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Moved Bank and Investment Accounts to a Living Trust

This article was written by in Personal Finance. 22 comments.

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.

Photo: Flickr

Updated October 15, 2015 and originally published June 11, 2013.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 22 comments… read them below or add one }

avatar 1 Anonymous

Establishing a Trust is something that we really need to do and have put off for some time. I have seen and dealt with numerous families that have had a Trust and it work out great for them, especially with the ability to assign the retirement account beneficiaries as the Trust. Like you said, it sounds like a major headache – but is well worth the work in the long run.

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avatar 2 Anonymous

IIRC, the beneficiary/transfer on death (TOD) forms required a SSN for the beneficiary. Did you get any resistance from the online brokerage accounts for assigning to something without an SSN?

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avatar 3 Luke Landes

With some, you choose the type of beneficiary, trust or individual. And with a revocable living trust, they don’t ask for a Social Security number, but if they did, one would just use the sole trustee’s SSN. I didn’t have to enter my SSN in any of the beneficiary forms except the printed Vanguard form.

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avatar 4 Anonymous

Thanks for the info. It’s like a different kind of “trip report” where you go to the bank. I’m curious to hear what daily life is like using the trust. You might not know yet, but if you feel like sharing in the future… Like how you pay for things (a card in the name of the trust account?) and how you receive payments for work you do (is it paid to you personally and then transferred to the trust?). And most importantly if it turns out to be easy or slightly more difficult.

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avatar 5 Luke Landes

The credit card accounts don’t go into the living trust. Basically, daily life is exactly the same. I pay my expenses, I receive income. Revocable trusts are basically pass-through entities, like a sole proprietorship would be for taxes.

The income I get for working is business income and remains in a business bank account (outside the trust) until I want to use the money for personal reasons. I’ll transfer it into my personal (trust) bank account, just like before, or I’ll use it to pay business expenses right from the business account.

Income from investments operates just the same as before… I reinvest just about everything anyway. The trust doesn’t change any taxes, and doesn’t change my liability. The money is still counted among my personal assets.

So there’s no real change to day-to-day money management.

If I had chosen an irrevocable living trust, the situation would be different, but the downside would be I wouldn’t be able to access the money.

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avatar 6 Anonymous

Thanks. “No real change” to daily life sounds good.

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avatar 7 Anonymous

Would like to know what Pat requested above in comments

Also what are the advantages of Living trust so that could help me make a decision if I should establish one.

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avatar 8 Luke Landes

You can read my earlier posts on the topic here and here.

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avatar 9 Anonymous

Thanks for the write-up. I’m getting ready to move my accounts into a living trust, so this is a timely article!

I was told (repeatedly) by my lawyer that there is no law requiring a bank to force you to close an account simply to change the name on the account to your revocable living trust. He said that sometimes banks claim it’s out of their hands, but it isn’t.

Of course, banks may choose to have a policy that requires people to close an existing account and open a new one. And I can choose to close the account and take my money elsewhere. I hope I don’t have to do that, but any bank that makes my life more difficult is not one I want to do business with.

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avatar 10 Anonymous

Thanks very much for your post. I wish I had seen your post earlier as I have had to discover much the same info the hard way. The idea of resetting years of optimized auto-receivables and auto-pays does not appeal. Time is too valuable. I had wondered if the new account requirement was driven by the Patriot Act of 2001. I dug that out and found no such requirement. The focus there was confirming identity which after years of working with my bank, they should know by now. I have told my bank that their solution of a new account was not acceptable. I will know soon whether they will follow my request or if I need to shift my banking to a more responsive flexible one.

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avatar 11 Anonymous

Thanks for sharing your experience with funding your revocable living trust. According to our attorney 8 out of 10 people who establish a trust never complete the process of transferring ownership of their assets to the trust. I can see why because I had a similar and frustrating experience with my local Wells Fargo Branch. The representative was not familiar with the process and the paperwork didn’t look right after 3 attempts. The final time I believe he filled in the trustee names, etc correctly, but there were no account numbers on the forms. I spoke with customer service on the 800 lines for regular banking and the investment advisors. They both said the branch office would have to help me. The investment rep was able to confirm that there should be account numbers on the form and the title of trust and Tax ID # were key items that needed to be correct. Also, that all trustees need to sign and any notary (not just Wells Fargo notaries) could notarize the signatures. These were all questions I left the branch office without answers to. I hope I have better luck tomorrow. I can see why some people don’t complete the process especially when you encounter these types of obstacles. I’m not looking forward to new account numbers because my direct deposits, etc.. will be affected-more hassles to change all of that. Thanks for the heads up! BTW I found this post by searching for retitle wells fargo account in search of some kind of help or guidance.

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avatar 12 Anonymous

A friend of mine is helping his mom set up a trust, and will act as the trustee. He wants to be able to manage the assets (stocks), but is unsure if this triggers some regulations from the SEC: will he be acting as a money manager on someone else’s behalf?

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avatar 13 Luke Landes

The trustee can manage the assets in a trust, and is required to do so in the best interest of the beneficiaries. When you establish the trust, the lawyer you work with can help answer questions like that.

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avatar 14 Anonymous

Thanks for sharing.You have helped me understand the process of “funding a trust”.

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avatar 15 Anonymous

Good article except for one thing. Naming a Trust as the beneficiary of a retirement account can cause negative tax consequences and should be avoided by most people. To avoid harsh tax rules, the Trust must have specialized, IRS-approved language to allow the retirement funds to pass through the Trust to the Trust beneficiaries. The Trust must have actual human beneficiaries, not just charities. And even when the Trust is set up properly, the IRS uses the age of the oldest beneficiary to calculate the distribution requirements. The other heirs lose a lot of flexibility and tax benefits. With all these complications, it is better for most people to name the human beneficiaries directly in the retirement accounts. If you are married, naming the spouse as the beneficiary allows extra tax benefits which are unavailable to non-married people. There are cases where it makes sense to name the Trust as the beneficiary of retirement accounts. An example is when the beneficiaries are minors or otherwise can’t be trusted to handle the funds and a special Trust is set up for them.

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avatar 16 Anonymous

How will naming the trust set up for – minor beneficiaries , have negative tax consequences.
can you elaborate. How can a” Living revocable Trust ” be Specialized -to allow the retirement funds to pass through the Trust to the Trust beneficiaries.
The Trust I intend to have will have actual human beneficiaries – not Charity.

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avatar 17 Anonymous

What a great column and intelligent comments and questions. We are also having some difficulty. We recently updated and amended our Revocable Living Trust. It now has the same title as previously but of course has a new “amended/restated” date after the title.
Our Credit Union wants us to close out our major account number and reopen it with a new account number. We are frozen, as we have many auto payments, direct deposits affiliated within that account number and do not want to risk messing with that convenience. Our new Trust Title is the same but has a new date on it and the Credit union has the older date on the original account. That same account number holds a large savings amount plus our checking account which contains the direct deposits and auto pays.
If anyone has a suggestion, please feel free to comment. Thank you so very much. Donna

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avatar 18 keith

I would open an additional account and try to gradually work out my preferences between the two as I phased one out..

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avatar 19 Anonymous

Great post. We just signed our living trust documents. We are in the process of converting all our financial accounts. We are with Chase, and we found out we have to make the trust the beneficiary or open entirely new accounts under the trust name. They changed their policy about a year ago per the CPC representative. It’s a pain, but after having handled the estate for a relative that only had a will, the bank changes are well worth it in the end. The estate has been going on for almost one year and is expected to continue into the next year due to tax stuff.

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avatar 20 anonymous

I feel bad for all the people who experience difficulties transferring their accounts into their trust. I work for Wells Fargo and it makes me upset and embarrassed that this happens. It is absolutely not required to close your existing account. It is quite a simple process to retitle your existing account. Unfortunately, with the high branch employee turnover and previous high pressure sales environment, we see this all the time where bankers either take advantage of the opportunity to make a sale on a new account or do not understand the process and choose the safe and easy route for themselves of simply closing and re-opening a new account. If anyone encounters this I would recommend they stop the transaction and visit another branch until they feel comfortable the banker who is assisting them is confident the maintenance on the account is made accurately. There are many excellent bankers out there that do this very transaction everyday.

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avatar 21 Rosa Risar

How noble of you, Wells Fargo employee, to clarify how to get things done correctly for our benefit! It isn’t easy to find a true friend within a giant corporation! This sort of help is super valuable because you have gone so much out of your way to help. THANK YOU IN THE NAME OF MANY OF US HERE!!! :o)

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avatar 22 Rose Risar

I thank the author of this article for enlightening us on this complex matter. Although this has been written or updated in 2015 and 2013 after which I’m sure many changes must’ve taken place, I wonder if anyone could help me with any opinions?:

1. Some months ago I opened a Will, Revocable Living Trust and other related documents with an estate lawyer who is also my successor trustee (because I have no family or friends (90 yo)), but…alas I realize now that he knows this subject even less than his declared 25% of doing this! I work very hard searching the web for answers and when I ask him instead of answering he says I worry too much!
2. The same as most of you, I too had very aggravating obstacles with re-titling my accounts in banks and credit unions, but because they demand to have a copy of my ENTIRE TRUST instead of the 3 or 4 relevant pages.
3. These problems, along with a few more, plus the frightening feeling of not getting answers from an experienced and knowledgeable attorney, made me want to just getting rid of the Trust altogether and just keep the Will only.
4. So…if I remain with only a Will, who can be a trustee-like to take care of things when I die? Is there a way? Or the Trust is THE only way?

Thanks ever so very much for any ideas. :)
P.S. I wish I could afford to hire a competent estate lawyer, but I already paid 2 lawyers (the first one of many years retired and left the state) and now this one… :(

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