Perhaps you just created a Trust, or maybe you’ve had one for years but never funded it. Either way, now is the time to review that Trust and see what exactly is in it. One purpose of a Trust is to avoid probate, but that is only possible if your Trust has been properly funded. The phrase “Fund a Trust” refers to the process of changing ownership of assets to the trust or ensuring that the asset is payable to the trust. In our article https://grissomlawfirm.com/funding-your-trust/, we discussed the need to fund a trust. This article and our article next week will discuss how to fund a trust with some of the most common assets.
To fund a trust with your bank accounts, you will retitle the accounts into your trust’s name. You should sign new signature and ownership cards to retitle any accounts or cash equivalents, including treasury bills, money market accounts, and certificates of deposit, into your Trust. You do NOT need to open a new account or a Trust Account. You are retitling your existing account from your personal name to the Trust’s name, with you as Trustee.
Before you retitle your certificates of deposit, consult with a bank officer to make sure that the institution does not consider the change in account name to be an early withdrawal that incurs a penalty. Generally, this should not be a problem because your tax identification number for the account will remain the same.
Instruct your financial institution by letter or in person to change the title to your Trust. The tax identification number (your Social Security number) on the account will remain the same. There is no new Tax ID, EIN, or TIN for the Trust. For joint trustee trusts, be sure to give each trustee signature power with respect to the account. Sign the new signature cards as Trustees.
When you retitle an account, it should have no effect on the name you wish to have printed on your checks. There is no reason to have the name of your trust on your printed checks. Ask your bank to continue to print your individual name on the checks. As an outsider looking at your accounts, that person should not be aware that your account is held by a trust at all, but should appear that everything is still titled in your name.
Many credit unions will not allow clients to retitle their account due to charter provisions. Originally, credit unions were created to cater to a specific group of people (i.e- Delta Community was originally only Delta employees). These days credit union charters have often been expanded to allow members of the general public to bank with them, but their charters may not have expanded to include Revocable Trusts. If your credit union does not allow you to retitle your account into your Trust, simply name the Trust as Payable on Death (P.O.D) beneficiary, which still avoids probate and assures the account passes to the Trust upon your death.
At Grissom Law, we walk you through the whole Trust process, from questionnaire to funding. Come in to review a Trust you’ve already established, or to create a new estate plan. Our firm is here to help.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC.