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funding revocable trust

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  • funding revocable trust

    So I just made a revocable trust.  The easy part was meeting with the lawyer and forking out the dough.  Now comes the hard part of funding the trust.  The lawyer transferred the title of the deed to the trust.

    Questions for you, dear wise forum members:

    1.  I have several accounts with CapitalOne (my emergency fund) and just found out they don't transfer accounts to trusts.  I guess I will need to transfer all my CapitalOne assets to something like Ally and put them under the name of the trust.  Anything thoughts on Ally or any other online banks in regards to trusts?

    2.  Went to my bank to change the title of my accounts.  Was told most people put their savings account into the trust but not the checking account.  Banker told me checking account under the trust's name was too complicated since bills were being paid from the checking account and if someone cut me a check, they needed to make a check out to the trust.  Any thoughts on this?  My bank savings account has just the bare minimum to get free checking so I don't care if it goes under the trust or not.  However, my checking account usually has 5 figures so I would rather this go under the trust.

    3.  Is there a difference between putting the trust as a beneficiary versus changing the title of the asset to the trust?

    The next step is for me to call Vanguard and transfer the title of my taxable account to the trust.  It is a joint account. I heard I would need to created a new vanguard account under the trust then Vanguard would transfer the old account into the new account.  Sounds like a pain.  Any tips are appreciated.

    Thanks so much for your help.  This forum has been so educational for me.

    Thinlittlepig  juststarting

  • #2
    Are you dead set on having every account in the trust? For example, in the case you describe if Capital One allows it, you could just name your heirs as beneficiaries. Then the account passes directly, outside of both probate and the trust. This has the additional advantage that the heirs immediately have ready cash for funeral expenses, etc.

    Unfortunately, Vanguard does not allow either beneficiaries or POD for joint accounts. On the other hand, the funds in a joint account will transfer immediately to the joint owner.

    But, if you want the Vanguard account in the RLT, just call them. They make the transfer fairly easy.

    and yes, there is a difference. If trust is a beneficiary of the account you still own it and it will pass through probate. If you transfer the account to the trust, it will pass to your heirs via the trust and not via probate.


    • #3
      It just takes some legwork, it's not hard. Follow the instructions provided by each institution. We had many (many) more accounts than this and completed all transfers in about thirty days.

      We moved our checking accounts into trust and haven't had any problems depositing checks made out to us individually.


      • #4
        yes funding the trust is the biggest PIA of the entire process.   Took about 4 weeks to get everything titled.

        1) house.  we had the trust already so it was titled on purchase.

        2) joint brokerage accounts....had to open new accounts (which have trust registrations for the institution) and then just shuttle over the old accounts

        3) checking. don't have. that is #2. i use a cash management account.

        4) anything with a direct beneficiary we left out of the trust.  we have an adult heir so we don't have to worry about minors as beneficiaries of my 401K, etc...