So you have a living trust? Remember you must place assets IN YOUR TRUST. You can’t just think about it…you actually have to take the time to change title to your assets. This is known as “funding” your trust. In fact, failure to “fund” a trust is the biggest reason most trusts fail.
In most cases, the following assets go “IN” your trust: checking accounts, savings accounts, CDs, regular investment accounts, stocks, bonds, credit union accounts, and real estate. Typically, your attorney should take care of the real estate during the signing meeting. However, you should make sure your assets are properly titled as the years go on and as you accumulate further assets. Simply put, assets IN your trust are governed by the trust and avoid the court system. Also, assets "in" your trust can be managed by your successor trustees. Assets NOT in your trust won’t necessarily receive the same benefits. Again, make sure trust assets are listed on your “Schedule A” - a schedule of all trust assets that should also be provided to your by your attorney.
How do you go about putting assets into your living trust? My practice is to prepare letters for my clients to present to their financial institutions. The main purpose of these letters is to illustrate how title should be held. In most cases, the institutions will just want to see the language on the letter. They won't necessarily want to keep the letter. In many cases, they might have you fill out their own forms as well. In addition, some may want to see your “Certification of Trust” which is also something your lawyer should give you as part of your overall plan. Finally, some institutions may ask for copies of certain pages of your trust. That is perfectly fine.
How should title read? In most cases, assets in your trust will be titled as follows: For single people, “YOUR NAME, as Trustee of the NAME OF YOUR TRUST, dated X/X/XXXX” and for married couples, it would be “YOUR NAME and YOUR NAME, as Trustees of NAME OF YOUR TRUST, dated X/X/XXXX.” By doing so, you are placing the asset IN your trust. For example, “John Smith, trustee of the John Smith Living Trust, dated July 5, 2003” or “Mary Smith and John Smith, trustees of the Smith Family Trust, dated July 2, 2010.”
If I can help you with your estate plan, please call my office at (661) 414-7100 for an appointment.