Many investors establish a revocable living trust in estate planning to help name beneficiaries and contingencies on inheritances. A revocable living trust allows the trustee to use the assets during his lifetime with the trust designations becoming irrevocable once the trustee dies. Establishing the trust is the first step in properly executing the estate plan. Funding the trust is the second. Investment accounts such as bank certificates of deposit (CD) must be transferred so the trust is the owner of the asset.
Go to the bank where you have the CD account. A CD account has designated terms with penalties for early withdrawal. Do this as soon as the trust is established regardless of where you are in the term of the CD.
Provide the bank representative with the CD account number, your identification and your trust document. Ask the representative what options are available to you and whether there are any penalties with the move. Most banks will open a new CD account under the trust and may even waive any penalties, though some banks will rename an existing CD account.
Fill out all appropriate paperwork for the bank. The representative will make a copy of your trust document for bank records and ask you to sign a new signature card as trustee for the trust account.
Confirm that the account is properly titled with the trust name, you as the trustee and the date of the trust. The date is imperative as people may update trusts over time outdating a previously dated trust.
Failure to move assets into the trust means that the trust is not controlling the assets, nor is the trust able to execute the assets upon death. This means the CD could be sent into probate, contradicting the entire reason for establishing a trust.
- Failure to move assets into the trust means that the trust is not controlling the assets, nor is the trust able to execute the assets upon death. This means the CD could be sent into probate, contradicting the entire reason for establishing a trust.
With more than 15 years of professional writing experience, Kimberlee finds it fun to take technical mumbo-jumbo and make it fun! Her first career was in financial services and insurance.