Despite the fact that I grew up on the Monterey Peninsula, my favorite sports team is the Green Bay Packers. Perhaps it was my attraction to watching football being played in inclement weather, my love for America’s small towns, my affection for green and yellow, my addiction to cheese, or the fact that the Packers are owned by approximately 112,000 members of the public who have limited voting powers, no rights to dividends, but who are entitled to free tours of Lambeau Field.
There are rumors that Packers stock will go on sale for the fifth time in history at the end of this season and I am ready to buy a share of my favorite team. After all, in my battle with my wife – a Patriots fan – over what team our 17-month old son will support, what better way to seal the deal than to be able to pass on ownership of an NFL team to him?
As an Estate Planning attorney, my immediate thought is once I buy the Packers stock, how do I fund it into my Revocable Living Trust? Trust funding is a process of changing title so that the title reflects the existence of the Trust as the owner of the asset. Trust funding makes it easier for successor trustees to gain control of the assets in the event of incapacity or upon death and generally avoids the court-supervised procedures known as conservatorship and probate.
The process for trust funding varies depending upon the specific asset. For example, real property is funded into a Trust by drafting and executing a deed and recording it with the county Recorder’s office. Bank accounts, safe deposit boxes, and taxable brokerage/investment accounts are funded into a trust by filling out signature cards or ownership documents, changing ownership from individuals to the Trust.
When it comes to stock held in certificate form, generally the process is to mail the stock certificates to the stock transfer agent and request that the certificates be re-issued in the name of the Trust. With regard to the Packers stock I plan to acquire, since my motivations for owning it are sentimental rather than economic, and since the Packers stock certificate will have no resale value, I’m going to prefer to have the stock certificate show my name as the owner rather than my Living Trust.
However, I will “assign” my ownership of the stock into my Trust by drafting a document that states I intend to hold the asset in my Trust. Assignments are generally used to transfer tangible personal property – assets with no formal title – into Trusts, but may be used in other circumstances – such as my Packers stock situation.
With the Packers stock funded to my Living Trust, it will pass on to my son free of probate, and he will (hopefully) continue a tradition of being a West Coast Cheesehead!