The bank tell me my trustees can have debit cards. More than one personal injury trust client has raised this with me.
The bank can tell you how you can operate a bank account, BUT the bank cannot tell you how to operate your trust and keep your benefits.
Many people have a joint bank account which operates with debit cards, but a joint current account for a trust cannot have debit cards. That is because the account should operate on two signatures/approvals. This arrangement protects you as the person whose money is held by the trust. It also means the trust will stand up to benefit agency scrutiny.
It is easy to be confused and think the bank account is the most important factor, but it is not. The trust is created by a legal document, called a trust deed. That trust deed appoints your trustees and those trustees must set up a bank account to hold and use the trust fund.
I am relieved there are still banks willing to operate current accounts for trusts, but do not be confused. It is the trust deed which dictates how the trust must operate to satisfy the benefit regulations. The bank account is simply the facility which holds the trust fund.
You do not have to hold all of the trust fund in a current account. The trusts written by this practice allow the trust fund to be held in a wide range of investments.
You can operate a trust without a bank current account. If there are no plans to spend the trust fund immediately, the trustees can do without a current account and hold the funds in a building society savings account, or a wide range of other investments.
We do not offer financial advice, so seek independent financial advice and decide what works best for your trust and your plans.