The Trust-Funding Habit: Why Retitling Assets Is the Golden Rule of Estate Planning

A revocable living trust is often sold as a “probate-avoidance machine,” but that machine only works if you fuel it. The fuel is proper asset titling—commonly called trust funding—and it is the single best-practice that separates airtight estate plans from expensive courtroom surprises. Below is a 500-word field guide you can share with clients (or use as a personal checklist) to keep the engine running.

1. Understand What “Funding” Really Means

Creating a trust document does not move a single dollar. Funding is the separate, follow-up step of retitling or assigning each asset so that the trust, not the individual, becomes the legal owner. Think of the trust as a bucket: signing the trust builds the bucket; funding it drops your property inside.

2. Prioritize Probate-Sensitive Assets

Start with assets that would otherwise be stuck in court:

• Real estate – record a new deed naming “John Smith and Jane Smith, Trustees of the Smith Family Trust dated ….”

• Non-qualified brokerage accounts – complete a change-of-ownership form with your custodian.

• Business interests – amend LLC operating agreements or issue new stock certificates to reflect trust ownership.

Retirement accounts and life-insurance policies usually bypass probate via beneficiary designations, so they stay titled individually but should list the trust (or sub-trusts) as contingent beneficiaries when appropriate.

3. Use a Pour-Over Will, Not a Parachute

A pour-over will “pours” any stray assets into the trust at death, but it does so through probate. Relying on the will as a safety net defeats the purpose of the trust. Think of it as an emergency patch, not everyday attire.

4. Mind the Bank Accounts

Many clients skip checking and savings accounts, assuming small balances aren’t worth the paperwork. Yet California’s “small-estate affidavit” caps out at $184,500 (2025 figure), and balances fluctuate. Spend ten minutes at the bank now to avoid months of declarations later.

5. Keep the Funding Ledger Current

Create a simple spreadsheet with three columns—Asset, Date Titled to Trust, Confirming Document—and store it digitally alongside PDF copies of deeds, confirmation letters, and account statements. Review the ledger at tax time; if you added a new brokerage account or refinanced the house, update the entry.

6. Coordinate With Professional Advisors

CPAs, financial planners, and bankers each touch pieces of the puzzle. Share the funding ledger and remind them that new accounts must open in the trust’s name. Consider granting your lawyer limited, view-only access to investment portals so funding can be verified without endless email chains.

7. Audit After Life Events

Marriage, divorce, relocation, or purchasing rental property triggers an immediate funding check. Out-of-state real property often needs a sister trust or ancillary deed to avoid two probates—one in California, another where the property sits.

8. Educate Successor Trustees Up Front

Your successor trustee inherits the funding duty for post-death assets like final paychecks or refund checks. Include funding instructions in your trustee binder so they know how to endorse checks to the trust’s EIN and avoid personal liability for missed items.

Drafting a trust is the first chapter; funding writes the rest of the story. By retitling assets promptly, maintaining a funding ledger, and looping in advisors, you ensure that the legacy you designed on paper delivers real-world results—namely, privacy, speed, and harmony for your beneficiaries. Contact us today to assist you.