Re-titling Assets Contained in a Trust is Particularly Important

You have signed a will, so after your death everything will go exactly as you have laid out, right? Not necessarily. 

If your assets are not titled correctly, and if your intended beneficiaries are not listed on your accounts, the distribution of your assets may be determined in probate court rather than at the reading of your will.  

For example, say you have a 401(k) retirement account with a balance of $750,000 which you intend to pass equally to your two adult children, as stated in your will. However, when you started the 401(k) 30 years ago, the children were toddlers and you listed your spouse as the beneficiary on the account documents.  

The conflict between the two documents will have to be hashed out in probate court. Even if you did not list any beneficiaries on the 401(k) documents, leaving the account to your children in your will would not be enough to make that happen without a long, drawn-out probate process. The will and the beneficiary listings must agree. 

Even stickier situations arise when a retirement or investment account still lists a first spouse as the beneficiary, setting up a probate battle with the second (and surviving) spouse. 

Periodic Review 

Lapses in titling and beneficiary designations are the inevitable result of putting an estate plan on the shelf and never reviewing or updating it. Things change, children grow older, marriages begin and end, grandchildren are born, new assets are acquired, and if an estate plan doesn’t keep up, a family conflict will likely be played out – publicly – in probate court. 

Working with an advisor and reviewing your estate plan periodically – every few years or when important life cycle events occur such as births, marriages and deaths – can help ensure that your assets are properly titled, beneficiary lists are updated and your will reflects your wishes. 

When most people think of assets that must be titled or include beneficiaries, they think of homes and life insurance policies. But there are many other assets that must be properly titled or that must include updated beneficiaries that align with the owner’s estate documents, including: 

  • Investments 
  • Business ownership  
  • Vehicles 
  • Certificates of Deposit 
  • Bonds 
  • Annuities  
  • Land and real estate 
  • Unfunded Trusts 

If you have a trust for the purpose of expediting distribution of your estate upon your death, the assets covered by the trust must be properly titled to be considered within the legal purview of the trust. In other words, if you intend for a trust to cover your residence and all your investments, then the home must be re-titled as belonging to the trust, as well as the investment accounts. 

This doesn’t mean you no longer own your home. It simply means your intention to include it in the trust has been legally executed by re-titling the home, as well as your other assets. 

The presence of a trust document that covers a residence and investment accounts that have not been property re-titled will result in a trip to probate court. 

Types of Titling & Beneficiary Designations 

Beneficiary designations can be made on all investment accounts and retirement accounts. But savings accounts, money market accounts, CDs and other types of investments don’t ask for beneficiary designations. For those accounts, you can use a “transfer on death” (TOD) or “payable on death” (POD) designation – usually a checkbox on the owner’s signature document – to identify who should get the account in the event of your death. A TOD or POD designation gives the beneficiary immediate access to the funds in the account, usually upon presentation of a death certificate. 

It is not uncommon for a person to have an investment account with their spouse listed as a primary beneficiary, but they haven’t listed a contingent beneficiary. In the event that two spouses die at the same time (say, in a car accident), the distribution of these accounts becomes a matter for probate court. It’s a good idea to list at least one contingent beneficiary on all accounts, or more. 

It is also possible when listing beneficiaries to allocate percentages of financial assets to each one. For example, if you list a grown child as a primary beneficiary, but you also want to provide for a favorite niece, you may allocate 75% of the account to your child and 25% to the niece. 

Various forms of titling carry different benefits, such as: 

  • Individual – This means you as the owner have complete control over the assets during your lifetime. You may have a TOD or POD designee, but if not, the account will go through probate on your death. 
  • Joint Tenants with Rights of Survivorship – This is the most common form of asset titling for married couples. It means if one partner dies, the asset passes to the surviving partner with no probate. 
  • Joint Tenants in Common – This is typically used when an asset is owned by two people who are not married. If one partner dies, their share of the ownership goes to their estate, but the other half of the property still is owned by the surviving partner.  This type of ownership might be used by siblings who own a farm together, for example. If one sibling died, their share of ownership would go to whomever they designated in their will or trust. 
  • Unique trusts – Some estate plans include unique trusts that are intended to benefit certain people, institutions or nonprofits. It’s important that the purpose of the trust be included in the name of the trust.  


Titling and beneficiary designations are critically important to ensuring the smooth execution of your estate plan, and to giving you confidence that your wishes will be carried out after your death. 

If you would like an estate plan review and a discussion of the assets you own that may need to be updated, contact an Adams Brown advisor. 

Note: The firm is not engaged in the practice of law or accounting. Content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.