Putting bank accounts in Revocable living trust

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Putting bank accounts in Revocable living trust

Postby mikep » Fri Apr 02, 2010 5:47 pm

Signed a revocable living trust yesterday. I spoke with my bank and to change the account to a trust account, would require closing current account and opening a new account. But they said they could "add" the trust to the existing account, so it would be the trust along with my wife and me listed as owners (3 owners).

In this case will probate be avoided, as long as the trust is at least one of the owners? I could see unneccessary complications, but would like to avoid closing/reopening bank accounts if possible.

Another bank account (online savings account) told me this was not possible, and I'd have to open a new account with the trust name.

Thank you for your time in responses. I will also ask my attorney which is best but wanted to see opinion of the board.

Mike
mikep
 
Posts: 3133
Joined: Wed Apr 22, 2009 9:27 pm

Trust Question

Postby krmann » Fri Apr 02, 2010 7:56 pm

For what it is worth - my credit union had no problem doing this - and did not have to close my account, change the account number, etc. Kate
krmann
 
Posts: 45
Joined: Tue Feb 27, 2007 9:08 pm

Postby mikep » Fri Apr 02, 2010 9:17 pm

Thanks - it likely depends on the banks, and likely not a popular request so it may depend on the person you talk to.
mikep
 
Posts: 3133
Joined: Wed Apr 22, 2009 9:27 pm

Postby CABob » Fri Apr 02, 2010 10:07 pm

But they said they could "add" the trust to the existing account, so it would be the trust along with my wife and me listed as owners (3 owners).
I'm certainly no expert and have no direct experience in a similar thing, but, this just doesn't sound correct. Having he, she, and a trust as joint owners seems to confuse the issue distinuishing trust assets with other assets. I have had problems transferring money and stock from an individual or joint account to a trust account. I have changed a joint account to a trust account at Vanguard without a problem or taxable event.
I suggest you ask the attorney. If nothing else, he might think of some possible ramifications that the bank was not aware of.
Bob | Engineers are not boring. We just get excited over boring things.
User avatar
CABob
 
Posts: 3111
Joined: Sun Feb 25, 2007 8:55 pm
Location: Shangri La

Postby Avo » Sat Apr 03, 2010 5:20 pm

I would definitely not do this. It's a mess with unknown ramifications.

I would try once again with the bank, asking to speak to someone higher up if necessary. If that doesn't work, I would find a new bank, since you will have the inconvenience of needing to set up new accounts in any case.
Avo
 
Posts: 796
Joined: Wed Jun 11, 2008 2:21 am
Location: California

Postby dm200 » Sat Apr 03, 2010 7:23 pm

I have not seen this, but I have seen maing the trust the Payable on death beneficiary for a joint account. The POD taes care of the probate issue, but does nothing for incapacity.

Joint with the trust sounds odd to me.
User avatar
dm200
 
Posts: 6948
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Trust property should not change frequently

Postby rocket » Sun Apr 04, 2010 7:19 am

Use a POD feature. Trust property should not change frequently like a checking account. Don't use trust property to pay for groceries and vacations.
rocket
 
Posts: 703
Joined: Sat Aug 11, 2007 7:24 am
Location: Hard Scrabble, MS

Postby sscritic » Sun Apr 04, 2010 5:23 pm

It's been a few years, but when I set up my revocable trust, the bank just retitled the account in the name of the trust. The trust did not have a separate taxpayer ID number, so there was no change in social security number. Vanguard did create new account numbers for the trust, but I don't recall that the bank did.

And yes I pay my bills from my trust checking account. It is my only checking account. It is my understanding that the revocable nature of the trust makes it "me" for most purposes. The only time the trust nature of the trust comes into play is when I die. I am not sure what rocket's concerns are.
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re:

Postby NTFbaseball91 » Mon Feb 03, 2014 9:53 pm

sscritic wrote:And yes I pay my bills from my trust checking account. It is my only checking account. It is my understanding that the revocable nature of the trust makes it "me" for most purposes. The only time the trust nature of the trust comes into play is when I die. I am not sure what rocket's concerns are.


This is what my understanding is as well.
NTFbaseball91
 
Posts: 7
Joined: Mon May 13, 2013 12:03 pm
Location: Pennsylvania

Re:

Postby JamesSFO » Mon Feb 03, 2014 10:05 pm

mikep wrote:Thanks - it likely depends on the banks, and likely not a popular request so it may depend on the person you talk to.


Basically each financial institution will be different, USAA just changed the account owner for me (~8 years ago), Vanguard had to give me all new account owners.
User avatar
JamesSFO
 
Posts: 2250
Joined: Thu Apr 26, 2012 10:16 pm

Re: Re:

Postby sscritic » Mon Feb 03, 2014 10:06 pm

JamesSFO wrote:Basically each financial institution will be different, USAA just changed the account owner for me (~8 years ago), Vanguard had to give me all new account owners.

So whom did they give your money to? Did you know any of them?
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: Re:

Postby JamesSFO » Mon Feb 03, 2014 10:15 pm

sscritic wrote:
JamesSFO wrote:Basically each financial institution will be different, USAA just changed the account owner for me (~8 years ago), Vanguard had to give me all new account owners.

So whom did they give your money to? Did you know any of them?


DOH, mistype, I meant numbers. :D
User avatar
JamesSFO
 
Posts: 2250
Joined: Thu Apr 26, 2012 10:16 pm

Re: Trust Question

Postby Gnirk » Mon Feb 03, 2014 10:29 pm

krmann wrote:For what it is worth - my credit union had no problem doing this - and did not have to close my account, change the account number, etc. Kate


Neither did my mom's: same account and account number.
Gnirk
 
Posts: 365
Joined: Sun Sep 09, 2012 3:11 am
Location: Western Washington

Re: Putting bank accounts in Revocable living trust

Postby bottlecap » Mon Feb 03, 2014 11:11 pm

Only your attorney can help you, but I suspect he will say the bank's proposal to "add" the trust to the account will be insufficient to avoid probate. It is tricky to keep all of your assets in the name of the trust throughout your life so as to completely avoid probate and this sure looks like a possible pitfall.

JT
User avatar
bottlecap
 
Posts: 3368
Joined: Tue Mar 06, 2007 11:21 pm
Location: Tennessee

Re: Putting bank accounts in Revocable living trust

Postby celia » Mon Feb 03, 2014 11:26 pm

mikep wrote:Signed a revocable living trust yesterday. I spoke with my bank and to change the account to a trust account, would require closing current account and opening a new account.

Possibly this is a case of misunderstood terminology. It appears you and your spouse have a checking and/or savings account and now you want to re-title the owner of the account to be your trust. You should be able to go to the "new accounts" person at the bank and fill out new forms and provide a copy of the pertinent pages of the trust document.

When you said you asked to change the account to a trust account, that can mean something different (in trust for someone else, ie not a revocable trust). Possibly you and the person at the bank were not on the same page. I have found that the up-front people are not the most knowledgeable people. When you go back and still have a problem, ask to speak with the branch manager.

BTW, You don't need to order new checks because of this. In fact, our lawyer said it is better not to have a trust printed on the checks since it can imply that there is a large trust fund behind it, and you could attract more lawsuits.
User avatar
celia
 
Posts: 2141
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Putting bank accounts in Revocable living trust

Postby sscritic » Tue Feb 04, 2014 12:06 am

The OP is almost four years old. My guess is that something was worked out at some time in the past.
sscritic
 
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am


Return to Personal Finance (Not Investing)

Who is online

Users browsing this forum: chabil, Djkell3, kcollett, ny_rn, rjbraun, springnr and 55 guests