New York Estate Planning & Elder Law Blog
A Living Trust is an estate planning vehicle that helps you avoid probate by transferring property to the people and charities of your choice. The assets are held in the trust’s name and not in the name of the individual. For this reason, it is important to appropriately name the trust.
The Importance of a Name
Trust names are important to consider because in order for a trust to legally hold the assets or property, the trust has to be identifiable by its formal name. This name must be distinct and separate from your name.
Many people choose to include their names in the trust name, such as the “James L. Smith Living Trust”. Including your own name is not required. People who desire extra privacy may choose to leave out their name entirely. The trust name can be anything you like.
It is also an option to include the date on which the trust was signed in the name of the trust. This option can help to further distinguish the trust from other legal entities and is helpful for future reference.
Things to Consider
As part of your estate plan, assets and property can be held within the living trust. This means changing the owner of the asset to the name of the trust. Some trust names may simply seem too long or cumbersome to be the owner of an asset. For instance bank accounts are required to be named with your name, as the trustee, followed by the name of the trust. This can lead to bank accounts being named “James L. Smith, Trustee of the James L. and Janet T. Smith Living Trust dated January 3, 2016.” To avoid this overly long title, many people choose to shorten trust names to something such as the “Smith Family Trust”.
While the name of a Living Trust can be changed at a future date, it is not something that should be taken lightly. Once the trust’s name is changed, all assets held in the trust must be retitled to reflect the change. Depending on the size and scope of the trust, this could be quite the undertaking.
The name of a trust is a vital decision and should be made early on in the estate planning process. Create an estate plan that works best for you by understanding the importance of your living trust’s name.
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