Moving Assets Into a Revocable Living Trust

Advertiser Disclosure This article/post contains references to products or services from one or more of our advertisers or partners. We may receive compensation when you click on links to those products or services.
Last updated on August 27, 2022 Comments: 27

To prepare for the idea that someday I may no longer be alive, but also as a matter of general organization, I have created a revocable living trust. The primary benefit of this type of trust is to avoid a hassle for those who may be dealing with my estate after I die. No, I don’t have a large piece of property somewhere in the south of France. My estate is just my assets — bank accounts, investments, business interests — as modest as they are. Without a trust, the process of probate could be expensive and disorderly, but with a trust, probate can be avoided altogether.

Banking Deal: Earn 1.55% APY on an FDIC-insured money market account at CIT Bank. See details here. CIT Bank. Member FDIC.

I met with an estate attorney last month, and we discussed the terms of the trust. Yesterday, the documents were complete, and I visited her office to sign the documents, including a Last Will and Testament, in front of witnesses. The general consensus is that at the age of thirty-six, I’m a somewhat ahead of the curve. People generally don’t begin to consider these things until later in life.

But I’ve been writing about personal finances for ten years; it’s time I completed some of the more fringe tasks of managing my own money.

A revocable living trust doesn’t necessarily provide any protection for your assets. Unlike an irrevocable trust, the owner (trustee) still retains control of the assets. Thus, assets in a trust still reachable by a court and they’re still counted in your total net worth when government programs determine whether you qualify for benefits. The trust is a legal document that defines what happens to your assets in a variety of situations, but is much more flexible than a will.

The benefits of a trust apply only to those assets that are placed within a trust. And that means re-titling or changing your accounts so the trust is the owner. This is a process that can be straightforward and easily completed or it can take some time, require specialized witnesses to signatures, or deal potentially with customer service representatives unfamiliar with the process.

Moving bank accounts into a trust

My first order of business is to consolidate my variety of bank accounts. At the height, I owned several dozen bank accounts. That’s not normal. I had so many open bank accounts because I’ve used my own money to test and review bank accounts for Consumerism Commentary readers, like this review of the American Express savings account. This has left me with small amounts of money in bank accounts all over the country.

I’ve been slowly closing these accounts over the past year, but I want to ensure there’s nothing left that’s not in just a few accounts. For now, those accounts are going to be Capital One 360 (formerly ING Direct), Wells Fargo (where I recently received a new debit card declaring me a “customer since 1989”), and Chase Bank (a branch opened up a few years ago within walking distance).

Capital One 360 makes transferring accounts into a trust simple. It requires a one-page form which can be scanned and e-mailed, faxed, or sent via standard mail. Other banks may have a more involved process. I’ll be visiting my Wells Fargo and Chase branches to determine what is necessary to move assets into the trust. Sometimes, banks need to see the legal document, but the attorney who draws up the trust should be able to create pages that include what the bank needs to see without sharing personal details, like how you want your assets to be distributed. That information isn’t necessary for the bank’s process.

Moving investment accounts into a trust

My primary brokerage account is held at Vanguard. I’ve closed almost all of my other investment accounts, but I still have some shares of my former employer held with E*TRADE. To move assets into a trust at Vanguard, the company requires a two-step process. First, I must open a new account at Vanguard under the name of the trust. I will receive a new account number. Then, I simply transfer all assets from my personal account to the account within the trust.

One of the forms requires a signature guarantee. This isn’t as easy to find as a notary public. This requires me to sign the document in front of someone who has a special certification, and this is a service available in not many places other than investment banks. Luckily, I found a local bank branch that does offer signature guarantees for its customers, if the particular employee who has the authority happens to be in the branch on any particular day. I’ve done this once before for a Vanguard form; I will need to do it again to move my stock and bond funds into my revocable living trust.

Moving retirement accounts into a trust

I have IRAs at Vanguard, Fidelity, and TIAA-Cref. I’ve avoiding moving these accounts from one company to another. My preference would be to consolidate them at Vanguard, and this is something I might attempt to do some day. The IRAs consist of Roth IRAs and traditional IRAs. Some are rollovers from 401(k) accounts with former employers. I have an SEP IRA from when I considered myself self-employed. I have an Individual 401(k) from when I was saving for retirement with income from my business.

You can’t put retirement accounts into a trust. With retirement accounts, however, you can name beneficiaries, and while it’s possible to name the trust as a beneficiary, one reason prevents me from doing this with my IRAs. When a trust is named as a beneficiary to an IRA, the trust must begin making withdrawals from the IRA account when the funds come into the trust. This could create a tax problem for the trust’s eventual beneficiaries. In order to avoid this, I must name individual beneficiaries for the retirement accounts. This allows the beneficiaries to roll over the IRA they receive from the estate into their own IRA, avoiding any required distributions, additional unexpected income, and the tax consequences of that income.

Moving a house into a trust

My primary residence is an apartment that I rent. If I owned a house, or any properties as investment, I would be going through the process of changing the ownership. More precisely, I’d most likely be allowing the attorney to handle those transfers. Since my trust is established before I’d be purchasing property, I may be able to buy a house as the trustee immediately, rather than purchasing the house as an individual and changing the title and transferring the deed later.

Moving a house into a trust doesn’t seem to be a difficult process, but it may be worthwhile to allow an estate attorney handle the paperwork.

Moving insurance into a trust

When you name a beneficiary of an life insurance policy, on the event of your death, the beneficiary will receive the proceeds of the policy and will avoid probate. But if the beneficiary is a minor, you may wish to name the trust as the beneficiary. Your trust can have language that allows a new trust to be established for any beneficiaries under an age you may specify — twenty-one and twenty-five are popular choices. This newly formed trust, coming into existence when you die, can set specific rules for how the life insurance proceeds (or any other assets inherited by the minor) can be used.

I do not have a life insurance policy. I’m currently the only individual being supported by my income, so life insurance is not a concern for me at the moment. That might change in the future. In fact, there may be many changes ahead. If I have children or get married, I’d be changing much of the terms of my revocable living trust. This type of trust gives me the flexibility to amend or restate the trust at any time.

While a revocable living trust can help with estate planning, its benefit is organizational. It can’t help you shelter all your assets from the estate tax. It can’t hide your wealth from creditors or the government. But it can give you an infinite amount of flexibility. You can be very specific about who receives the benefits of your estate and under what circumstances. Your trust can establish other trusts, exclude specific assets from your otherwise comprehensive plan (like a work of art someone other than your regular beneficiaries might appreciate). It can dictate your charitable desires with more flexibility than just a Last Will and Testament. And, in combination with other documents, can prepare your assets for circumstances other than your death.

Photo: Flickr

Article comments

Nicole says:

Paramount Bank has high interest checking (.85% at the moment) and it was very easy to set this up in the trust name after we set up the account originally. Just had to send a copy of the first 4 pages and all signatory pages.

Renee says:

Hi – thanks for your article. Its very helpful as I’m currently going through the process to fund my revocable living trust. I too have accounts everywhere. I’ve found Ally and Synchrony Bank to be the easiest to transfer. Unfortunately, my Capital One 360 account is not as easy as you experienced. They are requiring a trust application that has to be notarized along with my certificate of trust. The trust application is standard but I don’t see why they are requiring a notarized application when my certificate of trust is notarized? No other bank has required a notarized application. My certificate of trust was sufficient. I’m considering just closing the accounts and moving to another bank that does not require this extra step.

Anonymous says:

Can you please let us know what happened to your situation? I’m facing the same issue that you mentioned and nobody in CapOne knows about this and are asking just send the form

Renee says:

For Capital One I was told to download their trust application on their website


Exactly I have the same issue now as in they need SSNs of successor trustees without any explanation. I talked to my Estate plan attorney and she says just enter last 4 digits of the SSN if the successor trustees provide one. I would like to see what happened in your case?

Jim Mowbray says:

I would love to know how it went at JP Morgan Chase when you tried to transfer those accounts into your trust. My local branch teller informs me that is not possible.

Harry says:

Turns out that CapitalOne’s customer service has really degraded. The trust form asks SSNs of successor trustees and no one at CapitalOne could explain why they need them and they say there is no way to reach out to the concerned department for clarifications. We did not need successor trustees’ SSNs to set up the trust through our attorney.

Bob says:

Capital One started trust accounts – converting existing accounts & opening new accounts. I’ve re-titled my existing Capital One checking & savings account to trust account. Just faxed the form with notarization and it took 7 business days for them to convert. Pretty straight forward.

Bill says:

I also just called Capital One 360 to move my account into a revocable trust account. I was told the only option was to name beneficiaries. I had recently moved my accounts at Well Fargo without difficulty, just filled out a form at the bank.

Anna says:

I also just called Capital One 360 to move my account into a trust account. I was told the only option was to name the trust as a beneficiary. That doesn’t help while I’m alive and (in case) in incapacitated. Any insight to what to request?

Elizabeth Cammiso says:

Luke, you say transferring a Capital One 360 Money Market account into a revocable trust is easy. Just send in a form…well, I just called Capital One and they told me I couldn’t move the account into a trust. Any ideas…was the customer service rep wrong? Where would I get the form?

Jeff says:

So you did not mention this and I assume you would have; when transferring your assets into the trust were you required to recognize any unrecognized capital gains (or losses)?

Rich says:

No. Re-titling assets into the name of your revocable living trust does not trigger the realization of capital gains or losses.

Tare says:

What is the difference between the revocable & irrevocable trust? My husband is having surgery if he were to have to go to a nursing home could they our house away to pay for that?

Jen says:

Revocable means you can change the trust terms, change beneficiaries, add or use assets, or even dissolve the trust at any time. A Revocable Living Trust remains revocable until you (or you and your spouse) die. Then it becomes irrevocable, and can no longer be changed, but only distributed under its terms at that time. You want to set up a Revocable Living trust to retain control of your assets until you die. Hope that helps

Anonymous says:

As you know I “live” in this world and am shocked when I see anyone, nevertheless, a 36 year old fun a Revocable Living Trust. I think it is more important to know whether the document matches your testamentary intent.

For example, did your attorney provide you with an “English” translation of the document that tells you exactly what is happening to your assets?

Anonymous says:

Have you thought about purchasing a term life insurance policy now when you are young and healthy to lock in a lower rate? Just a thought?

Anonymous says:

I don’t see why a revocable living trust is really better than simply designating beneficiaries on your bank accounts & retirement accounts. Accounts with designated beneficiaries should avoid probate as well. Seems like your trust is just designated as a beneficiary of bank accounts, brokerage accounts & retirement accounts.

Probate differs a lot state to state so I think its important to check into your states rules. Its a lot worse in some states than others. States often waive probate for estates with values under a certain amount so a lot of people won’t have to do it.

Luke Landes says:

One way it can be better than just naming beneficiaries (or payable-on-death features with some savings accounts) is its flexibility. Rather than naming a beneficiary outright, you can include your assets in your overall plan, which might include charities, trusts that explicitly lay out how beneficiaries can access the funds, backup beneficiaries, etc. If you change your mind, or have some kind of event that would change your plans for your estate, you just change the trust document rather than changing your beneficiary designations on a variety of accounts. You living trust can create trusts… so instead of the possibility of your estate going to someone who is a minor, for example, outright, the documentation can specify exactly when and how your funds can be used by the heir. The possibilities are endless, unlike with having just a will or by naming beneficiaries.

Anonymous says:

Well no, the possibilities are close to endless in a will as well.

Jen says:

It is really helpful when your beneficiaries are minors, or too young to be inheriting large sums of money. For example, we had our trust as beneficiary of our life insurance, so it would be held under the terms of our trust, which enabled funds to be provided to guardians until the kids are 18, provided college funds for each child, then distributed their portion of their remaining funds at age 30. You might not want your 18 year old inheriting half a million dollars. :0

Anonymous says:

I’m so interested in a minor detail of this story. Why do you still rent? Are you not so tied to NJ? You can follow up with me offline.

Anonymous says:

I’d expect after running numbers it makes more sense to rent vs buy. It is that way in a number of the areas around where i live.

Luke Landes says:

That’s a part of the reason, but when it comes down to it, I haven’t had the need or desire to maintain a property and I haven’t had a strong desire to “settle down” in any particular area, nor become a landlord if I buy a house and then move soon after.

Anonymous says:

Okay but that’s the beginning of my intrigue. You’re location independent. Why not pick up and try a new city for a while? Why not stay in California near your mom? I only ask because I’m feeling lately like pulling my wheels up after all of my debt obligations have been fulfilled. Why stay, when you can explore?

Anonymous says:

What are the benefits of putting the assets into a revocable living trus, vs bequeathing your assets to a trust after you die.

Anonymous says:

Your will has to be admitted to probate before an testamentary trust is created. Unless you have ornery relatives who will contest your estate or issues that will hold up the probate process, this is generally not a problem, though it will take some time, whereas an inter vivos trust can shift into a new mode immediately after the grantor dies.

For the record, it is unlikely that probate would be completely avoided, hence you executed a will, which I presume was a pour-over will, which basically acts as a “clean up” to get all assets that you didn’t transfer into your trust into the trust. Also, trusts can be challenged just as wills can be challenged. There are all sorts of issues with the mechanism to do so and who has the right to challenge them, but doing an estate via a trust versus conventional probate does not guarantee a smoother process.