Founding Attorney
Yes, in most cases, a revocable trust should be funded as soon as it is signed. An unfunded trust is little more than paperwork, while a funded trust actually controls your assets and does the job you created it to do. So here’s the real question: if you’ve gone through the effort of setting up a trust, why leave it unfinished?
We hear this question often, especially from people who assume funding can wait. Let’s break down what funding really means, why timing matters, and how to approach it without turning it into a drawn-out project.
What It Means to Fund a Trust
A trust is “funded” when assets are formally transferred into the trust’s name. Until that happens, the trust does not own anything, which limits its usefulness.
A funded trust might hold:
- Real estate retitled in the name of the trust
- Bank or investment accounts owned by the trust
- Non-retirement assets assigned to the trust
An unfunded trust, on the other hand, exists only on paper. It may describe how assets should be managed or distributed, but it has no authority over property that was never transferred.
Why Most Revocable Trusts Should Be Funded Promptly
When a trust is left unfunded, it cannot avoid probate for the assets still held in your individual name. That often defeats one of the main reasons people choose a revocable trust in the first place.
Funding your trust promptly helps:
- Ensure assets pass according to the trust terms
- Reduce the chance that probate becomes necessary
- Keep management instructions clear if incapacity occurs
Delaying funding can also create confusion later, especially if life changes or assets are added and never properly titled.
Assets That Are Usually Transferred Right Away
Some assets are commonly moved into a trust shortly after it is created. These are typically assets where trust ownership aligns cleanly with how the asset is used.
Examples include:
- Primary residences and other real estate
- Non-retirement brokerage accounts
- Savings and checking accounts above a working balance
We often help clients prioritize these transfers so the most important pieces are handled first.
Assets That May Be Transferred Later or Handled Differently
Not everything needs to be retitled immediately, and some assets should not be retitled at all.
Common examples include:
- Retirement accounts, which usually stay in the individual’s name with updated beneficiaries
- Vehicles, depending on state-specific considerations
- Day-to-day checking accounts used for routine expenses
In these cases, coordination through beneficiary designations or pour-over wills often fills the gap.
The Risks of Leaving a Trust Unfunded
An unfunded trust can create problems that are easy to miss until it is too late to fix them.
Risks include:
- Assets still going through probate
- Conflicting instructions between a will and a trust
- Added work and expense for family members
We have seen situations where families were surprised to learn that a carefully drafted trust did not control most of the estate simply because funding never happened.
Practical Steps for Retitling Assets
Funding a trust does not require guesswork, but it does require follow-through.
The process usually involves:
- Updating deeds for real estate
- Working with banks and investment firms to retitle accounts
- Confirming beneficiary designations align with the trust
Each institution has its own process, which is why coordination matters.
Working With Financial Institutions
Financial institutions often have specific forms, documentation standards, and internal review processes. Some move quickly. Others do not.
We regularly coordinate with banks, advisors, and title companies to:
- Provide the correct trust documentation
- Address questions about trustees and authority
- Confirm accounts are titled correctly
This step helps avoid delays and ensures the transfer is actually completed, not just started.
Finishing What You Started
Creating a trust is an important step, but funding it is what makes it effective. When you are ready to move forward, Unique Estate Law can help you identify which assets to transfer, which to handle differently, and how to complete the process efficiently. Contact us if you have questions about funding a trust or want help getting it fully in place.