Onboarding a trust account: what a small RIA should have on file before managing it
Before managing a trust account, a small RIA should know who the trustees are and what each can authorise, keep the trust documents or a certification of trust on file, link the account to the right household with the trust shown as the owner, set its discretionary status as the advisory agreement allows, and make sure the IPS reflects the trust's purpose. Record the trustee who signs, and update the record whenever a trustee changes.
A new client's parents set up a family trust years ago, and now the client and her brother are co-trustees. The account comes over with the rest of the household. Three months later, the brother emails asking for a large distribution. Can the firm act on his instruction alone? That depends on what the trust says, and the answer should already be in the file.
What should be on file?
| Item | Why |
|---|---|
| Trust name and date | Identifies the account owner correctly |
| Trustees and successor trustees | Who can instruct you now, and who would next |
| What trustees can authorise, and whether all must agree | Decides whether one trustee's instruction is enough |
| Trust document pages or a certification of trust | The evidence behind the above |
| Beneficiaries, where relevant to the investment purpose | Shapes the objective and time horizon |
| Advisory agreement signed by the trustee(s) | Your authority to manage the account |
How should it be set up?
- Link the account to the family's household, with the trust as the owner.
- Set its discretionary status as the agreement allows.
- Write or adapt the IPS for the trust's purpose and horizon.
- Decide whether it's grouped with the household for billing, as the agreement says.
- Note who must approve instructions, especially money movements.
A worked example
Take the household above at a hypothetical two-person RIA. At onboarding, the operations lead files the certification of trust, which shows both co-trustees must sign for distributions. The account is linked to the household, set as discretionary under the agreement both trustees signed, and given its own IPS reflecting a longer horizon. When the brother's distribution request arrives, the firm replies that both trustees need to approve, calls each on the number on file, and processes it once both confirm. Everything is recorded on the account.
What are the common gaps?
- No trust documents on file, just the custodian's account form.
- Acting on one trustee's instruction when the trust needs both.
- Successor trustees not recorded, so a death leaves the firm guessing.
- The trust treated like the family's other accounts, with the same IPS.
When is this overkill?
It isn't. Trust accounts are where authority questions come up most often.
How Advorra fits
Advorra keeps households with their members and accounts, discretionary status on each account, IPS documents with every version kept, and communications on the same record, so the trust's set-up and who can instruct it sit with the account. See the product page, or read about households, members and accounts and verifying client money instructions.
One thing to do this week: for each trust account you manage, check you know which trustees must approve a distribution.
An operations checklist, not legal advice.
Questions advisors ask
What documents should we keep for a trust account?
Typically the relevant pages of the trust agreement or a certification of trust, plus the custodian's account paperwork. Your custodian will tell you what it needs to open the account.
Who can give instructions on a trust account?
The trustee or trustees, as the trust document allows. Some trusts need all trustees to agree. Check before acting on one trustee's instruction.
Does a trust account belong in the household?
Usually it's linked to the family's household for reviews and reporting, with the trust shown as the account owner. Whether it's grouped for billing depends on your agreement.
Does the trust need its own IPS?
It often helps, because a trust's purpose and time horizon can differ from the family's other accounts.
Is this legal advice?
No. It is an operations checklist. Trust questions belong with the family's attorney.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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