Estate Planning Question


M

Mike

A revocable trust, which includes the A&B trusts (one for the credit
exemption and the other for the marital deduction) is a very common
estate planning tool. Generally to avoid probate, the assets must be
in the trust's name.

Some states have Transfer at Death beneficiary forms (T.O.D.) which
allow certain assets to pass probate free to the beneficiary. The
assets would have to be located in the state that had the T.O.D. law.

If you named the revocable trust a T.O.D. beneficiary ( for example a
money market fund) would the fund transfer to the trust on the death
of the grantor without going through probate ? Or would the fund have
to be in the trust's name ?

Thank you, Michael
 
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G

Gene E. Utterback, EA, ABA

"Mike" wrote in message
A revocable trust (snipped) is a very common estate planning tool.
Generally to avoid probate, the assets must be
in the trust's name.

Some states have Transfer at Death beneficiary forms (T.O.D.) which allow
certain assets to pass probate free to the beneficiary.

The assets would have to be located in the state that had the T.O.D. law.

If you named the revocable trust a T.O.D. beneficiary (snipped) would the
fund transfer to the trust on the death
of the grantor without going through probate ? Or would the fund have to be
in the trust's name ?

Thank you, Michael
I'm not quite sure how, or for that matter WHY, you would go to the trouble
of setting up a revocable trust, which becomes irrevocable on the death of
the grantor, to put a TOD (or POD for banks) beneficiary on the account.
Besides why anyone would want to do this, I would expect the bank or
brokerage to ask questions about WHY if you have RT are you naming it as
beneficiary instead of just titling the asset in the name of the RT.
Remember, RTs are transparent while the grantor is alive.

But to answer your question I can't see WHY it wouldn't work - but again,
its like trying to play the lottery number 333 in a boxed configuration, it
makes no sense.

Gene E. Utterback, EA, RFC, ABA
 

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