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I have an irrevocable living trust with a checking account. Can I have a debit card or credit card with the checking account?

Wilmington, DE |

My bank says no. I asked them if I opened a checking account outside of the trust with a debit card, then could I make the beneficiary of the checking account the living trust? The bank said no that the beneficiary needed to be a living person. How can I avoid probate with this checking account outside of the trust?

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Attorney answers 2

Best Answer

Its not clear to me what you mean when you say you "have" an irrevocable living trust. Are you the beneficiary, or the settlor? Are you the trustee? Without knowing more it will be hard to help.

Also, understand that a bank doesn't "have to" open a particular kind of account for someone. The relationship is private, and banks as legal persons have presumptive freedom of contract. A strange request like a debit card for an irrevocable trust will raise enough flags with most banks for them to just say no.

For persons who are using trusts to plan their own estates, "revocable" are far more common than irrevocable. Irrevocable trusts are generally used with high value estates or special kinds of property. Due to how comparatively less commmon they are, for that reason alone they will increase bank reluctance to cooperate.

No legal representation exists by virtue of this answer. Consult your attorney. Licensed to practice law in Indiana and Illinois. Circular 230 Disclosure: any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein.



I am sorry about my mistake, but I meant that I have a revocable living trust with a checking account in the name of the trust (John Smith Living Trust). The bank will not allow me to have a debit card for that account. I had to open a checking account in my name in order to have the debit card. My concern is that this checking account is outside the trust and is subject to probate. I asked to bank to make the John Smith Living Trust the beneficiary of my checking account and they told me no that the beneficiary must be a living person. Is that another way to avoid probate? I have heard of something that transfer the checking account to my living trust upon my death. Can you tell me more about this?

Timothy Edward Kalamaros

Timothy Edward Kalamaros


how about trying a different bank? I dont know what state you are talking about but under Indiana's TOD statute for personal property, there is no such requirement that the beneficiary be a natural person. Anyhow, the "trustee of X trust" is in fact a natural person, isnt that right? So you might also go back and say fine, dont make my trust be the beneficiary, make it "The Trustee of X Trust" who is obviously going to be a natural person (assuming that's not a corporate fiduciary). At that point they may think you are a difficult customer though and you might be better off getting a different bank to get this done perhaps. Shop around.


I agree with Attorney Kalamaros' answer. I would simply add that if you are designating the trust as beneficiary, the designation would be, "John Smith, Trustee of the Derek Smith Irrevocable Trust, under agreement dated January 1, 2012." You ARE designating a living person, (the trustee), as the beneficiary. I do not see why the bank should have a problem with this. If they do, you can always move the money to a different bank that is easier to work with.

James Frederick

*** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.

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