You Have a Trust. Is It Actually Funded?

he did everything right.

She met with an attorney. She signed a revocable living trust. She paid the fee, brought home a thick binder, and set it on the shelf in her office. She told her children it was handled.

When she died, her family opened the binder and felt relieved. The trust was real. The signatures were there. Then the attorney asked one question that changed everything. Was the house ever retitled into the trust?

It was not. Neither were the bank accounts. The trust existed on paper, but it owned nothing. So the estate went through probate anyway, the exact outcome she had paid to avoid.

A trust only protects what you put inside it. An empty trust protects nothing.

What funding a trust actually means

Creating a trust and funding a trust are two different steps.

Signing the document creates it. Funding it means changing the ownership of your assets so the trust holds them instead of you personally. Your home, your bank accounts, your investment accounts, your business interest. Each one has to be retitled or assigned to the trust by name.

Until that happens, the trust is a set of instructions with nothing to instruct.

This is the step that gets skipped. Signing may feeel like the finish line. It is actually the halfway point.

How a trust ends up empty

It rarely happens on purpose.

Sometimes the documents were prepared with the assumption that the client would handle the retitling, and the client assumed the attorney already had. Sometimes a home was refinanced years later and the lender moved the deed back into the owner's personal name. Sometimes a new account was opened after the trust was signed and nobody thought to title it correctly.

If the assets are still in your name, they are not in the trust.

The fix is simple but it is up to you

Funding a trust is not complicated. It is a checklist.

Real estate gets a new deed. Bank and investment accounts get retitled. Beneficiary designations get reviewed so they support the plan instead of working against it. Most of it can be done in a single afternoon.

The hard part is knowing it needs to be done at all. Most people who own a trust have never been told to confirm it is funded.

If you have a trust, the most valuable thing you can do this month is confirm it actually owns your assets. If you are not sure how to tell, we can walk through it with you. And if you are still deciding whether a trust is right for your family in the first place, start with our post on what a revocable trust is and who actually needs one.

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