Creating a trust is the first step to avoiding probate for your assets after you pass away. However, other steps need to be taken in order to ensure that you assets are titled correctly so that they do not need to go through probate. This is called funding.
How Your Assets Should be Titled
In Ohio, the usual wording that will appear on the assets titled into the trust will look something like this: “Joe Smith and Jane Smith, Trustees of the Smith Family Trust Dated Jan 1, 2014”. While some places may switch the order a little by putting the name and date of the trust first, followed by the Trustees name, it is important to ensure that all parts, name of the trustees, the trust and date of the trust, are included on all the assets.
What Do I Need to Do to Fund My Trust?
Depending on the type of assets you own, the process of making the trust the owner can be a little different. If you are unsure how to start the funding process, be sure to reach out to an attorney who can walk you through it.
Bank, Security and Brokerage Accounts
These can be transferred by visiting branches or calling the entity to acquire the right forms. Once the forms are filled out you will need to take the forms and a copy of the trust to the branch. If there are more than one Trustee, all need to be present to sign the form.
Some entities may want a death beneficiary to be stated on the account when a trust is the owner. If that is the case, make sure you name the trust as the death beneficiary as well.
If you already own a home which you wish to transfer to a trust, you may do so by having a quit-claim deed prepared and filed with the county recorder. An attorney would be able to have that prepared for you, having all owners of the property sign in front of the notary. Then, the deed needs to be recorded and will be accessible as a public record.
If you are purchasing a new home, you may let the title company know that you wish the house to be titled into the trust and the title company will prepare the correct paperwork. They may ask to see a copy of the trust.
Stocks and Bonds
For stocks and bonds that you hold individually, you will need to contact your stock transfer agent who will be able to provide you with the right forms. Once the forms are filled out and signed, new certificates can be reissued with the name of the trust and trustees.
To transfer ownership, an amendment to the partnership (for partnerships) or operating (for LLCs) agreement will need to be prepared to put the trust and trustees’ names. All members or partners will need to agree and sign the amendment in order for it to be effective.
Life Insurance, Pensions, IRAs and 401(k) Plans
It is up to the trust owners to decide whether they want to put these assets into the trust. For those that decide to do so, instead of naming individuals as beneficiaries. Most will not include these in their trust because there are tax issues that should be considered. Yet, having individuals named as beneficiaries allows for a quick and easy transfer of funds upon the owner’s death.
We Can Help
At Sobon Law, LLC we work with families every day to walk them through the process of protecting their assets and their loved ones. Call today (216) 586-4246 to schedule an appointment.