Trust Administration: How to Fund Your Trust While You Are Alive

Creating a living trust is a powerful step in protecting your assets and ensuring a smooth transfer to your heirs. However, simply creating the trust is not enough—you must also fund your trust while you are alive. Funding a trust means transferring ownership of your assets into the trust so it can function as intended. Without this step, your trust may not help you avoid probate or fulfill your estate planning goals.

Below are the steps to take to fund your trust:

1. Understand What Assets Should Go Into the Trust

Most major assets can be transferred into a living trust, including:

• Real estate (homes, land, rental properties)

• Bank accounts (checking, savings, CDs)

• Investment accounts (stocks, bonds, mutual funds)

• Business interests

• Personal property (jewelry, collectibles, art)

• Life insurance policies (as beneficiary, not owner)

Some assets should not go into your living trust, such as retirement accounts like IRAs and 401(k)s—these are better handled with designated beneficiaries directly. You may also consider an IRA Beneficiary Trust as beneficiary to protect your beneficiary’s distribution.

2. Retitle Your Real Estate

To place your home or other real estate into the trust:

• Prepare a new deed transferring ownership from your name to the name of the trust.

• Record the deed with the county recorder's office.

• Update property insurance to reflect the trust ownership.

Work with an estate planning professional or title company to ensure this is done correctly.

3. Transfer Bank and Investment Accounts

For accounts at banks and brokerages:

• Visit the bank or financial institution with your trust documents.

• Request to change the title of your account to the name of your trust.

• Some institutions may require a new account be opened in the trust's name.

Alternatively, you may list your trust as “paid on death beneficiary.” This will allow you to keep your accounts titled in your name without having to open a new account in the name of your trust.

Keep a record of all changes for your trustee and estate plan administrator.

4. Assign Business Interests

If you own an LLC, partnership, or shares in a corporation:

• Consult the operating agreement or bylaws to determine how ownership can be transferred.

• Work with your estate planner to draft an assignment of ownership to the trust.

5. List Personal Property on a Schedule

You can use a "Schedule of Assets" to list personal items being transferred to the trust:

• Label it clearly as part of your trust documents.

• Describe the items clearly (e.g., "Grandfather clock in living room")

Although not legally required to retitle personal items, listing them adds clarity and helps avoid disputes.

6. Update Beneficiary Designations

Certain assets like life insurance or annuities can name your trust as a beneficiary:

• This gives the trustee control over proceeds without them going through probate.

• Be cautious: this affects tax and distribution outcomes, so consult with a financial advisor.

7. Keep Everything Documented

Maintain a binder or secure digital record with:

• Your signed trust document

• The schedule of assets

• Copies of deeds, account statements, and assignments showing ownership under the trust

This makes trust administration far easier for your successor trustee.

8. Review and Update Regularly

As your assets and life circumstances change, revisit your trust and make sure new assets are funded into it.

• Bought a new home? Fund it.

• Switched banks? Update the account ownership or make sure your trust is paid on death beneficiary.

• Received an inheritance? Consult your estate planner to integrate it.

Funding your living trust while you're alive ensures it actually works to protect your assets, avoid probate, and give your loved ones clarity and support after you're gone. It may take some time, but with proper guidance, the process is straightforward—and it’s one of the most powerful estate planning moves you can make.