Trust planning, whether it involves a revocable trust or an irrevocable trust, often includes critical details like naming the trust, which can significantly impact privacy, asset protection, and administrative ease. The two key secrets to naming your trust are essential regardless of the type of trust. Many people use a revocable living trust to avoid probate by transferring assets into the trust during their lifetime. Irrevocable trusts may also be funded during one’s lifetime or after death, but the principles of naming apply to both.
The first consideration when naming a trust is privacy. A common mistake is naming a trust after the family, such as “John and Jane Smith Revocable Living Trust.” This approach can compromise privacy and asset protection. For example, if the trust owns real estate, business interests, or other assets, a creditor or potential litigant could easily trace ownership by searching public records or Secretary of State filings. By naming the trust something unrelated to the family, you reduce the risk of unwanted attention and enhance asset protection.
The second consideration is administrative ease. When trusts evolve over time, such as a revocable trust becoming irrevocable after the grantor’s death, retaining a name like “Revocable Living Trust” can create confusion and administrative burdens. For instance, assets titled under a trust with “revocable” in its name might need retitling when the trust’s nature changes. This process involves updating deeds, brokerage accounts, LLC ownership records, and more—an unnecessary hassle that can be avoided with proactive planning.
To summarize, for privacy and asset protection, choose a name for your trust that isn’t associated with your family. Additionally, avoid including “revocable living trust” in the trust’s name to prevent future administrative complications. These thoughtful decisions can streamline trust management and provide greater security for your assets.