How to Fund a Trust: Moving Your Assets In

The Short Answer

To fund a revocable living trust, you change the title on each asset so it reads in the name of the trust, for example “Jane Doe, Trustee of the Jane Doe Living Trust.” Some assets are retitled (a house, a bank account); others are handled with a beneficiary designation instead (a retirement account). The aim is that when you die, nothing you owned is sitting in your name alone.

Why Funding Matters

An unfunded trust is a common and costly mistake. People pay to set up a trust, file the document away, and never move their assets in, so at death everything still goes through the probate the trust was meant to avoid. A trust only controls what it owns. Funding is what makes the trust do its job, which is keeping your estate out of probate.

Real Estate

A home is the asset most likely to force a probate if it is left out, so it is usually the first thing people fund. You transfer it by signing a new deed from yourself to the trust (often a grant deed or quitclaim deed, depending on the state) and recording it with the county recorder. Two things to check first: tell your mortgage lender and title insurer (most loans permit a transfer to your own revocable trust), and confirm the move will not disturb a property-tax exemption, since those rules vary by state. For how title and deeds work in your state, see your state transfer guide.

Bank and Brokerage Accounts

For checking, savings, and non-retirement brokerage accounts, you either retitle the existing account into the trust’s name or open a new account in the trust and move the money over. The bank or brokerage will ask for a copy of the trust or a short certification of trust and the trust’s tax ID. As an alternative for a single account, a payable-on-death or transfer-on-death designation also skips probate, though it does not give you the central control a trust provides.

Vehicles

Vehicles are often left out of a trust because many states offer simpler options at death, such as a small-estate transfer or a transfer-on-death title. If you do want a car in the trust, you retitle it at the motor vehicle office in the trust’s name. One state guide already covers this step by step: transferring a vehicle title to a revocable living trust in New Mexico, and your own state’s vehicle transfer guide explains the local process.

Retirement Accounts and Life Insurance

These are the exception to retitling. You generally do not move an IRA or 401(k) into a trust, because changing the owner of a retirement account is treated as cashing it out, which triggers income tax. Instead you leave the account in your name and use a beneficiary designation.

• Retirement accounts: name your beneficiaries directly. Naming the trust as beneficiary is possible but changes the payout timing and taxes, so do it only with drafting advice. See the inherited IRA rules.
• Life insurance: you can name the trust as beneficiary so the payout follows the trust’s plan, or keep individual beneficiaries. Some families use a separate irrevocable life insurance trust for estate-tax reasons.

Because the tax stakes are real, retirement and insurance are the pieces most worth running past a tax professional or estate attorney.

Business Interests and Personal Property

A stake in an LLC, partnership, or corporation is funded by assigning your membership interest or shares to the trust, subject to any operating or shareholder agreement. Prized personal property, such as jewelry, art, or collectibles, is moved in with a short assignment of personal property that lists the items and transfers them to the trust. Titled collectibles like a boat follow the same idea as a vehicle.