I am wondering if I should put my checking and savings accounts in my trust. Is this really necessary? It really seems like a lot extra work. Plus, I have accounts with somewhat small balances at multiple banks.
– Straight Talker on Stephens Dr.
Dear Straight Talker on Stephens Drive:
I get this question a lot. In California, if an account is solely in your name (i.e.: the account does not have a beneficiary, a joint owner and is not in a trust), the bank’s “house rules” are to freeze the account after your death for at least forty days (and perhaps longer if more money is involved).
All family / heirs will be denied access to the account for bills, etc., regardless of how badly they need access to it.
I have seen circumstances where family members must put immediate (often expensive) bills, such as a burial and memorial, on credit cards because the banks have frozen the account.
If an account is in trust or has a beneficiary, there might be a short delay (i.e.: while awaiting a death certificate and other papers) but the delay is generally shorter.
Even though checking accounts are often “smaller” and seem less important, every account can matter in a time of crisis. Reducing stress on the family is critical, and we don’t need the “house rules” denying access to make things even more difficult.