Joe and Judy Grantor have three adult daughters. Their assets include: (1) a house, (2) personal property, (3) two IRA’s, (4) a stock portfolio at a brokerage, (5) a bank account and (6) a classic car parked in the attached garage of their house. The Grantors want to leave their house and contents to daughter Debbie. They want the IRA’s to go to daughter Donna, and they want daughter Darlene to inherit their stock portfolio and bank account. Their living trust contains language reflecting their intent, and further provides that any residuary estate be divided equally between their daughters.
Have they done enough? No. They should:
1. Sign and record a deed, transferring the house to the trustee of their trust;
2. Execute an assignment transferring their personal property to the trustee;
3. Amend their bank signature card to show title in the trustee, or the bank account could be set up as a Totten Trust, naming Darlene as beneficiary;
4. Name Donna as alternate beneficiary of the IRA. (Typically, they would name each other as first beneficiary;
5. Change title to the car to reflect ownership by the trustee;
6. Instruct the brokerage that the stock portfolio is to be owned by the trustee of the trust.
7. Is the car to be considered “contents” of the house, to go to Debbie, or part of the residuary estate to be divided among the three daughters? Some clarifying language should be added to the trust.
No trust agreement funds itself. Funding should be discussed with the attorney who prepares the trust agreement, and should be accomplished promptly once the trust is formed.
Jerry Kessler practices law in Santa Clarita. You may call him at 661-255-1001.