8 reasons why you should set up a Trustee Bank Account
Whether you’ve been considering setting up a Trustee Bank Account for a while, or it’s completely new to you, we’ve put together 8 reasons why you should set one up.
Hopefully this will help you understand the benefits of setting one up.
If you’d like our support with this, it’s what we do best – you can find out more on our Trustee Accounts website here: https://www.trusteeaccounts.co.uk/
Reason 1 – Managing Assets
A Trust Bank Account can help you to manage assets on behalf of beneficiaries e.g. who may lack mental capacity, be minors, have a disability.
Reason 2 - Protecting Assets
A Trust Bank Account can help you to protect assets from creditors, from those who may influence beneficiaries. For example, other family members may get involved when it comes to discussing the money left for beneficiaries upon death. However, by putting it in a Trustee Bank Account, there will be no dispute as it’s full protected to go ONLY to the beneficiary listed.
Reason 3 - Preserving Disability Benefits
A Trust Bank Account can be used to help protect sums of money that would not impact the beneficiary’s means tested benefits.
There are three general types of trusts designed to protect disabled beneficiaries.
The Third-Party Special Needs Trust (which is often set up by someone other than the disabled person, this is often used to protect disabled children once the parents have died).
The Self-Settled Special Needs Trust (this is often the disabled persons assets, any proceeds that remain in the trust when the person dies must go to reimburse the Government for costs spent on behalf of the individual).
The Pooled Asset Trust – (this trust contains the resources of the disabled person but is established and managed by a not-for-profit company.)
Reason 4 - To ringfence Trust Assets from your personal wealth
If you are a Trustee, you shouldn’t be trying to manage Trust cash amongst your own personal wealth. Trying to do this can cause all sorts of problems from both a Tax point of view ie who earnt the interest? You or the trust? It can also be catastrophic for the Trust cash if you, as a Trustee, were to personally experience financial hardship and bankruptcy. Your personal assets could be frozen along with the “Trust’s” cash.
Reason 5 - To enable you to receive money in the event of a Personal Injury pay out
Often , Personal Injury claims are paid to a Personal Injury Trust and the Trustees of this newly created Personal Injury Trust will need somewhere to bank to settlement monies and the correct procedure is to set up a bank account in the name of the Personal Injury Trust.
Reason 6 - To receive money from a Trust created in a will upon someone’s death
Setting up a Trust fund is the safest way to ensure any money you leave in your will goes only to the person you specify. You can have it all written up and how to access the funds after you’ve gone.
Reason 7 - To earn better interest rates
As a Trustee, you have the legal responsibility to act in the best interests of the beneficiary. That might mean making sure the cash within the Trust earns a competitive interest rate. There are many similar bank accounts for Trustees as there are for personal account holders which give better rates of interest that just a Trust current account. For instance, 30-day notice accounts or a 1 year fixed rate of interest.
Reason 8 – To receive rental income from a Trust Owned Property
If assets within the Trust, for example property, generate income and expenditure, you will need a Trust current account to receive and make payments.
Hopefully this has explained many of the benefits and reasons why you should set up a Trustee Bank Account.
If you’d like to discuss any of the areas shared in this blog or enquire about the services we provide – give us a call on 0800 6342 111 and ask for Lisa.
We look forward to hearing from you soon and getting yours set up for you!
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