The Best Accounts and Assets for Your Trust: What to Include

Discover what type accounts belong in trust and how to optimize your assets for future security and ease.


When setting up a trust, understanding what type accounts belong in trust is crucial. Generally, you can include liquid accounts like savings and checking accounts, traditional investments such as stocks, bonds, and mutual funds, real estate, personal property like jewelry and furniture, as well as business interests and intellectual property. This foundational knowledge ensures that your assets are managed effectively to benefit your designated parties according to your wishes.

Setting up the right accounts in a trust is essential not only for asset protection and estate planning but also for ensuring that these assets are directed towards your intended purposes without unnecessary legal hurdles. Trusts can be intricate, and selecting suitable types of accounts and assets for inclusion can significantly impact the efficiency and effectiveness of the trust.

Funding your trust appropriately is equally important. It involves transferring assets into the trust, a process known as funding the trust, which will be discussed thoroughly in the subsequent sections. Adequate funding ensures that the trust operates as intended and meets its objectives, providing peace of mind to the grantor and beneficiaries.

Detailed infographic on types of accounts and assets suitable for trusts, including checking and savings accounts, stocks, bonds, mutual funds, real estate, personal property, business interests, and intellectual property. Each asset type is represented with an icon, showing how they are integrated into the trust and their role in effective trust fund management. - what type accounts belong in trust infographic brainstorm-6-items

Understanding Trust Accounts

When setting up a trust account, it’s crucial to grasp the legal framework, understand the fiduciary duties involved, and know the rights of the beneficiaries. These components are foundational to ensuring that the trust functions effectively and legally.

Legal Framework

A trust account operates under a specific set of legal standards that govern how assets are managed and distributed. The trust agreement is the cornerstone document that outlines all the terms, conditions, and operations of the trust. It defines what assets are included, the role and powers of the trustee, and the rights of the beneficiaries.

Trusts are subject to state and federal laws, which can vary significantly from one jurisdiction to another. These laws ensure that the trust adheres to legal standards and serves the best interests of the beneficiaries without conflicts of interest.

Fiduciary Duty

The trustee’s role is governed by what is known as a fiduciary duty. This is a legal obligation to act in the best interest of the trust’s beneficiaries. The trustee must manage the trust’s assets prudently and responsibly, making decisions that benefit the beneficiaries according to the trust’s terms.

For example, if the trust holds investment accounts, the trustee needs to manage these accounts by making sound investment choices that reflect the beneficiaries’ needs and the trust’s objectives, not the trustee’s personal gain.

Beneficiary Rights

Beneficiaries have specific rights outlined in the trust agreement. These rights include receiving distributions from the trust as dictated by the terms of the trust. Beneficiaries also have the right to be informed about the trust’s management and the right to a transparent accounting of the trust’s assets, liabilities, income, and expenses.

Beneficiaries can legally enforce their rights if they believe the trustee is not fulfilling their fiduciary duties. This ensures that the trust is managed in a manner that is faithful to the grantor’s intentions and protective of the beneficiaries’ interests.

Understanding these key aspects helps in setting up a trust that is robust, compliant, and capable of fulfilling its intended purpose. In the next sections, we’ll dive deeper into what type of accounts belong in a trust and how to effectively fund your trust.

Ideal Assets for Your Trust

When setting up a trust, choosing the right assets to include is crucial. Here’s a breakdown of the types of assets that are ideal for funding your trust, ensuring both flexibility and security for the future.

Liquid Accounts

Savings and Checking Accounts are straightforward assets to include. They provide liquidity and ease of management for the trustee. Transferring these accounts into a trust generally involves simply retitling the accounts in the name of the trust, allowing for smooth management and disbursement without probate complications.

Traditional Investments

Stocks, Bonds, and Mutual Funds are core assets for any diversified trust. These investments can grow over time, providing long-term benefits to the beneficiaries. It’s important to transfer the ownership of these assets to the trust properly to ensure they are managed according to the trust’s terms.

Real Estate

Including your Primary Residence and Investment Properties in a trust can be highly beneficial. It avoids the lengthy and public probate process and may protect the property from certain legal risks. Transferring real estate into a trust typically requires a new deed, transferring ownership directly to the trust.

Personal Property

Items like Jewelry and Furniture may not always seem like obvious choices for a trust, but they can be important. These items often carry sentimental value and can be specified within the trust document to ensure they pass to the intended beneficiary without disputes.

Business Interests

If you own part or all of a business, including LLCs or Partnerships in your trust is wise. This ensures that your business interests are handled according to your wishes and can provide continuity for the business operations after your passing.

Intellectual Property

Patents and Trademarks represent potentially significant economic value and legal rights. Including these in your trust helps ensure that any income or benefits derived from these properties are distributed according to your wishes.

Money Owed to You

Including Loans and Debts owed to you in a trust ensures that these amounts are collected and handled as per the trust instructions. This can be particularly important in ensuring that all assets and debts are managed comprehensively.

Incorporating these assets into your trust can provide significant advantages in terms of management, probate avoidance, and ensuring your wishes are carried out effectively. The next section will explore which assets you might consider excluding from your trust to optimize your estate planning strategy.

Assets to Exclude from Your Trust

When planning your trust, it’s crucial to understand not just what type accounts belong in trust, but also those that should be excluded. Certain accounts and assets may not be suitable for inclusion due to legal complexities or tax inefficiencies. Here, we’ll discuss four key types of assets you might consider leaving out of your trust.

Retirement Plans

Retirement accounts such as IRAs and 401(k)s are intended to be held by individuals and have specific tax benefits that could be compromised if transferred into a trust. These accounts are governed by special rules that allow for tax-deferred growth. If transferred, the entire balance could become subject to immediate taxation. Instead, you can name your trust as a beneficiary to manage the distribution after your death, maintaining the account’s tax advantages while ensuring it supports your estate plan.

Tax-Advantaged Savings Accounts

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) offer tax benefits that are closely tied to the individual account holder’s health expenses. Transferring these to a trust could disrupt the tax-exempt status, leading to taxes and penalties. Like retirement plans, consider designating your trust as a beneficiary rather than transferring the accounts directly into the trust.

Certificates of Deposit

Certificates of Deposit (CDs) might seem like a straightforward asset to include in a trust, but they come with a catch. Transferring a CD to a trust can sometimes be treated as an early withdrawal, which often carries penalties and fees. Check with your financial institution to understand the implications fully before moving a CD into your trust.

Life Insurance

Life insurance policies are designed to pay out directly to beneficiaries upon the policyholder’s death, bypassing probate automatically. Including a life insurance policy in a trust is generally unnecessary and offers no significant benefit. However, if you want the life insurance proceeds to be used in specific ways that align with your broader estate plans, you might designate the trust as a beneficiary of the policy.

By carefully considering the inclusion of these assets, you ensure that your trust is both effective and efficient. The goal is to facilitate a smooth transfer of your assets according to your wishes while minimizing tax liabilities and legal complications. For more detailed guidance, consulting with a professional experienced in estate planning, like those at Pace CPA, is recommended. This strategic approach helps you navigate the complexities of trusts and ensures that your assets are managed exactly as you intend.

In the next section, we’ll explore how to fund your trust, including the steps for retitling assets and working with financial institutions to ensure your trust is fully operational.

How to Fund Your Trust

Funding your trust is crucial to its effectiveness. Without properly transferring your assets into the trust, it won’t function as intended. Here, we’ll discuss how to retitle assets, manage deed changes, and work with financial institutions.

Retitling Assets

Retitling assets to your trust is essential. This means changing the ownership of your assets from your personal name to the name of the trust. For example, if you own stocks, a house, or a car, these need to be retitled in the name of the trust.

  • Stocks and Bonds: Contact your brokerage firm to retitle your stocks and bonds. They will require a copy of your trust agreement and may have forms for you to fill out.
  • Vehicles: For cars or boats, visit your local DMV with a copy of your trust document and request a change of ownership.
  • Safe Deposit Boxes: You can retitle a safe deposit box by providing the bank with a copy of your trust document.

Deed Changes for Real Estate

For real estate, the deed needs to be legally changed to reflect the trust as the new owner. This is done by preparing a new deed that transfers the title from your name to that of the trust. It’s advisable to work with an attorney to ensure that the deed complies with local laws and that the transfer is recorded properly.

  • Primary Residence: You will need an attorney to prepare a new deed transferring ownership into your trust.
  • Investment Properties: Similar to your primary residence, have an attorney prepare and record the appropriate deeds.

Working with Financial Institutions

When it comes to bank and investment accounts, you’ll need to provide your financial institutions with details of your trust. Most banks and investment firms have specific procedures for funding trusts.

  • Bank Accounts: Visit your bank in person or contact them online to find out the process for retitling your accounts. You will likely need to provide a Certificate of Trust or similar documentation.
  • Brokerage Accounts: Contact your investment broker to retitle your non-retirement brokerage accounts into the name of your trust.

Important Considerations:
Documentation: Always keep copies of all correspondence and forms submitted for your records.
Verification: After submitting your documents, verify with each institution that the changes have been made.

Trust Funding Process - what type accounts belong in trust

By following these steps, you ensure that your trust is properly funded and that your assets are managed according to your wishes. For more detailed guidance, consulting with a professional experienced in estate planning, like those at Pace CPA, is recommended. This strategic approach helps you navigate the complexities of trusts and ensures that your assets are managed exactly as you intend.

In the next section, we’ll address some frequently asked questions about trusts, such as what types of accounts cannot be used for a trust and how to list assets in a trust.

Frequently Asked Questions about Trusts

What Type of Account Cannot Be Used for a Trust?

When setting up a trust, it’s critical to know which accounts should not be included due to legal and tax implications.

  • Retirement Accounts: Accounts like IRAs and 401(k)s are designed for individual ownership. Including these in a trust can lead to immediate tax consequences, negating their tax-deferred benefits.
  • Health Savings Accounts (HSAs): HSAs are intended to be individually owned. Transferring an HSA into a trust could trigger unwanted tax consequences and potentially lose the account’s tax-exempt status.

How Do You List Assets in a Trust?

Properly listing assets in a trust ensures they are handled according to your wishes. Here’s how it’s typically done:

  • Schedules: Assets are listed in schedules attached to the trust document. This includes detailed descriptions and any specific instructions regarding each asset.
  • Legal Documentation: For assets like real estate, proper legal documents such as deeds must be retitled in the name of the trust to ensure they are legally part of the trust’s holdings.

Why Not Put Checking Account in Trust?

While it might seem convenient to include everything, certain accounts are best left out of trusts for practical reasons:

  • Accessibility: Checking accounts are often used for daily transactions. Including this in a trust can complicate easy access to funds needed for regular expenses.
  • Probate Avoidance: Interestingly, checking accounts can be set up to transfer directly to a designated beneficiary upon death through a payable-on-death (POD) arrangement, which also avoids probate without needing to be part of a trust.

Understanding these nuances helps ensure that your trust is both effective and efficient, tailored to meet specific needs and circumstances. For further clarity on setting up and managing trusts, professionals like those at Pace CPA can provide expert guidance tailored to your unique situation. Next, we’ll explore how to fund your trust effectively.


When it comes to securing your financial future and ensuring your assets are distributed according to your wishes, trusts offer a compelling solution. By choosing the right types of accounts and assets to include in your trust, you can optimize the benefits of this powerful estate planning tool.

Trusts provide several advantages that make them an essential part of a robust estate plan:
Avoidance of Probate: Trusts allow for the direct transfer of assets to beneficiaries without the costly and time-consuming process of probate. This means your heirs can access their inheritance more quickly and with less hassle.
Flexibility: You can specify exactly how and when your assets are distributed, which is particularly useful if you have minor children or beneficiaries who might not manage a lump sum wisely.
Privacy: Unlike wills, which become public documents once they enter probate, trusts maintain privacy by keeping the details of your estate out of the public eye.

At Pace CPA, we understand that each individual’s financial and family situation is unique. That’s why we offer fiduciary tax services that cater to the specific needs and goals of our clients. Our team of experts is dedicated to helping you navigate the complexities of trust setup and management, ensuring that your estate planning is not only effective but also aligns perfectly with your long-term objectives.

Whether you are looking to manage inheritance, plan for educational expenses, or ensure financial stability for your beneficiaries, setting up a trust account is a wise step. Let us help you take control of your legacy. Reach out today and let’s start building a secure financial future for you and your loved ones. Trust in us to make your estate planning successful and your peace of mind guaranteed.


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