Trusts Done Right
Why 90% of Trusts Are Not Funded Correctly
If you’ve created a trust, there’s one step that often gets missed: actually funding it. That means making sure your assets - like your house, cars, bank accounts, and life insurance - are legally placed into the trust so it can do its job. In this post, you’ll learn what trust funding means, why so many trusts fail at this step, and how a digital process can simplify the work. If you’re setting up an estate plan, this is one of the most important things to get right.
Why Trust Funding Matters More Than People Think
A trust is only useful if it owns what you want it to own. That sounds simple, but in practice, many people stop after signing the paperwork and never complete the transfer of assets. Evan Frazier points out that
about 90% of trusts are not funded correctly
That’s a big number, but it makes sense when you think about how many separate places you may need to update. A trust doesn’t automatically capture your assets just because it exists. For example, if you want a car to be part of the trust, you have to tell the DMV. If you want a house in the trust, you usually need to update the recording office. Bank accounts, insurance policies, and other assets may each require their own process. The key idea is this:
creating the trust is only step one - funding it is what makes it work
What It Means to Put Assets Into a Trust
When people hear “funding a trust,” they often think it means moving money into some kind of separate account. But trust funding is broader than that. It means telling the right institutions and agencies that an asset should now be owned by the trust. In other words, the trust needs to become the legal owner on paper. Here’s how that looks in real life:
Cars
- You update the DMV with the vehicle identification number, make, and model so the vehicle is titled in the trust name.
Real estate
- You work through the recording office to transfer the home into the trust.
Bank accounts
- You notify the bank and update the account ownership.
Life insurance policies
- You make the trust the beneficiary or owner, depending on the plan.This is where many people get stuck. Each asset type can have its own rules and forms, which makes the process feel complicated and easy to delay
Why Traditional Trust Funding Gets Missed
The biggest reason trusts go unfunded is that the process is fragmented. You’re not making one update in one place - you’re making several updates across multiple institutions. That creates a few common problems:
1. People assume the trust document is enough. Signing the trust agreement feels like the finish line, but it’s not. Without retitling assets or updating ownership records, the trust may not control anything you meant to include.
2. The process takes time and follow-up. Updating a trust often means dealing with the DMV, county recording offices, banks, insurance companies, and other institutions. That’s a lot to track, especially if you’re managing an estate plan for the first time.
3. People don’t know what needs to be transferred. Some assets are obvious, like a home or car. Others are easier to overlook, such as accounts, policies, or digital asset records. If you don’t know what to check, something can be left out.
4. The paperwork feels intimidating. Even when people know what to do, they may still avoid it because the forms and instructions are confusing. That delay can leave the trust incomplete for months or years.
The result is a trust that exists on paper but doesn’t fully protect the assets it was meant to cover.
How Electronic Trust Funding Can Simplify the Process
One of the most interesting parts of Evan’s explanation is the digital approach. He says the program runs out of Nevada, the only state that allows electronic funding of assets. That matters because it removes some of the friction from the process. Instead of physically going to each agency or institution, the system can handle the transfer electronically based on the identifying information for the asset. For example:
For a car, you provide the
VIN number and make/model
For a house, you provide the
property address
The system then processes that asset into the trust electronically
This doesn’t mean every single asset transfer happens the same way or that every state follows the same rules. But it does show a bigger point:
The easier the funding process is, the more likely people are to actually complete it
That’s important because trust planning only works when follow-through happens. A simplified system can help reduce missed steps, confusion, and procrastination.
What You Should Check in Your Own Trust Plan
If you already have a trust, or you’re creating one now, this is the part to pay attention to. Don’t assume the work is done once the documents are signed. Instead, review your assets one by one and ask:
Is the asset supposed to be in the trust?
Has the ownership or title actually been updated?
Did I complete the required forms with the right agency or institution?
Is there any asset I meant to include but haven’t transferred yet?
A simple checklist can make a huge difference. Start with the big items first:
Real estate
Vehicles
Bank accounts
Insurance policies
Any other valuable assets you want governed by the trust
If you’re not sure where an asset belongs, that’s a sign to slow down and confirm the paperwork before moving on. It’s much easier to fix the issue now than after a problem comes up later.
The Bottom Line: A Trust Only Works If It’s Funded
The main lesson here is straightforward: a trust is not fully effective until the assets are actually placed into it. That means updating titles, records, and ownership details so the trust controls what you intended it to control.Evan Frazier’s point about 90% of trusts being unfunded correctly is a reminder that estate planning is about execution, not just documents. The good news is that the process can be made easier, especially when technology reduces the need to visit multiple offices in person.If you have a trust, take time to verify the funding. If you’re still planning one, make sure asset transfer is part of the plan from the start. That’s the step that turns a trust from paperwork into protection. Want to go deeper? Review your current estate plan and make sure every major asset has been properly transferred or designated.
Frequently Asked Questions
What does it mean to fund a trust? Funding a trust means transferring ownership of assets into the trust or updating records so the trust becomes the legal owner. This can include homes, vehicles, bank accounts, and insurance policies.
Can a trust work if it isn’t funded? A trust may still exist legally, but it won’t control the assets that were never transferred into it. That can create serious estate planning gaps.
Do all assets need to be put into a trust? Not always. Some assets may be better handled through beneficiary designations or other planning tools. It depends on the type of asset and your overall estate plan.
Why do people forget to fund their trusts? Many people assume signing the trust is the final step. In reality, funding requires separate action with institutions like banks, county recorders, and the DMV.
Is electronic trust funding available everywhere? No. Nevada allows electronic funding of assets, but rules vary by state and asset type. You should always confirm local requirements.
Other topics to consider diving into more if this resonates with you:
Common Trust Funding Mistakes to Avoid
Trust Funding Checklist for Homeowners and Families
State DMV title transfer guidance
County recorder’s office instructions for real estate transfers
Nevada trust funding rules or legal resources
This blog post is for entertainment and educational information. Not intended as legal advice.
