Finschool By 5paisa

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Any sort of financial account that is opened by an individual and administered by a named trustee for the benefit of a third party in accordance with agreed-upon terms is referred to as a trust account or an account in trust.

For instance, a parent can open a bank account for their minor child’s benefit and specify regulations for the minor’s access to the money or property in the account as well as any earnings they may receive. Most of the time, the trustee who oversees the money and assets in the account performs their duties as fiduciaries, which means they are legally obligated to manage the money and assets in the beneficiary’s best interests.

Cash, stocks, bonds, mutual funds, real estate, and other types of investments can all be held in trust accounts. Trustees can also differ. They can be the individual who opens the account, a different person they choose as a trustee, or a financial organization like a bank or brokerage house.

The account in trust may undergo some modifications at the discretion of the trustees. These may involve designating a new trustee or beneficiary. Even better, a trustee has the option of closing the trust account or opening a subsidiary account to which they can transfer all or a portion of the trust account’s assets. The contract that created the account in trust’s rules must be followed by the trustee, though.

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