Estate Planning and the Fool
Transferring Trust Assets

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By Lokicious
July 23, 2008

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I'm probably wasting my time, but with bank failure scares, I'm hoping for an opportunity to get mother-in-law (who apparently has much more money at her local bank than we had any idea) to take some advice about what to do with assets in her pass through trust (father in law deceased going on three years now). My wife is only heir.

There are a few issues (and we still don't know what the actual trust assets are):

1) What the assets are (which I don't think she really wants us to know, though she from time to time she tells us stuff, like now about these bank assets).

2) Where the assets within the trust are (banks, full service brokerage account, I believe).

3) The fact that the trust is managed by some local guy she likes personally, but doesn't strike me as particularly good at providing advice (the last thing I want is someone to give her advice about stocks, etc., but bank diversification to get enough FDIC is pretty basic). Also have doubts about her stock broker.

What I would like her to do is move a lot of her assets to Vanguard brokerage. (She hasn't met with her local stock broker since her husband passed away, so an anonymous Vanguard broker would be fine.) She likes Vanguard and once had index fund money there, until her late husband decided to cash out (he liked stock picking). And most importantly, Vanguard has brokered CDs, so all the cash assets could get FDIC insurance (and she could build a ladder, instead of just keeping everything in 1-year CDs on the grounds she might not live more than a year).

In my dream world, Vanguard could take over managing the trust, without giving investment advice.

But, now for my question: would there be any difficulty within a trust simply doing an asset transfer, starting by transferring all the stocks held in the trust (father-in-law's pass through plus MIL's trust) from full service broker to Vanguard, like could easily be done for a regular account?

I presume, once a Vanguard brokerage account was established, cash assets in the trust, currently uninsured at local bank, could also be transferred (probably wire transfer, since she can't deal with internet, and I have actively discouraged her from doing anything financial via the internet, since $20 for a wire transfer is a whole lot less expensive than phishing).

Anyway, would the asset transfer be simple. (I know she has some concern about the trust being in California, but I assume you could hold trust assets anywhere.)