Living trust as beneficiary of TOD account?

[snic]

My elderly mother, whose finances I'm now managing, has all of her accounts held in the name of her living trust. I want to move some cash to a high-yield savings account at an online bank, Bread Savings, which consistently has among the highest rates available for FDIC-insured accounts. But they do not allow accounts to be held by a trust. They do, however, allow trusts to be the beneficiary.

Are there any tax or other potentially negative consequences of putting some of her money in an account held in her name with her living trust as the beneficiary? Her assets are well below the inheritance tax threshold. She will continue to maintain other bank accounts held in the name of the trust, so when the inevitable happens and her executor and successor trustee (most likely me) needs to access the money, the check made out to the trust should be easy to deposit. Or am I missing something?

[GilesMM]

First ask yourself how long she is likely to have the new account open and is it really worth the hassle for an extra couple percent interest to be opening new accounts at this time.


Second, if the beneficiaries are known now, they can be named directly, bypassing the trust process entirely and simplifying things.   If they are not known or could be changing in the future, then naming the trust should be fine.

[snic]

It is absolutely worth the hassle, to the tune of more than $5000 in interest earned over one year at 5% vs a couple hundred dollars at <0.5%. I plan to transfer some of the money into a 1 year CD at 5.2% yield.

Contingent beneficiaries are not allowed on TOD accounts, but they are listed in the trust and will.

[SilentC]

Why not just find an account where you can buy treasuries and keep in name of the trust?  I would prefer to make 40bos less and not need to worry about FDIC limits or potential probate problems.