If you create a Trust, you absolutely need to transfer certain assets to the Trust. If you fail to do so, you may unintentionally create a Probate problem – likely one of the very reasons you chose to create a Trust in the first place.
Common assets to transfer to Trust include:
- Residence: Done by signing a deed transferring title to the residence to the Trust and recording the deed with the County Recorder’s Office;
- Bank accounts: Done by submitting a Certification of Trust to the bank;
- Brokerage accounts: Done by submitting a Certification of Trust to the brokerage company;
- Limited liability company interests: Done by assigning your LLC interest to the Trust, but only if the Operating Agreement permits it;
- Stock in a closely held business: Done by having stock re-issued in the name of the Trust, but only if the Shareholder’s Agreement permits it; and
- Tangible, personal property (e.g. jewelry, furniture, artwork, antiques, collectibles, etc.): Done by assigning such property to the Trust.
Assets that generally should not be transferred to (re-titled in the name of) the Trust include:
- Qualified retirement accounts (e.g. 401(k)s, IRAs, Roth IRAs);
- Life insurance policies; and
- Jointly owned assets, provided you wish for such assets to pass to the joint owner on death.