Advertising Disclosure
  1. Home
  2. Community
  3. Ask
  4. Bread Savings

Bread Savings

Ltssharon
  |     |   471 posts since 2020

bread savings has a 4.5 apy 5 year cd. They are online institution. I called them and asked if I could title the cd in the name of my revocable living trust. They said NO. They said after I open the cd I could add a beneficiary in the name of my trust. So the trust would be a beneficiary.

Are there disadvantages of doing this? The CD will not be an IRA. I tried googling it, but didn't find this specific situation. If you have experience, please share it. Thank you.

  Post an answer
1


Answers
Kirkland
  |     |   374 posts since 2014
I don't have any experience in this but some of my comments might help. So changing the title from your name to a revocable trust has no immediate tax effect, because it is revocable, meaning you can change your mind, while you are still living, and can change the terms of that trust, change the beneficiaries of that revocable trust while you are alive. Once you pass away, it becomes an irrevocable trust and passes per the terms of the trust to the beneficiaries of that trust without probate. (Just as a CD passes to a POD beneficiary by contract (without probate)). If you have young children, you may have a co-trustee that you named in that revocable trust (now irrevocable), to manage the assets of that trust, once it becomes irrevocable.
Reply
2
lou
  |     |   1,004 posts since 2010
*********************
Reply
1
Kirkland
  |     |   374 posts since 2014
Just to be clear, both ways pass it to someone other than your estate on your death. It is likely, that the (online) financial institution does not want to allow title in the name of the trust, because then they may be responsible for keeping an original copy of your revocable trust on file in their records (sometimes they can be 100 pages). Either way, by law (title) or by contract (beneficiary designation) it will pass to someone other than your estate on your death (without probate). And if you have a separate will, the will, will (haha triple will) NOT govern the transfer of it (non-probate property)
Reply
1
Ltssharon
  |     |   471 posts since 2020
Thank you Kirkland. Plus I loved your triple WILL.
Reply
1
lou
  |     |   1,004 posts since 2010
There is no problem having a formal trust as the beneficiary of your account, as long as the owners of the account are the same as the owners of the formal trust. So if you and your wife are joint owners of the account in question and you make a formal trust as the beneficiary of the account, then the owners of the formal trust need to be you and your wife. The amount of NCUA/FDIC insurance will be determined by the number of beneficiaries in the formal trust.
Reply
1
Ltssharon
  |     |   471 posts since 2020
Thank you. THen it will work for me, because I am the titled owner of the account, as well as trustor and trustee of my revocable living trust. YAY
Reply
1


The financial institution, product, and APY (Annual Percentage Yield) data displayed on this website is gathered from various sources and may not reflect all of the offers available in your region. Although we strive to provide the most accurate data possible, we cannot guarantee its accuracy. The content displayed is for general information purposes only; always verify account details and availability with the financial institution before opening an account. Contact [email protected] to report inaccurate info or to request offers be included in this website. We are not affiliated with the financial institutions included in this website.