A revocable trust offers two potential benefits: (1) it avoids the need for a probate upon death; and (2) it avoids the need for a conservatorship in the event of incapacity. (For a discussion of probate in Utah, see “Basic Estate Planning Information” on this website.) However, a revocable trust provides these benefits only with respect to assets that are held in the revocable trust at the time of the incapacity or death.
An asset is held in a revocable trust if title to the asset is held in the name of the trustee, in his or her fiduciary capacity. For example, if William and Mary Jones are the trustees of the Jones Family Revocable Trust, title to trust assets would be held as follows: “William and Mary Jones, trustees of the Jones Family Revocable Trust.”
Real Estate. In order to fund a piece of real property into a revocable trust, a deed is prepared transferring the property to the trustee of the trust (e.g. to “William and Mary Jones, trustees of the Jones Family Revocable Trust”), and the deed is recorded in the Recorder’s Office of the county in which the real estate is located.
Accounts. In order to place a bank account or a brokerage account in a revocable trust, title to the account (i.e. the name that appears on the account) is placed in the name of the trustees (e.g. “William and Mary Jones, trustees of the Jones Family Revocable Trust”).
When an account is put in the name of the trust, banks and brokerage firms will usually ask to see a copy of the trust. However, many people are reluctant to disclose to the financial institution the confidential contents of the trust. In response to this concern, the Utah Probate Code provides that, in lieu of a copy of the trust, the institution must accept a trust certification that states certain basic information, such as the name of the trust, the date the trust was created, the name of the creator of the trust, the name and address of the trustee, and the powers of the trustee. (See Utah Code section 75-7-1013.)
Other Property. Assets that do not lend themselves to formal title, such as tangible personal property, can be transferred to a revocable trust through a General Assignment or similar document signed by the creator of the trust.
Note: Some assets may not be transferred to a revocable trust. For example, federal law prohibits any person other than the plan participant (i.e. the employee) from owning that participant’s retirement plan. Consequently, a retirement plan cannot be transferred to the trustee of a revocable trust, even if the participant serves as trustee of that revocable trust. But there is no need for a retirement plan to be held in a revocable trust because the retirement plan will avoid probate in any event by virtue of the beneficiary designation that is attached to the plan. (See Basic Estate Planning Information on this website.)
For a discussion of estate planning in Utah, see the home page of this website.
Rust Tippett is the author of this blog post.
Copyright 2012 UNLEPI, LLC, a Utah limited liability company. All Rights Reserved.
This blog post in no way creates an attorney-client relationship between the reader and either Robert S. (Rust) Tippett or Bennett Tueller Johnson & Deere, LLC. The reader should consult with his or her own estate planning attorney regarding his or her particular circumstances.