Question:
Hi. Settlor’s (mother) assets were funded into into family trust. Her annuity was the only asset NOT funded into the trust. In 2014, a Certification of Trust was implemented for bank account, CDs, and stocks. Question: the verbiage in certification of trust states that settlor gives, grants, conveys, transfer, assigns, and sets over all of the settlor’s property, etc. Can I interpret this verbiage to mean that the certification of trust automatically FUNDED the annuity into the trust in 2014?
Response:
Probably not. The certification may work for many assets but not for annuities. Annuities are essentially contracts with insurance companies and are governed by the terms of the contracts. In all likelihood, your mother’s annuity contract sets out the terms of its ownership, who may own it and how the ownership may be transferred. In addition, it’s likely that the annuity permitted your mother to name the beneficiary of the annuity who would receive it at her death. She could have named the trust or any one or more individuals. If she named no one, the annuity will be part of her probate estate.
Blanket assignments of assets to trusts are useful, but is no substitute for taking the necessary steps to implement the actual transfer of ownership to the trust.
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