My estate planning attorney has set up a family trust and I want to transfer my checking account to it. When I called my bank, the gentleman whom I reached told me he could have the new checking account set up for the trust in no time flat, and I could transfer whatever I wanted into it.
Why can't I just have them change the title on the account and be done with it? They already told me they could use my social security number so I don't need to apply for a new taxpayer number. Why do they have to complicate matters?
Your attorney could tell you that just creating the trust doesn't accomplish what you're trying to do -- you have to transfer assets into the trust to make sure that your assets are handled as you have planned when you die. If it's not very clear that you intended to move funds and other property from your personal ownership to that of the trust, someone who thinks he or she ought to have a piece of your estate (a creditor or an alienated relative, for example) might argue that whatever was in the trust's checking account actually belonged to your estate because there is no transaction that clearly shows the movement of assets.
The bank has its own reasons for wanting to have a clean break between the accounts, not the least of which is to avoid getting caught in the middle if a dispute were to be raised. Transferring the funds is simply a cleaner, easier way to document your intention to move assets into the Trust. It may be a short-term hassle, but it will avoid problems in the future.
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Your attorney could tell you that just creating the trust doesn't accomplish what you're trying to do -- you have to transfer assets into the trust to make sure that your assets are handled as you have planned when you die. If it's not very clear that you intended to move funds and other property from your personal ownership to that of the trust, someone who thinks he or she ought to have a piece of your estate (a creditor or an alienated relative, for example) might argue that whatever was in the trust's checking account actually belonged to your estate because there is no transaction that clearly shows the movement of assets.