Planning for Life

Is a General Assignment Sufficient to Fund a Revocable Trust?

Posted by Harry S. Margolis on August 4, 2011

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By Harry S. Margolis

If you sign a document saying that all of your assets will go into your revocable trust, will this work to fund the trust and avoid probate, or do you need to retitle each asset and account individually? In the California case of Kucker v. Kucker, the California Appeals Court answered in the affirmative, saying (with some caveats) that the general assignment worked.

Mona Berkowitz, age 84, executed a revocable trust and a general assignment of all of her personal property to the trust.  Personal property includes bank accounts, investment accounts, cash, and personal belongings, such as furniture, artwork, clothing, and jewelry.

At issue in this case was whether the general assignment covered certain stock.  There was a specific assignment of other stock, but one company was inadvertantly left off the form.  If it was not covered by the general assignment, Ms. Berkowitz's estate would have to be probated and the stock might pass to someone different, depending on the terms of her will and trust.

The trial court determined that the general assignment did not cover the stock.  But on appeal, the Californial Court of Appeals reversed determining that (1) there is no California law prohibiting the assignment of stock to a trust through a general assignment and (2) that it was clear that Ms. Berkowitz intended to transfer all of her property to the trust.  The Court commented that this finding would be different if real estate were involved.

While this case seems to have worked out for Ms. Berkowitz's intended heirs, we counsel clients to go the extra step of changing title to property they want to include so that there's no question that it has been transferred to the trust. And, of course, this case only applies in California.

Topics: Estate Planning

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