How to Transfer Accounts into Your Living Trust

If you have a living trust, you must make sure that your checking, savings, investment, and brokerage accounts are transferred to your trust so that your estate avoids probate. There are two ways of doing so:

  1. Make your trust the owner of the account by going to your bank and asking to transfer ownership to your trust.

This is the preferable option but many individuals do not take this action because banks will often make you close your existing account and open a new one, which can be a hassle if you have auto-deposit or auto-pay withdrawals on the account. However, this option will provide more protection in case of your incapacity because it can allow your successor or co-trustees access to your funds for medical bills, last expenses, or funeral costs. You are also covered by the FDIC, or Federal Deposit Insurance Corporation, up to $250,000.00 per beneficiary in case your bank were to fail.

OR

  1. Name your trust as your pay-on-death (“P.O.D.”) or transfer of death (“T.O.D.”) beneficiary by requesting a Beneficiary Designation Form from your bank.

The benefit of this is that there is no need to open a new account or transfer bill pay or auto-deposit, though the funds would not be accessible to your successor or co-trustees until after your trust has been administered. Your accounts would, however, be subject to a financial power of attorney (“POA”) which should allow your financial agent access to the account during your life if you are incapacitated. The problem is that many large financial institutions require POAs that have been signed in the last couple of years, which is often not the case. If a bank refuses to accept your agent’s POA, he or she will be forced to obtain a conservatorship over you in probate court.

Happy Planning!

B.B.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. Brittany Britton is licensed to practice law in the state of California only.

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