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LIVING TRUST

The assignment of personal items to trust.

By John Stevens, J.D.

• How to Fund a Living Trust With Royalties

A living trust is a legal entity that holds property for the benefit of someone other than the person who created the trust. The process of transferring property into a trust varies depending on the type of property. For example, transferring a house into a trust calls for a process that is different than transferring a bank account. The process of transferring personal items into a trust is a comparatively straightforward one that is accomplished with a document typically called an "assignment of personal property."

Inventorying Personal Items

It is important to take an inventory of your personal items to determine which items you want to transfer into your trust. Generally, it is sufficient to list items using only general terms, such as “household furniture, furnishings, appliances and clothing.” You should specifically identify each individual personal item that is valuable, such as jewelry, antiques and collectibles. If you intend to leave a specific item to a specific beneficiary in your trust document, you should also describe that item with enough particularity so your successor trustee can easily identify it.

Assignment of Tangible Personal Property

Remember that you are transferring ownership of your personal items from yourself, as an individual, to yourself in your capacity as trustee of your trust. Begin your assignment document with language stating that you transfer your entire interest in the “following described items” to your trust. Use the name of the trust exactly as it appears on your trust document. For example, this language might read, “I, Mary Johnson, hereby transfer my entire interest in the following described property to The Mary Johnson Trust.” List those items you identified from your inventory after this introductory language. You must now include language stating that you, as the trustee of your trust, agree to accept the personal items into the trust. This language might read, “I, Mary Johnson, trustee, hereby agree to the above assignment.” Because you are acting in your dual capacity as an individual and as the trustee, you must sign the assignment document twice. First, sign your name as you usually do. Second, sign your name, followed by the word “trustee.”

Adding Property to the Trust in the Future

The vast majority of trusts allow the person who created the trust to add property to the trust in the future. So long as you are mentally competent, you are free to do so at any time. Consider contacting an attorney if you are unsure whether you have the power to add items. If you acquire an item that falls within one of the general category descriptions, such as “clothing” or “furniture,” there is no need to make a change. If you acquire an item that does not fall within one of those general categories, such as a new valuable painting, you must create a new assignment form and list that item individually. Read More: Who Can Sign a Deed Transferring Property Owned by a Trust for the Trustee?

Special Considerations with Corporate Trustees

The person or entity in charge of a living trust upon its creation is called the “initial trustee.” The person or entity that assumes administration of the trust upon the death or incapacity of the initial trustee is called the “successor trustee.” If you name a corporate trustee, such as a bank, to serve as the initial or successor trustee, you should contact that business before transferring personal items to your trust. Some corporate trustees are not willing to handle the transfers of personal items because of the liability risk associated with such property. Unlike with titled property, such as a house or bank account, personal items can easily be carried away or hidden. A corporate trustee may not be willing to deal with the possibility of a lawsuit from disgruntled family members who contend that a valuable coin collection that was stored within your home, for example, has suddenly gone missing. If the corporate trustee objects to handling personal property, ask the trustee whether it would handle the property if you exempted the trustee from liability with respect to those items.

• Funding a Revocable Trust; Continuing Education of the Bar

John Stevens has been a writer for various websites since 2008. He holds an Associate of Science in administration of justice from Riverside Community College, a Bachelor of Arts in criminal justice from California State University, San Bernardino, and a Juris Doctor from Whittier Law School. Stevens is a lawyer and licensed real-estate broker.

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• Guide For Transfer Of Assets To A Revocable Living Trust

This memorandum has been prepared to provide you with some general information and to describe what should be done to transfer assets to yourselves as trustee(s) of your revocable living trust, or prepare beneficiary designations.

Why Transfer Assets To Yourselves As Trustees?

Objectives of the trust, including avoidance of probate administration upon your death, will be defeated if title remains in your name. Therefore, a formal transfer of title is essential.

What ‘Name’ Should Be Used?

We suggest that the title to trust assets be held by the trustee(s) in substantially the form set out in the following examples:

Co-Trustees: “John Jones and Mary Jones, Trustees of The Jones Trust dated January 1, 2009”.

Single Trustee: “Mary Jones, Trustee of The Mary Jones Trust dated January 1, 2009”.

Some institutions with whom you may deal (for example, brokerages and banks) may wish to use a different sequence of words in the trust name, or abbreviations, such as:

“John Jones and Mary Jones, Trustees UTA dtd 1/1/09”.

“Mary Jones, Trustee UTA dtd 1/1/09”.

Our discussions may refer interchangeably to transfer to “the trust” or “the trustee(s)”. In fact, legal title must include the names of the trustee(s) and the trust. A deed granting title to “The Jones Trust dated January 1, 2009” with no reference to the trustee(s) is not valid.

Taxpayer Identification Number

A revocable trust does not pay taxes. For federal and California income tax purposes, the assets in the trust are treated as belonging to you. If you file income tax returns and report trust income on your returns and if you are the trustee of your trust, the Internal Revenue Service and the California Franchise Tax Board do not require a separate tax identification number for your revocable trust.

When transferring assets, or when dealing with banks, stock transfer agents or other payors of income, you will be asked to supply a “taxpayer identification number” for the trust. You should use your social security number as the trust’s taxpayer identification number. Where a trust has been created by a husband and wife, either trustor’s social security number can be used.

Your Residence

If your residence is to be held as an asset of the trust, we recommend that you transfer title to the residence to your name(s) as trustee(s). If your residence is a cooperative or condominium apartment, we will advise you how to effect the transfer.

If title to your residence is to be transferred into the trust name, please give us a copy of the current deed to your residence containing the “legal” description of the residence and the assessor’s parcel number. We will prepare a new deed showing you as the grantor(s) and the trustee(s) of the trust, in the form suggested on page 1, as grantee, and we can then arrange to record the new deed. Under current law, transfers of property to a revocable trust will not result in reassessment of the property and we will file with the assessor the necessary form claiming this exemption.

Other Real Property

If you own other interests in real property you should consider including those interests in the trust. You must sign a deed for each separate real property interest that you transfer to the trust. Please supply us with copies of current deeds to these properties.

Checking Accounts

Because of possible inconvenience, we do not recommend changing the name of your day-to-day small checking accounts. If the total assets you retain outside the trust are less than $100,000, California law permits transfer after death by “declaration” and without formal probate.

Savings Accounts

We recommend that your savings accounts be held by the trustee(s) of the revocable trust. Any bank or savings and loan association savings account or certificate of deposit should be transferred to the name of the trust in the form suggested on page 1 of this memorandum. You should discuss transfer of these accounts directly with the depository institution who will complete its internal paperwork for you.

Securities Accounts

You should register any securities account in the name of the trust, as suggested on page 1 above. You should talk directly with your broker who will prepare a new account agreement for your signature.

Marketable Securities Not Held In Brokerage Accounts

Any securities not held in a brokerage or custody account should be re‑registered in the name of the trust in the form suggested on page 1. To transfer any stock certificate which you hold, you are generally required to submit the stock certificates, along with an executed assignment (either on the reverse of the certificate or an Assignment Separate From Security) with your signatures guaranteed by your stockbroker or bank, to the transfer agent with instructions to reissue the certificate to the name of the trust.

Securities In Closely Held Companies

To transfer to the trust any shares of stock in a closely held company which is now held in your name(s), you should instruct the secretary of the corporation to issue new certificates in the name(s) of the trustee(s) in the form suggested on page 1. Existing certificates should then be cancelled.

Investments In Partnerships

Some partnership agreements may not permit an investor to transfer his or her partnership interest to a trust that the investor has created. If you are considering the transfer of any partnership interest to your revocable trust, you may want us to examine a copy of the partnership agreement and any amendments to the agreement to determine whether a transfer is permitted. If the partnership agreement permits the transfer, you then sign an Assignment of Partnership Interest, which we can prepare. Some partnerships also impose a fee for a transfer. It may also be necessary for the partners to sign a consent to the substitution of the trust as a partner.

Beneficiary Designation Assets

Certain assets such as life insurance, retirement plans and accounts, and annuities pass under beneficiary designation forms filed with the respective companies rather than under your will or trust.

Life Insurance Policies

It is not necessary to transfer ownership of life insurance policies to a revocable living trust. Life insurance proceeds are not subject to administration in a probate estate when a beneficiary other than one’s “estate” is named on the beneficiary designation form filed with the life insurance company. It may be satisfactory to retain your current beneficiaries (so long as your “estate” is not your beneficiary), or you may wish to name the trustee as beneficiary. We recommend that you discuss with us the appropriate beneficiary.

To change the beneficiary designation on personally owned life insurance policies, you may write to the company and ask for “change of beneficiary” forms, or you may ask your life insurance agent to handle the changes.

Employee Benefits And Retirement Plans

We recommend that you discuss with us the choice of a beneficiary of the proceeds of retirement type accounts, including Individual Retirement Accounts, Keogh plan accounts, 401(k) accounts, company pensions, deferred compensation accounts, and other retirement accounts. The employed spouse should generally name the other spouse as the primary beneficiary and other individuals, such as children or the trust as contingent beneficiary; if the trust is so named, the account can be made payable to the trustee(s) in the form suggested on page 1 of this memorandum. The law currently requires strict compliance with the formalities of signing certain types of beneficiary designations. Income tax consequences vary depending on the beneficiary designation. In particular, naming the trust as beneficiary of an IRA or other retirement type account can have adverse tax consequences. We strongly recommend that you discuss the beneficiary designation with us or other tax advisors.

Annuities also pass under beneficiary designations rather than under your will or trust. These beneficiary designations are tax sensitive, so please discuss these with us or your other tax advisors.

We hope that the above information is helpful to you. Please let us know if we can be of any help in transferring your assets to your revocable trust or preparing beneficiary designations.

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How Do I Put Property, Money, and Other Assets in a Living Trust?

By FindLaw Staff | Legally reviewed by Aisha Success, Esq. | Last reviewed July 04, 2024

Legally Reviewed

This article has been written and reviewed for legal accuracy, clarity, and style by  FindLaw’s team of legal writers and attorneys  and in accordance with  our editorial standards .

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our  contributing authors . We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please  contact an attorney in your area .

This article provides basic instructions on how to fund a living trust with different types of assets. Your method depends on the type of real property, personal property, investment, business interest, or other assets you want to transfer.

A  living trust  is less expensive and time-consuming to create and manage than many other types of trusts. Its primary benefit is that trust assets will not need to go through the time-consuming probate process.

Living Trusts

Trust assets can transfer to beneficiaries on death or at a specified time. A trust has several other benefits as well, including the following:

• After death, a trust can reduce or eliminate state and federal estate taxes.
• If the decedent owned real estate in more than one state, it can all be placed into the trust to avoid ancillary probate in multiple states.
• It requires only one document to provide instructions for distributing all types of assets.
• A grantor can choose to have the trust professionally managed for maximum income-earning potential.
• The trustor can specify beneficiaries. They also can specify when and under what conditions they will receive their inheritance.
• Assets held in the trust can sometimes be protected from the beneficiary's creditors, divorcing spouses, and even their own irresponsible spending.
• There is no public record for trust documents, so it provides privacy for heirs. The probate process does not.

The trust funder is called a  grantor  or  settlor . Most living trusts are  revocable trusts  set up during the trust funder's lifetime. This  type of trust  does not act as a tax shelter or provide asset protection from creditors. However, the trust funder is usually the trustee and retains control over the assets.

The grantor has control over the trust assets and can take the following actions during the grantor's lifetime:

• Designate beneficiaries
• Change the terms of the trust
• End the trust at any time

You can provide directives for minor children, those with special needs, a surviving spouse, or any other individual or entity.

Once the trust funder dies, the trust becomes  irrevocable , and those assets in the trust are no longer taxable. Any income tax would be the responsibility of the trust. You can set up a  testamentary trust  in your last will and testament.

Funding a Revocable Living Trust

Drafting a living trust  document is only the first step. For the trust to effectively distribute assets after death, the grantor must transfer assets into the trust. There are many methods that a grantor may use to transfer assets into a trust, including the following:

• Title transfer
• Assignment of ownership
• Opening new accounts
• Assignment of rights
• Incorporating a pour-over will
• Naming the trust as a beneficiary

These are the most common methods used to transfer assets into a trust.

You may incur fees and taxes by transferring real estate into a living trust. It depends upon state law requirements.

Some states charge a nominal fee. Other states consider transferring a property into a living trust to be the same as a sale at full market value. In those cases, the transfer creates a significant tax liability. It's wise to consult a tax advisor before transferring real estate. This will allow you to understand the financial consequences and tax planning necessary for the transfer.

Transferring property typically requires the grantor to file a quitclaim deed. A grantor files a quit claim deed with their county clerk, which transfers the property to the trust. You may need to file a copy of the trust document, a Memorandum of Trust, or a Certificate of Trust with the quitclaim deed.

If the property is part of a homeowners association (HOA), you may need permission from the association. You may need the lender's consent if the property has a mortgage.

Title Transfer or Retitling

A title document proves vehicle ownership. There may be two options for transferring title (depending on the laws of your state):

• You may be able to retitle the vehicle to the living trust, listing the trust as the owner.
• You may designate the trust as a beneficiary of the title after death.

Transferring the vehicle's title could result in substantial taxes and fees. It could raise your insurance premiums. The vehicle title transfer may require a lender's approval if there is a lien on the vehicle. Before you begin the process, you should talk to your insurer, lender, and tax advisor.

Retitling assets to the name of the trust is an effective estate planning tool. You can retitle certain assets and place them in the trust. These include the following types of assets:

• A brokerage account
• Certificates of deposit
• Investment account
• A nonqualified annuity

Stocks and bond certificates can be reissued in the name of the trust, though this is complex. Ask your broker for advice on how to do this.

You can retitle business interests in the name of the trust. These include:

• Business partnership interests
• Shares in a limited liability company (LLC)
• Shares in a corporation

Check the partnership agreement, operating agreement, or articles of incorporation for instructions. These documents will also outline any transfer restrictions.

Assignment of Property Interest

Most property does not come with proof of ownership. In some instances, you can transfer ownership of personal property, such as:

• Collectibles

You may be able to accomplish the transfer of personal property with an Assignment of Property Interest document. There is, however, no standard form.

You must create the form stating precisely what you are transferring to the (named) trustee of the (named) trust. Sign and date the form. You must sign it once as the person assigning the properties to the living trust and once as the trustee. Include the word "trustee" after that signature. You may wish to have the form notarized.

You should also list all this property on a page of the trust document called Schedule A or Exhibit A. Describe the property in sufficient detail so that any successor trustee will be able to identify the property upon the grantor's death.

In addition to personal property, the following assets can also be assigned to a living trust in this matter. These assets include:

Consider including identification numbers where relevant. Notify the royalty company of the transfer of ownership.

Transfer of Insurance Policies

A grantor can name a living trust as a life insurance policy's owner or beneficiary. However, in some states, the cash value of a life insurance policy is only protected from creditors if a person owns the policy. Transferring the policy's ownership to the trust could cause you to lose that protection. Ask your insurance agent about the consequences for your situation.

Transfer of Bank Accounts

As for bank accounts, the bank may require you to close the account and reopen a new account in the name of the trust. These accounts can include:

• Savings accounts
• Checking accounts
• Money market accounts
• Certificate of deposit (CD) accounts

It may be advisable to wait for any CDs to mature. You can use the cash in the CD to open a new CD in the trust's account.

Assignment of Rights

An Assignment of Rights is a legal document. It's used to make your trust the recipient of your payments from oil, gas, and mineral rights in properties you do not own. If you own the property, it may be easier to change the deed. An Assignment of Rights document can also direct payments for outstanding loans owed to the grantor into the trust fund.

Funding an Irrevocable Trust Through a Pour-Over Will

The most important tool to transfer remaining property into a living trust upon the trustor's death is by setting up a  pour-over will  before death. Any assets that aren't distributed to an heir by title or deed, or transferred into the living trust, will "pour over" into the trust.

For some assets, it's disadvantageous to put them into a trust. For example:

• Some car insurance companies will charge higher premiums for trust-owned cars.
• If a car, truck, boat, etc., is involved in an accident and the owner is liable for damages above the insurance policy limit, creditors could attach a judgment to the trust.
• Some financial institutions may not want to finance or refinance a trust-owned property or may not consent to transfer a mortgaged property into a trust.

Some assets may have been unintentionally left out of a will, while other assets may be unknown at the time of death. For example, the deceased may be owed money or be unaware that they inherited property. These assets transfer with a pour-over will.

The downside to this approach is that a will must go through the probate process, which takes time. This leaves that part of the estate vulnerable to estate taxes.

Beneficiary Designation

The following types of assets should list the trust as the primary or secondary named beneficiary of funds. The grantor must complete this step during their lifetime. The accounts payout to the trust after death.

Talk to your tax advisor or estate planning attorney to determine whether a primary or secondary designation is most appropriate. Accounts with beneficiary designations can include the following:

• Retirement accounts (the deceased will no longer be using the money in their IRA, 401(k), 403(b), pension plans, and qualified annuities)
• Health Savings Accounts (HSA) and Medical Savings Accounts (MSA)
• Life insurance policies
• As noted above, a car title can list the trust as a beneficiary

Interested in Using a Living Trust as Part of Your Estate Plan? Talk to an Attorney

It's best to seek legal advice if you want help setting up a living trust or have questions about other estate planning concerns. A local  estate planning attorney  can guide you through the entire process. They can help you set up a trust for your loved ones and transfer assets according to your directives.

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A General Assignment of Assets to one’s Living Trust can help avoid a Probate.

                 Re-titling assets, like stock and bonds, from one’s name into one’s living trust is necessary to avoiding an unnecessary probate of such assets if held outside of the trust.   Sometimes people fail to transfer some or all of their intended trust assets into their trust.   A general assignment of assets to one’s living trust provides an important safeguard. Let’s examine what a general assignment is and how it helps to fund one’s trust and avoid a probate with the help of a Lake County probate attorney:

                A general assignment of assets transfers ownership on a wide variety of assets as the name implies.   An all encompassing general assignment is regularly used by estate planners to transfer all types of financial assets (excluding tax deferred retirement accounts) and personal property (such as the contents of one’s home) into the trust. It is a half-step towards actually re-titling the securities and the financial accounts into the name of the trustee.   Nevertheless, the settlor should still proceed to contact the banks, brokerages, and stock transfer agents (as relevant) to formally transfer legal title into the name of the trustee.   But, in the event that the formal legal title is not transferred prior to death, the general assignment can be used to obtain a court order to transfer legal title into the trust.

                In Kucker v. Kucker , (2011), 192 CA 4 th , 90, the Court of Appeal reversed a trial court decision wherein the trial court disallowed a petition to transfer stocks into a trust based on a general assignment of all assets by the settlor to the trustee.   The Court of Appeal agreed with the petitioner that a general assignment of all or substantially all of the settlor’s assets into one’s trust does cause the stocks to be owned by the trustee.   An otherwise unnecessary probate was thus avoided thanks to a general assignment by the settlor.

                Similarly, a declaration of trust by a settlor to hold certain assets listed on a schedule of pledged assets attached to a trust document can likewise be used to accomplish the same result.   Most attorneys use a schedule of initial trust assets and a general assignment to reinforce one-another.   Moreover, unlike the general assignment, the schedule of trust assets will also include the real estate – together with a full legal description — for the same reason.   That is, if a trust transfer deed is not properly executed prior to the settlor’s death, then the schedule of initial trust assets to a declaration of trust can be used to petition the court to transfer legal title into the trust without a probate.

                While the general assignment and the declaration of trust are important safeguards against the failure to formally transfer title to trust assets while the settlor is still alive and competent, such safeguards are just safeguards.   The better course of action is to see that one’s real estate, stocks and bonds, and financial accounts (and other trust assets) are properly titled in the name of the trustee of one’s trust.   After all, filing a court petition entails further expenses and delay in the administration of the trust that can be avoided.   

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Adding property to your living trust

A living trust isn't set in stone. You can add or remove assets so long as you follow the proper procedures to do it.

Start your living trust today

by   Michelle Kaminsky, J.D.

Writer and editor Michelle earned a Juris Doctor degree from Temple University's Beasley School of Law in Philad...

Read more...

Updated on: April 26, 2024 · 2 min read

Tranfer of ownership of real estate to a living tTrust

Transfer of ownership of bank accounts, cash-related accounts, or securities, removal of property from a living trust.

A living trust is a versatile estate planning tool that allows you to place assets of your choice into a trust for your benefit while you're alive. Upon your death, those assets then transfer automatically to your chosen beneficiaries without having to pass through probate.

Adding property to your trust—also called funding the trust—is an essential part of creating a living trust . To fund a trust, you must transfer ownership of assets to it. But once your trust is set up, it doesn't mean you can't make any changes to it.

A living trust is indeed "living" in the sense that you can add or remove assets from it provided you do it the correct way.

Many people choose to have their home included in a living trust . To add your family home or any other real estate you own to a trust, you must change the property's title so that the trust is the new owner.

You must register this change in the county where the property is located. Generally, most fees involving a usual property title transfer are waived so long as the grantor (creator of the trust) and trustee are the same person.

Cash-related accounts include bank accounts, brokerage accounts, savings accounts, and certificates of deposit. To transfer such assets into the living trust , you must place them in the name of the trust.

You can often request this change in person at the location of the account. Alternately, you may be able to file a form supplied by your bank or brokerage firm, which requires notarization.

Transferring stocks, bonds, or other securities requires a stock power form, which you can obtain from the bank, brokerage firm, or a stock transfer agent. You must have this form notarized or have a medallion signature guarantee, which verifies your identity in the security transfer process.

You may also choose to remove property from a living trust at your discretion. The process for removal is essentially the reverse of adding it. That is, you must change the asset's title back to you as an individual instead of you as the trustee of the trust.

Depending on whether you are adding or removing property from a living trust, you should revise the property schedule to include or exclude the asset. This change may also require you to amend the trust document regarding beneficiaries and compile an "amended and restated" version.

Note that state laws vary on creating and managing living trusts, so it's important to understand what is required in your jurisdiction. This is especially true if you move and need to make changes to your trust that involve adding or removing assets involving title changes.

Consulting with an experienced estate planning attorney is highly advised to ensure that your trust is accomplishing your goals.

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