E201 Should I Name a Trust as Beneficiary of My Accounts?

<p>Another question that we receive often is “should I name a trust as beneficiary of my estate?” In a recent case, Rhonda reached out to us, because she wanted the <a href= "https://anthonyspark.com/e163-always-leave-inheritance-in-a-trust-fund/"> benefits of a trust</a> (avoid probate, reduce chance of a “will contest,” etc.), but she was not quite ready for the headache of a full-blown trust setup. In her particular situation, naming her trust as beneficiary makes sense. If you are considering this doing this, here are a few things you should consider.</p> <h2>How to Name Trust as Beneficiary</h2> <p><img class="aligncenter size-medium wp-image-9330" src= "https://anthonyspark.com/wp-content/uploads/2021/01/how-to-name-trust-as-beneficiary-300x200.jpg" alt="How to Name Trust as Beneficiary" width="300" height= "200" /></p> <p>A full-blown trust has to be set up and funded. It can be a nominal amount, even as little as $10. It has to own things and you will need to convert your banking accounts, houses, and related items from your individual name to the trust name. It may be quite a bit of work in some situations. For example. <a href= "https://anthonyspark.com/e182-3-examples-of-how-co-ops-are-worse-an-executors-perspective/"> if you live in a co-op, this can be a lot of work to change your deed</a>. You will likely need board approval, and this will take time and work. If changing your banking, you will need to go to the bank and open new accounts in the trust name. You’ll then need to change any direct deposits and withdraws once the new account is open.</p> <p>In Rhonda’s case, instead of changing all of her accounts now, she is leaving them in her name and changing the beneficiary of the accounts to a trust. For example, when you have life insurance, you can name a person or multiple people as beneficiaries. However, instead of naming a person, you can name your trust to be the recipient.</p> <p>In her situation, her trust will be unfunded until she passes. Upon her passing, the trust will be funded using