Congratulations! You and your spouse just finished signing your Revocable Living Trust paperwork, and you couldn’t be happier. After all these years, you finally have a plan to cover all of life’s what-ifs. But just as you’re about to pop the cork on some expensive champaign, your estate planning attorney at Caitlyn Ashley Law in Denton reminds you that you’re not quite done yet. Now that your Trust is established, it’s time to fund it. And many people start that process by transferring their bank accounts.
But what does that mean, exactly? And how do you go about transferring your bank accounts into a Revocable Living Trust?
First Things First — What Does “Funding a Trust” Mean?
Think of your Trust as a giant umbrella. It is designed to protect everything you own, regardless of the calamity. But when you set it up, it’s technically not protecting anything. For lack of better phrasing, it’s nothing more than a stack of estate planning paperwork — because you haven’t put anything underneath it yet. Your goal as the trustee (owner) is to get everything under that umbrella as quickly as possible through a legal process called “funding.”
By funding a Trust, you are transferring ownership of all your assets from you to the Trust.
And by assets, this can include but not be limited to any of the following:
• Bank accounts
• Real estate
• Business interests
• Vehicles
• Boats
• Life insurance
• Intellectual property
• Brokerage accounts
• Safe deposit boxes
• Personal property
Funding a Trust can make many people think they are giving up control and even ownership of their stuff. But this couldn’t be further from the truth — especially with a Revocable Living Trust. One of the main perks of this estate planning tool is that you can manage the Trust and all its contents during your lifetime. You can add assets, delete assets, and even dissolve the Trust entirely.
How To Transfer Your Bank Accounts Into a Revocable Living Trust
Funding a Trust is easier than you may think. Your estate planning attorney has likely already provided you with detailed instructions for each of the assets listed above. That includes info on how to handle your bank accounts.
The first step in transferring your bank accounts is to tell your banker that you’ve established a Trust and schedule an appointment to visit your local branch in person. All trustees will need to be present. Depending on the bank, they will want to see a copy of the entire Trust or the Certificate of Trust with the primary Trust information (name of Trust, trustees, etc.).
Once the bank has done its Trust review, the next step is to transfer your bank accounts to the Revocable Living Trust.
This can be done through any of the following ways:
1. Establish new accounts in the name of the Trust and place all existing bank funds into those accounts.
2. Change the titles (ownership) of all existing accounts to the trustee’s name as trustees of the Trust.
3. Change the payable-on-death designation on all your accounts by naming the Trust as the beneficiary for your account.
Once the transfer is complete, you can repeat the same steps with your other assets.
Call Caitlyn Ashley Law Today!!
Having a plan for the future is the most important gift you can give yourself and your family. Granted, none of us will know what is around every corner in life. And just thinking about the what-ifs — what if I were to die or become incapacitated tomorrow; what if my child with special needs has no one to care for her; what if all my “stuff” isn’t passed onto the right people — can be overwhelming. But having a plan that accounts for your family’s unique circumstances, puts your affairs in order, has concrete solutions to your concerns, lays out your wishes and goals, and protects your family’s future provides peace of mind for the road ahead.
Caitlyn Ashley Law in Denton, Texas, will counsel you on which documents are best suited for your needs and ensure they are flexible enough to meet your changing needs for years to come.