I cannot overemphasize the importance of having a fully funded Living Trust. An unfunded or partially funded Living Trust does not avoid probate. These instructions will help you fund your Living Trust.
- You will make ownership changes to change the title of most of your assets from your name as an individual to your name as Trustee of your Living Trust.
- For other assets, such as life insurance and retirement accounts, you will make beneficiary changes to properly distribute those assets upon your death. The beneficiary will not necessarily be your Living Trust – please see the Retirement Plans and Life Insurance Policies and Annuities sections of this document.
Generally, to transfer assets to your trust, you must execute new documents of title, deeds to real property, and signature cards for your bank accounts, as well as change of beneficiary forms for pension plans, individual retirement plans and life insurance. Your financial advisor, accountant, broker, or life insurance agent may need to help you make ownership or beneficiary changes. These instructions will give you general knowledge of how to fund your trust, but they cannot comprehensively address every type of transfer. Please call us if you must make transfers that are not addressed in these instructions. We recommend you place copies of all written documents which evidence the interest of your Living Trust into your Living Trust Portfolio. These assets may include your accounts, real property, business interests, insurance policy proceeds, or any other property. Your final step in the transfer process should always be to place a document in the TRUST ASSETS section of your Living Trust Portfolio that proves your trust is the owner or beneficiary of each asset.
Using Your Certification/Affidavit of Trust
Your Living Trust Portfolio contains a Certification of Trust. In your certification, you state in writing that:
-your trust exists;
-you are one of or are the Trustees; and
-you have the authority and power to transact business as a Trustee.
Most institutions require you to provide a complete copy of the trust (which is provided to you as a copy in the enclosed manilla folder with an instructional sticker on the front of that folder, but some institutions have their own certification forms for you to fill out. If the institution you are dealing with does not have a form, you should provide them with a copy of your Certification of Trust form. Your Certification of Trust provides only the information that the persons you deal with need to see without disclosing confidential details.
Your Tax Identification Number
As long as you are alive, your Trustee does not need to obtain a separate tax identification number for your trust or 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 you die, 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. We 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.
Titling Assets in Your Name as Trustee
Generally, you should title all of your currently owned and newly acquired assets in the name of your trust. We prefer the following format for titling assets in the name of your trust:
“Your Name(s), as Trustee(s) of the Trust Name dated X/X/2025”
Instructions for Transferring Specific Assets
Cash Accounts
You should sign new signature and ownership cards to retitle any sizeable bank accounts or cash equivalents, including treasury bills, money market accounts, and certificates of deposit, to name yourself as Trustee of those accounts. If you do not wish to change any small joint or other checking accounts used primarily for household expenses, you should name your trust as the pay-on-death (POD) beneficiary of the accounts. 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. Retitling the account records should have no effect on the name you wish to have printed on your checks. There is no reason to have the name of your trust on your printed checks. Ask your bank to continue to print your individual name on the checks. After changing title, your next account statement will confirm the retitling by listing you as Trustee of your trust.
Investment Accounts
If you hold publicly traded stocks and bonds that are already in brokerage or investment accounts, contact your brokers or custodians and direct them to change the title of the accounts to the name of your trust. The procedure for doing so is the same as the procedure for retitling cash accounts explained above. You may have to complete new account applications and present a copy of your Affidavit or Certification of Trust in order to change the title. Title to the accounts should be in the trust name. After changing title, your next account statement will confirm the retitling by listing you as Trustee of your trust.
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.
- Open a brokerage or investment account in the name of your Living 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 that will be titled in the name of your Living Trust will prove your ownership of the transferred stock or bonds.
- Work directly with the transfer agent for the stock or bond and direct the agent to reissue your stock with your Living Trust named as the new owner.
Stock Options
Transferring or assigning stock options requires a careful analysis of the tax and legal issues. We recommend you ask your Certified Public Accountant (CPA) and your stock plan administrator about your choices in assigning your interests to your Living Trust. If you would like us to assist you, we would be willing to do so under a separate representation agreement.
Personal Effects
Tangible personal property refers to such items as household furnishings, appliances and fixtures, works of art, motor vehicles, pictures, collectibles, personal wearing apparel and jewelry, books, sporting goods, and hobby paraphernalia. Ownership of tangible personal property can be transferred to a Living Trust with a written assignment which is Titled as Exhibit A in your Trust.
Your personal vehicles can be titled in the name of your Living Trust, but we find that most of our clients prefer to leave their vehicles outside their trust for several reasons. One, if they have a vehicle accident, the fact they have a Living Trust could cause the other parties to the accident to assume they 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 to your Living Trust. Instead, if you have pre-retirement death benefits under such a plan, our general recommendation is that you choose from among your spouse, children, or partner as primary and contingent beneficiaries.
Making the proper beneficiary designations for retirement plans involves many complex tax and individual family issues. Therefore, making a recommendation without further consultation is difficult. You have many tradeoffs to consider in naming your beneficiaries–tradeoffs that affect your required minimum distributions and the taxation of your benefits after your death. If you would like to discuss the issues and solutions for designating your retirement plan beneficiaries to best match your unique goals, we would be pleased to do so. But this additional planning must be done under a subsequent written representation agreement. Your retirement plan administrator should send you a letter confirming the change of beneficiaries in your retirement plan records. Please put a copy of this confirmation letter in the extra folder in this Portfolio.[1]
Qualified Tuition Plans (529 Plans)
Transferring a 529 plan to your Living Trust is not necessary.
Life Insurance Policies and Annuities
You may want to tax-proof your major life insurance policies by creating one or more irrevocable life insurance trusts. Alternatively, you may want the proceeds from your insurance policies paid directly to your Living Trust. By consulting with us, we can help you determine the proper ownership and beneficiary designation for each policy.
If you decide to name your Living Trust as the beneficiary of a policy, here are several points you should consider. Your policy beneficiary designation, not your Will and Living Trust, controls the disposition of the policy benefits. Generally, you should designate your Living Trust as the beneficiary of your life insurance policies so the policy proceeds will be governed by the terms of the Living Trust. To do so, we recommend you advise your insurance agent that you want your Living Trust as the beneficiary. Your agent will make the change for you or provide you the beneficiary designation form for you to complete. If you name your Living Trust as the primary beneficiary, you should name your spouse, partner, or children as the secondary beneficiary.
Each insurance company will have its own preferred format for designating your Living Trust as the beneficiary. Here is a typical format:
Primary Beneficiary: Your spouse. If no spouse, then named individuals or your Trust.
Secondary Beneficiary: Trust Name dated X/X/2025, partner, adult children, or other heirs.
Your insurance company should send you a letter confirming the change of beneficiaries in your insurance policy or annuity records.[2]
Mortgage, Notes, and Other Receivables
If you have loaned money to anyone, you should assign your interest as lender to your Living Trust by a written document and notify your debtor of the assignment. We can prepare assignment documents for each interest for your signature.
Partnership Interest
If there are no restrictions in your general partnership agreement, your interest in the general partnership should be transferred through a written assignment of interest signed by you and acknowledged by your partners. Transfer of an interest in a limited partnership is accomplished in the same way as the transfer of a general partnership interest. We can prepare assignment documents for each interest for your signature.
Corporate Business or Professional Interests
You should contact your corporate counsel or ask us to assist you in transferring your professional business interests to the Living Trust.
- 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 Living Trust.
- If your business is a limited liability company, we can draft assignment documents to assign your interest to your Living Trust.
Sole Proprietorship Business Interests
A sole proprietorship is a business entity owned by one person. Ownership of a sole proprietorship can be transferred to a Living Trust with a written assignment of interest. All items of tangible personal property should be listed individually or by category in the assignment.
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 Living Trust. If your interest is a lease, you should assign your rights as a lessee to your Living Trust by a written assignment.
Real Property
Transferring your real property to your trust will require attention to ownership and tax issues based on the nature of the current title to the property. Ultimately, the transfer will require preparing, executing, and recording new deeds for each property. This should be done through an attorney. At your request, 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.
Anticipated Inheritance, Gift, or Lawsuit Judgment
If you are the beneficiary of an estate of someone who has already died, or if you are a plaintiff in a lawsuit, you can assign your interest in the estate or lawsuit to your Living Trust in case you are disabled or deceased before receiving distributions or payments.
Reviewing Your Estate Plan
You should review your estate plan with an attorney every two to three years because your estate plans may need on-going maintenance. In particular, a change in your family, an increase in your net worth, or a change in the tax law could significantly affect the effectiveness of your plan.
[1] In case your retirement plan administrator fails to send you a confirmation letter, please put a copy of the change of beneficiary designation you sent to the plan administrator in the TRUST ASSETS section of your Living Trust Portfolio. When you do receive the confirmation letter, you can then substitute it for the change of beneficiary designation.
[2] In case your insurance company fails to send you a confirmation letter, please put a copy of the change of beneficiary designation you sent to the insurance company in the extra folder this Portfolio. When you do receive the confirmation letter, you can then substitute it for the change of beneficiary designation.