You've just finished creating your estate plan with your attorney. Congratulations! That's a significant step toward protecting your legacy and giving your loved ones peace of mind. But before you put that binder of documents away, your work isn't finished yet.

The legal documents are the foundation of your estate plan, but they only work if your assets are aligned with them. The next step is called “funding” your trust, and it's the part that's up to you to complete.

What Does “Funding” Mean?

Funding is the process of transferring ownership of your assets into your trust (or otherwise making sure they're correctly coordinated with your estate plan). Think of it as integrating all the pieces of your financial life, like bank accounts, real estate, business interests, and retirement accounts, with the structure(s) you and your attorney just built.

If you skip this step, your trust may not control those assets, and it won't function as intended. That could mean probate court, unintended beneficiaries, or extra costs and delays for your loved ones, exactly what you were aiming to avoid by creating your estate plan.

Why People Put Off Funding

After creating the estate planning documents, many people procrastinate on the follow-through. Why? It takes time and effort to contact financial institutions, so it could be a matter of putting it on the back burner, something they'll do “later.” It could be because the process can feel overwhelming and confusing, especially if the estate planning attorney didn't provide instructions, help with deeds and assigning businesses, etc., making it seem like a large, ambiguous job with unclear tasks. 

But in reality, funding doesn't have to be too complicated or overwhelming, especially if you are working with a firm that equips you with clear, step-by-step guidance, like ours. We provide our clients with a solid, comprehensive estate plan along with straightforward, individualized funding instructions to demystify the process. Unfortunately, most estate planning firms do not provide this, leaving clients to wade through the process on their own, often delaying or overlooking essential steps.

How To Fund Your Estate Plan

Here are some examples of the core actions you'll need to take once your estate plan is in place:

• Real Estate: Work with your attorney's office or a title company to retitle property deeds into the name of your trust.
• Bank Accounts: Ask your bank about transferring accounts into your trust or updating your beneficiary designations. Each institution has its own process, such as filling out simple forms or requiring you to show up in person with your trust documentation.
• Investment & Brokerage Accounts: Coordinate with your financial advisor to re-register accounts in the trust's name.
• Retirement Accounts: These stay in your own name, but you'll want to update beneficiary designations to align with your estate plan.
• Life Insurance Policies: Change ownership or update beneficiaries as your plan directs.
• Business Interests: Transfer ownership shares or membership interests into your trust, as appropriate.
• Personal Property: Some assets can be transferred with a general assignment document; others may require specific steps.

Funding Is Ongoing

Your estate plan is not static; it changes along with you. Major life events (marriages, divorces, births, deaths) and financial changes (buying property, opening new accounts, selling a business) all require revisiting your funding. If new assets aren't aligned with your plan, gaps can open up, and they can land in probate. This is why we stress the importance of continually updating an estate plan and encourage our clients to come in for a follow-up every two to three years.

By taking the time to complete the funding step and making updates when life changes, you're ensuring that your plan truly works for you and your loved ones. With clear guidance, the process is entirely doable and essential. We know funding may take some effort, but it's the key that unlocks the protection and peace of mind you worked so hard to build.

^Sources:

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