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How to Transfer Bank Accounts to a Trust

Curious about how to transfer your bank accounts to a Trust? We answer this question and more in this guide.

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Deciding what should happen to your assets in the event of your death is a big decision. You may only trust one person to access your financial accounts and settle your affairs. To make sure your Beneficiaries can easily access your accounts and receive their inheritance, protect your assets by putting them in a Trust.

A Trust-Based Estate Plan is the most secure way to make your last wishes known while protecting your assets and loved ones. But creating your Trust is just the first step. After that, you need to fund your Trust with assets and accounts you plan to pass to someone else upon your death.

In this guide, we'll discuss the process of creating a Trust-Based Estate Plan and how to transfer bank accounts to your Trust.

Why a Trust?

While a Will makes your last wishes known and allows you to leave assets to your loved ones, Wills must also pass through Probate. A Trust, on the other hand, does not need to pass through Probate Court. This allows your assets to pass seamlessly from your Trust to your Beneficiaries or Heirs.

A Trust takes over the ownership of your assets. This can include your house, business, precious valuables, bank accounts, and anything else you may want to pass onto someone else. This change of ownership makes it possible for gifts to go directly to their intended recipient without the unnecessary hold ups that come with Probate Court.

Not all bank accounts are suitable for a Living Trust. If you need regular access to an account, you may want to keep it in your name rather than the name of your Trust. Or, you may have a low-value account that won't benefit from being put in a Trust. In the state of California, for instance, you may hold up to $166,250 in assets, property, or accounts outside of a Trust and still avoid Probate. But if you have over $166,250 in your account, you should consider transferring it to your Trust so that your Beneficiary can receive their inheritance outside of Probate.

To leave your bank account to someone else while keeping it out of a Trust, add a payable-on-death Beneficiary to your account. That way, when you pass away, the remaining contents of your account will automatically transfer to your Beneficiary.

How to Transfer Bank Accounts to a Trust

Wanting to ensure that your loved ones are taken care of is one of the biggest reasons people feel compelled to create an Estate Plan. A Trust keeps an account secure until the time comes for it to pay out to your Beneficiaries. You may use any or all of your accounts to fund your Trust—checking or savings accounts with banks, credit unions, and savings and loan associations.

When you are ready to transfer the ownership of one or more of your bank accounts to your Trust, there are three general steps taken to make it official:

Contact your bank

Each bank has requirements for transferring your bank accounts to a Trust. This process can be straightforward or more involved. It depends on the rules of your financial institution.

Once you've decided to get the process started, contact your bank to find out what is required. You may need to write a Letter of Instruction requesting that the name on your account be changed to the name of your Trust. Include your bank account number, the name of your Trust, your Social Security number, mailing address, phone number, and email address.

Deliver your Letter of Instruction to your bank, financial adviser, or lawyer, along with your Trust agreement. If you cannot hand-deliver the items to your bank, mail them to the branch where you initially opened your account.

Your bank will provide you with all of the necessary forms to fill out and return. These might include new account forms, signature cards, Trustee affidavits, and the Certificate of Trust.

Complete the Certificate of Trust

This is a two-page document provided by your bank that lists the general information about your Trust—the name of the Trust, your Social Security or Tax ID number, and a list of current Trustees. Your bank may ask to see the first and last pages of your Trust to verify its date and that it was notarized. In some cases, your bank may request a complete copy of your Trust. This proves that the Trust is real and establishes who the Trustees are.

While the Certificate of Trust does contain basic information about your Trust, it does not include details about the distribution of your Estate.

The bank finalizes the change of ownership

Once you have confirmed the changes you want made to your accounts, the bank will initiate the change of ownership. Once this happens, your account statements will list the name of your Trust in place of your individual name. If you named yourself as the initial Trustee, your bank account will list your name as Trustee in place of your individual name.

Most banks can finalize the change in ownership to the Trust and keep the same account numbers. However, some banks may require new account numbers for your Trust.

Create Your Trust-Based Estate Plan

A Trust-Based Estate Plan is the most comprehensive and complete way to protect your assets and loved ones in life and death. It allows you to make your last wishes known, including who will gain access to your financial accounts in the event of your death or serious injury.

Trust & Will can help you create a Trust online in less than 15 minutes. Our online Estate Planning documents are customized and state-specific, created by knowledgeable attorneys. There is also help available to advise on best practices, tax implications, and how to fund your Trust. Click here to get started.

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