The Listen to Lawrence Letter: Changing trust assets and the look-back period

CLIENT QUESTION:

I am reading that introducing new assets into an already established trust will trigger a lookback period.  Does this include moving expired CDs from one bank to another every 5 years? Does moving the cash already in the account violate the lookback or anything else? Is interest earned considered introducing new assets into the trust?

Thank you.

MY RESPONSE:

No worries, my friend. A new lookback period starts when you transfer assets from your name into the trust.   Once the assets are in the trust, they can be re-invested without fear of new lookbacks and penalties. This includes any income those assets may earn. They only get one bite at the apple.

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