What Happens If I Do Not Fund the Trust I Created?

Fund the trust
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After creating a trust it is important to “fund” the trust.

Your circumstances and goals necessitated a trust as part of your estate plan.

The instructions outlined in the trust provide an equal division of the assets among your children.

You find this fair and fitting.

According to a recent nwi.com article titled “Estate Planning: Fund the trust,” your plan may be less equitable than you imagine.

It is important to fund the trust you create.
Fund the trust you created before you die.

How so?

If you fail to fund your trust, you asset distributions will not be managed by the trust.


This is especially problematic if you choose to name one child as a joint owner to checking accounts, savings accounts, and the title on the family home.

These jointly owned assets will pass directly to this child rather than to the trust.

This child will receive a far greater inheritance than the other siblings.

If the assets were instead used to fund the trust, then the plan to distribute the inheritance equally would be accomplished.

Another way to address potential loose ends after you fund the trust is to use a “pour-over will.”

What is the purpose of a “pour-over will”?

This last will an testament directs into the trust assets not already retitled to fund the trust, except for those with specific beneficiary designations (think life insurance and retirement funds).

Although a “pour-over will” is beneficial, it is not an ideal default.


Most people choose a trust to avoid probate at some level.

Because a “pour-over will” must go through probate, it undermines this goal.

What should you do if you currently have one child listed jointly on all of your accounts?

You need to change this as soon as possible if it is not your desire for this child to be the sole heir.

This child will likely need to sign off on any relevant paperwork to be removed as a joint owner.

If the child refuses to sign off on this change, an experienced estate planning attorney may be able to work around this problem.

It is vital to make changes and fund the trust while you are still alive.

Like a fine automobile without petrol in the tank, an “unfunded” trust will not function as intended.

Referencenwi.com (Jan. 17, 2021) “Estate Planning: Fund the trust”

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