A Trust That Isn’t Funded Isn’t Finished
At Wakefield Law, every day we meet with clients who want to create trusts or amend their existing trusts. One of the first questions we ask clients is whether their trust is FUNDED. Many of our clients have not heard of the trust funding process (even the ones who worked with attorneys the first time when they drafted their trust). Creating a trust is a powerful step toward protecting your family members and assets, avoiding probate, and making life easier in the event of incapacity or death. But here’s the part many people don’t realize:
Signing your trust documents is only the beginning. A trust that is never properly funded is, quite frankly, not worth the paper it’s written on.
What Does It Mean to “Fund” a Trust?
Funding a trust means making sure your assets are either:
Titled in the name of the trust, or
Designated to pass to the trust as beneficiary
The trust document itself does not magically control your assets just because it exists. The trust only governs what it actually owns.
If your house, bank accounts, investment accounts, or other significant assets are still titled in your individual name, those assets are still headed toward probate—despite all your careful planning. In this way, it’s the worst of both worlds because you went to the expense of having a trust drafted for you with an attorney, and your family will still have to go through the time and expense of probate.
The Most Common (and Costly) Mistake We See
Many clients come to us after working hard to create a trust, only to discover years later that:
The deed to the home was never transferred
Bank accounts were never retitled
Beneficiary designations were never updated
New assets acquired later were never added
Assignments of businesses and personal property were never properly drafted
In those cases, families are often stunned to learn that probate is still required. The result? Delays, court involvement, added expense, and stress at exactly the wrong time.
“I’ll Get to That Later” Is a Risky Plan
Life gets busy. Deeds and account changes don’t always feel urgent—until they suddenly are. Unfortunately, if funding is never completed (or updated as assets change), your estate plan may fail when it’s needed most. The law will control what happens to those unfunded assets, not your trust.
Funding Is a Process, Not a One-Time Event
Even if you correctly fund your trust today, things change:
New bank or investment accounts are opened
Real estate is purchased
Beneficiary designations are updated improperly
Retirement accounts or life insurance policies change
New business ventures can blossom and turn into assets that will be probated if not assigned into the trust
That’s why reviewing both your trust and how it’s funded is essential over time.
Our Role Is to Help You Finish What You Started
At Wakefield Law, we don’t view estate planning as a document-signing exercise. Our goal is to make sure everything is taken care of with the trust. The estate planning process can be a lot to deal with, but the intention is to make things simpler. Also, we want to give you the peace of mind that everything will be taken care of if something happens to you. An unfunded trust isn’t an estate plan—it’s just paperwork.
If you already have a trust (or are considering creating one), we encourage you to take the extra step of confirming it has been properly funded with us at Wakefield Law. Your family will thank you for doing it right and making sure the estate planning process is handled properly. Give us a call to learn more – 703.771.9740