living trust title as beneficiary vs. name of trust

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kikie
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living trust title as beneficiary vs. name of trust

Post by kikie » Sun May 27, 2012 6:41 pm

hello
Last edited by kikie on Tue Jun 05, 2012 10:03 pm, edited 1 time in total.
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JDCPAEsq
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Re: living trust title as beneficiary vs. name of trust

Post by JDCPAEsq » Sun May 27, 2012 6:49 pm

You should retitle the Vanguard account in the name of the trust. You don't want a trustee managing part of your assets and an attorney-in-fact managing the other part. It is not that complicated. Speak with Vanguard about it.
John

smackboy1
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Re: living trust title as beneficiary vs. name of trust

Post by smackboy1 » Mon May 28, 2012 8:31 am

paix wrote:i made living trust and retitled everything except the largest chunk, which is the VG account, because it's a big hassle, instead I named the trust as a beneficiary.

wondering if that is what others may have done. the only downside i can see, is in case of incapacity, the trust doesn't take over(it only takes over after death), in which case the DPOA for finance I assume would manage the accounts, which is a family member, but maybe simplier than VG (who are the actual trustee) ; if you follow .... ?
I agree w/ JDCPAEsq. One reason for using a trust (I assume it's revocable and you are the trustee?) is to make things easier for you, even if you are incapacitated, and, after you are dead, the next of kin. By not taking the last step, it kind of defeats that purpose.

How is your durable POA written? Does it give the attorney-in-fact unfettered power over the assets? Would it be better to have the assets under the control of the trustee (who is limited by the terms of the trust) the entire time?

It's really simple to retitle Vanguard accounts. IIRC it's just a form. I did it years ago with all our accounts e.g. banks, brokerages, other investments etc.. You only have to do it once.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.

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Sheepdog
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Re: living trust title as beneficiary vs. name of trust

Post by Sheepdog » Mon May 28, 2012 8:56 am

It is not a hassle...really it isn't. Reissuing our 125 I Bonds to our trust....now THAT was a hassle.
My lawyer called me a month after the trust was written, "Have you transferred everything to the trust as we discussed?" I had done a few items, but not everything. He chastised me, "The trust must be funded....NOW. The trust is useless unless it is funded. Do it NOW!!".
I had everything filed to retitle to the trust within the next two weeks or so after that. Within a month, I had confirmation that everything was complete.
Jim
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

Tony
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Re: living trust title as beneficiary vs. name of trust

Post by Tony » Mon May 28, 2012 9:31 am

Sheepdog wrote:It is not a hassle...really it isn't. Reissuing our 125 I Bonds to our trust....now THAT was a hassle.
My lawyer called me a month after the trust was written, "Have you transferred everything to the trust as we discussed?" I had done a few items, but not everything. He chastised me, "The trust must be funded....NOW. The trust is useless unless it is funded. Do it NOW!!".
I had everything filed to retitle to the trust within the next two weeks or so after that. Within a month, I had confirmation that everything was complete.
Jim
Does re-titling everything into the trust cause any problems at all that you can think of? Do electronic bank transfers go through without any changes, either back and forth between Vanguard and your bank, or between Treasury Direct and the bank? What about bill pay from your bank account? And can you deposit checks into your bank that are written to you as an individual, or does the payee have to be the trust?
Tony

sscritic
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Re: living trust title as beneficiary vs. name of trust

Post by sscritic » Mon May 28, 2012 9:42 am

Tony wrote: Does re-titling everything into the trust cause any problems at all that you can think of? Do electronic bank transfers go through without any changes, either back and forth between Vanguard and your bank, or between Treasury Direct and the bank? What about bill pay from your bank account? And can you deposit checks into your bank that are written to you as an individual, or does the payee have to be the trust?
My bank accounts kept the same account numbers. My Vanguard accounts didn't, but Vanguard could still transfer to and from my bank accounts (they hadn't changed account numbers) .

The trustee is the payee and the payor. When you write a check, you sign your name. If you put your home in your trust, the owner will be Trustee, Trustee for Trust. When you sell your house, you will sign as Trustee, Trustee for Trust. At TD, the account in the name of your trust is owned by Trustee, Trustee for Trust.
Registration examples: ‘‘John Doe, Trustee under Declaration of Trust dated January 1, 2001, SSN 123–45–6789;’’


Check with your bank; as I said, mine didn't change any of the account numbers.

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JamesSFO
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Re: living trust title as beneficiary vs. name of trust

Post by JamesSFO » Mon May 28, 2012 9:44 am

There are SOME institutions (VG is one) that change your account numbers when you retitle. There are others, e.g. USAA, Bank of America, that don't. It takes a small amount of time, but is worth it.

lwfitzge
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Re: living trust title as beneficiary vs. name of trust

Post by lwfitzge » Mon May 28, 2012 9:48 am

JamesSFO wrote:There are SOME institutions (VG is one) that change your account numbers when you retitle. There are others, e.g. USAA, Bank of America, that don't. It takes a small amount of time, but is worth it.
Yep...I recently retitled at VG. VG has you fill out new account form for retitle & then fill out asset transfer form to the new account..

sscritic
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Re: living trust title as beneficiary vs. name of trust

Post by sscritic » Mon May 28, 2012 9:59 am

Note that Vanguard and the banks will mail your statements to Trustee, Trust. Right after I retitled my accounts into the trust, I asked if I could have the mail sent without the trust name on it, not wanting the postman or my neighbors to know about the trust. The person at Vanguard I talked to on the phone said, "sure" and took all my funds out of my trust and put them back into a new individual account. Two days later, they were back in the trust (luckily, they didn't put them into a new trust account). Now I have two empty individual accounts to go along with my trust account.

ourbrooks
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Re: living trust title as beneficiary vs. name of trust

Post by ourbrooks » Mon May 28, 2012 10:09 am

Some things to watch out for:

1. Some banks will want you to get a new tax number (EIN) for the trust. That's only necessary after the grantor (you) is deceased. Before that, you must use your own Social Security number.

2. Get the durable power of attorney, even if everything is titled into the trust. From personal experience, some banks, Bank of America in particular, don't recognize a change of trustee for a revocable trust as long as the grantor is still living. The attorney who set up the trust we handled told us that he'd actually sued Bank of American over this issue and won, but, apparently, not everyone in Bank of America got the memo. Fortunately, in our case, we were still able to get the grantor to sign the power of attorney, but if we hadn't been, we would have had to file a suit against the bank or file for a conservatorship.

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TheGreyingDuke
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Re: living trust title as beneficiary vs. name of trust

Post by TheGreyingDuke » Mon May 28, 2012 8:39 pm

Although the mail will come to the trust and trustees, if you have an Advantage account you can ask VG to issue you checks that have just the name of the trustees on it, without any trustee designation. For some reason, they will do this only AFTER the initial checks are received, a simple call got new checks here in just 10 days or so, no charge as always.
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Kevin M
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Re: living trust title as beneficiary vs. name of trust

Post by Kevin M » Mon May 28, 2012 8:55 pm

My taxable Vanguard accounts are held in the name of my living trust. Obviously my IRA accounts are not, and the beneficiaries are named (the trust is not the beneficiary, since this complicates the IRA inheritance process a bit).

It varies by state, but in CA, you should have anything over $100K of non-real-estate assets held in the name of your trust (not including tax-advantaged or POD accounts for which beneficiaries are named directly, and thus are not subject to probate). Your heirs can use a simple small estate affidavit to transfer non-real-estate assets under $100K (in California).

Using POD accounts is a simplified way to avoid probate. I use POD on my Ally accounts because I can open POD CDs online, but CDs in a trust require a phone call. POD accounts are suitable if you don't need to specify contingent beneficiaries. I name the beneficiaries directly. I investigated naming a trust as beneficiary, but it looked like there could be complications, and did not want to burden my successor trustees with that possibility.

Kevin
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Sheepdog
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Re: living trust title as beneficiary vs. name of trust

Post by Sheepdog » Mon May 28, 2012 11:19 pm

Tony wrote: Does re-titling everything into the trust cause any problems at all that you can think of? Do electronic bank transfers go through without any changes, either back and forth between Vanguard and your bank, or between Treasury Direct and the bank? What about bill pay from your bank account? And can you deposit checks into your bank that are written to you as an individual, or does the payee have to be the trust?
Others have answered your question in detail. I will just add that I have had no difficulties of any kind in transfers, deposits, anything else. . I will add that my attorney suggested that we not title our regular checking account to the Trust. He did suggest that we add our "Successor Trustee" signature to that checking account so that he could have access to that account in case we both died at the same time. I did title our high yield checking account to the Trust since it is, for us, a taxable investment (over $50k).
Jim
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cyclysm
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Re: living trust title as beneficiary vs. name of trust

Post by cyclysm » Thu May 31, 2012 11:16 am

sscritic wrote: The trustee is the payee and the payor. When you write a check, you sign your name. If you put your home in your trust, the owner will be Trustee, Trustee for Trust. When you sell your house, you will sign as Trustee, Trustee for Trust. At TD, the account in the name of your trust is owned by Trustee, Trustee for Trust.
Registration examples: ‘‘John Doe, Trustee under Declaration of Trust dated January 1, 2001, SSN 123–45–6789;’’
What happens in this situation when you update your trust, thus giving it a new date? Do you have to re-title everything? Is it possible to title it without the date of the trust?

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Sheepdog
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Re: living trust title as beneficiary vs. name of trust

Post by Sheepdog » Fri Jun 01, 2012 1:34 pm

cyclysm wrote: What happens in this situation when you update your trust, thus giving it a new date? Do you have to re-title everything? Is it possible to title it without the date of the trust?
The trust title must include the date.
I have updated my trust once. The trust was not redated, so nothing requires retitling.. An amendment was completed, signed and notarized. The amendment is titled:

FIRST AMENDMENT
TO THE TRUST KNOWN AS THE
xxxxxx REVOCABLE TRUST
DATED XXXXX, 11, 2005

The sections of the Trust which are amended are then noted in the amendment. The original Trust remains with any amendment (s) attached.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

runnergirl
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Re: living trust title as beneficiary vs. name of trust

Post by runnergirl » Fri Jun 01, 2012 1:53 pm

If you have a pour-over will does this protect some accounts left out of the trust?

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Kevin M
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Re: living trust title as beneficiary vs. name of trust

Post by Kevin M » Fri Jun 01, 2012 2:56 pm

runnergirl wrote:If you have a pour-over will does this protect some accounts left out of the trust?
Not according to the NOLO Press book on living trusts. That book discusses the topic, and recommends not bothering with a pour over will. You still want to have a will to handle anything not in the trust, but not count on it to avoid probate.

I would not trust a will to do this if your intention is to avoid probate.

In a thread here awhile back someone mentioned that their estate attorney had filed with the court to transfer property into the trust according to the pour-over will, so maybe it's possible, but then you're back to attorneys and courts, which you can avoid entirely with a living trust if all of your major assets are owned by the trust. Why take the chance?

Kevin
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kikie
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Re: living trust title as beneficiary vs. name of trust

Post by kikie » Thu Dec 20, 2012 2:39 pm

so what would be the pros and cons of naming the RLT as the beneficiary or the IRA

my client, does not want to name outright a person a bene on the IRA/401k portion...
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Tony
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Re: living trust title as beneficiary vs. name of trust

Post by Tony » Thu Dec 20, 2012 3:05 pm

Kevin M wrote: It varies by state, but in CA, you should have anything over $100K of non-real-estate assets held in the name of your trust (not including tax-advantaged or POD accounts for which beneficiaries are named directly, and thus are not subject to probate). Your heirs can use a simple small estate affidavit to transfer non-real-estate assets under $100K (in California).
In California it's now $150k. Worth checking on to make absolutely sure, but that's my understanding.
Tony

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dm200
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Re: living trust title as beneficiary vs. name of trust

Post by dm200 » Thu Dec 20, 2012 4:04 pm

A Payable on death beneficiary designation is probably the simplest for small balance accounts. It takes care of the probate issue, BUT it does not give the flexibility fo a successor trustee dealing with the account in case of incapacity.

JDCPAEsq
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Re: living trust title as beneficiary vs. name of trust

Post by JDCPAEsq » Thu Dec 20, 2012 5:17 pm

kikie wrote:so what would be the pros and cons of naming the RLT as the beneficiary or the IRA

my client, does not want to name outright a person a bene on the IRA/401k portion...
What happened to your original question that I answered? It appears you deleted it. :oops:
John

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Re: living trust title as beneficiary vs. name of trust

Post by bsteiner » Thu Dec 20, 2012 10:54 pm

While living trusts may make sense in some cases, or in some states, they're overhyped and oversold, and for most people are just a distraction from more important issues in the estate planning process.

Probating a Will is generally a very small part of the work involved in an estate administration.

An IRA is already its own revocable trust, so even if you have a living trust, there's no need to run your IRA through it. You can simply leave it to (or to trusts for) the desired beneficiaries.

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