Transferring Your Bank and Credit Union Accounts into Your Trust

Monday Mar 22, 2021

Creating a revocable living trust for yourself is a critical first step to avoid a costly and time-consuming probate of your estate following your death.  Remember, this is only a first step—you must still transfer ownership of your assets into your trust in order to avoid a probate. After creating a trust, many individuals forget to transfer ownership of their bank and credit union accounts into their trust.  By forgetting to make such transfers, these individuals risk having their financial assets in amounts exceeding a certain monetary limit go through an expensive probate to pass these assets, upon their deaths, to their intended beneficiary(ies).

Proper Vesting

So, what is the best way to get this done?  First, you should find the original or a copy of your signed declaration of trust (or trust agreement), which typically has been placed into a binder or folder of your estate planning documents, in addition to any instruction letter that an attorney may have prepared and provided to you.  Then review your declaration of trust to determine if there is a section providing how you should take title to an asset in your trust (i.e., the vesting).  If you cannot find such a section, look in any instruction letter you might have—the recommended manner of holding title should be in there.

Work with the Financial Institution

Next, make an appointment to meet with a representative at your local bank or credit union.  Bring your declaration of trust and any instruction letter to your meeting and tell the representative that you would like to transfer your account(s) into your revocable living trust.  Show the representative the section in your declaration or instruction letter stating the proper vesting for holding such accounts in your trust.  Sometimes the representative will scan your original declaration for the institution’s records—just make sure you get all originals back.

Abbreviating the Vesting

If the manner of holding title to your bank account in your trust is lengthy, the representative will often try to shorten it for the bank or credit union’s records.  While this is fine, any abbreviations should include your name as trustee, the name of your trust, the document your trust was created under, and the date of the document.  For example, the institution’s records could reflect: “John Smith, Tty of The John Smith Tr UDT 4/1/19.”  (“Tty” stands for Trustee, “Tr” for Trust, and “UDT” for under declaration of trust).  Once the representative has entered your vesting into the computer, you will be asked to sign a new “signature card” for the institution.  This should complete the process.  Thereafter, when you read your new bank statements, or sign into your account online, you will see the new vesting of your account in your trust.

Creating a trust is the first step in an estate plan.  The second step is transferring all your titled assets into the trust.  At McEntyre & von der Lieth, PC, we are ready to help you complete all the steps necessary to ensure your estate plan is complete.

The above statements are generalizations only and are not to be taken as legal advice for the reader’s particular situation.