A trust you open during your lifetime is called a living or inter vivos trust, and it can ease the process of passing your assets to your loved ones after you die. Trust assets aren't subject to the probate, like assets transferred to someone with a will, and that makes them a useful part of estate planning. You can include an inventory of your trust property in a document called a trust schedule, which guides the trustee as they carry out their duties managing the trust and ultimately distributing the assets to people you’ve chosen.
Using a trust schedule
A trust schedule is a simple, written inventory of the trust property, which may include:
Real estate
Bank accounts
Investment accounts
Personal items
Life insurance
The trust schedule doesn't actually transfer the assets into the trust. When setting up a trust, you still need to go through the process of properly funding it, and making the trust the legal owner of the property. For example, if you want to put your house in a trust, you'll need to retitle a deed into the name of the trust, file a copy with the local recording office, and keep a copy for your own records. If you fail to transfer assets into the trust, it may not be received by the trust beneficiary.
Read this guide on how to fund a trust.
For married couples who've opened a joint trust in a community property state, they may need multiple inventory lists. They can create one schedule to list their marital property, and additional schedules for each of the spouses to identify their own separate property in the trust. (In community property states, spouses own marital property equally.)
Schedule A: Community property
Schedule B: Spouse one's separate property
Schedule C: Spouse two's separate property
Learn about all the different types of trusts.
Why and how to make a trust schedule
Providing a successor trustee with a trust schedule can make it easier for them to settle the trust after you pass away. The trust schedule can act as a reference guide, letting them know what assets you intended the trust to own and to look out for the legal paperwork that indicates so.
There isn't a formal way to write a trust schedule — so you can easily do it yourself without an attorney and update it, too, which you should do periodically as you remove or add trust property.
Many people with a trust can benefit from including a pour-over will in their estate plan; this will let you “pour over” any forgotten assets into your trust after you've died so they can be received by a trust beneficiary. (Note that the trustee will still need to properly retitle the assets into the trust’s name.)
Schedules for trust taxes
Tax forms are also called schedules, and you may have encountered them when filing your income tax return. In certain situations, the trustee will need to file an income tax return for the trust (Form 1041), and while doing so may need to use various schedules (IRS forms.) These schedules related to taxes are unrelated to the trust schedule that lists assets, discussed earlier.
Additionally, trust beneficiaries may receive a form, called Schedule K, if they received income from the trust, which they must claim as income on their individual tax return.
Learn more about trust taxes.
