My friend's mother passed away recently. When she was going through her mother's paperwork, she found a copy of her mom's trust. It said that after her mom's death, my friend (her daughter) was supposed to get the money in her bank accounts, savings bonds, and CDs. Despite the fact that it said that right in the trust, the bank wouldn't give her the money. How could they refuse?
This is an important question. Obviously, we can't know the facts of your friend's specific case, but we can hazard an educated guess about what may have happened. There are two categories of assets: titled assets and untitled assets. To make untitled assets property of your trust, you simply say that's what you want to do either in the trust instrument itself, or in an exhibit attached to it. Assuming you are the owner of the assets being "transferred," that's all you need to do. (Of course, if you aren't the owner, describing the assets and saying you want them in your trust doesn't accomplish anything!)
Titled assets are a different story. In order for titled assets to be owned by the trust, the title to them must actually be transferred into the name of the trust. Examples would include cars, real estate, boats, bank accounts, CDs, stocks, and savings bonds. All too often, an individual will have a trust document drafted, they will execute it, then assume they're done. A competent attorney will, of course, instruct his client to transfer title to the trust for any titled assets he or she may want the trust to own, but sometimes there is simply no follow-through on the part of the client.
The saddest case we remember involved a husband and wife killed in a car/train crash. Their 20-something-year-old kids came from out of state to settle their affairs and thought it would be fairly easy and inexpensive, because the parents had told them they had a trust and that all of their assets were going to be put into the trust and no probate would be required. Unfortunately, the parents had never taken the steps necessary to transfer any of their titled assets (such as their bank accounts) into the trust, so the trust disbursement instructions could not be used for the titled assets because the trust didn't own those assets. Even worse, the parents had left a will and since they erroneously believed all their property was going to be in their trust -- not in their estate -- their will provided that any property not owned by their trust at the time of their death was bequeathed to a particular charity. In effect, they accidentally disinherited their children because they failed to take the next step after execution of the trust -- the step of transferring title of the titled assets to the trust. Trust property passes under the terms of the trust. Anything that isn't owned by the trust falls into the deceased person's estate, unless it has a payable-on-death beneficiary designation or is owned in joint tenancy with right of survivorship.
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This is an important question. Obviously, we can't know the facts of your friend's specific case, but we can hazard an educated guess about what may have happened. There are two categories of assets: titled assets and untitled assets. To make untitled assets property of your trust, you simply say that's what you want to do either in the trust instrument itself, or in an exhibit attached to it. Assuming you are the owner of the assets being "transferred," that's all you need to do. (Of course, if you aren't the owner, describing the assets and saying you want them in your trust doesn't accomplish anything!)
