For California-based individuals and families looking to avoid probate, which is a goal of many of our estate planning clients, we commonly recommend you create a revocable living trust and properly title your assets in the name of that trust while you are living, among other steps. We also encourage individuals and families to use tax season, and all the tax reporting you get, to confirm that you've done this.
A common follow up question is: Does my checking account need to be titled in the name of my trust? Our answer is always yes, we strongly recommend it.
Advantages to titling your checking account in a revocable trust
Titling a checking account in the name of a revocable trust has a few key advantages:
- Your designated successor trustee can quickly and efficiently access the account upon your incapacity or death, ensuring that bills and other financial obligations are met without interruption.
- Probate is not required to access the checking account at your death.
- The balance in the account passes pursuant to the terms of your thoughtful estate plan.
Practical considerations
To title your checking account in the name of your revocable trust, you need to contact your bank, let them know you have a revocable trust and would like to title your accounts in the name of the trust. They will ask you questions about the trust, all of which are answered in the trust certification that was provided to you when you signed your estate plan. Your estate planning attorney will have a copy if you need it. Sometimes, we've heard financial institutions can be frustrating to work with (they will require their own paperwork and sometimes require a delay while their legal department reviews it), but once the account is titled in the name of the trust your account should work exactly the same as it did before.
Clients often ask if they will be required to get new checks if they put their checking account into their trust. The answer is: it depends on the bank. I have checking accounts at two banks and both are titled in the name of my revocable trust. One bank required the name of my revocable trust to appear on the checks. One did not and my checks continue to reflect my individual name. Some clients have expressed concern that having their revocable trust listed on checks will signal to others that they are wealthy and compromise their privacy. I have not experienced this myself as it is very common, in California in particular, for any homeowner to use a revocable living trust.
Alternatives to titling your checking account in a revocable trust
If you choose not to title your checking account in the name of your revocable trust, it is highly recommended that you take other steps to avoid probate. The most common is to name a "Pay on Death" beneficiary of your checking account. This must be done by completing a beneficiary designation form with your bank designating the revocable trust as owner upon your death. If you do this, we recommend that you send your Withers estate planning attorney a copy of that designation for your file. Another option is to name a "joint owner" who will automatically inherit the account at your death. This may be a good solution if you are married (the account will automatically belong to your spouse if you pass away). If you name any other beneficiary, they will legally own the account upon your passing and it will not be subject to the terms of your estate plan so caution is recommended.
If you do not take any of the above steps to avoid probate and die with your checking account in your name alone, the account will be frozen when you die. If its balance, combined with all other assets held in your individual name without a joint owner or beneficiary, is less than the "small estate" limit in California ($184,500 or less in 2025), it can be claimed by your revocable trust trustee but only after 40 days have passed following your death. If these assets exceed the small estate limit, a probate proceeding will likely be required to gain access to and distribute the funds in the account.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
