Here is a truth that surprises many families: Signing a living trust does not, by itself, keep your estate out of probate. A trust only controls the assets that are actually titled in its name. If your home, accounts, or other property were never transferred into the trust, or quietly slipped back out over the years, your family may face the exact court process the trust was designed to avoid. The good news is that checking is simple, and fixing gaps is usually easy while you are here to do it.
What does “funding a trust” mean?
Funding is the step after signing. It means retitling your assets so the trust owns them. This involves recording a new deed for your home, changing the ownership of bank and investment accounts, and updating how new property is acquired. Think of the trust as a well-built container. It protects only what you place inside it. An unfunded trust is one of the most common estate planning problems we see in the San Fernando Valley, and families usually discover it at the hardest possible moment.
How do assets end up outside a trust?
It is rarely through anyone’s fault. A family buys a new home years after signing the trust, and title is taken in their individual names. A refinance requires the home to come out of the trust, and the lender’s paperwork never puts it back. A new bank account gets opened during a busy season of life. An inheritance arrives and sits where it landed. Each of these is ordinary, and each one quietly creates an asset the trust does not control.
What happens to assets left out of the trust?
Most trust-based plans include a pour-over will, which acts as a safety net by directing stray assets into the trust at death. The catch is that the pour-over will generally has to go through probate to work. The safety net catches the asset, but only after the court process the trust was meant to spare your family. That is why funding, rather than the documents alone, determines how smoothly things go.
How do you check whether your trust is funded?
Pull the deed to your home and see whose name is on it. Look at the ownership line on your bank and investment statements. List anything of significance you have acquired since the trust was signed, including property in another state. If the trust’s name is not on an asset, and the asset does not pass by beneficiary designation, it likely sits outside the plan. A California attorney can review the full picture quickly.
The conclusion
A trust you signed years ago may still be excellent. It simply needs to own what you own today. If it has been more than a few years since anyone looked, or if you have refinanced, moved, or opened new accounts, a funding review is one of the most valuable checkups available. Our San Fernando Valley estate attorneys would be happy to take a look with you. Please call our office at (818) 334-2805.