Key to your living trust's effectiveness
Asset transfer is the last and most important step in your revocable living trust's setup. Most of the asset transfer must be done by you. Your estate planner is legally unable to change ownership of your assets. If assets remain in your name, they will be subject to probate. A trust is worthless if assets are not transferred (
funded).
Below are basic steps you'll need to take in the weeks after your trust is signed and delivered to you. While the task may look daunting, it is actually quite simple to accomplish!
Real Estate
A deed must be prepared, executed in the presence of a notary, and recorded in the county in which the property is situated. If you purchase real estate in the future, be sure it is titled in your trust's name.
We prepare new deeds for our clients when creating their Revocable Living Trusts to transfer ownership of current properties.
For a copy of your deed online, visit
your County Recorder's website.
Contact both your TITLE INSURANCE company and HOMEOWNER'S INSURANCE company to ensure that your Living Trust, as the new owner, is added to your title insurance and homeowner's policy. Any mortgage you may have will not become immediately due by placing your property into your Living Trust.
Checking & Savings Accounts, CDs
Take your
CERTIFICATE OF TRUST (typically a 3-4 page short version of your trust) to the institution, advise them that you have executed a living trust, and request that the name on all of your accounts be changed to the name of your trust. The institution may or may not change the account number, but you will be asked to sign new signature cards, where applicable. Most banks allow your account numbers and checks to remain as they were.
If the bank account is out-of-state, send a cover letter similar to the one we have provided for you and a copy of your CERTIFICATE OF TRUST. The bank may send new signature cards to you for signing. Simply comply with its request and return the cards.
Vehicles
Take your CERTIFICATE OF TRUST (the document under the third tab) and current Title to the DMV to transfer your automobile, boat, trailer, etc. into the name of the trust.
The vehicle MUST BE PAID in full to transfer the vehicle to the trust. If you are still paying for your vehicle, you must wait until it has been fully paid to transfer the vehicle to the trust.
Stocks, Bonds & Investments
Stocks held by you in your own name must be transferred by sending the CERTIFICATE OF TRUST to the transfer agent, along with a letter of request and a STOCK POWER, signed by you exactly as your name appears in the certificate and with your SIGNATURE GUARANTEED (not notarized) by a national banking association member or a member of the New York Stock Exchange. If you have a broker, your broker can assist you with these transfers. Investment accounts require a letter addressed to the administrator requesting the transfer, after which you will be sent the appropriate documentation to complete as instructed.
Life Insurance, Retirement Accounts and Annuities
Contact your insurance company or account manager and REQUEST A CHANGE OF BENEFICIARY FORM for each policy or account. Generally, the order of beneficiaries on your life insurance, retirement accounts and annuities reflect a spouse as the PRIMARY BENEFICIARY (so that a spouse has the advantage of "rolling over" these funds into his or her own retirement account without incurring an adverse tax liability). Name another beneficiary or your living trust*** as the CONTINGENT BENEFICIARY. IMPORTANT: Do not change the owner of your life insurance, retirement accounts or annuities to your trust.
*** If a living trust is the beneficiary of a life insurance policy, those proceeds alone will be taxed as income to your beneficiaries. It is best to list actual names of people as your beneficiaries. Do your best to list actual names as beneficiaries of your IRAs so that they may stretch those accounts over their lifetimes rather than take a potentially hefty tax hit on a lump sum distribution. Consult your financial planner or insurance agent prior to taking action from this website.
Power of Attorney
Provide copies of your Power of Attorney & HIPAA Release to those you have named Power of Attorney.
Living Will
Provide copies of your Living Will to your primary physician and Powers of Attorney. You may register your living will with Arizona by visiting http://www.azsos.gov/adv_dir/Register.htm or calling 602-542-6187 for instructions.
