Trust Implementation Checklist

If you have successfully created a living trust, then congratulations!  You have completed a complex task that many avoid.  Unfortunately, your job is not done when you have a fancy trust binder sitting on your shelf.  The trust must also be funded, and that involves retitling your assets, contacting the banks and brokers to change the ownership of your assets into the name of the trust.  Since the whole process can be confusing, we have created the following trust implementation checklist to help guide you: 

1. Financial accounts 

Financial accounts currently held in the name of yourself, your spouse, or jointly should generally be renamed or “converted” into a trust account.  This category does not include IRA’s or other retirement accounts, which we will discuss later.   We do recommend changing the title of your brokerage accounts, checking and savings accounts.  This step is essential to avoiding probate and ensuring the trust governs the assets.   

2. IRA’s, 401k’s, Pensions, and other retirement accounts 

IRA’s, 401k’s, Pensions and other retirement accounts are different because they must be owned by an individual and cannot be placed in a trust while the owner is still living.  However, IRA’s, 401k’s and Pensions have a powerful alternative.  You may name beneficiaries for the IRA so that the funds will pass to the named individuals.  This process avoids probate and is fast and easy.  You may also name the trust as the beneficiary of the IRA.  If you have minor children, or if your trust has special provisions, such as a special needs trust, then naming the trust may be preferable.  Absent these situations, we prefer to name the individuals as the beneficiary rather than the trust.  You may also have a primary and contingent beneficiary, a beneficiary who will inherit the funds if your primary beneficiary is already deceased.  If you are not sure, it is a good idea to ask your estate planning attorney to clarify how these accounts should be handled, and whether the trust should be named as a beneficiary for the IRA in your specific situation.  

3. Your Life Insurance 

Similarly, you may want to discuss your life insurance policy with your estate planning attorney. While naming your spouse as the beneficiary of the life insurance policy is the simplest and most straightforward approach, there are circumstances when there are advantages to naming your trust as the beneficiary or contingent beneficiary. As with retirement accounts, you may want to name the trust as the beneficiary of the life insurance policy when you have a blended family or second marriage, when your children are minors, when you have beneficiaries with special needs, or when you have special provisions within the trust to control the disbursement of the funds. 

4. Your Home 

The next thing that should be put into the trust is the Home and/or mortgage. Just by stating the home is in the trust is not enough. You must file a Grant Deed or Quitclaim Deed with the County Recorder’s Office. This step is so critical that most estate planning attorneys will prepare the appropriate documents for you. We recommend using an attorney since filing incorrectly could result in a reassessment of your property taxes. 

5. Do I need everything else in my trust? 

Usually, a good estate planning attorney will create a “pour over will” that will “pour” any assets outside of the trust into the trust upon your death.  The pour over will is designed to clearly give your trustee authority over other assets such as cars, furniture, and personal effects.  Here is a list of assets that typically do not need to be retitled: 

1. Vehicles 

2. Furniture 

3. Personal effects  

6. Share the trust with key parties 

We also recommend that you notify the appropriate parties that you have a trust. This may take the form of a family meeting where you share your estate plan with the family. While you may choose to keep some of the information private, typically you would want to at least notify the individual or individuals named as successor trustee that he or she is being named for that role.  Similarly, it is often a good idea to notify the beneficiaries, though some prefer to keep this information private. Also, your advisors, such as your financial advisor (that’s us) and CPA should be notified that you created or amended your trust. 

7. Store the trust in a safe place 

Finally, it is wise to store your original trust in a safe place, such as a home safe, safe deposit box, or in the attorney’s vault. I like to store an electronic copy in a safe location as well – just in case.