Page 50 - Successor Trustee Handbook

CHAPTER 12

MAINTAINING TITLE TO ASSETS,

TRANSACTING BUSINESS & PAYING EXPENSES

As a general rule, all assets should always be properly titled in the Trust.
Typically, the ownership should reflect the following or similar wording, “your
name, Trustee of the _______ Trust dated _______.” The most notable
exceptions to watch out for are retirement accounts, IRAs and annuities.
The transfer of title to these assets into the Trust may cause adverse income
tax consequences. You should check with your attorney, financial advisor
and/or CPA who is familiar with the intricacies of these accounts before
attempting to re-title them.

All moneys received should also be deposited into an account in the name
of the Trust, including income from investments and proceeds from the
liquidation or sale of assets. An interest bearing checking account should be
opened for the Trust, if none exists in the Trust name. Never place any assets
or moneys received into accounts in your own name, even if you intend to
transfer them later to a Trust account. The only exception to this would be
where there is a brief interim period between the date of disability or death
of the Trustor and the opening of a Trust account, or between the date of
disability or death and the transfer of an existing account already in the
Trust into your own name as Trustee.

Sometimes, all assets of the Trustor are not in the Trust at the time of his or
her disability or death. This may, depending upon the circumstances, require
you to take action to transfer title to those assets into the Trust. Certain
assets outside of the Trust may be held in joint tenancy or have a beneficiary
designation, in which case they may pass outside the Trust “by operation of
law” directly to the other joint tenant(s) or beneficiary(ies). Even though
these assets may pass in this manner, it may be possible that the Trust (or
the Trustor’s estate) has a claim for a portion or all of the assets; you may
need to investigate the source of the funds that created or maintained that
asset and with the help of an attorney, determine whether there is a claim
that you, as executor or Trustee, may need to make on behalf of the estate
or Trust. Assets that stand outside the Trust in the Trustor’s name alone may
be transferable into the Trust through a simple affidavit process not
requiring court approval.

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