Posted by Looking at a 14-year-old copy of a trust document is confusing. Especially when it starts out as a revokable trust and then changes to an irrevocable trust upon the death of a spouse. After a review of the assets that I assumed were in the trust, it turns out that only one asset was protected by the trust. One professionally managed investment account was actually in the trust. All other assets had beneficiaries listed. This means that any asset outside of the trust must be dispersed directly to the beneficiaries. For example, the life insurance provider requires each beneficiary to “claim” their share by calling the company to arrange their dispersement. Investment accounts and IRA’s need to have separate accounts created in order to transfer funds. Generally, the account will be created within the company that holds the account. Then you can move the funds to your own investment account. Asking them to do it differently will lead to a run-around.
Obviously, they would like to see you keep the funds with their company. Real estate is an area filled with pitfalls for beneficiaries. If you accidentally issue a check for the sale to one person when multiple people are listed on the deed, that one person is responsible for all of the capital gains tax. Life insurance and investment accounts can also have tax liabilities that need to be included on a beneficiary’s tax return. As of the date of death, the deceased is no longer considered a taxpayer. Any investment gains accrued after that date need to be on a beneficiary’s tax form. My assumption of having everything under the trust was not correct. Each asset has its own distribution rules. Some are created by the company that holds the asset and others follow distribution rules based on state and federal tax law. Don’t assume something is in a trust. It may have not been added correctly. Or someone simply didn’t know it was their job to change asset ownership from a beneficiary to the trust.