Accredited Investor Trust Requirements: How a Trust Qualifies

A trust can be an accredited investor in three ways under Rule 501(a) of Regulation D: on its own size (more than $5 million in total assets, not formed to buy the securities, with the purchase directed by a sophisticated person), by looking through a revocable trust to grantors who are all accredited, or because a bank acting as trustee makes the investment. The trustee's personal net worth does not make the trust accredited, and for a conventional trust the beneficiaries do not count either.

That last point surprises many investors who hold their wealth in a family trust. This guide sets out each route, compares revocable, irrevocable and grantor trusts in one table, and explains who signs and what a sponsor checks in a Rule 506(c) deal. For the individual tests (income, net worth, licenses), see the accredited investor definition. Rules are as of October 2026.

What are the three ways a trust can be an accredited investor?

Rule 501(a) lists the categories of accredited investors. Three of them reach trusts.

The "sophisticated person" in the size test is defined by reference to Rule 506(b)(2)(ii): someone with enough knowledge and experience in financial and business matters to evaluate the merits and risks of the investment. It is a judgment about the person directing the purchase, usually the trustee or an adviser the trustee relies on.

Two routes do not work, according to the SEC staff's interpretations of Regulation D. A trustee with $1,500,000 of net worth cannot make the trust's purchase accredited under the individual net worth test, because "except where a bank is a trustee, the trust is deemed the purchaser, not the trustee." And a conventional trust is generally not accredited just because all its beneficiaries are, because beneficiaries are not the trust's "equity owners."

Is a revocable trust an accredited investor?

Usually yes, if the people who created it are accredited. The SEC staff's view (Compliance and Disclosure Interpretation 255.21, citing a 1982 no-action letter) is that when the grantors of a revocable trust can amend or revoke it at any time, the trust as a legal entity is deemed not to exist for this purpose. The grantors are treated as the equity owners of the trust's assets, so the trust is accredited under Rule 501(a)(8) if every grantor is accredited.

Each grantor qualifies on the individual tests. For a married couple, Rule 501(a)(5) and (a)(6) let a person count joint net worth or joint income with a spouse or spousal equivalent, so a couple whose joint net worth (excluding their home) is over $1 million are each accredited, and so is their joint revocable trust. If one grantor of a three-grantor trust does not qualify, the look-through fails, because every equity owner must be accredited.

The trust itself can be small. A revocable trust holding $400,000 can be accredited if its grantors are, while the size test would need more than $5 million.

What about an irrevocable trust or a grantor trust?

An irrevocable trust is a separate entity whose grantor has given up control, so the look-through generally does not apply. It qualifies through the size test or a bank trustee.

"Grantor trust" is a tax term: the grantor is taxed on the trust's income. Being a grantor trust for tax purposes is not enough on its own. In Interpretation 255.24 the SEC staff described an irrevocable trust whose grantor could be treated as the equity owner, and it had all five of these features: it was a grantor trust for federal tax purposes funded only by the grantor, taxed to the grantor for at least 15 years after the investment and included in the grantor's estate; the grantor was a co-trustee with total investment discretion; the grantor's contribution plus a fixed return would be repaid before anything went to beneficiaries; it was set up for family estate planning; and the grantor's creditors could reach the grantor's interest. A trust that matches only some of these is not covered by that interpretation.

Self-directed IRAs are a separate case: the SEC staff treats an IRA as accredited under Rule 501(a)(8) when its participant is accredited. See investing through an LLC, trust or IRA for the practical side.

Who signs for the trust, and whose status matters?

The trustee signs the subscription agreement and other documents on the trust's behalf, because the trust is the purchaser. The trust is the name on the investment, the K-1 goes to the trust, and distributions go to the trust's account.

Whose status matters depends on the route:

• Size test: the trust's total assets, its purpose when formed, and the experience of the person directing the purchase.
• Revocable look-through: each grantor's own accredited status.
• Bank trustee: that a bank is acting as trustee (or co-trustee directing the decision) for this investment.

The beneficiaries' status does not matter for any of the three, and neither does the trustee's personal wealth, unless the trustee is also the sole grantor of a revocable trust and qualifies in that role.

What does a sponsor verify under Rule 506(c)?

In a 506(c) offering every purchaser must be accredited and the sponsor must take reasonable steps to verify it. The methods listed in Rule 506(c)(2)(ii) (tax forms, statements and a credit report, a professional's letter) are written for natural persons, so for a trust the sponsor verifies the route the trust relies on:

1. The trust document or a certificate of trust, to see whether it is revocable, who the grantors and trustees are, and when it was formed.
2. For the size test: recent statements showing total assets over $5 million, and enough about the trust's history to show it was not set up for this deal.
3. For the look-through: the same verification for each grantor that an individual would give, such as tax forms for income, statements and a credit report for net worth, or a letter from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney or a CPA dated within the prior three months.
4. For a bank trustee: confirmation that the trustee is a bank and is directing the investment.

In a 506(b) deal the sponsor can rely on a reasonable belief, but most sponsors still collect the same certificate and a written representation of the route.

A worked example (hypothetical, for illustration only). Four trusts each want to put $100,000 into an apartment deal.

Trust C could still invest in a 506(b) deal as a non-accredited purchaser if the sponsor accepts non-accredited investors and gives the required disclosure; it could not invest in a 506(c) deal.

What mistakes do investors and sponsors make?

• Using the trustee's net worth. Unless a bank is trustee, the trust is the purchaser.
• Counting beneficiaries. A conventional trust is not accredited because its beneficiaries are.
• Assuming "grantor trust" means look-through. The tax label alone is not enough.
• Forgetting the formation date. A trust created or funded just to make this investment fails the size test.
• Mixing up total assets and net worth. The size test looks at the trust's total assets over $5 million; the individual test looks at a person's net worth over $1 million excluding the primary residence.

How DoorRaise fits in

DoorRaise helps sponsors raise equity for apartment buildings with 5 or more units from their friends and followers, and takes verified accredited investors only, under Rule 506(c) by default or 506(b). On the investment form an investor can invest as a trust and give the trust's legal name. A trust can be verified by investing $1,000,000 or more with written statements of its category and that the money is not borrowed for the deal, by a letter from an SEC-registered investment adviser or registered broker-dealer, or with documents; the accreditation feature shows each route. Investors fund by wire into escrow at Enterprise Bank & Trust, an independent bank, not DoorRaise. Fees are $1,500 to set up (non-refundable), $5,000 at closing (only if the deal closes) and $3,500 a year.

If you are a sponsor, see how pricing works. If you are checking your own status first, the accredited investor verification guide explains every method.

FAQ

Can a trust be an accredited investor?

Yes. A trust is accredited if it has more than $5 million in total assets, was not formed to buy the securities and is directed by a sophisticated person; if it is a revocable trust whose grantors are all accredited; or if a bank acting as trustee makes the investment.

What are the accredited investor trust requirements?

For the size test in Rule 501(a)(7): total assets over $5,000,000, not formed for the specific purpose of acquiring the securities, and a purchase directed by a person with enough financial knowledge and experience to evaluate the investment.

Is an irrevocable trust an accredited investor?

Only through the size test or a bank trustee in most cases. The SEC staff has described one narrow set of facts where the grantor of an irrevocable grantor trust can be treated as its owner.

Is a grantor trust an accredited investor?

Not just because it is a grantor trust for tax purposes. A revocable grantor trust is looked through to its grantors. An irrevocable one needs the size test, a bank trustee or facts like those the SEC staff described in Interpretation 255.24.

Can the trustee's net worth make the trust accredited?

No. Except where a bank is trustee, the trust is the purchaser, and a trust is not a natural person, so the individual net worth and income tests do not apply to it.

Sources

• 17 CFR 230.501, definitions used in Regulation D (Cornell LII)
• 17 CFR 230.506, Rule 506 conditions and verification methods (Cornell LII)
• SEC: Securities Act Rules Compliance and Disclosure Interpretations, Questions 255.19 to 255.24
• SEC: Amendments to the accredited investor definition, small entity compliance guide

This article is general information, not legal, tax or investment advice. Staff interpretations are not rules, and trust documents differ, so confirm your trust's status with your own attorney. Every investment can lose money. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.