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CalAttorney2
CalAttorney2, Attorney
Category: Business Law
Satisfied Customers: 10237
Experience:  I am a businesses law attorney, with experience advising and representing owners and investors.
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I need to set up a Trust account to hold funds in a bank

Customer Question

I need to set up a Trust account to hold funds in a bank for a down payment for a boat that will be manufactured in six months. The down payment is refundable. I want the funds to be protected from the bank seizing them or from the money being seized or some other entity putting a lien on them. I want you to tell me the exact legal zoom document I will need and/or if this is something you can help me with. I don't want to pay if you can't help me. Please advise.
Submitted: 1 year ago via LawDepot.
Category: Business Law
Expert:  Attorney2020 replied 1 year ago.

The monies should be placed into an LLC, not a trust. A cash LLC that you can set up through Legalzoom. The documentation will then be brought to the bank and the bank will set up your LLC protecting it from all creditors having claims against you personally or other companies that you own/operate.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation. Thank you.

Customer: replied 1 year ago.
Can you please send me the link so that I can get a "cash LLC" from Legal Zoom? Does the customer send the money to the bank once the cash LLC is set up? What kind of wording needs to be on the cash LLC so that the customer feels confident that his money is safe and he can get it back if he changes his mind in a couple of months for unforseeable (Life happens) reasons. I have agreed that he can have the money back if we have not started making his boat.
Expert:  CalAttorney2 replied 1 year ago.

Dear Customer,

A different expert here, your earlier expert opted out.

I would recommend a slightly different approach to this. Rather than setting up an LLC for each individual transaction, contact the bank where you hold your business accounts. See if they have escrow accounts for transactions such as this. Many business banks will hold accounts in escrow to do exactly what you propose (hold a deposit pending completion to the satisfaction of both parties), and will even have model contracts for you to use (Do review these carefully and make any changes or adjustments necessary to meet your needs).

For a good overview of what a business escrow account is, see this link: https://www.reverebank.com/escrow-services-work-small-businesses/

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