putting a bank account in a trust

Putting Your Bank Account in a Revocable Living Trust

A revocable living trust is a powerful estate planning tool, but it’s only effective as long as you remember to fund it after you set it up. That means retitling your assets or naming the trust as the beneficiary of certain accounts. For instance, putting your bank account in your living trust is one way you ensure to fund the trust.

If you leave a trust unfunded, the estate’s assets will not pass as easily to your desired beneficiaries. The assets will still have to go through the expensive, time-consuming probate process.

Don’t let your hard work to give your loved ones peace of mind get undone. If you want to place liquid assets in a trust, you need to know how to fund a trust with a bank account. 

The Importance of Putting a Bank Account in a Trust

Creating a revocable living trust gives you a legal document that will protect your property, including your bank accounts and any other assets in your estate. You should put your bank accounts in a living trust to ensure the funds are easily accessible for your beneficiaries when the time comes to inherit.

The process of transferring your bank account to a trust requires new signature and ownership cards that retitle your bank account to the trust so that the trust becomes its legal owner. When it’s time to distribute your assets, the funds in the bank account will be paid into the trust. 

Listing yourself as the trustee on the account gives you the freedom to control all the details of the trust during your lifetime. After you pass away, a successor trustee will take over to manage the trust and its assets on your behalf. It’s crucial that you list specific instructions in the trust document to help your successor carry out your wishes. 

How to Fund a Trust with a Bank Account in Five Easy Steps:

  1. Meet with your personal banker where your account is held.
  2. Tell your banker you would like to transfer a bank account into a trust.
  3. Remove any existing bank account beneficiaries.
  4. Present an official copy of the trust to your banker.
  5. Sign new signature and ownership cards.

What Not to Put in a Trust

While bank accounts are ideal for funding a trust, there are several other accounts and assets that do not belong in a trust. For example, 401ks and life insurance policies don’t need the help of a trust to easily pass an inheritance to your beneficiaries. If you want to know more about what doesn’t belong in a trust, or if you have questions about putting a bank account into your existing trust, give your estate planning attorney at Phelps LaClair a call

Get Help Creating a Revocable Living Trust in Arizona

The most common mistake surrounding revocable living trusts is the failure to properly “fund” the trust. Now that you understand what funding a trust means, you can avoid this costly mistake! Besides funding the trust, it’s also vital to consider the role and responsibility of your successor trustee. Don’t select anyone without the proper training. 

To best protect your estate and avoid probate, have your trust drafted by an experienced estate planning attorney. It is very dangerous to create your own trust from a computer-generated “one trust fits all” form. The estate planning experts at Phelps LaClair can help you create a personalized trust that fits your needs and your situation, not a generic plan that fits the needs of someone else. 

We service Chandler, Mesa, Phoenix, Scottsdale, Glendale, and beyond. By attending our free webinars on estate planning, you can learn how to avoid the top seven estate planning mistakes and gain a free consultation!



photo by Steve Buissinne| from pixabay.com on 9/1/2021 | used under the creative commons license | no edits made

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