In order for the revocable trust to eliminate probate, it is imperative that all family assets be transferred into the trust prior to death. Unfortunately, a large number of people go to the expense of forming a revocable trust but never actually fund the trust during their lifetime.
Funding the trust simply requires transferring legal title from husband and wife into the name of the trust. For example, if John and Mary Smith are funding their revocable trust, they will substitute their existing title to their assets from “John Smith and Mary Smith, husband and wife” to “John Smith and Mary Smith as Trustees of the Smith Family Trust, Dated March 24, 2009.”
For real estate, title is changed by executing and recording a deed. Whereas bank accounts and brokerage accounts can be transferred by simply changing the name on the accounts to reflect the trust as the new owner. This can be done by completing a new account application and assignment paperwork from the particular bank or brokerage house. Shares of stock and bonds in registered form are changed by notifying the transfer agent for the issuing company and requesting that the certificates be reissued in the name of the trust, using the transfer agent’s paperwork and protocol. Many other types of property can be transferred by a simple written declaration called an Assignment.
If you have questions on trust funding options or estate planning call me for a free consultation.