Living Trust

When you set up a Living Trust, it is critical that the followup work of moving the assets into the Trust is tackled and completed accurately.

Most people’s largest asset is their residence. To put the residence into the Trust, you must execute a valid Deed, which must be recorded at the County Recorder’s office where the property is located. This also applies to any rental property that you may own. It is also a good idea to contact your liability (homeowners) insurance agent to request that the Trust be added as an endorsee on the policy.

Next on the list are cash and investment accounts. Such items as checking accounts, savings accounts, CDs, brokerage accounts, mutual fund accounts, DRIP (stock) accounts require a change in ownership to the Trust. You will need to contact the financial institution holding the account and find out the procedures for making the change into your Trust. Be careful. Some institutions have a policy of closing the old account and opening a new Trust account. This can cause you a problem if you have a checking account you want to change, but you have automatic deposit or bill payment from that account. If you choose to leave the account out of Trust, you can request the institution to designate a beneficiary for the account. These are often called “POD” (Pay on Death) or “TOD” (Transfer on Death).

Transferring accounts into your Trust does not include such items as IRAs, 401(k)s, Annuities, and other retirement or tax deferred accounts that may hold stocks or mutual funds. These types of accounts pass according the beneficiary designation form that you have filed with the company. Life insurance is also handled by beneficiary form. It is a good idea to review the forms periodically to be sure that they are correct, but the account name will never change to the name of the Trust.

Your Trust is designed to keep your assets out of Probate Court, saving your Estate time and money. For maximum effect, you need to ensure that your assets are in your Trust.