Legal Question in Wills and Trusts in California

Can I fund an Estate/Trust account from funds I received on a Transfer on Death account?

My father recently passed away.

He had plenty of assets (IRA, brokerage, house), but very little cash on hand.

His assets were in either a Living Trust or Transfer on Death.

We need cash to pay off the outstanding bills and funeral expense.

We have just received the funds from his Transfer on Death accounts.

Can we transfer some of those funds to the Estate/Trust account to pay off the bills?

And can we get reimbursed for those funds after we sell the remaining assets?

If not, how would you recommend we pay off the bills and expenses?

Asked on 9/20/19, 1:25 pm

1 Answer from Attorneys

Michele Cusack Pollak & Cusack

If you are the only beneficiary, just pay the bills and funeral expenses; it doesn't matter from which source. If you have siblings and you have all received funds from TOD accounts, you have two options: 1) ask them to each pay their share of the bills and expenses; or 2) lend your own money to the trust (from yourself as individual to yourself as trustee) and then reimburse yourself when other assets are sold (Make sure to document everything very carefully, and don't charge interest so you will not be benefiting from the transaction). This is assuming that there is time pressure and/or you do not have access yet to a trust brokerage account. If so, liquidate enough stocks or bonds to pay the bills and expenses. In the case of funeral expenses/death notice which must be paid up front, generally the trustee or another child puts them on their credit card and then is reimbursed by the Trustee.

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Answered on 9/20/19, 1:52 pm

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