The most expensive mistake in estate planning is an empty trust
Signed, notarised, filed in a binder, and holding nothing. It happens to thousands of families who did everything they were told to do.
The classic estate planning failure is not a badly drafted document. It is a perfectly good revocable living trust that was signed, paid for, and never funded, so the house is still titled in a person rather than in the structure built to hold it.
Why it happens
Signing a trust feels like completion. There is a document, there are signatures, there is often a notary. Every signal says the task is finished.
But a trust governs only what it owns. Funding it is a separate, unglamorous administrative job: retitling the house with the county, re-registering accounts with each institution, checking which assets should be left alone. Nobody feels the absence of it until the moment it matters, which may be twenty years later.
What an unfunded trust actually does
It governs nothing. Assets still held in your own name are dealt with under your will if you have one, or under your state’s default rules if you do not, whatever the trust says about them.
This is exactly why a trust is issued with a pour over will. That will directs anything left outside into the trust, so the terms you wrote still apply. It is a safety net rather than a substitute: assets arriving that way arrive later and by a longer route than assets the trust already held.
How to tell whether yours is funded
Look at the title, not the trust. Does the deed to your house name the trust? Is the brokerage account registered in the trust’s name? Which accounts pass by beneficiary designation instead, and are those designations current?
It is a checklist rather than a judgement call, which is why the platform generates one from your own assets and keeps asking about it until the list is short.
Why we score funding separately
Signing a trust moves your Estate Readiness. Actually funding it moves it considerably further, and the two are measured separately on purpose.
Buy a property and your plan flags that the new asset is sitting outside the trust. Sell one and it flags the clause that now refers to something you no longer own. A plan that cannot notice the difference between a signed trust and a funded one is not tracking the thing that matters.
Legacy Buddy provides document creation tools, not legal advice.
Knowing what to do is the hard part. This is the easy part.
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