Transferring assets from a trust (part 2)
Ask the LDA
December 18, 2021
There are times, as the successor trustee, you may find that the decedent, such as your parent, signed a trust document designating certain assets to be held in trust but for some reason failed to actually transfer title into the name of the trust. I have seen trusts that have failed to record the new deed to the family home. You should see an attorney for advice on whether you should record or not.
Generally, assets not transferred to the living trust could still be subject to probate. Therefore, you should carefully examine all title documents (for example, real property deeds, bank and brokerage account statements, and stock certificates) to see if title was transferred properly into the trust. Also check to see if bank accounts have a "pay on death" provision. If the asset was transferred to the trust, the ownership document will show title held something like this: "The Jane Doe Trust" or "Jane Doe, Trustee of the Jane Doe Trust dated May 31, 2010."
Property that doesn't have formal title documents, however, such as miscellaneous items of personal property, can be included in a living trust without being formally transferred to the trust. They need only be listed in the trust document or in an "assignment" that transfers listed property to the trust. Sometimes people list their wishes on a separate piece of paper.
It can be hard for the person trying to distribute the property to inventory (or account/find) every little asset owned and place it in a trust. Therefore, a "pour-over will" is sometimes used along with a trust to cover assets that have been inadvertently overlooked or left outside the trust. An example might be an uncashed lottery ticket!
The pour-over will simply states that such assets are to be transferred into a specified trust at the time of the person's death. A pour-over will is treated the same as other wills, and formal probate is required if the assets covered by the will exceed $166,250. (If the decedent dies after April 1, 2022, that amount will be somewhat higher to adjust for inflation.) If such assets have a gross value under $166,250, the trustee can use one of the small estate procedures to transfer the assets to the trust without formal probate.
SEE AN EXPERT! Get help if you're not sure whether the property is in the trust. If property exists in the decedent's individual name, yet evidence exists that the decedent intended to hold the property in a trust, get help from an attorney. A different type of court proceeding, sometimes referred to as a Heggstad Petition or a Probate Code Section 850 Petition, may be possible to avoid probate. An attorney can help you evaluate your options.
Diana Wade is a Legal Document Assistant. She can be reached at (661) 821-0494 or firstname.lastname@example.org. Diana is not an attorney; she can only provide self-help services at your specific direction. Kern County LDA #185, ex 4/11/23.