Q: How confidential are trusts? Is there anything I can do to make my trust more confidential?
A: Confidentiality is one of the big selling points for trusts. If you meet with an attorney, you will likely be told how estate files are public records yet trusts are not.
All of that is true, to an extent. As a general rule, probate estate files are public records, theoretically, available to the public. Personally, I don't think it is quite that easy.
In order to view a probate file, you need to get past the clerk. Before a person can gain access to a probate file, there may be some questioning. Probate files are not sitting out on the counter available to anyone who happens by. On the other hand, if you are persistent, you will likely be able to review the file.
If a person gains access to a probate file, what they will find may not be all that interesting anyway. Sure they will be able to see the will and who is getting your stuff, but information such as social security and bank account numbers are redacted and kept in a separate file that is not available to the public.
Unlike wills, trusts are generally not presented for probate. Therefore, there will not be a file at the clerk's office with a copy of the trust in it.
A copy of the trust must be attached to the Indiana Inheritance Tax Return when it is filed. However, an Inheritance Tax Return is confidential and not available to the pubic for review.
Usually when the confidentiality of a trust is challenged, it's not at the clerk's office, but rather at a place you wouldn't expect, your bank. Before some banks will re-title bank accounts into the name of a trust, they insist on seeing a copy of the trust. I once had a bank tell me that they didn't need an entire copy of the trust, but wanted to be the ones making the copies of the pages they did need. As silly as it sounds, they got their way.
My position is that bank does not need an entire copy of the trust. All they need is certain pages from the trust: front page, signature page, successor trustee page and the powers of the trustee page(s). The other pages are none of your bank's business and I would resist turning over an entire copy. If your bank insists on seeing a full copy of the trust, you have the option of providing them the information or doing business somewhere else. Guess which one I would choose?
On the other-hand, if you provide a copy of your trust to your bank, it's not like it's going to be posted on the rate board. Banks are subject to rules regarding confidentiality that are much stricter than those imposed on the clerk's office.
If you are concerned about your neighbors knowing how much money you left your family, you should consider using a trust. On the other-hand, I think you'd be surprised how little your friends and family actually care.
Opinions expressed solely are those of the writer. Christopher W. Yugo is a member of the Indiana Bar and a vice president and senior trust Officer for First National Bank's Trust Department. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN, 46321. Yugo's information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planning specialist.
