Podcast Summary: "Titling Assets: The Critical Step After Estate Docs Are Signed"

Episode Release Date: June 10, 2025
Podcast: The Practical Planner
Host: Thomas Kobelman
Co-Host: Dave Haughton
Production: wealth.com

Introduction

In this insightful episode of The Practical Planner, hosts Thomas Kobelman and Dave Haughton delve into the often-overlooked yet crucial aspect of estate planning: titling assets. They emphasize that while setting up estate documents is essential, ensuring that assets are correctly titled to reflect these documents is equally important to avoid unintended probate and administrative complications.

The Importance of Titling Assets

Thomas opens the discussion by highlighting titling as a significant pain point in estate planning. He states:

"I think it's actually the almost the biggest pain point in estate planning... there's all the conversations about, what's an estate plan if it never gets funded? And part of funding is also titling..."
[00:11]

Dave agrees, noting that many clients establish a trust but fail to transfer their assets into it, leaving the estate plan incomplete:

"A lot of times if a client goes to see an attorney, they get their trust in place... they forget by the time they reach the parking lot, right. And nothing ever gets in."
[01:49]

Bank Accounts

The discussion begins with bank accounts, where Dave emphasizes the necessity of titling non-qualified assets in the trust’s name to avoid probate and complications during incapacitation.

"You need to set up... any non-qualified assets in accounts you want to be in the name of the trust... instead of TOD."
[02:45]

Thomas expands on the practicality, acknowledging that clients often have multiple accounts:

"We have multiple savings accounts... do you maybe see this as like... the main account you're operating in plus what's like kind of the big savings account?..."
[03:18]

Dave adds that while prioritizing larger accounts is essential, overlooking smaller accounts can inadvertently trigger a full probate process:

"But if you leave too much out, you could cause a full blown probate, which is what you're trying to avoid in the first place."
[04:44]

Qualified Accounts

Moving to qualified accounts such as IRAs and Roth accounts, Thomas points out the limitations in titling these accounts in the trust’s name:

"How do we do it there? ... you're not able to title them in the name of the trust."
[09:27]

Dave explains the standard approach of naming a spouse as the primary beneficiary to leverage unique tax benefits. He also discusses scenarios where naming the trust might be beneficial, especially when dealing with minors or dependents with special needs:

"The spouse usually carries with it really unique benefits under the tax law to be the direct primary beneficiary."
[10:02]

Non-Qualified Accounts

In the segment on non-qualified accounts, Dave reinforces the importance of retitling these accounts into the trust to ensure seamless asset transfer and avoid probate.

"What I found is that the process for transferring to a successor trustee is far easier than with a power of attorney."
[15:28]

Thomas reassures listeners that retitling these accounts is generally straightforward, often requiring only the trust’s certification.

"You just have to retitle it with them... it's really not some hard thing to do."
[16:00]

Business Ownership

The conversation shifts to business ownership, where Dave highlights the complexities involved in transferring business interests into a trust, especially with entities like S Corporations:

"You might say, yes, I want my business to own my trust asset... what if it's an S corp?"
[17:02]

Thomas asks for clarification on potential downsides related to S Corporations, prompting Dave to discuss eligibility and compliance issues:

"There are restrictions... you don't want to disqualify your S Corp simply because you put it into a trust."
[18:30]

Private Investments

Addressing private investments, Dave emphasizes the necessity of evaluating each investment’s unique restrictions and ensuring compatibility with trust structures:

"When it comes to private investments and alts, they have all different kinds of subscription information..."
[19:40]

Thomas shares a real-world example indicating the challenges investors might face when integrating complex assets into their estate plans:

"They can't do any estate tax planning because they've been told by SpaceX that they already have the max number..."
[20:18]

Life Insurance

In the final asset category, life insurance, Dave discusses the flexibility and considerations when naming a trust as the policy’s beneficiary or changing its ownership:

"You can change the ownership of a life insurance policy into a trust... it depends on what type of life insurance you have."
[21:06]

Thomas underscores the importance of coordinating with advisors to navigate the nuances of life insurance in estate planning:

"It's something again to talk with your advisor about."
[22:04]

Conclusion

Wrapping up the episode, Thomas and Dave reiterate the critical role of advisors in ensuring that estate plans are fully funded by correctly titling assets. They stress the ongoing responsibility of advisors to assist clients in systematically transferring assets into their trusts:

"Our job is to help make sure everything gets funded because we're working with them on a yearly basis."
[22:51]

Thomas encourages listeners to engage with their advisors and estate planning attorneys to navigate the complexities of asset titling, ensuring that their estate plans work as intended.

"Hopefully this helps... you're one of your biggest roles is how do I help after the estate documents are drafted."
[22:50]

Key Takeaways

1. Titling Assets is Essential: Establishing estate documents without correctly titling assets can lead to probate and unintended distributions.
2. Prioritize Major Accounts: Start by retitling significant bank and investment accounts to avoid major probate issues.
3. Qualified vs. Non-Qualified Accounts: Understand the differences and limitations in titling various account types within a trust framework.
4. Complex Assets Require Careful Planning: Business interests and private investments need specialized attention to align with estate planning goals.
5. Life Insurance Considerations: Properly naming trusts as beneficiaries or adjusting ownership can enhance the effectiveness of life insurance in estate plans.
6. Advisor Collaboration is Key: Continuous collaboration with financial and legal professionals ensures that estate plans remain comprehensive and effective.

This episode serves as a comprehensive guide for advisors and clients alike, emphasizing the importance of meticulous asset titling in estate planning to ensure that one's wishes are fully realized without unnecessary legal complications.