Checking the Assets in Your California Living Trust
You signed your living trust, chose a successor trustee, and put the documents somewhere safe. Before calling the project finished, there is one more question to answer: which assets does the trust actually hold?
Funding a living trust means putting appropriate assets under the trustee's ownership in that capacity. The Santa Clara County Superior Court's living-trust guidance identifies transferring title as a step after signing the trust. Your home, savings, investments, and retirement benefits may each need different treatment.
A useful review connects the instructions in your estate plan to the records held by financial institutions and the county recorder.
Start with an asset list and supporting records
Gather the trust and amendments, any funding instructions, recent account statements, property deeds, and beneficiary confirmations. Create a list showing each asset, its current owner, and the person or trust intended to receive it.
For each item, record whether the proposed action is complete, pending, or still needs legal advice. Keep supporting documents with the list. "I submitted the form" and "the institution confirmed the change" are different stages.
Do not assume that writing an account on a schedule attached to your trust changes the institution's ownership records. An attorney can evaluate what the trust documents accomplish and what additional steps are appropriate.
Check the deed for your home
If your plan calls for your home to be held in trust, have the ownership documents reviewed. Confirm the current title, the property description, the trustee and trust information, and whether the intended transfer was completed and recorded.
One easily confused term is "deed of trust." Despite its name, that document generally secures a loan; it is not the document used to transfer a home into your living trust. The California Board of Equalization explains this distinction.
Bring the latest deed rather than relying only on an old copy in the estate-planning binder. If you purchased or refinanced property after signing the trust, include the closing documents. Have counsel assess the ownership and tax implications before signing a new deed; trust funding is not a reason to make an unreviewed title change.
Ask banks and brokerages to confirm the result
For nonretirement accounts intended to be held in trust, ask each institution what documents and account changes it requires. Confirm the correct trustee designation and trust information with your attorney before submitting paperwork.
After processing, obtain a statement or written confirmation showing how the account is held. Compare it with the requested change, and keep a record of unresolved issues.
Also distinguish ownership from a payable-on-death or transfer-on-death designation. These arrangements serve different functions. The right choice depends on the account and your plan, so avoid applying the same instruction to every account simply because the forms look similar.
Review retirement beneficiaries separately
An IRA or workplace retirement plan should not be treated like an ordinary savings account during trust funding. Do not casually retitle it or withdraw money to move it into a trust.
Instead, obtain the current primary and contingent beneficiary designations and review them with your attorney and tax adviser. The IRS explains that retirement beneficiaries must be designated using the plan's procedures, and some plans require particular beneficiaries under their terms. Naming a trust as beneficiary also needs individualized review; it is not a universal default.
Review life-insurance beneficiary records as part of the same coordination exercise.
Understand what a pour-over will can do
A pour-over will can direct property from your estate to the trustee after death. It does not, by itself, eliminate probate for an omitted asset. The Alameda County Superior Court describes a pour-over will as directing property subject to probate to the revocable trust's trustee.
That does not mean every asset outside a trust requires a full probate proceeding. California offers other transfer routes, depending on ownership, asset type, value, the date of death, and applicable requirements. The California Courts' guide to simpler property transfers explains those distinctions. Eligibility requires a separate review.
Leave a clear record of completed steps
Keep an updated inventory with the relevant deeds, account confirmations, and beneficiary records. When opening a new account or acquiring property, check how it fits the existing plan.
Law Guardian, APC's estate-planning practice includes asset-title and beneficiary-designation coordination. To discuss whether your documents and ownership records fit together, contact Law Guardian, APC. Please wait for secure document-sharing instructions before sending financial records or account numbers.
This article provides general information about California estate planning, not legal or tax advice for a particular situation. Contacting the firm does not create an attorney-client relationship.
