Almost any FDIC-insured bank or NCUA-insured credit union can open a fiduciary account, so the real question is not whether a bank offers them but which type of institution fits what you are managing. For a straightforward estate or a simple cash-only trust, a local bank or credit union is usually enough. For a multimillion-dollar irrevocable trust holding real estate, business interests, or a complex investment portfolio, you will want a dedicated trust company or a brokerage and wealth management firm. The banks that offer fiduciary accounts fall into three broad categories, and matching the category to your situation is what keeps costs reasonable and the administration manageable.
Commercial Banks and Credit Unions
Any FDIC-insured bank or NCUA-insured credit union can open a fiduciary checking or savings account. These accounts work well for ordinary estate administration, simple trusts, and guardianship accounts that primarily hold cash. The bank provides the account and standard transaction services; you handle everything else, including tax filings, court accountings, investment decisions, and legal compliance. Fees are usually limited to normal account maintenance charges, which makes this the most affordable option by a wide margin.
The trade-off is experience. Staff at a neighborhood branch may rarely see fiduciary account titling or the specific documentation involved, and that shows up as delays when you try to open the account. Bring your paperwork prepared and organized, and expect at least one in-person visit with originals or certified copies.
Trust Companies
Trust companies exist specifically to act as professional fiduciaries. Rather than giving you an account to run, they serve as the trustee or executor themselves, taking on full legal responsibility for managing the assets, filing tax returns, distributing income to beneficiaries, and keeping the books. It is a fundamentally different service from a bank that holds money in an account you control.
That comprehensive service has a price. Trust companies typically charge an annual fee calculated as a percentage of assets under management, often in the range of 1% to 2% per year, sometimes with additional charges on the income the trust earns. The cost makes sense for trusts holding complex assets like private business interests, commercial real estate, or concentrated stock positions, where professional management reduces the risk of a fiduciary breach. For a modest cash trust, the fees eat the trust alive.
Brokerage and Wealth Management Firms
Brokerage firms focus on the investment side of fiduciary management. They offer custodial accounts designed to hold and trade securities on behalf of trusts and estates, and their expertise is portfolio construction, tax-efficient investing, and adhering to prudent investor standards. The Uniform Prudent Investor Act, adopted in some form by nearly every state, requires trustees to evaluate investments as part of an overall portfolio strategy that accounts for risk tolerance, beneficiary needs, inflation, and liquidity.
These investment accounts almost always need a linked bank account for cash transactions like paying estate expenses or distributing income to beneficiaries. In practice, you often end up with both a brokerage account and a bank account for the same trust or estate. The brokerage handles investment reporting, and you remain responsible for the broader legal administration.
How to Pick the Right Institution
Three things drive the choice: your legal role, what the entity owns, and how long it will exist.
If you are an executor or administrator closing out an estate, the arrangement is temporary. You collect income, pay debts and expenses, and distribute what is left to heirs.1Justia. Managing Assets During Probate and an Executor’s Legal Duties A simple checking account at a commercial bank is usually enough for the months it takes to close a typical estate.
If you are a trustee of a revocable living trust that holds mostly cash, a bank or credit union account works fine. While the grantor is alive, the IRS treats the trust and the grantor as the same taxpayer, so the account uses the grantor’s Social Security Number.2Internal Revenue Service. Understanding Your EIN Once the grantor dies and the trust becomes irrevocable, you will need an Employer Identification Number for the trust and may want to reassess whether a bank account alone still fits.
If you are a trustee of an irrevocable trust holding investments, a brokerage or wealth management firm is usually the better fit, often paired with a bank account for cash transactions. If the trust holds complex assets or will run for years with multiple beneficiaries and distribution rules, a trust company that takes on the administration itself may save you from mistakes that create personal liability.
If you are a court-appointed guardian or conservator, the account may be in place for years or even decades, and you will be submitting formal accountings to the probate court on a regular schedule.3Consumer Financial Protection Bureau. Managing Someone Else’s Money – Help for Court-Appointed Guardians of Property and Conservators A bank with clear monthly statements and good online recordkeeping tools matters more here than it does for a short estate administration.
If you are a representative payee managing Social Security benefits, the Social Security Administration limits where unspent funds can go. Benefits you do not spend on the beneficiary’s current needs must be held in an insured savings account or U.S. Savings Bonds, which effectively points you to a bank or credit union.4Social Security Administration. A Guide for Representative Payees
Do You Even Need a Fiduciary Account?
Not every estate requires one. Every state has a small estate process that lets heirs collect assets using a sworn affidavit instead of court-issued letters. The dollar thresholds range widely, from as low as $5,000 to as high as $200,000 depending on the state.5Justia. Small Estates Laws and Procedures: 50-State Survey If the estate qualifies, you present the affidavit directly to the bank holding the deceased person’s account and the bank releases the funds without a fiduciary account ever being opened. Check your state’s threshold before assuming you need to pick a bank at all.
What You’ll Need to Open the Account
Banks will not open a fiduciary account without verifying that you have legal authority to control someone else’s money. Expect to visit a branch in person with original or certified documents.
The proof of authority depends on your role. An executor or administrator presents Letters Testamentary or Letters of Administration from the probate court; banks typically want the original or a recently certified copy, and many reject documents older than 60 days. A trustee presents a copy of the trust agreement or, more commonly, a Certificate of Trust that identifies the trust, the trustees, and the powers granted without disclosing private distribution terms. A guardian or conservator presents the court order appointing them and specifying financial authority. A representative payee presents the SSA’s own appointment letter.
You will also need a government-issued photo ID, and the bank will collect your Social Security Number or Individual Taxpayer Identification Number to satisfy federal customer identification requirements.6Federal Financial Institutions Examination Council. FFIEC BSA/AML Examination Manual – Customer Identification Program That identifies you as the person controlling the account; it is not the tax ID that goes on the account itself.
The account is titled under the estate, trust, or guardianship, not under your personal name, and it needs its own tax identification number. For most estates and irrevocable trusts, that means getting an Employer Identification Number from the IRS.7Internal Revenue Service. Instructions for Form SS-4 The IRS online application tool is free and issues the number immediately upon approval.8Internal Revenue Service. Get an Employer Identification Number You are limited to one EIN application per responsible party per day, so if you are administering multiple entities, plan accordingly. The exception is a revocable living trust while the grantor is alive, which uses the grantor’s Social Security Number and does not need its own EIN.2Internal Revenue Service. Understanding Your EIN
FDIC Coverage and Account Titling
How the account is titled affects not only your legal standing but also whether the money is insured. Fiduciary accounts qualify for pass-through deposit insurance, meaning the FDIC looks through the account to the actual owners of the money rather than insuring it in the fiduciary’s name. For this to work, three conditions must be met: the funds must genuinely belong to the beneficiaries, the account title must indicate it is held in a fiduciary capacity, and records must identify the beneficiaries and their ownership interests.9FDIC. Pass-through Deposit Insurance Coverage
For trust accounts specifically, each trust owner gets $250,000 in coverage per unique beneficiary, up to a maximum of $1,250,000 for trusts with five or more beneficiaries.10FDIC. Your Insured Deposits That cap took effect in April 2024 and applies regardless of how many beneficiaries are named beyond five. For a large estate or trust with substantial cash holdings, you may need to spread deposits across multiple FDIC-insured banks to keep everything fully covered. This is another argument for picking a bank that is comfortable with fiduciary titling; a mistitled account can be treated as the fiduciary’s personal deposit and aggregated with any other accounts you hold at the same bank, which can leave large portions of the funds uninsured.9FDIC. Pass-through Deposit Insurance Coverage
The title itself should reflect the legal arrangement, not just your name. An estate account should read something like “Estate of [Decedent Name], [Your Name] as Executor.” A trust account should include the trust name and your capacity as trustee. Confirm the title on the signature card before you leave the branch, because fixing it later is harder than getting it right the first time.