Title of Your Assets
How you hold title to assets is extremely important and should be reviewed each year. There are two different ways you can hold assets with respect to a revocable trust: 1) Titled in the name of the trust and, 2) Attach a beneficiary directly to your asset.
To assure your assets are titled in the name of the trust, the title or heading of the asset must include the trust name. Simply listing an asset on your schedule “A” does not automatically place the asset in the name of the trust. In order to title an asset into the name of the trust , a request to the custodian of the asset needs to be made. For example, if you owned real estate, a Quitclaim Deed would have been prepared. These documents should be submitted to the appropriate County Recorder’s office in order to transfer title of the asset.
The second category refers to assets such as IRA’s, 401(k)’s, annuities, and any other asset that has (contingent) beneficiary. In the case of a married couple, the spouse is the primary beneficiary and other heirs or the trust should be the secondary beneficiary. It is a good idea to examine the beneficiary designations every year to assure the beneficiary indicated is the individual or entity you wish to have the asset pass to upon your death. Please bear in mind that if the trust is not the beneficiary of the asset, the terms of the trust will not control the distribution of the assets.
The main purpose to have a revocable trust is to avoid probate. If there are any assets that fall into this category, it is vital that you transfer title into the name of the trust as soon as possible
As you can see, there are a few way to hold title to an asset, but not all are going to be beneficial. If you have not verified how you hold title within the last few years, now is a good time to make certain the asset is titled in either the name of the trust or has a valid beneficiary designation attached to it. If you have questions, please feel free to contact here at American Family Legal Services Inc. and we will be able to assist you in this matter.