The information below assumes that you know where specific assets need to go. There is no set rule about this. It really depends on your specific situation.

Figure Out What Tax Identification Number to Use for the Trust.

If you have a joint revocable living trust

If you have a joint revocable living trust, your Trustee does not need to obtain a separate tax identification number as long as you are both alive. You also do not need to file a separate trust tax return.  The Internal Revenue Service (IRS) prefers that you use your own Social Security number.  You should report all of the income generated by trust assets on your personal IRS Form 1040.

When one of you dies, your trust becomes irrevocable for tax purposes.  It may split into multiple trusts, each of which may be treated as a separate taxable entity for income tax purposes.  Your estate plan attorney will work with your successor Trustee and your accountant to see that your heirs get the full benefit of your estate planning upon your death.

If you have an irrevocable trust

An irrevocable trust needs to obtain a separate tax identification number.

Titling Assets in Your Name as Trustee

As a general rule, you should title all of your currently owned and newly acquired assets in the name of your trust.  Here is a format you can us for titling assets in the name of your trust:

“Charlie Brown and Margret Jean Brown, Trustees of the Brown Family Trust dated ________, and any amendments thereto.”

Hopefully you caught the reference to Peanuts there. (grin)

Funding a Trust With Cash Accounts.

If you have a Certificate of Trust or Trust Affidavit, take that to your bank or financial institution. Otherwise, just bring a copy of your trust for them to review. Tell them that you have a trust, and that you want to transfer your account to it.

If you have a revocable living trust.

If you have a revocable living trust, you should retitle any sizable bank accounts or cash equivalents, including treasury bills, money market accounts, and certificates of deposit, to name yourself as Trustee of those accounts.  The bank or financial institution will require you to sign new signature and ownership cards. You need not change any small joint or other checking accounts used primarily for household expenses.

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 for withholding and reporting purposes will remain the same.  For joint trustee trusts, be sure to give each trustee signature power with respect to the account.  Sign the new signature cards as Trustees.

You shouldn’t need to get new checks printed even though you have retitled the account records. You can choose whether or not to have the name of your trust on your printed checks. Most people ask their bank to continue to print their individual name on the checks.

Transfer Investment Accounts to the Trust.

If you’re funding a trust with investment accounts, you’ll need to make sure that the funds are transferred directly to the trust’s name. You should also check with your financial institution to ensure that the trust has access to those accounts.

Stocks and Bonds Not Held in Investment Accounts

If you possess original stock or bond certificates, there are two ways to transfer the certificates to your trust.

Registering the Stock

Here is the first way. You can open a brokerage or investment account in the name of your trust and deposit your original certificates in the account.  (You may later have your broker deliver the certificates to you made out in the name of the trust if you wish.)  Your future account statements, titled in the name of your trust, will prove your ownership of the transferred stock or bonds.

Reissuing the Stock Certificate

The other way is to work directly with the transfer agent for the stock or bond and direct the agent to reissue your stock with your trust named as the new owner. (This is the traditional way of transferring stocks.)

Personal Effects

Person effects (aka “tangible personal property”) refers to all the things you own other than real property, cash and accounts, contractual rights and business interests. Examples of personal effects include motor vehicles, household furnishings, appliances and fixtures, works of art, pictures, collectibles, personal clothing and jewelry, books, sporting goods, and hobby paraphernalia.  Ownership of personal effects can be transferred to a trust with a written assignment.

Motor Vehicles

Most people prefer to leave their vehicles outside their trust for several reasons.  One, if you have a vehicle accident, the fact that you have a trust could cause the other parties to the accident to assume you have deep pockets and encourage a lawsuit.  Second, heirs can usually transfer vehicles without formal probate proceedings.  If you decide to title your vehicle in the name of your trust, consult your casualty insurance agent to make certain the transfer will not result in a business rating on your insurance policy that would increase your premiums.

Retirement Plans

You should never transfer the ownership of a qualified retirement or pension plan or individual retirement account (IRA) to a trust.  If you have pre-retirement death benefits under such a plan, consider naming beneficiaries such as your spouse, children, or partner.

Making the proper beneficiary designations for retirement plans involve many complex tax and individual family issues. Consult with an estate plan attorney to best match your unique goals, we would be pleased to do so.  But additional planning must be done under a subsequent written representation agreement.

Life Insurance Policies and Annuities

In estate taxes is a concern, you can avoid them by creating one or more irrevocable life insurance trusts.  In any event, you will probably want some policy proceeds paid directly to your trust (so there is money available for your funeral and final expenses).  Please consult with us so we can help you determine the proper ownership and beneficiary designation for each.

Corporate Business or Professional Interests

You should contact your business attorney or ask us to assist you in funding a trust with your business interests.

• If your business is a corporation, you will have to cancel shares held in your name and reissue them in your name as Trustee of your trust.
• If your business is a limited liability company, you need an assignment document to assign your interest to your trust.

Sole Proprietorship Business Interests

A sole proprietorship is a business entity owned by one person.  You can transfer ownership of a sole proprietorship to a trust with a written assignment of interest.  List all items of tangible personal property individually or by category in the assignment.

Partnership Interests

If your partnership agreement permits it, you can transfer your interest in a partnership to your trust through a written assignment of interest signed by you and acknowledged by your partners.

We can prepare assignment documents for you. Just contact us.

Oil, Gas, and Mineral Interests

The method of transferring interests in oil, minerals, and gas depends on whether you own or lease the interests.  Generally, if you own the interests, you should record a deed that titles your interests to your trust.  If your interest is a lease, you should assign your rights as a lessee to your trust by a written assignment. We can prepare assignment documents for you. Just contact us.

Real Property

Transferring your real property to your trust will require preparing, executing, and recording new deeds for each property.  However, you should do this through an attorney. The attorney needs to review ownership and tax issues based on the nature of the current title to the property. Contact us and we will assist you with this.

Regarding your homeowner’s policy, contact your insurance provider to discuss adding your trust as an additional endorsee on your policy.

Other Types of Assets

If you have other types of assets, we can help you. We didn’t talk about patents or contract rights, for example. Just contact us and we’ll help.

Funding a Trust Can Be Complex

Depending on the size of your estate, the complexity of your family relationships, and how your assets are organized, funding your trust can be difficult. But you don’t have to do it alone.

At SWPL, we use our estate planning and trust experience to help clients like you. Call us at 602-443-4888. Or contact us using our convenient Contact Form.