There are various inquiries from clients who requested phone call consultation. These days, more clients inquire about inheriting the deceased's current assets. Though I addressed it many times in my previous columns, many people still have some misunderstandings about inheriting current assets.
Clients are asked to submit information about their current assets when making a living trust. So, they believe that their current assets are automatically transferred into the living trust since their lawyer asked them to submit it. However, since the lawyer is not their financial representative, the current assets cannot be transferred into the living trust through the lawyer. Then how can current assets be transferred into a living trust?
First, you should show the certification of trust—proof of making a living trust—to the relevant financial institution and request the transfer of your assets into your living trust. Then, the financial institution will transfer the ownership of your asset account into your living trust. For example, Cul Su Kim made The Chul Su Kim Living Trust. Then, he can take the trust certification to his bank and transfer the ownership of his account to The Chul Su Kim Living Trust. That is how the assets in your account transfer into the living trust. One thing to be careful about in this transfer is that the financial institution may request closing your account and opening a new one in your living trust's name instead of directly transferring the account's ownership into your living trust. Thus, to keep your current account, you should check whether your account is closed to transfer your assets to your living trust.
An easier way to do this is to make a new account in your living trust's name. For instance, a certificate of deposit (CD) has its due. You can open a new CD in your living trust's name when the due comes. Then, the CD is owned by your living trust from the beginning.
Then why do we need a living trust account? First, if you make a living trust account, your successor trustee can manage your assets in the living trust account if your health is not good enough to manage your assets (such as suffering from dementia). In other words, creating a living trust account makes managing your assets more accessible for your children—as a successor trustee—. Therefore, I encourage you to transfer your assets into the living trust. At the same time, if someone sells the parents' real estate before and after their death, they will need an account to receive payment. If Kim's son does not have The Cul Su Kim Living Trust after a real estate transaction, he must now open an account—which is inconvenient. In particular, if it is after Kim's death, he cannot use Kim's social number, so he will need to get a new tax ID.
Then why do lawyers ask their clients to submit their current asset information? In my lawyer's office, the major purpose is to provide a detailed consultation about the transfer of their assets into their living trust, decision-making on setting up their children as beneficiaries and letting the children know their parents' current asset information.
Most of the children do not know their parents' current asset information. Thus, leaving account information for current assets and setting up beneficiaries entirely is essential, even if you do not transfer the assets into your living trust.