After you have properly signed your trust, it’s up to you to make sure that the property you want to be governed by your trust is in your trust estate. Your trust estate is the collection of assets that will be managed by the trustee, distributed to the beneficiaries and subject to the restrictions you have placed in your trust document. To check what property is in your trust estate, you can check the title to your assets which will be the name on your accounts or the name on any ownership documents such as a deed.
If the title to your asset is “Name of trustee, trustee of the Name of Trust,” then your asset is a part of your trust estate. So, where Minnie Mouse is the trustee of the Minnie and Mickey Mouse Family Trust that they signed on January 1, 2010, and their stock account is titled as” Minnie Mouse, trustee of the Minnie and Mickey Mouse Family Trust, udt January 1, 2010,” that stock account would be subject to the terms of the trust document. If the stock account is titled as “Minnie Mouse,” it is not subject to the trust terms of the trust document.
There are many factors to consider when deciding which assets to put into your trust estate. Most of my clients want as many assets as possible to be governed by their trust in order to gain the most benefit from setting up the trust. However, what you put into your trust is a matter of your personal wishes. Some assets cannot be place into a trust estate, and some can be but it may not make the most financial sense to put them into your trust estate. In order to make your distribution scheme work the way you would like, you may need to name one beneficiary on one account and give another a larger portion of the trust distribution. Some clients want a particular piece of real property to go to one beneficiary and then balance the rest of the distribution accordingly. The main objective is to balance your entire estate (trust assets and non-trust assets) so that you give the percentages to your beneficiaries that you plan to.
Every time you open a new account or acquire a valuable asset (such as a house, stock account, collectible art, etc.), and if you want that asset to be governed by the terms of your trust, you need to take the title as trustee of your trust. I recommend that you check over your trust document and your financial accounts on an annual basis to make sure that they reflect your current wishes.
This area of estate planning is a mine field for problems. While I am happy to give you direction and advice, please remember that it is your responsibility to make sure that the titles to your assets reflect your wishes.
Originally posted by Susan on February 18, 2013.