• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Beneficiary assignment in a living trust and do you have to list the assets of a trust in the trust document

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

DyaDya

New member
What is the name of your state? California...


Do the assets of the trust need to be accurately described in the trust. I was thinking all i need to do is have a letter to the executor that describes all my property which i update frequently and the executor would be able to find everything. Another way to say this is if i make a trust and list my assests and then change a lot of the institutions holding my assets and thus their accounts and maybe buy or sell a property, (without updating the trust), does that somehow affect my trust's intentions. Of course we are assuming I always properly name all new accounts going forward. But they won't be up-to-date listed on the trust. And if this is the case why do assets have to be listed in the trust document? (maybe they don't as long as the executor knows where to find them).

As a follow up to this question I am making my first attempt at a trust with nolo press willmaker 2020 software. It wants you to assign a listed asset to a beneficiary. I look at my trust as what will be eventually be one pot, (even though there are at least 10 items in it).
I want to leave about 10% of my estate in named dollar amounts to specific people. I want my residual to go to 5 charities and I can list those as percentages of the residual. So I don't want to say bank account xyz goes to friend W. I want to say $10,000 goes to friend W. At least in my head this makes perfect sense and fully covers everything. So i am thinking about simply re-writing the beneficiary section to something like:
(say my name John Smith)

Myfriend One shall be given $50,000 worth of John Smith's interest
in the trust property in a combination of cash and/or publicly
traded stock.

Myfriend Two shall be given $75,000 worth of John Smith's interest
in the trust property in a combination of cash and/or publicly
traded stock.

MyCharityOne and MyCharityTwo shall be given John Smith's
interest in the trust property not otherwise
specifically and validly disposed of by this Part as
follows: MyCharityOne shall receive a 3/4 share;
MyCharityTwo shall receive a 1/4 share.

Does this pose any problem? My executors would have a letter of instruction and how to liquidate the trust. And there would be plenty left as a residual for the charities.
 


Taxing Matters

Overtaxed Member
The trust has to OWN the assets for the trust to be able to do anything with them or have any power to distribute them. So simply telling the trustee what assets you have and where they are won't be good enough. For financial accounts (bank accounts, CDs, stock and bond accounts, etc), you need to have them titled to the trust (or have the trust made the pay on death (POD) beneficiary of them with the institution). With a car, boat, real estate, etc., you need to have them titled to the trust. So, for example, for real estate you'd record a deed showing the transfer of the property to the trust. For personal assets (furniture, jewelry, etc), you need to give them to trust, which should be documented with a letter of contribution or something similar that tells the trustee what personal items it now owns. Note that a will and trust are two different things.
 

TrustUser

Senior Member
for a titled asset (real estate, bank account, brokerage account, etc.) to be a part of a trust, said asset needs to be titled in the trust. you can place personal assets in your trust, as well.

i dont know specifically about nolo, but most people do not leave their assets to individual beneficiaries. that is not to say they dont leave any of their assets that way. but the majority of them are typically considered a part of the pot. and then the pot is distributed in some way.

so it seems unlikely to me that nolo is demanding that you place a beneficiary to an asset. they may just be giving you that option for whatever asset you want to list

i would never write my assets within the trust document. it is common to have a separate sheet (sometimes referred to as a schedule) that lists those assets, and keeps them updated. it has nothing to do with legalities. it just gives the successor trustee some knowledge on what is supposed to be in the trust
 

LdiJ

Senior Member
From the language you used in your original post, it almost seems as if you are mentally mixing elements of a trust with elements of a will. A will and a trust are two separate things. For example, you could have a will that leaves specific things to specific people, but you would not typically have a trust that does so. Typically the beneficiaries of a trust would be entitled to a percentage of either the trust's income or the trust's assets, depending on how the trust was set up.

You could also have a will, with an executor, that leaves all of your assets to a trust. That trust would then have a trustee to handle the assets and a beneficiary (or beneficiaries) who would benefit from the trust.

You possibly need to do some more studying (and possibly consult an estate planning attorney) before you proceed much further.
 

DyaDya

New member
Thanks for your replies and yes of course everything is to be properly titled etc etc. TrustUser, your response about the schedule made sense to me and based on that i found an article that basically said as much. So I am now confident the schedule can be "helpful" but what's in the trust is in the trust and that's the bottom line, (whether or not its actually documented correctly anywhere or not). Nolo has a few way ways to do beneficiaries sort of in a mutually exclusive way once you go down a path and not very flexible. And one of the ways is to cherry pick assets to bequest. another is percentages of assets and another percentages of the whole pot. I want to do a combo. Specific cash amounts to specific people and the residual by percentage to charities. (Not at all worried the pot will be short for a residual). So I have to write my own bequest section. and i won't worry about the accuracy of my schedule. (of course i have to have a way for the executor to know where everything is but it doesn't have to be that particular schedule.) So I was going to use wording as mentioned in my original post. The intention of my example would simply give 2 friends some specified cash each and split the residual between 2 charities. And i was wondering if that language would be appropriate.
 

Dandy Don

Senior Member
You have made a valiant effort to do research to help you decide what you want.

However, no one can really understand what the exact definition or meaning is of what "John Smith's interest in the trust property" is.

You do not necessarily need a will AND a trust. It may beneficial for you to have just a trust if you don't want your bequests made public (since a will would be public record). Take the documents you have to a trust attorney and explain what you want to accomplish and the attorney can answer all questions you have and provide you with the exact terminology that will be needed to achieve exactly what you want. The attorney will be happy to see the effort you have already put into your estate planning.

And after you have the trust document you really should discuss your situation with whoever you have decided will be the trustee so that the trustee will know where the trust document is.
 

TrustUser

Senior Member
personally, i would try to keep my trust distributions as simple as possible

if i am going to give friends some money, i would either give it to them outright, while i am alive, but knowing that i dont have much time left

or simply open up bank accounts with them as the beneficiary.

and then leave the trust document for my main beneficiaries
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top