When Your Trust Isn’t Enough: Why Proper Funding Is What Actually Makes It Work

Revocable living trusts are often marketed as the solution to probate.

And when done correctly, they can be.

But here is the uncomfortable truth: most trust failures are not drafting failures. They are funding failures.

You can have a beautifully written trust that does absolutely nothing to avoid probate if the assets were never properly transferred into it.

If you have a trust in Oregon, or are considering one, understanding funding is not optional. It is the part that makes the entire structure function.

What Does “Funding a Trust” Mean?

Funding a trust means transferring ownership of your assets into the name of the trust.

Creating a trust document is step one. Changing legal title to your assets is step two.

If you do not complete step two, the trust does not control those assets.

Think of the trust as a container. If you never move your assets into the container, they remain outside it. And anything outside the trust at death may still require probate.

The Most Common Funding Mistakes

Here are the funding errors I see most often in Oregon.

1. Real Estate Never Retitled

You signed your trust five years ago. But your home deed still shows you individually as owner.

If the deed does not name the trust as owner, the home is not in the trust.

At death, that property may require probate.

2. Bank Accounts Left Outside

Many people fund their trust initially, then open new accounts later and forget to title them properly.

If the new savings account is in your individual name only, it is outside the trust.

3. No Contingent Beneficiaries on Retirement Accounts

Retirement accounts usually should not be retitled into a revocable trust during life. But they must be coordinated.

If the primary beneficiary dies first and no contingent beneficiary is listed, the account may default to your estate and end up in probate.

4. Vehicles and Small Assets Ignored

Some assets do not need to be formally retitled, especially lower-value items.

But when larger titled assets are overlooked, the probate avoidance goal collapses.

5. Relying Too Heavily on the Pour-Over Will

Most trust-based estate plans include a pour-over will. Its purpose is to “catch” any assets accidentally left outside the trust and transfer them into it at death.

That sounds reassuring.

But here is the catch: the pour-over will still requires probate.

If your house and bank accounts were never titled into the trust, the pour-over will does not magically avoid court. It simply moves the assets into the trust after probate is opened.

The pour-over will is a safety net. It is not a substitute for funding.

How to Perform a Trust Funding Self-Audit

If you already have a revocable trust, here is a simple audit checklist.

Review each of the following:

Real estate deeds
Bank accounts
Brokerage accounts
Business interests
Life insurance beneficiary designations
Retirement account beneficiaries
Payable-on-death and transfer-on-death forms

Ask one simple question for each asset:

Is this titled in the name of my trust, or properly coordinated with it?

If the answer is no, you likely have a funding gap.

Why This Matters in Real Life

Imagine this scenario.

You created a revocable trust to avoid probate. But you never retitled your home. You also opened a new bank account last year that remains in your individual name.

At death, your family must:

Open probate to transfer the house
Open probate to transfer the bank account
Use the pour-over will to funnel those assets into the trust

The trust still functions eventually. But the probate you were trying to avoid still happens.

That means:

Court filings
Public records
Statutory waiting periods
Additional legal fees

All because the funding step was incomplete.

Business Owners and Funding

If you own an LLC or corporation, trust funding becomes even more technical.

Membership interests in an LLC must be properly assigned to the trust. Operating agreements may need to allow for that transfer.

Failure to update ownership records can create confusion or disputes after death.

Trust funding is not just about deeds. It is about ownership documentation.

Why Funding Gets Overlooked

Funding is administrative. It feels tedious compared to signing estate documents.

But it is also the difference between a plan that works and one that exists only on paper.

Many online trust templates provide no guidance on funding. Others leave the responsibility entirely to the client without clear instructions.

That is how gaps happen.

The Bottom Line

A revocable living trust is not a magic document.

It works only to the extent it actually owns your assets.

If you have a trust and are not sure whether it is properly funded, now is the time to check. If you are creating a trust, funding should be treated as part of the plan, not an afterthought.

At Track Town Law, trust funding is built into the planning process. Deeds are prepared. Instructions are clear. Asset coordination is deliberate.

Because the goal is not just to draft documents. The goal is to make them function.

If you would like to review your existing trust or build one that is properly funded from the start, you can schedule a free consultation here:

https://www.tracktownlaw.com/book-now

You can review flat-fee pricing for estate planning here:

https://www.tracktownlaw.com/pricing

A trust you never fund is just paperwork. A funded trust is a plan.