When you buy property in Israel as a foreign buyer, your lawyer plays a central role in handling your money. Before any funds reach the developer or seller, they pass through your lawyer's trust account. Understanding how this works — and what happens when it doesn't — is important for anyone buying Israeli real estate from abroad.
This guide explains what a lawyer trust account is in the context of Israeli real estate, why it matters for foreign buyers, what's been changing with Israeli banks, and what your options are when trust account setup causes delays.
What Is a Lawyer Trust Account in Israel?
In Israel, real estate transactions are handled through a lawyer's trust account (חשבון נאמנות — kheshbon ne'emanut). The trust account is a bank account held by a licensed lawyer in which client funds are held separately from the lawyer's own assets. It is a legal and regulatory requirement in Israeli property transactions.
The structure works like this: you wire your purchase funds to your lawyer's trust account. The lawyer holds them there until the purchase conditions are satisfied — title is clear, mortgage is released, all parties have signed. Only then does the lawyer release the funds to the developer or seller. The trust account is your protection as a buyer: money held in trust cannot be released without meeting the contractual conditions.
Why Are Israeli Banks Making Trust Accounts Harder to Open?
Over the past several years, Israeli banks have significantly increased their compliance requirements for opening and operating trust accounts. The requirements are particularly strict for transactions involving foreign buyers or foreign currency — exactly the situations most common in real estate purchases by people living outside Israel.
Lawyers who work with foreign clients are increasingly finding that banks refuse to open new trust accounts, impose months-long delays, or place restrictions on foreign currency receipts. This is not a legal problem with the transaction — it is a practical problem with the banking relationship.
For a foreign buyer, this can mean: your lawyer tells you the purchase is ready to proceed, but there is no trust account to receive your funds. Or the account exists but the bank flags foreign currency receipts for compliance review, adding weeks to the process.
What Foreign Buyers Should Ask Their Lawyer Before Signing
Before you sign a purchase contract, ask your lawyer these questions:
- Do you have a trust account open and active with a major Israeli bank?
- Has your bank placed any restrictions on receiving foreign currency transfers?
- Have you received foreign wire transfers into this account in the last 6 months?
- What is the process for receiving Shovar payments from a foreign buyer in USD, GBP, or EUR?
These questions are not unusual. A lawyer who regularly handles foreign buyer transactions will answer them without hesitation. A lawyer who hesitates or is unsure is a signal to investigate further before proceeding.
The Alternative: A Licensed Currency Exchange Company as the Trust Holder
When a lawyer's bank is creating problems with the trust account, there is a licensed alternative. Under Israeli law, a licensed currency exchange company (חברת מרת מטבע) can hold client funds in trust as part of a property transaction.
Adesco is licensed by the Israel Capital Market Authority (License #57103) and is authorized to hold client funds in trust. For transactions where the lawyer's bank is creating delays or refuses to process foreign currency, Adesco can act as the trust holder — receiving foreign currency from abroad, converting to shekels, and releasing funds to the developer or seller at the appropriate stage.
This is not a workaround. It is a legitimate, fully compliant alternative to a bank trust account, used by Israeli real estate lawyers across the country when the standard banking route is blocked or too slow.
How Adesco Trust Account Setup Works
Setting up a trust arrangement with Adesco takes 48 hours from initial contact to account activation. The process:
- Your lawyer contacts Adesco directly with the transaction details
- Adesco reviews the transaction, the parties, and the source of funds documentation
- A dedicated trust account is established for the transaction
- You wire foreign currency directly to Adesco's account; Adesco holds the funds in trust
- At each payment stage, Adesco converts to shekels at the agreed rate and releases payment to the developer or seller per your lawyer's instructions
- Full documentation is provided at every stage for both buyer and lawyer records
Because Adesco handles the currency conversion and the trust function together, you avoid the double cost of wiring to a bank trust account and then having the bank convert at a poor rate. The conversion happens at a market-based rate as part of the trust process.
What About the Buyer's Protection — Is a Currency Company Trust as Safe as a Bank?
Adesco holds all client funds in a dedicated omnibus trust account at a major Israeli bank. Client money is completely segregated from Adesco's operating funds and cannot be used for any other purpose. The structure is designed so that Adesco's own financial position never puts client funds at risk.
This is regulated by the Israel Capital Market Authority, which audits the arrangement. The protection is comparable to a lawyer trust account — your funds cannot be released without meeting the transaction conditions.
For Lawyers: Partnering with Adesco on Foreign Buyer Transactions
If you are an Israeli real estate lawyer dealing with increasing restrictions from your bank on trust account operations for foreign clients, Adesco works directly with lawyers as a compliant alternative.
We handle the foreign currency receipt, the compliance documentation, the conversion, and the shekel payment to the relevant parties — all on your timeline, with full documentation for your files. Setup takes 48 hours and there is no cost to you as the lawyer.
Learn more about the lawyer trust account solution: Trust Accounts for Israeli Real Estate Lawyers.