Ask Terry Questions Revocable trust & checking account

Revocable trust & checking account

By Terry Savage on December 24, 2018 | Financial Planning / Retirement

My bank officer says people do not put their checking account into their trust, but you say it should be. Now, we are confused. Can you please help clarify? Thanks Terry

Terry Says

No, I DIDN’T say that!

Your ordinary checking account doesn’t belong in the name of your trust – because you probably keep a very low balance in it. That’s the reason that when your estate planning attorney set up your Revocable Living Trust, he or she created a “pour over will” stating that any assets NOT named in the trust would go into the trust at your death, for distribution per your written instructions.

Your bank CDs, mutual funds etc should be in the name of the trust.  Accounts with beneficiaries (IRAs, etc) will pass directly to the beneficiary.  And don’t put the trust as a beneficiary because a human beneficiary has better withdrawal opportunities at your death.

And stuff like your car, checking account, etc.  should remain outside the trust because otherwise you’ll have a hassle every time you try to write a check or pay a bill!

Please go back and tell your banker I agree with him/her!

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