In part one of Funding Living
Trust I wrote about changing title to your bank accounts from
you as an individual to your t. Remember in addition to signing
your living trust, you must also fund it. Funding means changing
ownership, beneficiary or both of all assets to your Trust.
Like bank accounts, Brokerage
Accounts, Individual Securities and Mutual Funds must also be re
titled.
The easiest is if you hold
these assets within a brokerage account because it is the
account itself that is re registered. Unlike bank accounts, most
brokers will require you to open a new trust brokerage account
and then transfer the assets instead of re titling your current
account. The broker may use the term journal the assets to the
new account. This is usually the same as transfer. Make sure the
assets are transferred and not sold and re purchased.
If you own individual stock
certificates and or bonds you will need to re register each one.
Contact each company in which you hold stock and request that
their stock transfer agents provide you with instructions for
transfer and the forms they require. As you might expect, no two
stock transfer agents do things quite the same. Most require
that you surrender your original stock certificate, complete a
stock power, and have your signature on the stock power or
certificate guaranteed by a bank or brokerage firm. (This is not
the same as a notarization). Once they have received the
paperwork, some transfer agents will complete the transfer and
issue new certificates in a matter of days, others it may take a
few weeks. If you do own several individual securities, you may
wish to first transfer them to a brokerage account and then re
title the brokerage account in the name of your trust.
Individual Mutual funds are
similar to individual securities. You must contact the mutual
fund company and follow their directions.
If the mutual fund companies or
transfer agents require something in writing, you may want to
use language similar to this:
TO:
Dear ____________________
On _____________________ we
signed the __________________ Revocable Trust Agreement for
estate planning purposes.
This trust is a GRANTOR TRUST
as defined under the Internal Revenue Code §676 which states in
part;
The grantor shall be treated as
the owner of any portion of a trust where at any time the power
to re vest in the grantor title to such portion is exercisable
by the grantor,
We are requesting that you RE
TITLE the above referenced account instead of opening a new
account because:
- The address and all other
records stay the same;
- The social security number
(which is the tax id of the trust) remains the same;
- The cost basis remains the
same; and
- The authorized signers
remain the same
This account should now be titled _________________ &
_________________, trustees or successors of the _______________
Revocable Trust Agreement dated ________________
We have attached a signed and
notarized copy of the Certificate of Trust. If there is any
problem with the above request for funding living trust, please
give me a call at _______________. In addition please confirm
this change in writing to me at the address below.
Please check back soon for part
3 in the series Funding Living Trust on Retirement Assets and
Life Insurance.
