Signing a living trust is only the first step in the estate planning process. To unlock its full benefits—like avoiding probate and protecting your assets—you must take the next critical step: funding the living trust.
Funding a trust means transferring ownership of your assets into the name of the trust. If an asset isn’t properly transferred, it won’t be governed by the trust and may still go through probate. This guide walks you through how to fund a living trust, based on the asset type.
What Does It Mean to Fund a Trust?
Funding a trust involves retitling property and financial accounts into the name of the trust or naming the trust as a beneficiary upon death. Without this, your living trust remains legally ineffective. T.L. Morson and Associates, PLLC offers expert guidance and comprehensive estate planning services, including funding assistance.
How to Fund a Living Trust by Asset Type
✅ Real Estate
Transfer real property using a deed, typically a quit claim deed. A Lady Bird Deed, which allows property transfer without losing control during your lifetime, is included in our Estate Plan package.
✅ Titled Personal Property
Vehicles like cars, motorcycles, boats, or RVs need retitled ownership. In some states, you may designate the trust as a beneficiary on the vehicle title, ensuring seamless transfer upon death.
⚠️ Caution: Check for tax consequences, lender restrictions, or changes to insurance premiums.
✅ Untitled Personal Property
For items like jewelry, furniture, tools, or collectibles, complete a signed and dated assignment of ownership document. Be sure to clearly describe each item.
✅ Bank Accounts
Bank accounts should be retitled in the trust’s name. Most banks require a certificate of trust and updated documentation.
✅ Investment & Brokerage Accounts
Similar to bank accounts, brokerage accounts must be retitled using a certificate of trust and new account paperwork.
✅ Business Interests
Ownership in an LLC, partnership, or corporation can be transferred to the trust. Review the operating agreement or bylaws for transfer restrictions.
Using Your Trust as a Beneficiary
Some assets can’t be retitled but allow you to name the trust as a beneficiary instead.
➤ Retirement Accounts
Do not retitle IRAs, 401(k)s, 403(b)s, or annuities—this counts as a withdrawal. Instead, designate the trust as a primary or secondary beneficiary based on your estate goals.
➤ MSAs and HSAs
These medical savings accounts can also list the trust as a beneficiary to ensure proper asset distribution.
➤ Life Insurance Policies
You may name your trust as the owner or beneficiary. Ownership allows for management if you become incapacitated.
⚠️ Caution: In some states, creditor protection is lost when the policy is not individually owned. Consider a power of attorney as an alternative.
Funding Other Specialized Assets
➤ Royalties, Copyrights, Patents, Trademarks
Consult with the U.S. Copyright Office or U.S. Patent and Trademark Office to legally assign these rights to your trust.
➤ Gas, Oil, and Mineral Rights
Use a deed or assignment of rights, depending on how the interest is held. Legal assistance is highly recommended.
➤ Accounts Receivable
Transfer loan payments or debts owed to you using a legal assignment of rights to make the trust the new payee.
Why Funding Your Trust Matters
Without funding, your living trust cannot achieve its primary purpose—avoiding probate. Properly funded trusts:
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Streamline asset distribution
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Protect privacy
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Minimize legal delays and costs
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Ensure clear instructions are followed
At T.L. Morson and Associates, PLLC, we help clients establish and fund living trusts effectively. From real estate deeds to account retitling, we ensure your trust is fully operational.
Ready to Fund Your Living Trust?
A properly funded trust secures your legacy and spares your loved ones unnecessary stress. Contact T.L. Morson and Associates, PLLC to get started on a comprehensive estate plan, including trust creation and funding.
📞 Call 1-877-234-1989
📧 Email: tmorson@tlmorson.com