The Best-laid Plans – Funding Your TrustBy Merrell Bailey
Please learn from our clients’ hard-earned wisdom.
Periodically check the title on your accounts and assets that you believe belong to your trust. Be thoughtful every time you sign paperwork with a bank or other custodian; it is an opportunity for something to go awry.
Our dear client – let’s call her Violet – was great with paperwork. She and her husband had a trust-based estate plan for decades. Attorney Bailey would go to Violet’s house on a regular basis and review the titles on Violet’s accounts. Everything always was just how it was supposed to be.
Violet lived a very long and fascinating and wonderful life. Her granddaughter – let’s call her Mary – is handling Violet’s after-death paperwork. We anticipated a very smooth trust administration with little muss or fuss and no probate.
Lo and behold – one of the bank accounts is titled in Violet’s name as a human. Because it is in Violet’s name and not in Violet’s trust, this bank account now has to go through the probate process to transfer title to Violet’s heirs.
This bank account used to be titled in the name of Violet’s trust. What happened?
When Violet’s husband died, Violet went to the bank to remove him as co-trustee. The bank staff instead removed the account from the trust and retitled it as an individual account in Violet’s name as a human. This clerical error has resulted in significant cost, delay, and frustration for Violet’s beneficiaries and particularly for Mary.
Violet’s family – Violet’s attorney! – never guessed the title had transferred out of the trust. The bank account kept the same account number. The bank account statement showed that the title continued to remain ...in Trust…
The bank insists that Violet, who was 90 years old at the time, instructed them to move the account out of trust and into her name. Violet’s signature is on the bank’s signature card. The bank has shrugged its shoulders and will accept no recourse.
Title is important. Not all bank officers are versed in trust titling. If you have any doubts about what you are signing, or when you fill out documents pertaining to your accounts, please give your friendly estate planning attorney a call to make sure everything is right.