How must a title company's escrow account be labeled?

The correct labeling for a title company's escrow account as a trust account is essential for ensuring compliance with legal and ethical standards in the handling of funds. A trust account is specifically designed to hold client funds separately from the company’s operational funds, thereby protecting clients' money and maintaining transparency in financial transactions.

In a trust account, the funds are managed on behalf of clients, such as buyers and sellers in a real estate transaction, and must be carefully accounted for to prevent any misuse or commingling with the title company's operational funds. By using a trust account, a title company assures its clients that their money is safeguarded and that the company is adhering to regulations that govern the handling of such funds.

While other options may represent different types of accounts, they do not accurately describe the required labeling for an escrow account. An IOLTA account, for instance, pertains to Interest on Lawyer Trust Accounts, which has specific implications related to attorneys rather than title companies. Similarly, a title company account or an operating account would not denote the special fiduciary responsibility that comes with managing funds in escrow for clients. Thus, "trust account" is the most appropriate term in this context.