Four Guidelines for How to Title Assets That Are Moved to a Sub-Trust

While some living trusts are simple and straightforward, others are more complex and offer the creation of sub-trusts in order to minimize taxes. In these cases, the successor trustee is often responsible for choosing which assets should be moved into each individual sub-trust. Once you have made these important decisions, you must then consider whether or not to change the legal title to each asset to the name of an individual sub-trust.

Four Considerations When Retitling Assets in a Sub-Trust

When administering a trust, you may have had no prior experience with funding and titling assets in a sub-trust. The following are important guidelines for a successor trustee to follow when considering whether to retitle trust assets:

  1. In many cases, the trust instrument itself may not require that the legal title to the assets used to fund the sub-trusts be changed to the name of the sub-trust. Instead, the asset can remain in the name of the primary trust, with the trustee in charge.
  2. If the assets are not retitled into the name of the individual sub-trusts, the trust’s accounting records must document and accurately reflect the property that is held in each sub-trust.
  3. In cases where the different sub-trusts each have different trustees, it may make more sense to retitle the assets to the name of the sub-trusts, even if not otherwise required.
  4. Regardless, your attorney may recommend that you retitle the assets to the name of the sub-trusts, even if not otherwise required.

As you administer the trust that belonged to your loved one, you may run into this and other complicated trust administration issues. To prepare yourself, we encourage you to read more about this process. Our free guide, Understanding the Revocable Trust – In Language that Anyone Can Understand in 8 Minutes, is an excellent place to start.

 

James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm
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