Put checking accounts in living revocable trusts?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
User avatar
Topic Author
rcjchicity
Posts: 204
Joined: Fri Nov 29, 2013 5:07 pm
Location: Where do you think?

Put checking accounts in living revocable trusts?

Post by rcjchicity » Sat Jul 18, 2015 8:15 am

DH and I are setting up a living revocable trust, and are unsure what to do about our individual and joint checking accounts. Our estate attorney says those at his firm normally doesn't put personal checking accounts into revocable trusts, but he knows others do, and feels it's a personal preference.

For background, DH and I are 40/38 y/o, respectively, and have a 1 year old daughter and hope to have 1 more. We live in Illinois.

From the revocable living trust I had when I was single which included my checking account, I know that it's a pain to get them out of trusts since I had to close that long-standing account and open a new one (bye-bye unused Bank One checks with my maiden name still on them)

Reading previous threads on this site, it seems like people are split in terms of having them in or out of revocable trusts.

My concern is in the situation where one spouse dies and the other is incapacitated, that the successor trustee can access all pertinent accounts to support our child(ren) and pay our ongoing bills as necessary. Our attorney says the Power of Attorney would have the ability to do this with the accounts not in the trust.

Has anyone had experience as a successor trustee/POA in this type of situation and feel that one way is more efficient than the other?

Thx

rixer
Posts: 664
Joined: Tue Sep 11, 2012 4:18 pm

Re: Put checking accounts in living revocable trusts?

Post by rixer » Sat Jul 18, 2015 9:09 am

I was the successor trustee for the inlaws. They had the checking account listed under the trust so I don't know how it would have been handled if it wasn't. At any rate, the m/l passed first and later the f/l was incapacitated by alzhiemers. I just had to furnish death certificate for m/l and two doctor's letters verifying that the f/l was incapacitated and could no longer handle his financial accounts. The banks accounts were then put in my name as the trustee and I had full control. It wasn't too difficult.

Longdog
Posts: 1473
Joined: Sun Feb 09, 2014 6:56 pm
Location: Philadelphia

Re: Put checking accounts in living revocable trusts?

Post by Longdog » Sat Jul 18, 2015 9:17 am

If I were going through the effort to create a revocable living trust with specific goals in mind, I would include every financial account within the trust, unless there was a specific goal to achieve (that wouldn't be accomplished by the trust) by doing otherwise. What would the purpose be for NOT having your checking account in the trust?
Steve

User avatar
Sheepdog
Posts: 5555
Joined: Tue Feb 27, 2007 3:05 pm
Location: Indiana, retired 1998 at age 65

Re: Put checking accounts in living revocable trusts?

Post by Sheepdog » Sat Jul 18, 2015 10:52 am

When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to that checking account so that, if we both pass together, or soon after, or otherwise be incapacitated, he could have access to the checking account to pay bills, etc.
“One moment of patience may ward off great disaster. One moment of impatience may ruin a whole life.” — Chinese Proverb

Leesbro63
Posts: 6545
Joined: Mon Nov 08, 2010 4:36 pm

Re: Put checking accounts in living revocable trusts?

Post by Leesbro63 » Sat Jul 18, 2015 11:04 am

Sheepdog wrote:When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to our checking account so that, if we both pass together, or soon after, he could have access to the checking account to pay bills, etc.
Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.

cadreamer2015
Posts: 976
Joined: Wed Apr 08, 2015 1:52 pm
Location: North County San Diego

Re: Put checking accounts in living revocable trusts?

Post by cadreamer2015 » Sat Jul 18, 2015 11:07 am

If the OP wants to maintain separate checking accounts, perhaps they could be POD if they want to avoid putting them inside their trusts.
De gustibus non est disputandum

sport
Posts: 9280
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Put checking accounts in living revocable trusts?

Post by sport » Sat Jul 18, 2015 11:09 am

Leesbro63 wrote:Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.
There is a similar concern about putting vehicles into a trust. Do you want the officer that stops you for a traffic offense to know that you are "a rich trust fund person"? You might not get much sympathy or leeway from that officer if he/she is a jealous type of person.

mjdaniel
Posts: 117
Joined: Sat Jan 21, 2012 2:20 pm
Location: Temecula, CA

Re: Put checking accounts in living revocable trusts?

Post by mjdaniel » Sat Jul 18, 2015 11:11 am

My wife was trustee and power of attorney for her mother's trust, which did not contain her checking account. I was executor and my sister was power of attorney for my mother's will. Last year each of us lost our mom's and we both sold homes and distributed the proceeds according to our mother's will and trust without any gliches.

littlebird
Posts: 1609
Joined: Sat Apr 10, 2010 6:05 pm
Location: Valley of the Sun, AZ

Re: Put checking accounts in living revocable trusts?

Post by littlebird » Sat Jul 18, 2015 11:20 am

Leesbro63 wrote:
Sheepdog wrote:When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to our checking account so that, if we both pass together, or soon after, he could have access to the checking account to pay bills, etc.
Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.
I keep our checking account in our trust. But I can see Sheepdog's lawyer's point also. It's pretty much a crapshoot as to which roadblocks are going to pop up at the time your need arises. There's a lot of flux in banking and finance administration right now (maybe always was?)

Also -- it is NOT necessary for the face of the check to reflect that it is a trust account. Only your bank need know. Your checks can simply be imprinted with both your names, just as if it were an ordinary joint account.

sport
Posts: 9280
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Put checking accounts in living revocable trusts?

Post by sport » Sat Jul 18, 2015 1:00 pm

littlebird wrote:Also -- it is NOT necessary for the face of the check to reflect that it is a trust account. Only your bank need know. Your checks can simply be imprinted with both your names, just as if it were an ordinary joint account.
Will the bank require that the word "trustee" is part of the signature, such as "John Anyname, trustee"?

User avatar
Topic Author
rcjchicity
Posts: 204
Joined: Fri Nov 29, 2013 5:07 pm
Location: Where do you think?

Re: Put checking accounts in living revocable trusts?

Post by rcjchicity » Sat Jul 18, 2015 1:41 pm

OP here.

My previous checking account only showed that it was a part of my old trust on the statements. My checks, debit cards, etc only had my name. My name was only required in the signature, too. So it's not a concern that including checking accounts would "advertise" having a trust, other than to the mailman (sans e-statements). And the people at Chase would not have been impressed with my average daily balances to think I was fancy. :P

That old trust was a DIY Suze Orman thing, so I don't think the same steps I took before are necessarily appropriate in my current situation.

It sounds like we could go either way and things would probably be ok. POD is another thing to consider.

User avatar
corn18
Posts: 1701
Joined: Fri May 22, 2015 6:24 am

Re: Put checking accounts in living revocable trusts?

Post by corn18 » Sat Jul 18, 2015 1:48 pm

Sheepdog wrote:When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to that checking account so that, if we both pass together, or soon after, or otherwise be incapacitated, he could have access to the checking account to pay bills, etc.
^^^This. My FIL just passed and had the checking account outside the trust with his wife and 2 grown kids as joint owners. Good thing he did because it is taking forever to get the assets in his trust assigned to her trust. If the checking account were in his trust, she wouldn't have anything to live on right now.

We are keeping the checking, savings and vehicles outside the trust.

Oh and do you have to be rich to have a trust? I didn't see that on the application.

Tom
Don't do something, just stand there!

littlebird
Posts: 1609
Joined: Sat Apr 10, 2010 6:05 pm
Location: Valley of the Sun, AZ

Re: Put checking accounts in living revocable trusts?

Post by littlebird » Sat Jul 18, 2015 4:00 pm

sport wrote:
littlebird wrote:Also -- it is NOT necessary for the face of the check to reflect that it is a trust account. Only your bank need know. Your checks can simply be imprinted with both your names, just as if it were an ordinary joint account.
Will the bank require that the word "trustee" is part of the signature, such as "John Anyname, trustee"?
Not in my experience

littlebird
Posts: 1609
Joined: Sat Apr 10, 2010 6:05 pm
Location: Valley of the Sun, AZ

Re: Put checking accounts in living revocable trusts?

Post by littlebird » Sat Jul 18, 2015 4:15 pm

tomhole wrote:
Sheepdog wrote:When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to that checking account so that, if we both pass together, or soon after, or otherwise be incapacitated, he could have access to the checking account to pay bills, etc.
^^^This. My FIL just passed and had the checking account outside the trust with his wife and 2 grown kids as joint owners. Good thing he did because it is taking forever to get the assets in his trust assigned to her trust. If the checking account were in his trust, she wouldn't have anything to live on right now.

We are keeping the checking, savings and vehicles outside the trust.

Oh and do you have to be rich to have a trust? I didn't see that on the application.

Tom
Transferring assets from one trust to another after death is a cumbersome procedure which can take time. The best use of a living trust (in my opinion) is to make it easy for someone to take over money management for you when you become disabled. To that end, you generally name a successor trustee for your trust and this transition should be fairly easy and, I believe, that the type of transaction the OP is contemplating.

Buffetologist
Posts: 347
Joined: Sun Aug 22, 2010 8:58 am

Re: Put checking accounts in living revocable trusts?

Post by Buffetologist » Sat Jul 18, 2015 4:44 pm

Our checking account is a joint-tenancy with right of survivorship (JTWROS) in trust for our living trust. In other words, our trust is the beneficiary if both of us die. This way we avoid probate, but also avoid any complications while both of us live.

User avatar
snackdog
Posts: 897
Joined: Wed Nov 12, 2014 4:57 am

Re: Put checking accounts in living revocable trusts?

Post by snackdog » Wed May 27, 2020 2:42 pm

I guess depending on the state in which you reside, if your non-trust assets (such as your checking/savings account) exceed a threshold it will trigger probate.

User avatar
FIREchief
Posts: 4535
Joined: Fri Aug 19, 2016 6:40 pm

Re: Put checking accounts in living revocable trusts?

Post by FIREchief » Wed May 27, 2020 2:50 pm

I think a lot of folks (including the lawyers) are overthinking this. Just retitle the checking account to the trust and be done with it. It can't hurt and may only make things simpler for your successor trustees/heirs in the future.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

User avatar
FIREchief
Posts: 4535
Joined: Fri Aug 19, 2016 6:40 pm

Re: Put checking accounts in living revocable trusts?

Post by FIREchief » Wed May 27, 2020 2:52 pm

Buffetologist wrote:
Sat Jul 18, 2015 4:44 pm
Our checking account is a joint-tenancy with right of survivorship (JTWROS) in trust for our living trust. In other words, our trust is the beneficiary if both of us die. This way we avoid probate, but also avoid any complications while both of us live.
Unless you wind up in a situation neither one is alive/capacitated and the bank refuses to honor your DPOA. We hear many reports of this, despite the fact that such refusal typically violates state laws.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

J295
Posts: 2447
Joined: Sun Jan 01, 2012 11:40 pm

Re: Put checking accounts in living revocable trusts?

Post by J295 » Wed May 27, 2020 2:58 pm

Just a matter of preference. Many like to keep it simple with
a joint checking account with a POD, and expect to rely upon the power of attorney if needed.

User avatar
cchrissyy
Posts: 119
Joined: Fri May 05, 2017 10:35 pm

Re: Put checking accounts in living revocable trusts?

Post by cchrissyy » Wed May 27, 2020 3:33 pm

I would put the trust as the beneficiary of the checking account, and i would not be worried about the trustee needing access to it while I'm incapacitated but still alive because there is also power of attorney paperwork which gives the right person the ability to access my accounts in that exact situation.

User avatar
JaneyLH
Posts: 496
Joined: Wed Oct 16, 2013 7:16 pm

Re: Put checking accounts in living revocable trusts?

Post by JaneyLH » Wed May 27, 2020 4:40 pm

cchrissyy wrote:
Wed May 27, 2020 3:33 pm
I would put the trust as the beneficiary of the checking account, and i would not be worried about the trustee needing access to it while I'm incapacitated but still alive because there is also power of attorney paperwork which gives the right person the ability to access my accounts in that exact situation.
You should worry, a lot.

My husband assumed a POA responsibilities for his 97 year-old father in March, 2019. The older brother had been named POA with my husband as secondary in case the older brother could or would not carry out the responsibilities. As soon as FIL developed dementia, older brother renounced. We stepped in and have battled to get my husband’s POA status recognized ever since with 5 different financial institutions. We have spent hundreds of hours, gotten notarizations, gold medallion stamps (at great difficulty and expense), made dozens of phone calls.

We still aren’t done — one bank, which recognized POA for a checking account, is now digging in their heels 8 months later and refusing to act on my husband’s request to cash out two CDs we just found out about. They still insist that the elder brother is the POA for those accounts despite having had all the correct paperwork for nearly a year.

We have been told we have to come into a branch — the nearest one is 1800 miles away. We have been told that the 97-year-old with dementia must sign the bank’s form or call them directly. We can’t get access to accounts unless we know the account numbers. We have had to become amateur detectives to try and track down information.

Meanwhile, FIL is in a nursing home of his choosing that is billing $15,000 a month... and if we run out of money and we can’t gain legal access to his remaining funds, he won’t be eligible for Medicaid because he will still have untapped assets! This is an amazing mess that we have been in for more than a year!

Bottom line, you should understand that banks are not compelled to recognize even legally executed POA documents. If you plan to rely on a your agent being able to access your accounts in the event of your incapacitation, SET THIS UP WITH YOUR FINANCIAL INSTITUTIONS IN ADVANCE! ON THEIR FORMS! Otherwise, your agent might have to pursue a court order to force recognition of the POA.

FYI, Capital One, TD Bank, and Deutsche Bank have been the worst to deal with. Vanguard was the easiest — but they only had one account of $2700. :(

nesdog
Posts: 171
Joined: Thu Dec 07, 2017 8:20 pm

Re: Put checking accounts in living revocable trusts?

Post by nesdog » Wed May 27, 2020 4:56 pm

Also -- it is NOT necessary for the face of the check to reflect that it is a trust account. Only your bank need know. Your checks can simply be imprinted with both your names, just as if it were an ordinary joint account.
[/quote]

This. We put ours in the trust. Only our statement reflect that info. The checks remained the same as always.
Insert clever comment here...

RetiredAL
Posts: 721
Joined: Tue Jun 06, 2017 12:09 am
Location: SF Bay Area

Re: Put checking accounts in living revocable trusts?

Post by RetiredAL » Wed May 27, 2020 4:58 pm

JaneyLH wrote:
Wed May 27, 2020 4:40 pm

You should worry, a lot.

My husband assumed a POA responsibilities for his 97 year-old father in March, 2019. The older brother had been named POA with my husband as secondary in case the older brother could or would not carry out the responsibilities. As soon as FIL developed dementia, older brother renounced. We stepped in and have battled to get my husband’s POA status recognized ever since with 5 different financial institutions. We have spent hundreds of hours, gotten notarizations, gold medallion stamps (at great difficulty and expense), made dozens of phone calls.

We still aren’t done — one bank, which recognized POA for a checking account, is now digging in their heels 8 months later and refusing to act on my husband’s request to cash out two CDs we just found out about. They still insist that the elder brother is the POA for those accounts despite having had all the correct paperwork for nearly a year.

We have been told we have to come into a branch — the nearest one is 1800 miles away. We have been told that the 97-year-old with dementia must sign the bank’s form or call them directly. We can’t get access to accounts unless we know the account numbers. We have had to become amateur detectives to try and track down information.

Meanwhile, FIL is in a nursing home of his choosing that is billing $15,000 a month... and if we run out of money and we can’t gain legal access to his remaining funds, he won’t be eligible for Medicaid because he will still have untapped assets! This is an amazing mess that we have been in for more than a year!

Bottom line, you should understand that banks are not compelled to recognize even legally executed POA documents. If you plan to rely on a your agent being able to access your accounts in the event of your incapacitation, SET THIS UP WITH YOUR FINANCIAL INSTITUTIONS IN ADVANCE! ON THEIR FORMS! Otherwise, your agent might have to pursue a court order to force recognition of the POA.

FYI, Capital One, TD Bank, and Deutsche Bank have been the worst to deal with. Vanguard was the easiest — but they only had one account of $2700. :(
I'd add Wells Fargo to the worst list. I've recently had issues getting them to accept their own forms for adding my son as agent to the Checking/Saving accounts that is joint between me and my elderly Dad.

MathIsMyWayr
Posts: 1740
Joined: Mon Mar 27, 2017 10:47 pm
Location: CA

Re: Put checking accounts in living revocable trusts?

Post by MathIsMyWayr » Wed May 27, 2020 5:17 pm

Sheepdog wrote:
Sat Jul 18, 2015 10:52 am
When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to that checking account so that, if we both pass together, or soon after, or otherwise be incapacitated, he could have access to the checking account to pay bills, etc.
Against what I learned from a trust seminar by a CA lawyer. According to him, a joint account will be frozen the moment a spouse is incapacitated or dies. On the other hand, such an event has no effect on a trust.
Last edited by MathIsMyWayr on Wed May 27, 2020 11:38 pm, edited 1 time in total.

MathIsMyWayr
Posts: 1740
Joined: Mon Mar 27, 2017 10:47 pm
Location: CA

Re: Put checking accounts in living revocable trusts?

Post by MathIsMyWayr » Wed May 27, 2020 5:20 pm

nesdog wrote:
Wed May 27, 2020 4:56 pm
Also -- it is NOT necessary for the face of the check to reflect that it is a trust account. Only your bank need know. Your checks can simply be imprinted with both your names, just as if it were an ordinary joint account.
This. We put ours in the trust. Only our statement reflect that info. The checks remained the same as always.
[/quote]
Same in our bank accounts.

phxjcc
Posts: 354
Joined: Thu Aug 23, 2018 3:47 pm

Re: Put checking accounts in living revocable trusts?

Post by phxjcc » Wed May 27, 2020 5:46 pm

RetiredAL wrote:
Wed May 27, 2020 4:58 pm
JaneyLH wrote:
Wed May 27, 2020 4:40 pm

You should worry, a lot.

My husband assumed a POA responsibilities for his 97 year-old father in March, 2019. The older brother had been named POA with my husband as secondary in case the older brother could or would not carry out the responsibilities. As soon as FIL developed dementia, older brother renounced. We stepped in and have battled to get my husband’s POA status recognized ever since with 5 different financial institutions. We have spent hundreds of hours, gotten notarizations, gold medallion stamps (at great difficulty and expense), made dozens of phone calls.

We still aren’t done — one bank, which recognized POA for a checking account, is now digging in their heels 8 months later and refusing to act on my husband’s request to cash out two CDs we just found out about. They still insist that the elder brother is the POA for those accounts despite having had all the correct paperwork for nearly a year.

We have been told we have to come into a branch — the nearest one is 1800 miles away. We have been told that the 97-year-old with dementia must sign the bank’s form or call them directly. We can’t get access to accounts unless we know the account numbers. We have had to become amateur detectives to try and track down information.

Meanwhile, FIL is in a nursing home of his choosing that is billing $15,000 a month... and if we run out of money and we can’t gain legal access to his remaining funds, he won’t be eligible for Medicaid because he will still have untapped assets! This is an amazing mess that we have been in for more than a year!

Bottom line, you should understand that banks are not compelled to recognize even legally executed POA documents. If you plan to rely on a your agent being able to access your accounts in the event of your incapacitation, SET THIS UP WITH YOUR FINANCIAL INSTITUTIONS IN ADVANCE! ON THEIR FORMS! Otherwise, your agent might have to pursue a court order to force recognition of the POA.

FYI, Capital One, TD Bank, and Deutsche Bank have been the worst to deal with. Vanguard was the easiest — but they only had one account of $2700. :(
I'd add Wells Fargo to the worst list. I've recently had issues getting them to accept their own forms for adding my son as agent to the Checking/Saving accounts that is joint between me and my elderly Dad.
Add US BANK to the list. Not a big deal...unless mom/dad had an account at the old HOME SAVINGS and LOAN, then good luck.

And most certainly do NOT add checking to the trust. I hasten to add get your relatives to open a checking account with a nice little bank. The nationals are a PITA to work with.

User avatar
FIREchief
Posts: 4535
Joined: Fri Aug 19, 2016 6:40 pm

Re: Put checking accounts in living revocable trusts?

Post by FIREchief » Wed May 27, 2020 5:51 pm

J295 wrote:
Wed May 27, 2020 2:58 pm
Many like to keep it simple with a joint checking account with a POD, and expect to rely upon the power of attorney if needed.
Why is that any simpler than just retitling the checking account to the trust? I think it took us about ten minutes at the local branch.

Also, see the countless posts about banks refusing to honor properly executed DPOAs. That certainly doesn't sound "simple."
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Planner01
Posts: 194
Joined: Mon Dec 26, 2016 2:44 pm

Re: Put checking accounts in living revocable trusts?

Post by Planner01 » Wed May 27, 2020 7:04 pm

So if you exclude your checking and retirement accounts and vehicles from the trust, then that only leaves the house, savings and taxable accounts to add to the trust. Why bother setting up a trust then if so much should be excluded?

MathIsMyWayr
Posts: 1740
Joined: Mon Mar 27, 2017 10:47 pm
Location: CA

Re: Put checking accounts in living revocable trusts?

Post by MathIsMyWayr » Wed May 27, 2020 11:46 pm

sport wrote:
Sat Jul 18, 2015 11:09 am
Leesbro63 wrote:Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.
There is a similar concern about putting vehicles into a trust. Do you want the officer that stops you for a traffic offense to know that you are "a rich trust fund person"? You might not get much sympathy or leeway from that officer if he/she is a jealous type of person.
Time to learn about what a living trust is.

User avatar
FIREchief
Posts: 4535
Joined: Fri Aug 19, 2016 6:40 pm

Re: Put checking accounts in living revocable trusts?

Post by FIREchief » Thu May 28, 2020 12:02 am

MathIsMyWayr wrote:
Wed May 27, 2020 11:46 pm
sport wrote:
Sat Jul 18, 2015 11:09 am
Leesbro63 wrote:Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.
There is a similar concern about putting vehicles into a trust. Do you want the officer that stops you for a traffic offense to know that you are "a rich trust fund person"? You might not get much sympathy or leeway from that officer if he/she is a jealous type of person.
Time to learn about what a living trust is.
I recommend that you ignore comments such as the ones you responded to. Having a living trust shouldn't convey the image of great wealth to anyone. They are very common, and I highly doubt that a traffic officer would have any interest whatsoever. I think this is just something made up on the internet. In our country today, in many scenarios, if you actually have current registration and insurance, it likely suggests that you have a decent income.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

sport
Posts: 9280
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Put checking accounts in living revocable trusts?

Post by sport » Thu May 28, 2020 8:20 am

FIREchief wrote:
Thu May 28, 2020 12:02 am
MathIsMyWayr wrote:
Wed May 27, 2020 11:46 pm
sport wrote:
Sat Jul 18, 2015 11:09 am
Leesbro63 wrote:Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.
There is a similar concern about putting vehicles into a trust. Do you want the officer that stops you for a traffic offense to know that you are "a rich trust fund person"? You might not get much sympathy or leeway from that officer if he/she is a jealous type of person.
Time to learn about what a living trust is.
I recommend that you ignore comments such as the ones you responded to. Having a living trust shouldn't convey the image of great wealth to anyone. They are very common, and I highly doubt that a traffic officer would have any interest whatsoever. I think this is just something made up on the internet. In our country today, in many scenarios, if you actually have current registration and insurance, it likely suggests that you have a decent income.
Well, I wrote that 5 years ago, and I still feel it is a valid concern. There is a big difference between having "a decent income" and having assets so substantial that you would put them in a trust. BTW, that is my own thought, not something I read "on the internet".

Nowizard
Posts: 2804
Joined: Tue Oct 23, 2007 5:33 pm

Re: Put checking accounts in living revocable trusts?

Post by Nowizard » Thu May 28, 2020 8:23 am

We have put Successor Trustees on bank accounts and anything else that represents available funds such as brokerage accounts. That means they will have immediate access to funds to pay final expenses and others without using their funds. We might have done otherwise is the Successor Trustees were not trusted sources, our two sons. Our Trust was established after seeing how easy it made settling the very small estate of a parent, not due to common perceptions of only the wealthy having one. It is sometimes cringeworthy when mail or other notifications arrive with the address including the word "Trust" since we are not wealthy by many standards.

Tim

User avatar
FIREchief
Posts: 4535
Joined: Fri Aug 19, 2016 6:40 pm

Re: Put checking accounts in living revocable trusts?

Post by FIREchief » Thu May 28, 2020 12:45 pm

Nowizard wrote:
Thu May 28, 2020 8:23 am
We have put Successor Trustees on bank accounts and anything else that represents available funds such as brokerage accounts.
Are those accounts owned by your trust or by you individually?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

MathIsMyWayr
Posts: 1740
Joined: Mon Mar 27, 2017 10:47 pm
Location: CA

Re: Put checking accounts in living revocable trusts?

Post by MathIsMyWayr » Thu May 28, 2020 5:22 pm

sport wrote:
Thu May 28, 2020 8:20 am
FIREchief wrote:
Thu May 28, 2020 12:02 am
MathIsMyWayr wrote:
Wed May 27, 2020 11:46 pm
sport wrote:
Sat Jul 18, 2015 11:09 am
Leesbro63 wrote:Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.
There is a similar concern about putting vehicles into a trust. Do you want the officer that stops you for a traffic offense to know that you are "a rich trust fund person"? You might not get much sympathy or leeway from that officer if he/she is a jealous type of person.
Time to learn about what a living trust is.
I recommend that you ignore comments such as the ones you responded to. Having a living trust shouldn't convey the image of great wealth to anyone. They are very common, and I highly doubt that a traffic officer would have any interest whatsoever. I think this is just something made up on the internet. In our country today, in many scenarios, if you actually have current registration and insurance, it likely suggests that you have a decent income.
Well, I wrote that 5 years ago, and I still feel it is a valid concern. There is a big difference between having "a decent income" and having assets so substantial that you would put them in a trust. BTW, that is my own thought, not something I read "on the internet".
According to my takeaway from attending trust seminars, one of the main reasons of setting up a living trust is to avoid a probate court. In California, your estate ends up in court if your residence is more than $100k (not sure about the exact figure), not $100k equity. I don't know whether you may be to find a home under $100k in California. It may be a nice pitch for a living trust.

sport
Posts: 9280
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Put checking accounts in living revocable trusts?

Post by sport » Thu May 28, 2020 5:52 pm

MathIsMyWayr wrote:
Thu May 28, 2020 5:22 pm
sport wrote:
Thu May 28, 2020 8:20 am
FIREchief wrote:
Thu May 28, 2020 12:02 am
MathIsMyWayr wrote:
Wed May 27, 2020 11:46 pm
sport wrote:
Sat Jul 18, 2015 11:09 am

There is a similar concern about putting vehicles into a trust. Do you want the officer that stops you for a traffic offense to know that you are "a rich trust fund person"? You might not get much sympathy or leeway from that officer if he/she is a jealous type of person.
Time to learn about what a living trust is.
I recommend that you ignore comments such as the ones you responded to. Having a living trust shouldn't convey the image of great wealth to anyone. They are very common, and I highly doubt that a traffic officer would have any interest whatsoever. I think this is just something made up on the internet. In our country today, in many scenarios, if you actually have current registration and insurance, it likely suggests that you have a decent income.
Well, I wrote that 5 years ago, and I still feel it is a valid concern. There is a big difference between having "a decent income" and having assets so substantial that you would put them in a trust. BTW, that is my own thought, not something I read "on the internet".
According to my takeaway from attending trust seminars, one of the main reasons of setting up a living trust is to avoid a probate court. In California, your estate ends up in court if your residence is more than $100k (not sure about the exact figure), not $100k equity. I don't know whether you may be to find a home under $100k in California. It may be a nice pitch for a living trust.
Thanks for the information. However, my remark was about putting a vehicle in a living trust. In my state we can designate a beneficiary on the car title.

User avatar
FIREchief
Posts: 4535
Joined: Fri Aug 19, 2016 6:40 pm

Re: Put checking accounts in living revocable trusts?

Post by FIREchief » Thu May 28, 2020 9:41 pm

sport wrote:
Thu May 28, 2020 5:52 pm
MathIsMyWayr wrote:
Thu May 28, 2020 5:22 pm
sport wrote:
Thu May 28, 2020 8:20 am
FIREchief wrote:
Thu May 28, 2020 12:02 am
MathIsMyWayr wrote:
Wed May 27, 2020 11:46 pm

Time to learn about what a living trust is.
I recommend that you ignore comments such as the ones you responded to. Having a living trust shouldn't convey the image of great wealth to anyone. They are very common, and I highly doubt that a traffic officer would have any interest whatsoever. I think this is just something made up on the internet. In our country today, in many scenarios, if you actually have current registration and insurance, it likely suggests that you have a decent income.
Well, I wrote that 5 years ago, and I still feel it is a valid concern. There is a big difference between having "a decent income" and having assets so substantial that you would put them in a trust. BTW, that is my own thought, not something I read "on the internet".
According to my takeaway from attending trust seminars, one of the main reasons of setting up a living trust is to avoid a probate court. In California, your estate ends up in court if your residence is more than $100k (not sure about the exact figure), not $100k equity. I don't know whether you may be to find a home under $100k in California. It may be a nice pitch for a living trust.
Thanks for the information. However, my remark was about putting a vehicle in a living trust. In my state we can designate a beneficiary on the car title.
My state only allows that if the title is in the name of a single individual. It can be co-owned by husband, wife and trust; with any of those able to sell or retitle. Trust has an ownership interest on insurance. Seems the most flexible, as successor trustee can take out insurance or easily sell.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

afan
Posts: 4878
Joined: Sun Jul 25, 2010 4:01 pm

Re: Put checking accounts in living revocable trusts?

Post by afan » Fri May 29, 2020 8:42 am

I took over affairs for an elderly person. They had put almost all of their assets into their living trust with me as co trustee. This was set up before I was needed. The checking account was in the trust. It was seamless. I started paying bills from the checking account with no problems.

The small amounts that were no in trust were major hassles. Same story with companies refusing to accept the DPOA. Fortunately, the person was still able to close accounts and transfer assets to the trust. Until we hit in that solution, we went through the same thing with being told to go to individual bank branches. The DPOA probably would have been useful for something but I never found any institution that would accept it.

We don't have our checking account in the trust but we don't have much money in there either.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

ChrisC
Posts: 901
Joined: Tue Jun 19, 2012 9:10 am
Location: North Carolina

Re: Put checking accounts in living revocable trusts?

Post by ChrisC » Fri May 29, 2020 9:36 am

As an elderly couple, we have all of our checking, savings and CD accounts titled in our revocable living trusts. These are all joint accounts, anyway, and the checking accounts still bear our names, not the trust, on issued checks. We also have POAs; we titled these bank accounts in the trust simply to make it easier for our successor trustees, our children, to navigate our financial affairs when the last one of us standing departed from the scene.

Both financial institutions, Navy Federal CU and Wells Fargo, re-titled them for us with a modest level of paperwork -- though I think a lot of this depends on the customer service representative's skill level and knowledge of internal banking procedures, for instance, one branch level staffer at Wells Fargo told us we couldn't do this -- another one a few months later handled the entire process within 30 minutes, as well as POAs for another matter involving my BIL!

Each banking institution, as well as its retail customer service representatives, has its own quirky procedures. With PNC, one POA we had was good for them, whereas the same POA was considered deficient for Wells Fargo. Navy Federal advised us that successor trustees had to be members of Navy Federal to keep the accounts in the trust once we were gone or else they would close them out and distribute funds in the name of the trust. Wells Fargo did not care about the successor trustee. For a banking account we established for an Irrevocable Trust, Fifth Third Bank required a copy of the EIN letter from the IRS and specific trust documents designating the successor trustees.

I believe there are good reasons to re-title assets, even those initially jointly held by a couple, in revocable living trusts to make it easy for successor trustees, if that is one of your goals.

User avatar
unclescrooge
Posts: 4857
Joined: Thu Jun 07, 2012 7:00 pm

Re: Put checking accounts in living revocable trusts?

Post by unclescrooge » Fri May 29, 2020 10:33 am

rixer wrote:
Sat Jul 18, 2015 9:09 am
I was the successor trustee for the inlaws. They had the checking account listed under the trust so I don't know how it would have been handled if it wasn't. At any rate, the m/l passed first and later the f/l was incapacitated by alzhiemers. I just had to furnish death certificate for m/l and two doctor's letters verifying that the f/l was incapacitated and could no longer handle his financial accounts. The banks accounts were then put in my name as the trustee and I had full control. It wasn't too difficult.
What sort of doctor does it need to be? Any type, or a psychiatrist? How does one go about long for such a doctor?

Seasonal
Posts: 1635
Joined: Sun May 21, 2017 1:49 pm

Re: Put checking accounts in living revocable trusts?

Post by Seasonal » Fri May 29, 2020 11:50 am

MathIsMyWayr wrote:
Wed May 27, 2020 5:17 pm
Sheepdog wrote:
Sat Jul 18, 2015 10:52 am
When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to that checking account so that, if we both pass together, or soon after, or otherwise be incapacitated, he could have access to the checking account to pay bills, etc.
Against what I learned from a trust seminar by a CA lawyer. According to him, a joint account will be frozen the moment a spouse is incapacitated or dies. On the other hand, such an event has no effect on a trust.
This doesn't make sense to me. The idea of a Joint Tenant With Right of Survivorship account is that it passes to the survivor upon the death of the other person.

I did a quick google search to see if there was anything odd about CA law. "What is the right of survivorship? When a joint tenant dies, his or her interest in the asset vests in the surviving joint tenant or joint tenants. In other words, if two people own real estate in joint tenancy, and one of them dies, the surviving joint tenant then owns 100 percent of the property." https://www.ca-trusts.com/jointtenancy.html

Since that is exactly how I thought things would work, I didn't look further.

RudyS
Posts: 1818
Joined: Tue Oct 27, 2015 10:11 am

Re: Put checking accounts in living revocable trusts?

Post by RudyS » Fri May 29, 2020 3:55 pm

Seasonal wrote:
Fri May 29, 2020 11:50 am
MathIsMyWayr wrote:
Wed May 27, 2020 5:17 pm
Sheepdog wrote:
Sat Jul 18, 2015 10:52 am
When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to that checking account so that, if we both pass together, or soon after, or otherwise be incapacitated, he could have access to the checking account to pay bills, etc.
Against what I learned from a trust seminar by a CA lawyer. According to him, a joint account will be frozen the moment a spouse is incapacitated or dies. On the other hand, such an event has no effect on a trust.
This doesn't make sense to me. The idea of a Joint Tenant With Right of Survivorship account is that it passes to the survivor upon the death of the other person.

I did a quick google search to see if there was anything odd about CA law. "What is the right of survivorship? When a joint tenant dies, his or her interest in the asset vests in the surviving joint tenant or joint tenants. In other words, if two people own real estate in joint tenancy, and one of them dies, the surviving joint tenant then owns 100 percent of the property." https://www.ca-trusts.com/jointtenancy.html

Since that is exactly how I thought things would work, I didn't look further.
The interesting thing is that this was presented at a seminar intended to sell TRUSTS! (Bold type above is mine).

Seasonal
Posts: 1635
Joined: Sun May 21, 2017 1:49 pm

Re: Put checking accounts in living revocable trusts?

Post by Seasonal » Fri May 29, 2020 4:31 pm

RudyS wrote:
Fri May 29, 2020 3:55 pm
Seasonal wrote:
Fri May 29, 2020 11:50 am
MathIsMyWayr wrote:
Wed May 27, 2020 5:17 pm
Sheepdog wrote:
Sat Jul 18, 2015 10:52 am
When my wife and I funded our revocable trust, our lawyer firmly told us NOT to include the checking account. The reason was that access to the checking account by the survivor may not be immediately possible at our individual death. He suggested that we keep that as a joint account. All other assets are titled to the trust.
He also suggested that we add our successor trustee's (in our case, a son) signature be added to that checking account so that, if we both pass together, or soon after, or otherwise be incapacitated, he could have access to the checking account to pay bills, etc.
Against what I learned from a trust seminar by a CA lawyer. According to him, a joint account will be frozen the moment a spouse is incapacitated or dies. On the other hand, such an event has no effect on a trust.
This doesn't make sense to me. The idea of a Joint Tenant With Right of Survivorship account is that it passes to the survivor upon the death of the other person.

I did a quick google search to see if there was anything odd about CA law. "What is the right of survivorship? When a joint tenant dies, his or her interest in the asset vests in the surviving joint tenant or joint tenants. In other words, if two people own real estate in joint tenancy, and one of them dies, the surviving joint tenant then owns 100 percent of the property." https://www.ca-trusts.com/jointtenancy.html

Since that is exactly how I thought things would work, I didn't look further.
The interesting thing is that this was presented at a seminar intended to sell TRUSTS! (Bold type above is mine).
Yes, I noticed that. Even though the site I linked is a trusts site, it at least accurately reports how a JTWROS works. Only if both joint tenants die will the account be frozen, and even then the bank would have to know of the deaths.

rixer
Posts: 664
Joined: Tue Sep 11, 2012 4:18 pm

Re: Put checking accounts in living revocable trusts?

Post by rixer » Sat May 30, 2020 1:45 pm

unclescrooge wrote:
Fri May 29, 2020 10:33 am
rixer wrote:
Sat Jul 18, 2015 9:09 am
I was the successor trustee for the inlaws. They had the checking account listed under the trust so I don't know how it would have been handled if it wasn't. At any rate, the m/l passed first and later the f/l was incapacitated by alzhiemers. I just had to furnish death certificate for m/l and two doctor's letters verifying that the f/l was incapacitated and could no longer handle his financial accounts. The banks accounts were then put in my name as the trustee and I had full control. It wasn't too difficult.
What sort of doctor does it need to be? Any type, or a psychiatrist? How does one go about long for such a doctor?
We just made an appointment with his regular doctor. Then, he referred us to a neurologist and they did a brain scan which can show areas of dementia.

Leesbro63
Posts: 6545
Joined: Mon Nov 08, 2010 4:36 pm

Re: Put checking accounts in living revocable trusts?

Post by Leesbro63 » Mon Jun 01, 2020 9:31 am

rixer wrote:
Sat May 30, 2020 1:45 pm
unclescrooge wrote:
Fri May 29, 2020 10:33 am
rixer wrote:
Sat Jul 18, 2015 9:09 am
I was the successor trustee for the inlaws. They had the checking account listed under the trust so I don't know how it would have been handled if it wasn't. At any rate, the m/l passed first and later the f/l was incapacitated by alzhiemers. I just had to furnish death certificate for m/l and two doctor's letters verifying that the f/l was incapacitated and could no longer handle his financial accounts. The banks accounts were then put in my name as the trustee and I had full control. It wasn't too difficult.
What sort of doctor does it need to be? Any type, or a psychiatrist? How does one go about long for such a doctor?
We just made an appointment with his regular doctor. Then, he referred us to a neurologist and they did a brain scan which can show areas of dementia.
I thought dementia can’t be diagnosed by imaging?

Seasonal
Posts: 1635
Joined: Sun May 21, 2017 1:49 pm

Re: Put checking accounts in living revocable trusts?

Post by Seasonal » Mon Jun 01, 2020 9:40 am

Leesbro63 wrote:
Mon Jun 01, 2020 9:31 am
rixer wrote:
Sat May 30, 2020 1:45 pm
unclescrooge wrote:
Fri May 29, 2020 10:33 am
rixer wrote:
Sat Jul 18, 2015 9:09 am
I was the successor trustee for the inlaws. They had the checking account listed under the trust so I don't know how it would have been handled if it wasn't. At any rate, the m/l passed first and later the f/l was incapacitated by alzhiemers. I just had to furnish death certificate for m/l and two doctor's letters verifying that the f/l was incapacitated and could no longer handle his financial accounts. The banks accounts were then put in my name as the trustee and I had full control. It wasn't too difficult.
What sort of doctor does it need to be? Any type, or a psychiatrist? How does one go about long for such a doctor?
We just made an appointment with his regular doctor. Then, he referred us to a neurologist and they did a brain scan which can show areas of dementia.
I thought dementia can’t be diagnosed by imaging?
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3937983/

https://stanfordhealthcare.org/medical- ... scans.html

afan
Posts: 4878
Joined: Sun Jul 25, 2010 4:01 pm

Re: Put checking accounts in living revocable trusts?

Post by afan » Mon Jun 01, 2020 10:30 am

Far better to appoint a co trustee than a successor. With a successor, they would need to prove that the thing that triggers their status to trustee has occurred. You may or may not be able to get a doctor to go along.
With a co trustee you bypass this problem.
While you are healthy and managing your own affairs there is nothing for the co trustee to do. Once you become incapacitated, the co trustee can act without needing to prove anything to the the financial institutions.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

Luckywon
Posts: 941
Joined: Tue Mar 28, 2017 10:33 am

Re: Put checking accounts in living revocable trusts?

Post by Luckywon » Mon Jun 01, 2020 11:07 am

afan wrote:
Mon Jun 01, 2020 10:30 am
Far better to appoint a co trustee than a successor. With a successor, they would need to prove that the thing that triggers their status to trustee has occurred. You may or may not be able to get a doctor to go along.
With a co trustee you bypass this problem.
While you are healthy and managing your own affairs there is nothing for the co trustee to do. Once you become incapacitated, the co trustee can act without needing to prove anything to the the financial institutions.
Agree with this and another option is to make it reasonably easy for your successor trustees to assume powers. The default for many Trusts is two physician attestation. This could be changed to one physician. Or the successor trustee could determine incapacity fo the predecessor and state so in a sworn affidavit. Or a third party, i.e. trust protector could be given the the power to determine incapacity of the trust settlor.

LeftCoast
Posts: 96
Joined: Mon Jan 01, 2018 12:19 pm

Re: Put checking accounts in living revocable trusts?

Post by LeftCoast » Mon Jun 01, 2020 11:32 am

Our checking account has been in the name of our living trust for the last 25 years. We've never had a problem. We expect that our structure will avoid probate and function well in the event one or both of us becomes disabled.

You should never rely upon a bank to honor a Power of Attorney to take control of a checking account. Banks are justifiably concerned about fraud, forgery, coercion and elder abuse, and may simply refuse to act upon a Power of Attorney that isn't on their form and signed in front of them.

littlebird
Posts: 1609
Joined: Sat Apr 10, 2010 6:05 pm
Location: Valley of the Sun, AZ

Re: Put checking accounts in living revocable trusts?

Post by littlebird » Thu Jun 11, 2020 8:06 pm

sport wrote:
Sat Jul 18, 2015 11:09 am
Leesbro63 wrote:Also, do you really want everyone who receives a check to know that you are a "rich trust fund person"? Yeah, checks are becoming less and less used and we Bogleheads understand that you don't have to be Warren Buffett to benefit from a trust. But to the average Joe, it can send the wrong message.
There is a similar concern about putting vehicles into a trust. Do you want the officer that stops you for a traffic offense to know that you are "a rich trust fund person"? You might not get much sympathy or leeway from that officer if he/she is a jealous type of person.
I’ve never had the word “trust” on my Trust checks. Just my and spouse’s name when he was alive, now my and co-trustee daughter‘s name. Looks just like checks from a joint account. Bank doesn’t care.

Since my purpose for having a revocable trust was to enable my daughter to step in when I became unable or unwilling to manage my money, it would make no sense not to have the checking account titled the exact same way as brokerage and other financial accounts. Especially since I ran into a problem with V. when spouse’s IRA was, by definition, not in our trust name, and they therefore refused to allow me to deposit his RMDs into the trust using their own POA.

Post Reply