Creating a trust is a smart step toward protecting your assets and making sure they are distributed according to your wishes. But setting up a trust is only half the job – funding it properly is what makes it work. Unfortunately, many people overlook this step, leaving their assets exposed to probate or other unintended consequences. Below are five crucial things you should know about funding your trust to ensure it does exactly what you want it to do.

1. If assets aren’t funded, then they won’t avoid probate. One of the biggest misunderstandings about trusts is the belief that simply signing the documents means your estate will avoid probate. Not so. If you don’t retitle your assets into your trust or name your trust as the beneficiary where appropriate, any assets held in your sole name stay outside the trust and will pass through your Will instead.

In that case, the assets will still make it to your trust – but first they have to go through the probate process. Probate can be time-consuming, expensive, and public – exactly what most people create a trust to avoid. Funding your trust correctly ensures that your wishes are carried out privately and efficiently, just as you intended.

2. Different types of accounts are funded differently! Funding your trust isn’t a one-size-fits-all process. Each type of asset has its own best method for being incorporated into your trust – and what works for one may not work for another.

Non-retirement accounts like checking, savings, or brokerage accounts are generally retitled into the name of your trust.  In some cases, these types of assets may remain titled in the individual’s name and their trust is designated as the beneficiary. Life insurance policies can also name your trust as the beneficiary, which can be especially useful if you don’t want the proceeds going directly to young children or minors.

When it comes to retirement accounts like IRAs or 401(k)s, however, the trust is never the owner – only the beneficiary. And even then, naming the trust as the beneficiary must be done carefully. If you’re married, it’s usually recommended that your spouse be named the primary beneficiary to preserve certain tax advantages, with the trust listed as the contingent beneficiary. In some cases, it may even be beneficial to name individuals as beneficiaries instead of your trust, depending on your goals and the terms of your trust. 

Every family situation is unique, so it’s essential to get specific advice from an experienced estate planning attorney to ensure your designations are right for you and won’t cause unintended tax consequences.

3. You May Need to Provide a Certification of Trust. When you transfer accounts into your trust, banks or financial institutions will want proof that the trust exists and that you have the authority to act for it. The law says that financial institutions can rely on a document called a Certification of Trust, which summarizes the key provisions without revealing all the private details like beneficiaries. However, some banks have stricter internal policies and may demand to see the entire trust agreement.  In some cases, banks and financial institutions may ask to see the original documents, not copies. As such, when you’re funding your trust, be prepared to provide this documentation and always keep your original documents safe.  If the bank employee insists on seeing your original trust, don’t leave the bank until you get your original trust back.

4. Remember Future Assets! Funding your trust isn’t a one-time project. Life changes and so will your asset portfolio. People often acquire new bank accounts, investment accounts, or real estate after their initial trust funding, but forget to transfer these new assets into the trust. One of the reasons to have regular check in meetings with your estate planning attorney – every two to five years – is to review your trust funding. These check-ins help you catch any gaps before they create big headaches later.

5.Get Confirmation and Keep Records. Sometimes, even when you’ve done everything right on your end, banks or insurance companies drop the ball. It’s not uncommon for a bank to say they’ve changed the title or beneficiary designation but then fail to follow through. Or they might update one account but not another held with the same institution.

Always get written confirmation that your accounts have been retitled correctly or that beneficiary designations have been updated. Keep copies of this paperwork with your trust documents. This simple step can save your family from confusion and delay down the road.

Every situation is different, and your trust should reflect your unique life, family, and objectives. A well-drafted trust is a powerful tool, but it’s only effective if it’s properly funded and maintained over time. A good estate planning attorney will give you written instructions on how to properly fund your trust based on your assets and your specific goals. By understanding how each of your assets should be titled or designated, keeping clear records, and checking in regularly with your estate planning attorney, you ensure your plan stays current with your life’s changes. With your trust fully funded, you can rest easier knowing you’ve done everything you can to protect your legacy and provide for the people and causes that matter most to you.

Attorney Leah A. Kofos is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC, which focuses on advising its clients in the areas of trust and estate planning, estate settlement, and elder law matters. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781-461-1020.

© August 2025 Samuel, Sayward & Baler LLC