Asset Alignment: Why Funding a Trust Is Essential for Your Legacy
Creating a trust is one of the most meaningful steps you can take to protect your family’s future. It’s a way to ensure your assets are distributed according to your wishes, provide privacy by avoiding probate, and reduce stress for your loved ones during difficult times. There’s one step that often gets overlooked—and without it, even the most carefully drafted trust can fail. That step is funding the trust, also known as asset alignment. Funding a trust means moving ownership of your property, financial accounts, investments, and other key assets into the trust’s name. It’s what makes your trust functional and legally enforceable. Without this step, your trust is like a safe with the door wide open: it may exist, but your valuables aren’t actually inside.
The Alarming Truth About Trust Planning in America
The need for proper trust funding is more widespread than most people realize. According to a recent national survey, 55% of Americans do not have a will or trust at all, leaving their estates completely vulnerable to probate and state default laws.
Even among the 45% who do take the step of creating a trust or other estate planning documents, a surprising number don’t complete the process. Experts estimate that nearly 50% of trusts are never properly funded, which means that half of the families who thought they were protected are still at risk of legal complications and delays. These numbers reveal a startling reality: too many families are stuck halfway between planning and protection. They’ve made the effort to create a trust, but without asset alignment, their trust may fail to deliver the benefits they worked so hard to secure.
A Real-Life Example: When Funding Falls Short
Consider the story of Michael and Denise. They spent months working with an attorney to create a revocable living trust designed to protect their blended family. Their trust included clear instructions for distributing assets among biological and stepchildren, and it even included a special needs provision for their youngest son.
However, after the paperwork was finalized, they didn’t take the next step of transferring their assets into the trust. Their home title, bank accounts, and brokerage accounts were still in their individual names. When Michael passed away unexpectedly, Denise was shocked to learn that many of their most valuable assets had to go through probate.
The family faced months of delays, public court proceedings, and thousands of dollars in legal fees—all because the trust wasn’t properly funded. Michael and Denise’s well-intentioned plan fell apart because it was incomplete.
This scenario is more common than you think, and it’s why asset alignment matters so much.
What Happens When a Trust Isn’t Funded
When assets remain outside of a trust, several problems can arise:
Probate delays: Property not titled in the trust must go through probate, which is time-consuming, costly, and public.
Creditor exposure: Without proper ownership transfers, creditors or lawsuits may still have access to those assets.
Family conflict: When some assets are in the trust and others are not, disputes often arise between beneficiaries, especially in blended families.
Privacy loss: Probate is a public process, meaning anyone can access records about your estate.
Ineffective planning: Even carefully crafted trust terms are meaningless if the assets aren’t legally linked to the trust.
In other words, an unfunded trust is like an empty shell. It looks secure on paper, but in practice, it provides little real protection.
At Lanier Legacy Law, your family comes first as we align your assets and fund your trust to create lasting protection for the people you love most.
What Asset Alignment Really Involves
Proper asset alignment means ensuring that every asset you want protected by your trust is legally connected to it. Here’s how that works across common asset types:
Real Estate: The deed for your home or other properties should be updated to list the trust as owner.
Bank Accounts: Checking, savings, and other bank accounts can be retitled or set up with transfer-on-death (TOD) instructions naming the trust.
Investment Accounts: Brokerage accounts need beneficiary designations updated to flow directly into the trust.
Retirement Plans & Life Insurance: While some accounts remain in your name for tax purposes, their beneficiary designations can be updated to include the trust where appropriate.
Business Interests: If you own a company, your ownership shares or LLC membership interest should be assigned to the trust.
High-Value Personal Property: Vehicles, collectibles, art, or jewelry can also be documented as trust assets when needed.
Even a single missed account can create legal complications. That’s why this process requires careful attention and ongoing updates.
Why Funding Should Happen Now, Not Later
Some people delay trust funding, thinking they’ll get to it later—or assuming they don’t have enough assets yet to worry about it. But waiting is risky.
Life changes quickly: A sudden illness, accident, or death can happen at any time, leaving your plan incomplete.
New assets are acquired: Every time you open a new bank account, buy property, or receive an inheritance, those assets need to be aligned with your trust.
Avoiding last-minute stress: Trying to fund a trust during a crisis often leads to errors or missed steps.
Starting early and maintaining alignment as part of your financial routine ensures your trust stays current and ready to protect your family whenever needed.
The Role of Ongoing Reviews
Funding a trust isn’t a one-and-done task. Think of it like home maintenance: you wouldn’t fix your roof once and then ignore it forever. We encourage our clients to schedule regular reviews—at least every few years or after major life events like:
Marriage or divorce
Birth of a child or grandchild
Buying or selling property
Significant changes in business holdings or investments
Moving to another state
These check-ins allow us to identify misaligned assets early and correct issues before they create legal problems down the road.
How Lanier Legacy Law Supports Asset Alignment
At Lanier Legacy Law, we understand that creating a trust is just the first step. Our comprehensive approach to asset alignment includes:
Custom funding checklists tailored to your specific assets.
Assistance with deeds, account retitling, and beneficiary designation updates.
Education for you and your family about how to maintain alignment going forward.
Collaboration with your financial advisors to ensure smooth transitions.
Ongoing support whenever you acquire new assets or need to make changes.
