A trust can be one of the most powerful tools in your estate planning toolkit, offering both privacy and control over how your assets are managed and distributed. However, simply creating a trust and signing the documents isn’t enough. Proper funding and ongoing maintenance are vital to ensure your trust continues to protect you and your loved ones.
Why Trusts Need Funding
When you set up a trust, think of it as creating a new legal entity. For it to function, the trust must own property—this process is known as trust funding. Many people mistakenly assume that once they sign their trust documents, their work is done. Unfortunately, an unfunded trust is ineffective, leaving assets unprotected and potentially subject to probate.
Funding your trust means transferring ownership of assets—such as real estate, bank accounts, investments, or business interests—into the trust’s name. In most cases, this involves re-titling assets so that the trust becomes the legal owner. Without this critical step, even the best-designed trust won’t achieve its intended purpose.
For example, if you set up a trust but never change the deed on your home, that property may still go through probate, defeating one of the primary benefits of trust-based estate planning. Similarly, if you fail to update beneficiary designations on life insurance or retirement accounts, those assets may not be distributed according to your trust’s terms.
Why Most Law Firms Don’t Fund Trusts
Many law firms operate on a transactional basis, meaning their job ends once they draft and deliver your estate planning documents. Typically, they provide you with instructions on how to fund your trust, but they don’t actively assist you in completing the process. Often, this responsibility falls on you, and if you don’t follow through—or don’t fully understand the process—your trust remains unfunded and ineffective.
It’s also common for financial advisors to be unfamiliar with trust funding, leaving clients unsure of how to proceed. This is where many traditional estate planning processes fall short, leaving families vulnerable to unintended legal and financial consequences.
Keeping Your Trust Up to Date
Even if your trust is properly funded, it’s not a “set it and forget it” document. Life changes—marriages, divorces, births, deaths, and financial shifts. All these changes necessitate periodic trust reviews and updates. Moving to a new state or acquiring new investments may also require adjustments. This is to ensure that your trust remains effective and compliant with local laws.
Beyond updating the trust’s terms, ongoing maintenance includes ensuring that new assets are correctly titled in the trust’s name. Regularly reviewing beneficiary designations on insurance policies and retirement accounts is also critical. This is because these designations typically override trust instructions. Additionally, if your home is held within the trust or a related entity such as an LLC, the trust or LLC should be listed as an “additional insured” on your homeowner’s policy. This is important to maintain adequate coverage.
How We Do Things Differently
At Sechler Law Firm, we believe estate planning should be an ongoing relationship. It is not a one-time transaction, which is why we go beyond simply drafting trusts. We also actively help our clients fund their trusts. Through our Red Wagon Club, we provide continued support to ensure that your trust remains properly funded and up to date.
When you sign your documents and join the Red Wagon Club, we will connect you with our dedicated funding coordinator. This full-time team member helps you fill out necessary paperwork, while guiding you through the funding process. We also offer group classes where clients can ask questions, review their plans, and sign funding documents in the presence of a notary.
But we don’t stop there. Life changes, and so should your estate plan. Through our membership program, we offer regular educational events and an annual review workshop. In so doing, we give you the opportunity to update your documents and ensure that your trust continues to work as intended.
The Bottom Line
A well-crafted trust is a powerful estate planning tool, but it only works if it’s properly funded and maintained. At Sechler Law Firm, we’re committed to helping our clients create trusts and ensuring that they are effective. To learn more about how to protect your assets and ensure your trust is working for you, join us for our “Three Secrets to Protect Your Legacy” workshop. Visit sechlerlawfirm.com/workshops to register for a session near you.
By staying proactive and engaged in the process, you can secure peace of mind for yourself and your loved ones. You can be assured your estate plan is built to last.
