- Who is a Grantor? The person(s) who establishes a Trust. Also referred to as the “Trustor” or “Settlor”.
- Who is a Trustee? One who holds legal title to Trust assets in accordance with the terms and conditions specified in the Trust agreement. A Trust may have one or more Trustees (Co-Trustees) who act together.
- What is the taxpayer ID number or EIN for my Trust? The taxpayer ID number for a revocable living trust is the grantor(s) or trustor(s) social security number. If a married couple has a joint Trust and both are listed as grantors, either social security number may be used for joint assets. This is in accordance with Treasury Regulation Section 301.6109-1(a)(2). Most financial institutions or investment companies will only allow you to use one social security number.
- How should I title assets that are transferred to my Trust? In your Funding Instructions, we have recommended language for how your assets should be retitled. Any description referring to the Trust will be effective if it reasonably identifies your Trust or indicates that the Trust property is held in a fiduciary capacity. Title to your Trust may be expressed as provided in the following example:
John Doe, Trustee of the John Doe Trust, dated “Your Trust Date” or, John Doe, Trustee under the John Doe Trust, dated “Your Trust Date” or, John Doe, Trustee of the John Doe Trust, uta “Your Trust Date”
- Do I transfer all my assets to my Trust? Unless instructed otherwise by your estate planning attorney, all assets subject to probate, or assets that do not have beneficiary designations, should be titled in your Trust.
- What happens to assets left outside of my Trust? The “Pour Over Will” directs that all assets left outside the Trust be transferred to the Trust at death. However, those assets must go through probate, unless a beneficiary has been designated.
- Is there anything I should not retitle to my Trust? Yes. Retirement accounts, life insurance policies, annuity contracts, long term care policy, auto or umbrella liability policy, social security, safe deposit boxes, vehicles and 529 plans. Please refer to your Trust Funding Instructions for further information.
- Do retirement plans get retitled to my Trust? Not while you are alive. During your lifetime, retirement accounts (such as IRA’s, 401(K)’s, 403(b)’s, TSPs, Roth IRA’s, KEOGH, SEP-IRA’s, and Profit-Sharing plans, etc.) must remain in the owner’s name. However, it may be appropriate to name new beneficiaries. Please refer to Article 17, “Retirement Accounts” in your Trust Funding Instructions to determine who your attorney-of-record advises for the beneficiary designations.
- Where do I get the forms to transfer my accounts to my Trust? Almost all financial institutions or companies have their own form(s) they require for new account registrations and beneficiary designations.
- How do I put my bank accounts in my Trust? For local banks we recommend you visit the bank in person and take your Estate Plan binder with you. Ask the bank to re-register bank accounts into the name of your Trust, which will also include the names of the Trustee(s). If more than one Trustee is serving, such accounts may also be titled using the grammatical conjunction “or” as either Trustee may act independently. Please refer to Article 3 of your Trust Funding Instructions for further information.
- Do I have to order new checks for the checking account? It is not necessary to have the Trust name printed on your check after your names. It is only essential that the signature card held by the bank bear the correct Trust designation.
- What if the bank won’t allow me to register my accounts to my Trust? You may close the account and open a new account in the name of your Trust, or you may ask the bank for a Payable on Death (POD) beneficiary form to designate your Trust as the beneficiary, which will ensure the account avoids probate. Please refer to Article 3 of your Trust Funding Instructions for further information.
- Do I put my child or grandchild’s 529 plan in my Trust? No, your 529 plan will not be retitled into your Trust. For this type of college fund account, we recommend naming your Trust as the alternate or successor owner, if it is permissible. Check with your 529 plan administer.
- How do I put my personal property in my Trust (paintings, antiques, jewelry, coins etc.)? Since these assets have no registered title and no formal recognized transfer procedure, the Trust contains language “generally assigning” all of your tangible personal property to your Trust. Alternatively, transfer of ownership of any asset to the Trust can be initiated, and in some cases perfected, by signing a so-called “General Assignment” instrument directing transfer of “all rights, title and interest in and to” the property to the Trustee. There is a General Assignment Form in Article 22 of your Trust Funding Instructions.
- What if I want to leave certain items of personal property to different people? Inside your Estate Plan binder there is a tab, “Distribution of Tangible Personal Property”. You may use this form to list items to be given to specific people and amend it at any time. Once signed it is a legally binding document.
- What should I do with my homeowner’s policy? Please notify your homeowners’ insurance company regarding the transfer of your real estate to your Trust. We recommend you list your Trust as an additional insured under your homeowner’s policy.
- What about title insurance? If you purchased owners title insurance when you acquired your real estate, please review the policy to determine if the definition of insured (those covered by the policy) includes a Trust to which you transfer the property. If it does not, you can contact the title insurance company to update the insurance policy.
- Should I transfer my mortgage or home equity line of credit to my Trust? No. If there are liabilities associated with your assets, the liabilities follow the assets. You will transfer your real estate into your Trust. However, it is not necessary to transfer the mortgage liability to your Trust.
- Will I lose the capital gains exemption on my home if I transfer it to my Trust? No. This exemption will still be available to you.
- If I put my home in my Trust, can I still deduct the mortgage interest? Yes, you can.
- If I place my home in my Trust, will it affect my mortgage? Can the mortgage company “call” my mortgage? No. Transferring your home into your Trust will not affect your mortgage because you have not given away a beneficial interest in the property. However, if you are transferring commercial property to your Trust such as an office building, multi-unit apartment, office condo, you must obtain the lender’s permission to transfer the property to your Trust.
- Do I have to have my assets appraised before I transfer them to my Trust? No.
- Can I transfer assets back out of my Trust? Yes. Your Trust is revocable. You may spend your assets, give assets away, and transfer assets back into your name without restriction. However, after a Trustor dies, depending on your type of trust, this power may change.
- ONCE MY ASSETS ARE TRANSFERRED TO THE TRUST ARE THEY PROTECTED AGAINST MY CREDITORS? NO. A REVOCABLE TRUST DOES NOT PROTECT ASSETS AGAINST THE CLAIMS OF CREDITORS, LAWSUITS, JUDGEMENT HOLDERS OR OTHERS TO WHOM YOU MAY BE OBLIGATED, SUCH THAT IT IS NOT AN ASSET PROTECTION DEVICE. HOWEVER, A TRUST CAN OFTEN PROVIDE ASSET PROTECTION FOR THE BENEFICIARIES AFTER DEATH. IF YOU SEEK SUCH PROTECTION FOR YOUR OWN ASSETS WHILE YOU ARE ALIVE, YOU SHOULD CONSULT WITH AN ATTORNEY WHOSE PRACTICE INCLUDES THIS FIELD OF LAW, WHICH THE COLLINS FIRM DOES NOT.
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