How to Fund a Trust: The Critical Step Many Forget

9 August 2025

So, you’ve set up a trust. First of all—kudos! You’re ahead of the game when it comes to protecting your assets and planning for the future. But before you give yourself a high-five and toss the paperwork in the drawer, let’s talk about something crucial that far too many people skip right over…

Funding the trust.

Yep. That’s the part people forget. And without it, your trust is basically just a fancy pile of paper—not the fortress you thought you’d built for your family or estate.

Don't worry though—I'm going to walk you through exactly how to fund your trust, what it means, and how to avoid some common traps along the way. Grab a cup of coffee, and let’s get into it!

What Does It Mean to “Fund” a Trust?

First thing’s first—what even is “funding” a trust?

Simply put, funding a trust means transferring ownership of your assets into the trust. Imagine your trust like a suitcase. Creating the trust is like buying the suitcase and tagging it with your name. Funding it? That’s the part where you actually pack your socks, shirts, and undies (aka your assets) inside.

If you skip funding, all you’ve done is bought an empty suitcase. Looks good, but it’s not doing anything. If you pass away and haven’t put anything inside, those assets might still have to go through probate—exactly what most of us are trying to avoid by setting up a trust in the first place!

Why Funding a Trust Is So Important

Let’s say you went through the time and expense of creating a living trust. You met with a lawyer, got your documents all perfect, and named your beneficiaries.

But—let me say this loud and clear for the people in the back—if you don’t actually transfer your assets to the trust, it’s like building a safe but forgetting to put your valuables inside. Your heirs might still have to go through court to get what’s legally theirs. That defeats the purpose of setting up the trust entirely.

Some other perks of properly funding your trust:

- Helps your loved ones avoid probate
- Provides more privacy (no court involvement!)
- Avoids legal confusion or disputes
- Keeps everything organized under one umbrella

So, yeah… It’s a big deal.

What Assets Can You Put in a Trust?

Here comes the fun part—what can you actually put inside this magical trust suitcase?

Here’s a list of common assets people fund into their trust:

1. Real Estate

Homes, vacation properties, rental properties—yep, your trust can own them. You’ll need to create and record a new deed naming the trust as the new owner.

2. Bank Accounts

Checking, savings, CDs—these can be moved into the trust. Some banks just require a form or two. Others may require that you open a new account in the trust’s name.

3. Investment Accounts

Brokerage accounts, stocks, and bonds (not held in retirement accounts) can and usually should be titled to the trust. Talk to your financial advisor so you don’t mess this up—especially where tax implications are involved.

4. Business Interests

LLCs, shares in corporations, and partnerships can generally be transferred to a trust. You’ll often need to update operating agreements or shareholder documents to reflect the change.

5. Personal Property

Think valuable items like jewelry, art, antiques, or even your car. Some require a simple assignment of ownership, while others (like vehicles) might need title transfer depending on your state laws.

6. Life Insurance

Rather than changing the ownership, most folks list their trust as the beneficiary of their life insurance. That works too!

7. Retirement Accounts (With a Twist)

IRAs, 401(k)s, and other qualified retirement plans usually can’t be owned by your trust while you’re alive. But—you can name your trust as the beneficiary of these accounts after you pass. Just be careful—there are tax and distribution rules to consider.

How to Fund a Trust Step-by-Step

Okay, we’ve talked about the “what.” Let’s move on to the “how.” This is where the rubber hits the road.

Step 1: Create a List of Your Assets

Sit down and make a list. Write down everything you own—big or small—that has value. Think real estate, bank accounts, insurance policies, investments, personal items, etc.

Pro tip: Use a spreadsheet or a checklist so nothing slips through the cracks.

Step 2: Determine What Goes in the Trust

Not everything should go in your trust right away. For example, retirement accounts and HSAs stay out (but the beneficiary can be updated). Work with an estate planner or attorney to help sort it all out.

Step 3: Update Titles and Ownership Documents

This is where the legwork happens. You’ll need to contact banks, insurance providers, and financial institutions to update the ownership or beneficiaries. For real estate, that means recording a new deed.

Yes, it takes time—but this is the heart of funding your trust.

Step 4: Sign and Notarize Where Needed

Many institutions require notarized forms. Some will have in-house notaries. Others may accept e-signatures now (thanks, technology!).

Make sure everything is legally binding and up to date.

Step 5: Keep a Paper Trail

Document every single transfer and keep all paperwork in a safe place—preferably with your trust documents. This saves your family hours of detective work later.

Step 6: Review Regularly

Funding a trust isn’t always a "set it and forget it" deal. Life changes, right? New assets come into play—new house, new accounts, etc. Review your trust funding at least once a year and especially after big life events.

Common Mistakes People Make (And How to Dodge Them)

Alright, time to play a quick game of “don’t do this.” Here are the most common mess-ups we see—and how to steer clear of them.

❌ Mistake #1: Only Moving Some Assets

You move the house but forget the bank accounts…classic. Incomplete funding can leave parts of your estate subjected to probate.

✔️ Fix: Use a comprehensive checklist. Think broad, then narrow.

❌ Mistake #2: Not Updating Beneficiaries

Let’s say your ex is still listed as the primary beneficiary on your life insurance. Yikes.

✔️ Fix: Review ALL your beneficiary designations. Update them to match your trust or current wishes.

❌ Mistake #3: Skipping Real Estate Transfers

Real estate transfers require a deed, and many folks don’t realize this. Without it, your home won’t be covered by the trust.

✔️ Fix: Work with a real estate attorney to get it done right.

❌ Mistake #4: Forgetting New Assets

You bought a second home or opened a new savings account… and forgot to put it in your trust.

✔️ Fix: Build the habit of reviewing your trust funding annually or after any big purchase.

Do I Need a Lawyer to Fund a Trust?

Technically? No. You can handle a lot of the legwork yourself.

But realistically? Having a lawyer or estate planner in your corner—especially for real estate and business interests—can save you from making costly mistakes.

They’ll also help you customize your plan, avoid tax pitfalls, and dot all the i’s and cross the t’s.

If your estate is straightforward, you can manage many of the asset transfers on your own with a bit of time and persistence. But when in doubt, get professional guidance.

Final Thoughts: Don’t Leave Your Trust Empty!

Creating a trust without funding it is like buying a safe and never putting anything inside. It’s a missed opportunity—and one that can leave your loved ones tangled in legal red tape.

So, grab that checklist, roll up your sleeves, and pack your trust full of the assets you want to protect. It may not be the most thrilling weekend project, but your future self (and your family!) will be grateful.

Remember, you’ve taken an incredible step toward peace of mind—don’t stop short just before the finish line!

FAQs About Funding a Trust

Q: How long does it take to fund a trust?

A: It depends on how many assets you have. Some things (like personal property) can be transferred in minutes. Bank accounts and real estate might take a few days or weeks.

Q: Can I change my mind after funding my trust?

A: If you have a revocable living trust, yes! You can move assets in and out and make changes anytime while you’re alive and mentally competent.

Q: What happens if I forget to fund one asset?

A: Some states allow a “pour-over will” to catch anything left out of the trust and transfer it after your death. But that still usually triggers probate. Best bet? Just fund everything properly up front.