Funding Your Trust: Other Assets

by Sheryll Bonilla, Esq.

In our last article, we looked at funding your trust as it relates to real estate.  This article discusses other types of assets.

NOTE: The short form trust / certificate of trust / declaration of trust (SFT/CT/DT) (different terms for the same document) is the shorter document that confirms the trust exists and identifies the trustees, successor trustees, and trustee powers.

Banks and Credit Unions and Certificates of Deposit
The FDIC (banks) and NCUA (credit unions) have rules for what insurance protection is available according to how many owners and beneficiaries there are on accounts.

Ask yours about the protection you have whether you put your account into your trust or leave it out.

Bring your SFT/CT/DT as well as the trust agreement to the bank/credit union for their review and copy the necessary pages for the account file.For certificates of deposit, you may have to wait until the certificate matures before you can change the name on it.

Many institutions charge penalties for early withdrawal, so it’s often best to wait until the maturity date to transfer the certificate to the trust.

Other Financial Institutions, Stockbrokers, Mutual Funds, Etc.
Each will have its own policies and procedures and forms. Bring your trust agreement and SFT/CT/DT for them to copy the pages they need for their files and their review.

They will give you the forms for you to fill out to change the name of the account to the trust as owner.

Tangible Personal Property
Tangible personal property generally can be thought of as “anything you can sell at a garage sale.” These don’t have title documents showing your ownership.

Often, the lawyer who prepares your trust will prepare a document transferring all your tangible property into your trust. This allows your successor trustee to distribute, sell, or donate your belongings as you direct.

If you are also given a Memorandum of Distribution (or similar document), it’s helpful to attach photos of the items you are giving to specific individuals so the successor trustee knows what you intend to give to a particular person, writing the recipient on the back of the photo and referencing that item on the Memorandum.

Accounts Receivable and Promissory Notes
Money that is owed to you, whether the debt is or is not in writing, should be assigned to the Trustee.

Vehicles
Generally, you don’t need to put your vehicles in the trust because the County Department of Motor Vehicles will process the transfer by your heirs bringing your death certificate to prove your passing.

Luxury or antique or expensive vehicles, with certificates of ownership, however, should be put into your trust.

Life Insurance
Generally, life insurance proceeds do not go through probate unless your beneficiary predeceases you and there is no contingent beneficiary.

If you intend for children to be the beneficiary, however, you may want to name the trust as a beneficiary so that the successor trustee can collect the benefit and hold it for the children.

Minors cannot receive money and a court order appointing a conservator is needed to receive money on their behalf. Each child has to have her or his own conservator case in probate court, so this can get expensive quickly.

Naming the trust as beneficiary can avoid the need for a court-appointed conservator for child beneficiaries of a life insurance policy.

Business Interests
Consult your business lawyer to prepare the necessary documents and follow the proper procedures for transferring your interest into your trust.This article is for general informational purposes only. Please consult your lawyer for information that pertains to your particular situation.

Get the latest stories from Hawaii Filipino Chronicle straight to your inbox! Subscribe to our FREE newsletter here.