Los Angeles, Calabasas, Westlake Village and San Fernando Valley, CA Estate Planning Firm
A revocable living trust is one of the most popular estate planning tools in California—and for good reason. When properly drafted and funded, a trust can help your family avoid probate, maintain privacy, and ensure that your assets are managed according to your wishes if you become incapacitated.
Unfortunately, many people discover too late that their trust is essentially worthless. The documents may be beautifully drafted, but if the trust was never funded, it cannot control assets that remain in your individual name. At death, those assets may still pass through probate, defeating one of the primary reasons the trust was created in the first place.
What Does “Funding” Mean?
Funding a trust means retitling your assets so that the trust—not you individually—is the legal owner. For real estate, that typically means recording a deed. For bank and brokerage accounts, it means changing the registration on the account. For business interests, it may mean assigning membership or stock to the trust.
Each type of asset has its own funding requirements. Some assets, such as retirement accounts and life insurance, generally should not be owned by the trust but may name the trust as beneficiary. Confusion about these distinctions is one of the most common reasons trusts fail to work as intended.
Common Mistakes We See
- Signing the trust but never changing title to the home or investment accounts
- Assuming a “pour-over” will alone is sufficient without reviewing how each asset is owned
- Naming the trust as beneficiary of an account without confirming the institution’s requirements
- Creating a new trust after a move or divorce but failing to update beneficiary designations
- Relying on a fill-in-the-blanks kit that did not include funding instructions
How To Keep Your Trust Working
Review your estate plan whenever you acquire a major asset, open a new account, or experience a significant life event such as marriage, divorce, or the death of a spouse. Ask your attorney for a written funding checklist and work through it methodically. If you are not sure whether an asset has been transferred, check the title—not the trust document alone.
At Steelyard Consulting, we provide funding guidance to every client who establishes a revocable trust. We believe an estate plan is not complete until your assets and your documents match. ← Back to Articles/Awards