all signers to be present at the branch, which can be logistically difficult. Additionally, if a trustee or executor is newly appointed, banks may not recognize their authority without additional legal documentation.

LLC, Business Entity, Estate, or Trust Bank Account Opening Guide & Checklist

1. Choose the right bank.

Start with the right bank that fits your account needs.

Research banks that offer the types of accounts you need.
Call the banks and inquire about specific requirements.
Compare fees, minimum balance requirements, and online banking options.
Make an appointment for a personal discussion with a banker.

2. Gather the required documents.

Below are the most common requirements for these types of bank accounts. Some banks may not ask for all of these, while others may require more.

For Trust Bank Accounts:

Certification of Trust or full Trust Agreement
EIN from the IRS if you did not create the trust and/or it is irrevocable
Social Security Number for Revocable Trusts created by you
Trustee/s’ government-issued ID (driver’s license, passport, etc.)

For Estate Bank Accounts:

Certified Death Certificate
Court-issued Letters Testamentary or Letters of Administration
EIN for the estate
Executor’s government-issued ID
Copy of the Will

For LLC or Business Bank Accounts:

Articles of Organization for LLCs or Articles of Incorporation for corporations
EIN from the IRS
Operating Agreement for LLCs or Bylaws for corporations
Business License
Government-issued ID/s of owner/s or authorized signer/s

3. Visit the bank and open the account.

This may take multiple visits, depending on the bank and the availability of requirements.

Bring all required documents
Accomplish and submit the bank’s application forms
Provide the initial deposit (some banks may require a minimum opening balance)
Understand and sign the account agreements outlining the terms, fees, users, etc.

4. Set up the modes of accessing and managing the account.

Once opened, you need to access and manage the account to enjoy its benefits.

Register for online banking and set up alerts
Order checks and debit cards if needed
Assign authorized users if applicable
Keep digital and physical copies of bank documents for future reference

5. Maintain the accounts.

To ensure the continuous effectiveness of these accounts, you must practice proper maintenance through regular record-keeping.

Separate personal and entity funds to prevent legal and tax issues
Keep detailed records of all transactions for legal and tax compliance
Retain monthly statements and receipts for accounting purposes

Common Pitfalls to Avoid

Our pro tip: Avoid these common mistakes when opening and using bank accounts for trusts, estates, LLCs, and other business entities:

Not getting an EIN in advance - This is the common cause of delays in account opening.
Bringing incomplete documents - Always double-check with your bank before your appointment.
Assuming all banks follow the same rules - As mentioned, bank policies vary, so always call ahead.
Relying on online information - Outdated and incomplete online information is more common than you think. Always verify with your bank before going in to open an account.

Expert Guidance from Rilus Law

Opening a bank account for a trust, estate, LLC, or business is a critical step in financial and legal management. By following the above steps, you can have a frustration-free experience in ensuring the protection and administration of your assets or business.

If you need additional support, we are here for you. Rilus Law specializes in estate planning, trust administration, and probate law. If you need assistance with setting up a bank account, obtaining an EIN, or handling estate matters, our team is here to help. Contact us for expert legal guidance today!

Opening a Bank Account for a Trust, Estate, LLC, or Business Entity: A Step-By-Step Guide