How to Fund a Living Trust: What to Retitle
Funding a living trust means changing the title or ownership of your assets from your own name to the name of the trust. Real estate needs a new deed, bank and brokerage accounts need retitling at the institution, and business interests need an assignment. Retirement accounts and life insurance generally are not retitled; you update their beneficiary designations instead. An unfunded trust avoids nothing, because assets left in your name still go through probate.
Why funding matters
The most common failure in trust planning is not a bad document. It is a good document with nothing in it. A trust controls only the assets that are titled in the trust's name, such as "Jane Doe, Trustee of the Doe Family Trust." If your house is still in your name at death, it goes through probate even though you signed a trust. A pour-over will can sweep leftover assets into the trust, but the will itself then has to be probated, which is the step the trust was meant to avoid.
What to retitle
| Asset | How to fund the trust |
|---|---|
| House and other real estate | Sign and record a new deed from you to you as trustee. See below. |
| Bank and credit union accounts | Retitle at the bank, or name the trust as payable on death beneficiary. |
| Brokerage accounts | Retitle in the trust's name through the custodian's forms. |
| LLC or partnership interests | Sign an assignment to the trust, after checking the operating agreement for transfer limits. |
| Personal property (furniture, art, jewelry) | A general assignment signed with the trust covers these. |
| Vehicles | Often left out, since Texas has a simple transfer process at death. Ask your attorney. |
What not to retitle
Retirement accounts (IRAs, 401(k)s) should generally stay in your name. Moving them to a trust can be treated as a taxable withdrawal. Instead, name beneficiaries on the account form. Life insurance and annuities likewise pass by beneficiary designation. Some plans name the trust as beneficiary, which needs careful drafting for tax reasons, so ask before you name a trust on a retirement account.
Deeding the house
Putting a Texas house in a living trust takes a deed, usually a general or special warranty deed to the trustee, signed, notarized and recorded with the county clerk where the property sits. Check three things first: your mortgage (federal law generally keeps a lender from calling the loan just because you move a home into a revocable trust you live in), your homestead exemption (it should continue, but confirm with the appraisal district), and your title insurance policy.
Keeping it funded
Funding is not one-and-done. When you open a new account or buy new property, title it in the trust from the start. Review your trust and your account list whenever something major changes. Your attorney can give you a funding checklist and prepare the deed and assignment forms.
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Book Free ConsultationFrequently asked questions
Do I have to retitle everything?
No. Focus on real estate, larger accounts and business interests. Assets with beneficiary designations can stay as they are if the designations are current and coordinated with the trust.
Will putting my house in a trust raise my property taxes?
Texas does not reassess on a transfer, and a homestead exemption generally continues when you transfer to your own revocable trust. Confirm with your county appraisal district after recording.
What happens to assets I forget to fund?
They pass under your will or Texas intestacy law, which usually means probate. A pour-over will then directs them into the trust.
Can I fund the trust myself?
Some accounts can be retitled with the institution's forms. Real estate deeds and business assignments are better prepared by an attorney, because errors can cloud title.