If a person has a checking account and it is under the name of a trust, can a debtor freeze the account so that it cannot be used?
Whether or not a creditor's attachment or garnishment will reach funds in an account should depend on the ownership of the account and the name in which the legal document is served. There are trusts and there are trusts. If an account is owned by a true trust -- a trust created by a legal document, usually referred to as a declaration of trust, that ownership is legally separate from assets of the individual who happens to be the trustee of that trust.
If, on the other hand, an account is set up in the form "David Depositor in trust for Betsy Beneficiary," or "David Depositor, Trustee for Betsy Beneficiary," there is often not a true trust behind it. In fact, without evidence of a declaration of trust, such an account is legally owned and controlled by the trustee (David Depositor), and a legal attachment in his name would reach the funds in the account. If you believe that your bank erred in its handling of a creditor's attachment or similar legal document, you should talk to the bank and then, perhaps, to your attorney.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
Whether or not a creditor's attachment or garnishment will reach funds in an account should depend on the ownership of the account and the name in which the legal document is served. There are trusts and there are trusts. If an account is owned by a true trust -- a trust created by a legal document, usually referred to as a declaration of trust, that ownership is legally separate from assets of the individual who happens to be the trustee of that trust.