When someone passes away, one of the first things a Trustee need to do is to find out what assets are in the trust, which need to be put into the trust, and which have direct beneficiary designations. Most estate plans have an inventory sheet where all the trust assets are listed, but most people ignore it, or the inventory in it gets outdated over time.
The best place to start is by collecting the deceased person’s mail.
Within a month, all of the bank and credit card statements, and other bills should arrive and that will give the trustee an idea of what assets and bills the decedent had. Things like dividend statements from investment accounts and stocks may take a bit longer, but they’ll eventually show up.
The next best place is the schedule “B” on the decedent’s income tax return.
All trust accounts should have the word “Trust” in the account holders name. Here are a couple of examples:
- John Doe As Trustee For the John Doe Trust Dated January 2, 2013
- John Doe ATF John Doe Trust Dated January 2, 2013
- John Doe TR John Doe Trust
Accounts that are held in the name of the trust are the easiest to transfer. Usually, you’ll present a copy of the trust with a death certificate, and the accounts should transfer right away.
Accounts that are not held in the name of the trust, break down into 2 categories:
Direct Beneficiary (or pay on death) Accounts. These accounts have a named beneficiary who receive the balance of the account at time of death. This bypasses a probate administration and any distribution language in the trust. These transfer fairly quickly. The beneficiary, usually, will just have to present a copy of the death certificate.
No Beneficiary Designation. If no one was named as a beneficiary, or if all of the beneficiaries have passed away, then the asset needs to be pulled into the trust. The is usually done through a mechanism called a “pour over will.” This document acts as a backup, to make sure everything is distributed according to the trust. This could trigger a probate administration if there’s a piece of real estate worth over $50,000 (gross), or other assets worth $150,000 in total left outside of the trust with no direct beneficiaries.
The easiest way to find out if a piece of real estate is inside of a trust, is to look at the property tax statement. You want to look for the word “Trust” on it. If the word is on the tax statement, then it should be in the trust, unless it was taken out sometime between when the tax statements were sent out and when the person passed away. It’s always a safe bet to check with your county assessors office.
If the property is in the trust, then transfer of trustee will be handled as part of the deceased person’s estate administration. If it’s not in the trust, then a probate administration will be necessary to transfer it into the trust, so it can be distributed out.