What is informal trust account?
An informal trust account is a trust arrangement where one party (the trustee) holds and manages assets on behalf of another party (the beneficiary) without the need for formal legal documentation or complex structures. It is often used for practical purposes rather than legal or estate planning purposes.
How do I open a trust chequing account?
Most major banks and credit unions offer trust chequing accounts. Choose an institution that suits your needs and offers favorable terms and services for trust accounts. Some institutions specialize in managing trust accounts and may offer additional services or expertise.
To open a trust chequing account, you will need to provide various documents, including:
- Trust Deed or Agreement. A legal document that outlines the terms of the trust, including the trustee's responsibilities, beneficiaries, and how the funds are to be managed.
- Identification. Personal identification for the trustee(s), such as a driver's license or passport. The bank may also require identification for the beneficiaries in some cases.
- Business Documents (if applicable). For corporate trusts, documents such as the company’s certificate of incorporation, business number, and corporate resolutions may be required.
Depending on the institution, you may be required to visit a branch in person to open the account, or you may be able to complete the process online. Speak with a representative to discuss your needs and ensure that you have all necessary documentation. The representative will help guide you through the account opening process.
Fill out the application form provided by the financial institution. This form will ask for details about the trust, the trustee(s), and the beneficiaries. All required signatures must be provided on the application and trust documents.
Some institutions may require an initial deposit to open the account. This amount varies by institution. You can order cheques for the trust account if needed. Set up online banking access if the institution offers it, to manage the account efficiently.
You can also place free funds on a savings account.
Calculate your future income on a savings account (example):
| Amount, $ | Rate, % | Accrued %, $ |
| 25,000 | 3.40% | 850 |
| 25,000 | 3.50% | 875 |
| 25,000 | 3.60% | 900 |
| 60,000 | 3.70% | 2,220 |
| 60,000 | 3.80% | 2,280 |
| 60,000 | 3.90% | 2,340 |
| 140,000 | 4.00% | 5,600 |
| 140,000 | 4.10% | 5,740 |
| 140,000 | 4.20% | 5,880 |
| 340,000 | 4.30% | 14,620 |
| 340,000 | 4.40% | 14,960 |
| 340,000 | 4.50% | 15,300 |
What are real estate trust accounts?
Real estate trust accounts in Canada are specialized accounts used by real estate professionals, such as lawyers and real estate agents, to hold and manage funds related to real estate transactions on behalf of their clients. These accounts ensure that funds are handled securely and used appropriately in the course of real estate dealings.
Can a student open a trust account in Canada?
Yes, a student can open a trust account in Canada, but there are specific conditions and considerations to keep in mind. The type of trust account a student might be interested in could vary based on their needs, such as a personal trust account for managing funds received from family or a trust account set up as part of an estate plan.
A student might be a trustee or a beneficiary of a personal trust account, often set up by family members. This account would be used to manage funds held in trust for the student's benefit.
Sometimes, trust accounts are set up specifically to fund education expenses. In this case, the student might be the beneficiary of such a trust.
What are the law society trust account rules in Canada?
In Canada, Law Society trust account rules are designed to regulate how lawyers handle and manage trust funds on behalf of clients. Lawyers must keep client funds separate from their own personal or business funds. This is typically achieved through separate trust accounts. Client funds held in trust should be deposited into a designated trust account, distinct from the lawyer's general operating account.
Lawyers must maintain detailed and accurate records of all transactions involving client funds, including deposits, withdrawals, and interest earned. Trust accounts must be reconciled monthly to ensure that the records match the actual account balances.
Funds from a trust account can only be disbursed for purposes authorized by the client or as directed by legal proceedings. Any withdrawal or payment from a trust account requires the client’s consent or proper legal authorization.
See the similar FAQ at the link:
- BMO RDSP
- BMO S&P 500 index ETF
- BMO SelectTrust portfolios
- BMO US dividend fund
- BMO US dollar monthly income fund
Details of companies offering the financial services:
Windsor Family Credit Union
Head office’s address: 3000 Marentette Ave (Corporate & Administration Office), Windsor, ON
Contact center: 519-974-3100
Web-site: https://mywfcu.ca/
National Bank
Head office’s address: 600 Gauchetiere St W, 4th Floor, Montreal
Contact center: 888-483-5628
Phone: 844-394-4494
Web-site: https://www.nbc.ca/en/personal.html
Swift code: BNDCCAMMINT
Stock code: NA
BSB: 006
Scotiabank
Head office’s address: Scotia Plaza, 44 King Street West Toronto
Contact center: 800-472-6842
Phone: 416-866-6430
Web-site: http://www.scotiabank.com/ca/en/0,,2,00.html
Swift code: NOSCCATT
Stock code: BNS
BSB: 002
TD Bank
Head office’s address: Toronto-Dominion Centre, Po Box 1 Stn Toronto Dom, Toronto
Contact center: 866-222-3456
Web-site: https://www.td.com/about-tdbfg/our-business/index.jsp
Swift code: TDOMCATTTOR
Stock code: TD
BSB: 004