How to transfer property into Trust.
I cannot over state how important it is to have a fully funded revocable living trust. A fully funded trust means that you have transferred all of your assets into your trust. An unfunded or partially funded revocable living trust means that those assets that you do not transfer into your trust must go through the probate process at a courthouse.
Now, to transfer assets to your trust, you must exist the new deeds to real estate, signature cards for bank accounts, change beneficiary forms and designations for pet pension plans, individual retirement accounts, and life insurance policies.
Basically anything that has a title with your name on it has to be changed to the name of the trust. Now, we provide trust funding as a service, but many people don't want to go through the expense of having us do it and that's okay. For a small estate, that might be all that's needed, but if you have different assets and different locations and at different financial companies, then you should probably have a professional assist you with that.
In Oklahoma, I generally see most people have cash accounts, life insurance policies, and mineral interests. So, let's go through each one of these individually. If you've had an attorney draw up your revocable trust, then you most likely have either a certificate of trust or an affidavit of trust. We actually like to give you both documents. What this document really states is that you actually have a trust and it's notice to the world that you have a trust without divulging the details of the actual trust document itself.
So, with cash accounts like a bank account, all you need to do is generally take this certificate of trust to your bank and tell them you want to change the name on your account to the name of your trust. Most banks will allow you to keep the same account number and will just change the name or the title of your account.
Now, with a CD or a certificate of deposit, you need to be careful and check with your bank before you change the name on the account that owns the certificate of deposit, and that's because CDs generally have a early withdrawal penalty and changing the name of a certificate of deposit could, in the eyes of some banking institutions, be an early withdrawal. So, you may just need to wait until the CD matures and then when you a purchase a new one or you roll it over, make sure the new certificate of deposit is in the name of your trust.
Now, it really kind of depends on whether you want your heirs to get a lump sum of money or you want the money to be spread out over several years. If you want the money upfront for them to get it as a lump sum, then you will probably want to designate your beneficiary for your life insurance policy as your heirs and then the secondary, the back-up beneficiary being your trust. However, if you are like most people, and you don't want your heirs to get a lump sum of money immediately, then you should probably name the trust as a beneficiary and in the backup, the secondary beneficiary as your heirs, that way the money will be distributed according to the term of the trust.
Now with mineral interests it really depends on whether or not you own the mineral interest or you lease them. If you own the mineral interest then you need to execute some sort of a deed to transfer your ownership to the name of the trust. If you lease the interest, the mineral interest, then you need to sign your lease interest to the name of the trust.
You really need to discuss these with either your attorney, your CPA, or your financial planner to make sure, make certain that you are making the correct decision for your particular situation.
There are no two situations that are exactly alike, and that is why when you come to us we customize in a state plan that is tailored to your specific needs. So to get you started, I invite you to download our estate planning strategies guide.