Setting up a trust: what to do with CDs?
October 1, 2011 5:39 PM Subscribe
My brother and I are helping our elderly mother set up a trust with the help of a lawyer. She has signed over her assets, house deeds, car title, stocks, bank accounts etc to the trust. She also has a number of CDs that we were led to believe would go into the trust as well. But now they're not?
posted by TWinbrook8 to Work & Money (6 answers total)
The CDs have my mother's name and also my name or my brother's name (or another heir) on them. (I don't have a statement with me and I can't remember the exact wording.) My mother did this so it was very clear who would inherit what. We gave the CD account numbers with all the other information to the lawyer who is setting up the trust and now, months later, it is finally happening. At our meeting with him last week, everything was signed and then, as we were getting up to leave, I had a question about the CDs and that's when he said they would not be part of the trust, that the next time they are due to be renewed, my mother should take her name off them and turn them over to the heirs.
Huh, wha? Does this make sense? We had always discussed them as being part of the trust that we would eventually inherit. Aren't the tax implications pretty severe if she turns them over to us now (for instance, mine comes due again in December)? We're talking very low six figures here. Sure I could use some of the money now but not all of it and I certainly don't want to lose a whack of it to the IRS if I don't have to.
I guess in a perfect world, I would like a portion of it in December and the remainder put into a new CD in both our names like before and have that go into the trust. Is this possible/advisable? This is in NH and you are not my lawyer.