Living Trusts & Bank Accounts

By Maggie Lourdes

You can place your bank accounts and other assets in a living trust so they bypass probate when you die. Avoiding probate generally saves time and money for the beneficiaries of your estate. You must physically change the titles of your assets from your individual name to the name of your trust for them to skip the probate process upon your death.

You can place your bank accounts and other assets in a living trust so they bypass probate when you die. Avoiding probate generally saves time and money for the beneficiaries of your estate. You must physically change the titles of your assets from your individual name to the name of your trust for them to skip the probate process upon your death.

Titling Bank Accounts

You can easily transfer your bank account into your living trust. A bank generally requires proof of your trust and may require completion of a bank form before making account transfers. Your bank may accept a certificate of trust in lieu of a full copy of your trust. A certificate provides you greater privacy because it only identifies basic information, such as the trust's name and trustee. Generally, you maintain full control over your bank assets after titling them into trust -- and you can convey bank accounts back out of the trust at any time.

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How to Title Assets for a Trust

References

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Can You Transfer Debt Into a Living Trust?

A living trust is an agreement in which you transfer your assets into the ownership of the trust. You can retain control of those assets by naming yourself as trustee until your death, at which time a successor trustee takes over and distributes your assets to your beneficiaries. While you cannot transfer debt into a living trust, creditors might be able to reach the assets in the trust during your lifetime and after your death.

Can I Put Jointly Held Property in a Living Trust?

Generally, you place assets into a living trust for your management, use and benefit during your lifetime, with those assets passing to beneficiaries after your death, without going through the probate process. These assets are titled in the name of the trust, typically with you as the trustee. While you might put jointly-held property into a living trust for a variety of reasons, the overriding purpose should not be to avoid probate, since jointly held property normally passes directly to the joint owner at death without going through probate.

How to Choose an Administrator for My Living Trust

A living trust is a trust formed and funded during your lifetime, as opposed to a testamentary trust, which is created as part of your will. A living trust is managed by a trustee, or administrator, who is held to strict standards of fiduciary responsibility, which requires that the administrator employ fair dealings toward all beneficiaries and prudent investment of the trust's funds. Choose a skilled, efficient financial administrator to ensure that your intentions for your living trust are fulfilled.

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