# of trust accounts

William11027609

Since there are 3 different types of trust accounts (sales, management, and security deposit), would a firm ever need to create more than three trust accounts? If so, why?

bobratahan

@William11027609

While a single trust account can accommodate funds from multiple sources, with appropriate accounting to delineate ownership, practical considerations often necessitate separate accounts. The administrative overhead of allocating interest earned proportionally across numerous individual deposits typically renders interest-bearing trust accounts impractical. Conversely, situations involving substantial sums, such as a property manager handling funds for several large clients, each with numerous units and significant monthly income, warrant distinct trust accounts. In such cases, clients often expect interest accrual on their deposits, making separate accounts a logical and financially prudent approach. Other factors may also contribute to the decision to establish multiple trust accounts.