Trust Funding 101: The Step Most People Forget

Creating a trust is one of the most powerful tools in estate planning—but it’s only the first step. One critical step that many people overlook is funding the trust. Without properly funding your trust, your carefully written documents may not protect your assets or spare your loved ones from probate, legal fees, and unnecessary stress.

At Pettis Webber Pacific, we’ve seen it time and again: a well-written trust that never fulfills its potential—simply because it wasn’t funded. Here’s what you need to know to make sure your trust actually works when it matters most.

What Is Trust Funding?

Trust funding is the process of transferring ownership of your assets from your individual name into the name of your trust. It ensures that the assets you want to protect—such as real estate, bank accounts, and investments—are legally owned by the trust and therefore managed according to your instructions.

If an asset is not titled in the name of the trust, it may have to go through probate—even if you have a trust in place depending on what type of asset it is.

What Happens If You Don’t Fund Your Trust?

If you create a trust but fail to fund it, you’re leaving your estate vulnerable to the very issues a trust is meant to avoid:

• Probate: Assets left outside the trust may be subject to probate, which is a public, time-consuming, and potentially costly legal process.
• Delays in Asset Distribution: Your loved ones may face months of uncertainty and administrative burden before receiving their inheritance.
• Legal Fees: Probate-related attorney fees and court costs can significantly reduce the value of your estate.
• Family Stress and Conflict: Unclear ownership or access to funds can spark unnecessary disputes among beneficiaries.

What Assets Should Be Funded Into a Trust?

The types of assets you should transfer to your trust depend on your personal circumstances, but common examples include:

• Real estate (homes, rental properties, vacation homes, especially if out of state)
• Bank accounts (checking, savings, CDs)
• Non-retirement investment accounts
• Business interests (LLCs, partnerships)
• Valuable personal property (art, jewelry, collectibles)

For other assets, like retirement accounts or life insurance policies, you may not be able to transfer ownership to the trust—but you can name the trust as a beneficiary if it aligns with your estate planning goals.  At a minimum you want to coordinate those beneficiaries with your overall estate plan.

How to Fund a Trust

Funding your trust is not automatic—it requires intentional steps:

1. Real Estate: Work with your attorney to retitle a deed into the name of your trust.
2. Bank Accounts: Visit your bank to change the ownership of your accounts to the trust.
3. Investment Accounts: Coordinate with your financial advisor or brokerage firm to retitle accounts.
4. Personal Property: Sign an assignment of personal property document to transfer ownership to the trust.
5. Vehicles and Other Assets: Depending on your state and goals, consider whether vehicles or other assets should be titled in the trust or addressed through other estate planning tools.

Don’t Forget to Keep It Updated

Trust funding isn’t a one-and-done task. As you acquire new assets—such as purchasing a home, opening a new bank account, or starting a business—you should make sure those assets are titled correctly or include the proper beneficiary designations.

How We Can Help

At Pettis Webber Pacific, we don’t just draft trusts—we guide you through the full process, including funding. We’ll help you:

• Identify which assets should be moved into your trust
• Coordinate with your financial institutions
• Ensure your documents are aligned with Washington State law
• Keep your trust up to date as your life evolves

Final Thoughts

Creating a trust without funding it is like buying a safe and never putting anything inside. Don’t let a missing step undermine your estate planning efforts. With proper funding, your trust can do what it was designed to do—protect your assets, avoid probate, and provide peace of mind for your family. 

Need help reviewing or funding your trust? Click here to schedule a consultation with our team today.