TRANSFERRING ASSETS INTO THE TRUST 

AND BENEFICIARY DESIGNATIONS

Here is some information on transferring assets into the trust or using beneficiary designations. It is critically important that you double check on whether your accounts have up to date beneficiaries or that the asset has been properly transferred into trust. Many people think they do and they don’t! If your trust has not been created yet, you will have to wait to transfer those assets into your trust. However, you can go ahead and double check your beneficiary designations.

The Goal is to Avoid Probate: The ultimate goal is to avoid probate and there are different ways to accomplish this goal. For starters, certain financial accounts can have a beneficiary designation. They might include checking and savings accounts, CDs, IRAs 401ks and safe deposit boxes. Another way to avoid probate is to transfer the asset into the trust.

Beneficiary Designations Supersede the Terms in the Trust or Will: If there is a beneficiary on one of these accounts, they supersede whatever terms you have in your trust or will. For example, if you have “Bob” as your beneficiary on your savings account which has $100,000.00 in it at the time of your death, Bob gets it. This is true even though Bob has been a real jerk and you left nothing for him in your Trust or Will. So, please keep that in mind when you decide the terms of your trust and/or beneficiaries.

So what assets should be transferred into the trust? And which assets should have beneficiary designations? The following answers may not work for everybody, but they can work for most people. When a financial account needs to be transferred into the trust they (the financial institution) will need to see the actual trust document or the “Certification of Trust.” I would recommend just bringing the entire estate planning folder in with you. If you choose beneficiaries, you can usually choose multiple persons and have alternates too.

Real Estate: We will transfer this for you and record the new deed with the county recorder. You should receive the deed back from the county within three weeks. When you do, place the copy in the folder we gave you. If you very buy real estate in the future, make sure it is titled in the name of the trust. If not, it will most likely need to be probated.

Savings Accounts: We typically advise putting your savings account into trust. There will undoubtedly be bills that need to be paid after your death and until the estate has been fully administered, i.e. the mortgage, SCE, water to keep the grass green etc. By putting the savings account into trust the successor trustee can use this account to pay those bills. Whatever is left over goes per the terms of your trust.

Certificate of Deposit – CDs and Safe Deposit Boxes: Please transfer these into the Trust.

Checking Account: We generally advise our clients to NOT transfer this account into trust, but to make sure there are beneficiary designations on the account (POD or payable on death). The reason is because you may have certain direct deposits that go into this account such as Social Security payments and the names may need to match. So please double check whether you have up to date beneficiaries on your checking account.  

IRA’s and 401ks: Individual retirement accounts and 401(k)s cannot be assigned to a trust; you, as an individual, must own your accounts. You can, however, name a trust as a beneficiary, however, we do NOT recommend designating the trust as a beneficiary. The main reason is because these types of retirement accounts have certain rules like the required minimum distributions or RMDs. It is generally just easier to designate individual beneficiaries (who are people).

Cars, Trucks, RVs, Boats, Motorcycles: These will be transferred into the trust by a general assignment. Even though they have a “title” or “registration” which can be changed, we do NOT recommend transferring onto the trust that way. At the time of death, there will be a procedure with the DMV that can be done by the successor trustee to transfer the asset/re-register.

If you have assets other than what is listed above, please discuss it with our attorney. You will also be receiving more information on transferring assets into your trust when you sign your documents.