You Have a Trust — But Does It Actually Hold Anything?

This is a conversation I have more often than you’d expect.

Someone comes to me and says they already have a trust. They paid for it — maybe through an attorney, maybe through an online service. They signed the documents. They put the folder in a safe place. And they feel good about it because they did the responsible thing.

Then I ask: what assets are actually in the trust?

Usually there’s a pause.

What “funding a trust” means

A trust is a legal container. It can hold property, bank accounts, investment accounts, and other assets. When you die, the assets inside the trust pass directly to your beneficiaries — no probate, no court, no public record, no delay.

But the trust only works for assets that are actually in it.

“Funding” your trust means formally transferring ownership of your assets from your individual name into the trust. For a house, that means a new deed. For a bank account, that means updating the title on the account. For investment accounts, it might mean changing the registration or the beneficiary designation.

If you skip this step, your trust is a perfectly drafted legal document that holds nothing. And your family goes through probate anyway — for every asset that didn’t make it in.

The most common funding mistakes

I see the same patterns over and over. These aren’t obscure edge cases — they’re the norm for people who created trusts without ongoing guidance.

The house that never moved

Someone creates a revocable trust and assumes the house is “in” it because the trust document mentions real property. But the deed was never updated. The county recorder still shows the property in the individual’s name. When they die, the house goes through probate — exactly the thing the trust was supposed to prevent.

Transferring a house into a trust requires a new deed — typically a quitclaim deed. It has to be prepared correctly, signed, notarized, and recorded with the county. If this step doesn’t happen, the trust doesn’t own the house.

The bank account nobody retitled

Bank accounts need to be retitled into the trust’s name, or at minimum have the trust named as a payable-on-death beneficiary. Many people never contact their bank after creating the trust. When they pass, the account goes through probate even though a perfectly good trust exists.

The retirement account with the wrong beneficiary

This one is more nuanced. Retirement accounts like 401(k)s and IRAs pass by beneficiary designation, not by your will or trust. If the beneficiary designation form still names your ex-spouse, or names “my estate,” or was never updated after your divorce — the money goes where the form says, regardless of what your trust document says.

Beneficiary designations override your will and your trust. This is one of the areas where having a CFP® credential makes a meaningful difference, because coordinating beneficiary designations with the rest of your estate plan is financial planning work, not just legal work.

The life insurance policy that doesn’t match

Same principle. Life insurance pays out to whoever is named on the policy. If your trust is supposed to receive the proceeds but isn’t named as the beneficiary — or if an irrevocable life insurance trust (ILIT) was supposed to own the policy but the ownership was never transferred — the plan doesn’t work the way it was designed to.

Why does this happen so often?

Usually it’s not negligence. It’s a gap in the process.

Some attorneys draft excellent trust documents but don’t include asset transfer as part of the engagement. The client walks away with a signed trust and a general instruction to “fund it” — without specific guidance on which assets need to move, what forms to fill out, or how to handle the deed.

Online services are especially prone to this. You get a trust document, maybe a pour-over will, maybe even a deed form. But there’s no one making sure the pieces actually work together, and no one checking back to see if you completed the steps.

How to check whether your trust is funded

If you already have a trust and you’re not sure whether it’s properly funded, here are the questions to ask yourself:

• Real property: Is the deed recorded in the name of the trust? Check with your county recorder’s office or look at your property tax records.
• Bank accounts: Are your checking and savings accounts titled in the trust’s name, or do they have the trust listed as payable-on-death?
• Investment accounts: Is the registration on your brokerage or investment accounts in the trust’s name?
• Retirement accounts: Who is listed as the primary and contingent beneficiary on your 401(k), IRA, and pension? Does it match your estate plan?
• Life insurance: Who is the beneficiary? If an irrevocable trust was supposed to own the policy, was the ownership actually transferred?

If you can’t confidently answer yes to all of these, your trust may not be doing what you think it’s doing.

What unfunded trusts actually cost families

Probate in Kentucky, Indiana, and Ohio typically costs 2–4% of the estate in fees — court costs, executor fees, and attorney fees. On a $500,000 estate, that’s $10,000 to $20,000. It also takes six months to two years, and it’s a public process.

The entire point of creating a revocable trust is to avoid that process. But if the trust doesn’t own the assets, the assets still go through probate. Your family pays those fees and waits that time despite the fact that a trust existed — and you paid for it.

That’s the part that’s hard to hear. But it’s better to hear it now, while it’s fixable, than for your family to discover it later.

Allison Cooper, JD, CPA, CFP®

Allison Cooper is the founder of Cooper Law, LLC, an estate planning firm based in Louisville, Kentucky. She holds a JD, CPA, and CFP® and is licensed to practice law in Kentucky, Indiana, and Ohio.