Putting bank accounts in Revocable living trust

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mikep
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Putting bank accounts in Revocable living trust

Post by mikep »

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
krmann
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Trust Question

Post by krmann »

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
Topic Author
mikep
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Post by mikep »

Thanks - it likely depends on the banks, and likely not a popular request so it may depend on the person you talk to.
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CABob
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Post by CABob »

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
Avo
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Post by Avo »

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.
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dm200
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Post by dm200 »

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.
rocket
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Trust property should not change frequently

Post by rocket »

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.
sscritic
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Post by sscritic »

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.
NTFbaseball91
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Re:

Post by NTFbaseball91 »

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.
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JamesSFO
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Re:

Post by JamesSFO »

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.
sscritic
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Re: Re:

Post by sscritic »

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?
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JamesSFO
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Re: Re:

Post by JamesSFO »

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
Gnirk
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Re: Trust Question

Post by Gnirk »

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.
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bottlecap
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Re: Putting bank accounts in Revocable living trust

Post by bottlecap »

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
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celia
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Re: Putting bank accounts in Revocable living trust

Post by celia »

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.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
sscritic
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Re: Putting bank accounts in Revocable living trust

Post by sscritic »

The OP is almost four years old. My guess is that something was worked out at some time in the past.
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