Should bank accounts be included in a living trust?

Yes, bank accounts are typically included in a living trust.

A living trust, also sometimes referred to as a revocable trust, is a type of legal instrument with which you can transfer the ownership of your assets to a trustee within your lifetime while still being in control. There are very many advantages one stands to gain from doing that, particularly controlling bank accounts.

Avoid Probate: One of the main reasons why accounts need to be placed in a trust is to avoid probate. Probate of wills is a court process that may, at the end of the day, become very time-consuming and expensive, since it requires administration of the executor, evaluation of the assets and obligations, and the settlement of the debts. Therefore, accounts held in banks should be placed in a trust as necessary to avoid probate and guarantee proper access to the beneficiaries at the appropriate time.

Immediate Access: If you hold bank accounts in a living trust, the money in the account will be accessible to your beneficiaries right away. This is especially important if they're using those accounts to pay their own or their loved one's living expenses or medical care. In contrast, probate can be extended over several months or years, leaving most beneficiaries to wonder when their finances will possibly turn for the better.

Estate planning: It is sound estate planning to have all your bank accounts placed in a living trust. It allows you to specify to whom your assets will go, thus reducing the chances of any dispute or misconception among the beneficiaries. You can also make provisions for a successor trustee to manage the trust in the event that something happens to the original trustee.

Flexibility and Control: If compared with a will, a living trust is more flexible. The most important difference is that even under any condition, you retain the control of the property while you are alive. You can even revoke or amend the trust. You can mold the living trust according to your necessities and desires, provided that you amend it accordingly. Furthermore, a living trust normally protects your property from potential creditors or lawsuits.

Considerations to Make About Bank Accounts

While Adding Bank Accounts to a Living Trust Offer Many Advantages there is something to consider:

• Type of Account: Not all accounts held by banks can be added to a trust. For example, there may be the idea of adding jointly owned accounts in the bank with another person.
• Access: If the bank accounts will be accessed frequently and for daily living, it probably will be easier to hold those bank accounts in your own name. At the same time, you still can make cash transfers from your personal accounts into the trust accounts.
• Tax Consequences: The transfer of bank accounts into the trust may carry some tax consequences. It will be appropriate to get some advice from a tax professional about those consequences.

Conclusion

Allowing for a living trust regarding the bank account is a very effective estate-planning strategy. With a living trust, one can undoubtedly protect his assets from probate and ensure his dear ones access the funds very fast, with a lot of flexibility and control. It is also important that you discuss with a lawyer whether the Health Support End to End would work for you or not. At One Pacific Trust, our vision is to be the leading provider of trust services.