Fund Your Trust: The Step That Makes It Work
Here is the part nobody tells you: signing your trust was the second-to-last step, not the last one. A trust only controls the assets that are actually in it. Right now, your trust may be an empty box.
"Funding" is the process of putting your house, your accounts, and your other assets into that box, by changing how they are titled and who is named on them. Until that is done, those assets can still go through probate, which is the exact thing you set up a trust to avoid.
The good news: most of it takes a few phone calls and a couple of forms, and you do not have to figure it out alone. That is what we are here for. If you get stuck on any step below, call us at 801-872-9889 and we will walk you through it.
Why a Trust Has to Be Funded
Think of your trust as a container. The legal document creates the container and names who is in charge and who benefits. But an empty container does nothing. Funding is the act of moving your assets into it, so that when something happens to you, those assets pass under the trust's instructions instead of through the courts.
A trust can be beautifully written and still fail completely if the assets were never moved into it. This is the single most common estate planning mistake, and it is entirely avoidable. The steps below walk through each kind of asset in plain English.
Step 1: Your Home and Real Estate
For most families, the home is the largest asset, so it matters most. If we prepared your estate plan, we most likely prepared and recorded a deed transferring your Utah real estate into your trust. Your copy is in your portfolio binder, behind the Trust Assets tab.
If you are not sure whether your real estate was transferred, or if you own property in another state, tell us. Out-of-state property is handled separately, and without it your family could face probate in that state.
Step 2: Bank and Credit Union Accounts
Call each bank and credit union. You can say: "I have a revocable living trust and I would like to retitle my accounts into the name of the trust." They will have you complete their form, and they will usually ask for a copy of your Certificate of Trust, which is in your binder.
This covers checking, savings, and CDs. You do not need to close anything or open new accounts in most cases. You are simply changing the name on the account to your trust.
Step 3: Investment and Brokerage Accounts
Same idea as your bank accounts. Contact the firm that holds the account (Schwab, Fidelity, Edward Jones, or your financial advisor) and ask to retitle the account into the trust's name. They will send a form. If you work with a financial advisor, they can often handle this in a single meeting.
Step 4: Retirement Accounts and Beneficiary Designations
This step has one important warning. Do not retitle retirement accounts such as a 401(k) or IRA into your trust. Changing ownership of those accounts can trigger a tax bill. For retirement accounts, the move is the beneficiary designation, not the title, and we will have told you exactly what to name. If you are unsure, check your funding guide or call us before you touch a retirement account.
For life insurance and other accounts that let you name a beneficiary, update the beneficiary to your trust unless we advised otherwise. Payable-on-death and transfer-on-death designations are easy to overlook and important to get right, because they pass outside your will or trust.
Step 5: Business Interests, and Telling Two People
If you own an interest in an LLC or corporation, your membership interest or shares usually need to be assigned to your trust, and your operating agreement may need a quick review. Tell us about any business interests so we can coordinate this correctly.
Finally, tell two people where your binder is: your successor trustee and one other person you trust. A plan nobody can find is a plan that does not work.
When You Are Done
Use the Funding Record in your binder to check off each asset as you move it. When everything is in, your plan is doing exactly what you set it up to do, and you can relax.
Funding is the part people put off, and it is the part that matters most. We would rather you call us five times than leave it half-done. If anything here is unclear, reach out and we will help.
This page is general educational information and is not legal advice for your specific situation. If you have questions about your own estate plan, please contact our office.
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