Re: Titling Assets when a Trust is evolved

Your trust most likely contains provisions that are designed to reduce the amount of Federal Estate Tax that you and your wife will pay upon your deaths to the lowest possible amount (ideally zero). When you are funding additional assets into your trust, you always need to be careful that you do not throw off the balancing of assets that was hopefully achieved when you initially funded the trust.

I’m curious as to the reason for your intended stock purchase. If it is your intention is to leave a gift for the grandchild, then there may be better ways to reach the result that you want. One danger of using the “payable on death” designation on stock is that the stock might be liquidated prior to the death of the survivor of you and the gift to the grandchild would be eliminated. Another problem is that the stock’s value could drop significantly and virtually wipe out the gift. Also, from an investment perspective, it is generally not a good idea to become overly attached to a piece of stock because it can cause you to hang on to it for too long (P.O.D.s can sometimes cause this kind of unhealthy attachment). And, of course, there is a whole host of other problems that go along with gifting money directly to a minor. Instead of using the P.O.D. designation on the stock, you may want to consider some other options. One idea would be to amend the trust to add a specific gift to the grandchild, guaranteeing the amount of the gift and allowing you to determine when the child will get the money. If your intention is to provide for your grandchild’s education, you may want to consider a “Section 529 Plan.” These are state sponsored investment plans that possess some excellent tax advantages. Depending on the result that you want to achieve, there are many creative ways to leave long lasting multi-generational legacies.

Re: Titling Assets when a Trust is evolved

You should check with an attorney familiar with Probate laws. If the purpose of you placing your assets in the stated trust was to avoid probate, it will not and therefore taxes will be due.