“Funding a Trust Gets You Across the Goal Line”

By Marty Bodnar

In a previous blog, about “How to Score a Touchdown with a Living Trust” where we mentioned that funding a trust is important to scoring a “touchdown.” Let’s further discuss the funding process to get across the goal line and avoid probate.

For each client, an excel spreadsheet of their assets is created. We review it with you throughout the process to make sure all your assets are on it. In the past, clients have forgotten about a vacant lot in Arizona, an undivided interest in a cabin or those U.S Savings bonds sitting in a safe deposit box. If one asset is forgotten and not titled properly, probate will be looming in the future.

Invariably, clients’ assets consist of things like bank and brokerage accounts, stocks and bonds, real estate, businesses, retirement and life insurance, household goods and furnishings and motor vehicles.

Bank and brokerage accounts can be retitled directly into a trust or the trust can be named beneficiary through a Payable on Death (“POD”) or Transfer on Death (“TOD”) designation. Our recommendation on this choice is on a client-to-client basis.

If your stocks and bonds aren't worth much, we often advise selling them if they're not held in a brokerage account. It is lot simpler to sell them than to retitle them.

 Regarding real estate, at signing, clients sign deeds conveying their real estate to the trust directly or upon death through a ladybird deed. If the real estate is located outside the State of Michigan, we advise contacting a local attorney to prepare the deed(s).

We also have clients sign assignments transferring shares in their businesses to the trust directly or upon death through a “TOD” designation. 

With retirement and life insurance, at signing, we instruct clients in writing on who should be named the primary and secondary beneficiaries. 

For household goods and furnishings, at signing, clients sign an assignment conveying all such property to the trust. 

Regarding motor vehicles, under Michigan law, all cars and boats can be transferred at the Secretary of State’s office directly to a family member without probate involvement if the value of all such vehicles is under $60,000. 

If you’re interested in learning more about funding your trust and crossing the “goal line,” please call Marty Bodnar, Ann Arbor estate planning attorney at 734-665-4441 or email him at mbodnar@psedlaw.com.