I spent about half of the day today taking care of some of the financial responsibilities I have been putting off. It feels good to check to-do items off my list, especially if they have been sitting there for some time, and I’ve been either procrastinating or filling my day with other priorities.
One of my goals has been to retitle and reopen bank accounts and investments under my revocable living trust. I established a trust earlier this year to keep my assets under a banner that makes it easy to deal with if something were to happen to me. Although I intend to live well into the next century, it’s unlikely my plan will play out as I hope. This is a process I started months ago, and now I can consider the process complete.
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My first visit was to the local Wells Fargo branch, where the customer service representative tried hard to assist, but wasn’t quite familiar with the process. She was new to the branch, but had worked for the bank and its predecessors for more than twenty years. Her former branch is located in an area of the state populated mostly by retirees, so she probably should have been familiar with the process for assigning new accounts to a trust.
Unfortunately, Wells Fargo requires a complicated process for dealing with trusts. I needed to open a new account — giving up the account number I’ve had since 1989 — and transfer money from the old personal account to the new trust account. With the establishment of a new account, I was put through the typical sales pitches, and I had to make a choice between accounts, all with different requirements to avoid a bottomless pit of fees.
My personal account, grandfathered with terms from when my account was owned by Wachovia, will remain open, at least for the next month or two. The account is linked to several automatic payment services, so I want to be sure my deposits and withdrawals are associated with the new account number.
At Wells Fargo, the customer service represented confirmed, after various consultations with other individuals at the branch and over the phone, that business bank accounts could not be opened under the trust. This was my expectation, so I wasn’t surprised.
After my ninety-minute adventure, I moved down the street to the local Chase branch. At Chase, I didn’t need to open a new account. The “private banking specialist,” after consultation with the bank’s legal department, approved the request to retitle my personal account under the trust. She was required to fax my paperwork to a central office, but other than that, the process was quick.
The Chase representative was also able to provide a signature guarantee, a required protection for the forms I needed to submit to Vanguard to move my non-retirement investments to new accounts established within my living trust. I had completed the forms several months ago, but it took a visit to the bank, where an employee with the ability to provide a signature guarantee happened to be available, for me to complete the process.
Later, at home, I checked my retirement accounts at Vanguard, Fidelity, and TIAA-CREF. Retirement accounts cannot be placed within a trust, but the beneficiaries can be set as the trust. This is incredibly convenient, especially with several retirement accounts. If I ever decide to change my beneficiaries, and if I have children or get married, chances are I will, I can change instructions just by amending my trust documentation — one change rather than changes at each brokerage. All three brokerages allowed me to modify my beneficiaries online.
TIAA-CREF still requires me to send one form through the mail. For some reason, my investments at TIAA-CREF are structured into two different departments. When I first established my retirement account there, I did so because I had little money to contribute and the brokerage had a much lower minimum deposit amount than Vanguard. When I opened the account, they created as a “Retirement Investment.” That makes sense, I thought.
When I decided to invest in different mutual funds at TIAA-CREF, somehow these new accounts were opened up in what they call the “mutual fund side” of TIAA-CREF. When I first invested, I thought I invested in a mutual fund! I did — one of TIAA-CREF’s index mutual funds — but it’s contained in some kind of retirement account wrapper, and it seems unnecessary to me. It doesn’t appear to be an annuity; I can withdraw funds from the account at any time without any consequence other than the 10% penalty tax for early withdrawals.
For this account, I was able to change my beneficiary to the trust using the website, but for the accounts I opened later, designated as “Directly Held Mutual Funds,” TIAA-CREF requires me to print out and send a form through the mail.
With all my deposit and investment accounts now owned by my revocable living trust and with the trust designated as beneficiary of my retirement accounts, I am more confident that if the worst were to happen, dealing with my assets won’t be too much of a hassle. And until then, as situations in my life change, I can easily make changes to my continuation plan reflecting those life changes. Revocable living trusts sound complicated, and most people assume you have to be wealthy for them to be worthwhile, but everyone benefits. They save stress and money (in court fees for probate) at a time when family could face high levels of pressure.
Updated October 15, 2015 and originally published June 11, 2013.