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Funding your trust is the process of transferring ownership of your assets into your trust. This critical step involves changing the title of your assets from your individual name to the name of your trust. Without proper funding, your trust is essentially an empty vessel – a set of instructions with nothing to govern.
When you fund your trust, you ensure that your assets will be managed according to the terms you’ve established. A properly funded trust avoids probate, keeps your affairs private, and ensures your instructions are followed without court involvement.
Without proper funding, your trust cannot accomplish its most important purposes. Here’s why funding your trust matters:
A trust can be fully funded (all suitable assets transferred), partially funded (some assets transferred), or unfunded (no assets transferred). A partially or unfunded trust fails to achieve many of the benefits you sought when creating it.
Your trust serves as an instruction manual for your assets. If you don’t want the trust to dictate what happens to certain assets, you might choose to leave them outside the trust.
Common assets to consider funding into your trust include:
Assets typically left outside a trust include:
This section provides general guidelines for funding your trust, but you should always double-check with your estate planning lawyer before following advice you found on the internet. Errors in trust funding can result in unnecessary legal costs and confusion for your loved ones.
To transfer real estate into your trust, you’ll need to execute a new deed. The property should be titled in the name of the trustee, such as:
“Jane Doe, as trustee of the Jane Doe Living Trust dated [insert date].”
You can use a warranty deed or a quitclaim deed. A warranty deed offers more protection to future buyers, while a quitclaim deed is simpler but offers no guarantees about title.
Recording the deed with the county is optional but recommended. Just keep in mind that if you plan to refinance or sell the property, having it in the trust may require additional paperwork.
To fund bank accounts into your trust or open a living trust bank account:
Alternatively, you may designate your trust as the payable-on-death (POD) beneficiary, though this approach doesn’t avoid probate if you become incapacitated.
Brokerage accounts can be retitled in the name of your trust. Contact your broker and provide a copy of your trust certificate. They’ll walk you through the required forms, which may need to be notarized or include a medallion signature.
Online platforms like Fidelity, Charles Schwab, and Vanguard each have unique processes for this. Follow the steps provided on their sites or consult with customer service.
For privately held stock, certificates or services like Carta can usually reissue ownership in the name of your trust.
You generally should not retitle retirement accounts into a trust, as doing so could trigger immediate taxation. Instead, name your trust as the contingent beneficiary—after your spouse, if applicable.
Ask your plan administrator for a beneficiary designation form and make sure it’s completed and returned.
These can be reissued in the name of your trust. Your bank can help you request the appropriate forms.
We typically don’t recommend retitling vehicles into your trust. It may raise your insurance rates or signal wealth in a liability situation. Florida makes it relatively easy to transfer vehicle titles after death without going through probate.
Special forms are available for surviving spouses or heirs to transfer title, such as the Application for Surviving Spouse Transfer.
If you receive royalties from patents, copyrights, or trademarks, check whether those rights are assignable. If so, they can be transferred into your trust. If not, name the trust as the beneficiary of future payments.
Items like jewelry, furniture, and collectibles don’t have titles. Use a personal property memorandum to include them in your trust and list who should receive each item.
Legally considered personal property, pets can be registered to your trust. You can also establish a pet trust to ensure they’re cared for after you’re gone.
If you fail to fund your trust:
When setting up a family trust bank account, bring:
Most banks and financial institutions routinely handle trust accounts and can guide you through their specific requirements.
Remember that funding your living trust is an ongoing process that requires attention whenever you acquire new assets. Many estate plans fail not because of poor planning, but because of incomplete funding.
At Cuturic Law, we help Florida residents create and properly fund their trusts to provide peace, security, and protection for their loved ones. Schedule a consultation today so we can make sure your estate plan will work as intended.