Once the estate planning signing ceremony is done — and the Revocable Living Trust and supporting documents are signed — other tasks still remain. Assets intended for the Living Trust – typically listed on an attached schedule – need to be formally retitled and insurance policies updated. Let us discuss.
Let’s start with the real property going into the Living Trust. Typically estate planning attorneys provide their clients with both Trust Transfer Deeds and Preliminary Change of Ownership of Reports (“PCOR’s”). You file them with the County Recorder’s office in each county where real property is located.
Bring a copy of each such document for the County Recorder to stamp as proof of filing. Also bring a check to pay the recording fees and the new $75 Building Homes and Jobs Act fees unless an exemption – such as the owner occupied residence exemption — applies.
Contact your Casualty Insurance Company to request a rider on each residence that names the trust as an additional insured. In the event of a claim the successor trustee can then obtain the proceeds. This could help to avoid a probate where the owner of the residence dies and cannot personally collect on the insurance claim.
Also consider contacting your Title Insurance Company to request a rider on the Title Insurance that insures against defects in title to name the Living Trust as an additional insured.
Next, retitle those financial accounts that you want in your Living Trust. Your attorney may have provided you with a California Statutory Certification of Trust by Trustee when you sign your Living Trust. Take this certification with you to the banks.
Brokerage companies will typically have their own in-house Certification of Trust and Account Title documents that you will have to request and complete. Most of the information needed is found on the California Statutory Certification of Living Trust.
Consider retitling your Bank Safe Deposit Box into the name of your Living Trust, provided you want the contents as part of the Living Trust. That way your successor trustee will have control in the event of your incapacity or death.
Vehicles, unless they are valuable antiques or high end automobiles are typically remain outside of a trust. Title can be held by spouses in a way that easily allows the surviving spouse to retitle in his or her name.
New Certificates of Title and Registration for Manufactured and Mobile Homes in the name of the Trust are requested from the California Housing and Community Development (“HCD”). Doing so entails completing bureaucratic HCD paperwork, surrendering the existing Certificate of Title, paying various HCD fees, and lots of patience.
Certificate of Ownership in business entities should be reissued in the name of the trust. Ownership information records for closely held corporations will need to be updated with the Secretary of State.
Income earned by trust assets is still reported using the settlor’s Social Security number on the settlor’s annual state and federal income tax returns. No Taxpayer Identification Number is needed while the settlor (owner) is the trustee.
Lastly, consider naming the Trust as the Designated Death Beneficiaries on any Life Insurance policies and Annuities so that the death proceeds are paid to and administered by the trust. The foregoing may entail naming a sub trust within the one’s Living Trust — such as the Survivor’s Trust or a Special Needs Trust, as relevant.
The foregoing touches upon some common tasks to be completed as soon as reasonably possible. It is not exhaustive. Your estate planning attorney should tell you what tasks you still need to do, so that you proceed in the right direction.