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Trustee Controls What Assets?

What constitutes trust assets after someone dies? A Trust only controls assets that are held in the name of the Trustee. In other words, a Trust does not necessarily control every asset owned by the decedent. For example, let’s say your mom and dad owned a home, a bank account with $200,000 on deposit, and a brokerage account that held stocks and bonds worth $500,000. Will the Trust control all of these assets? That depends on whether the assets are held in the name of the Trust.

Will the Trustee Control if a Joint Tenant Passes Away in California?

If the house is held in the name of mom and dad as joint tenants, then the Trust will NOT control. Instead, the house will pass to the surviving joint tenant. That means if mom dies, then dad will own the house automatically. The Trust terms will not apply to the house.

Trust Accounting: Who Controls the Bank Account for the Trust?

If the house was transferred into the name of mom and dad as Trustees of the Trust prior to their death, then the house would be controlled by the Trust terms. The same is true for the bank account and the brokerage account. If the name of the Trust is listed on those accounts, then the trust controls. If those accounts are held in mom and dad’s individual name, then the Trust would not control. It all comes down to how the assets are titled (or owned).

Who Controls the Brokerage Account?

Controlling the Brokerage Account, and the name found on the account can be confusing in join tenancy trusts. Making sure you have the correct information can save you a lot of time in the end, and calling our Trust Attorneys will show you how to find the information correctly, and can help free up some of your time that will be dedicated to learning and understanding the trust.

For example, let’s say you only have one parent living, your mom, and she has a brokerage account in her individual name. She also owns a house, but the house is titled in the name of the Trust. Will the Trust control both the house and the brokerage account? No. The Trust would control the house because the house is held in the name of the Trust. But the brokerage account would fall to mom’s probate estate. If mom had a pour-over Will leaving her probate estate to the Trust, then the brokerage account would end up in the Trust after the Will goes through the probate process. But that takes time and money. The brokerage account would not be controlled by the Trust terms right away.

What if the Trust did not Create a Pour-Over Will?

Worse yet, if mom does NOT have a pour-over Will (and she has no Will at all), then the brokerage account would pass under the intestate laws. Under intestate distribution, mom’s assets would pass equally to her children. If that is different from the Trust terms, too bad. The assets passing under the Trust would follow the Trust terms, while the assets passing under the intestate laws would pass equally to the children. If that is not the result mom wanted, then she should have done better estate planning.

Differences in How the Trust is Managed VS. How Wills are Managed

It can be quite a shock to learn that not all assets will pass under the Trust terms. Many people believe that Trusts are like Wills, and in some respects that is true. But Wills seem different because they control all the assets owned by a person that is held by a person’s individual name.

Trusts, however, only control assets specifically titled in the name of the Trust. That can be a big difference depending on whether the person who created the Trust did proper planning.