Funding Your Living Trust: The Step Most People Skip

Here's a scenario that comes up more often than you'd expect: someone pays to have a living trust drafted, signs it, feels good about having "done their estate planning," and then their family still ends up in probate after they die. The reason is almost always the same — the trust was never funded.

What "Funding" Means

Creating a trust document is only step one. The trust is just an empty container until assets are actually retitled into its name. "Funding" means the legal process of transferring ownership — your house, your bank accounts, your investment accounts — from your individual name into the name of your trust.

Why This Step Gets Skipped

It's not usually negligence — it's that funding is less exciting than signing the trust document, and it requires separate steps with each institution:

• Real estate needs a new deed recorded with the county, transferring the property to you as trustee
• Bank and investment accounts need to be retitled or have the trust added, which usually means an in-person or online request with each institution
• Business interests may need assignment documents depending on the entity type

If an attorney hands you a signed trust and stops there, the funding step is often left entirely to the client — and life gets busy.

What Happens If a Trust Isn't Funded

The trust document itself doesn't control an asset that was never transferred into it. If your house is still titled in your individual name when you die, it generally still needs to go through probate — the same process a funded trust was supposed to avoid — regardless of what the trust document says should happen to it.

A Practical Checklist

• Real estate: has a new deed been recorded transferring the property to the trust?
• Bank accounts: are they titled in the trust's name, or at minimum does the bank have the trust on file?
• Investment and brokerage accounts: same question
• New assets acquired after the trust was created: have they been titled in the trust's name, or do they need a separate step?
• Beneficiary-designated accounts (retirement accounts, life insurance): these usually aren't funded into the trust directly — they're coordinated through beneficiary designations instead, which is a different (but related) step worth reviewing

The Takeaway

A trust is only as good as its funding. If you have a living trust and you're not certain whether your major assets were actually retitled into it, that's worth confirming — ideally before it matters, not after.