Is Your Trust Actually Funded? Why Unfunded Trusts Still End Up in Probate in California
Most people feel relieved after signing a living trust, believing they’ve protected their family from probate. But a trust only controls the assets actually placed into it. If your home, bank accounts, or investments were never transferred into the trust, your family may still face a full California probate—despite your signed, notarized documents. Funding is the step most often skipped, and it’s the difference between a trust that works and one that fails.
Signing a trust creates an empty legal container. Funding is the process of moving assets into it. Real estate requires a new deed transferring the property to you as trustee and recording it with the county. Bank and brokerage accounts must be retitled or given coordinated beneficiary designations. Retirement accounts and life insurance need updated beneficiaries that match your plan. Business interests, vehicles, and personal property must be assigned to the trust. None of this happens automatically. If no one records the deed or contacts the bank, the asset stays in your individual name—and outside your trust.
Most unfunded trusts result from what happens after signing. Online services and DIY kits often produce a valid document but leave the funding steps to you. Some preparers hand clients a binder and a to‑do list that never gets finished. Buying, selling, or refinancing property can pull assets out of the trust without anyone noticing. New accounts default to individual ownership. And many people simply don’t know how their assets are titled. These are common, understandable mistakes—but the consequences fall on your family.
In California, a home left outside a trust can trigger a full probate, with public filings, court hearings, and delays that often stretch a year or more. Statutory fees under Probate Code section 10810 can be substantial: an $800,000 home can generate $38,000 in combined attorney and executor fees, based on the property’s value—not your equity. Additional court costs, appraisal fees, and publication expenses add even more. While some post‑death fixes exist, they are limited, time‑consuming, and not guaranteed. Correcting funding now is far easier and far cheaper.
A quick self‑check can reveal whether your trust is actually funded. Look for a recorded deed transferring your home into the trust. Confirm that any property bought or refinanced since signing is titled correctly. Review bank and brokerage statements for the trust’s name or coordinated beneficiary designations. Check beneficiaries on retirement accounts and life insurance. Verify that rental properties, businesses, or out‑of‑state assets were transferred. If you can’t answer confidently, your trust may not work as intended.
ET Wilson Law can review your trust—even if it wasn’t created with us. Our Trust Funding Review confirms how your real estate is titled, evaluates your account statements, and identifies gaps in funding. If assets are missing, we prepare and record deeds, assignments, and guide you through retitling accounts and updating beneficiaries. We also review your trust document for outdated provisions after major life changes. If your trust is fully funded, you’ll have written confirmation. If it isn’t, you’ll know exactly what to fix—while you still can.
