Creating a trust is one of the most effective ways to avoid probate in Florida—but simply signing the trust agreement is not enough. For a trust to work as intended, it must be funded. Unfortunately, many Floridians overlook this step, leaving their estates exposed to probate and unnecessary complications.
At Lumsden Law, we often tell clients: “A trust without funding is like an empty box.” Below, we’ll explain what trust funding means, why it matters, and how to ensure your assets are protected.
What Does It Mean to Fund a Trust?
Funding a trust means transferring ownership of your assets into the trust’s name. For example:
- Deeding your home to the trust.
- Retitling bank accounts or investment accounts in the trust’s name.
- Naming the trust as a beneficiary on life insurance or retirement accounts.
Without this transfer, the trust has nothing to manage or distribute. Assets that remain outside the trust may still go through probate.
Why Funding a Trust Matters in Florida
- Avoiding Probate
The main advantage of a trust is avoiding Florida’s probate process, which can be lengthy and expensive. Only funded assets bypass probate.
- Ensuring Smooth Distribution
A properly funded trust ensures beneficiaries receive their inheritance quickly, without waiting for court approval.
- Maintaining Privacy
Probate is public. A funded trust allows your family’s financial details to remain private.
- Protecting Against Mistakes
If assets aren’t properly titled, they may end up in probate, defeating the purpose of the trust.
Steps to Fund a Trust in Florida
- Real Estate: Sign and record a deed transferring property into the trust. Florida requires specific language for homestead property, so professional guidance is essential.
- Bank Accounts: Retitle checking, savings, and money market accounts into the trust’s name.
- Investment Accounts: Brokerage accounts can often be transferred with the help of your advisor.
- Life Insurance & Retirement Accounts: Name the trust as a beneficiary to ensure proceeds are handled as intended.
- Personal Property: Tangible assets, like jewelry or art, can be assigned to the trust through a simple document.
Common Mistakes in Trust Funding
- Assuming your attorney did it for you: Many estate planning attorneys prepare the trust documents but leave funding to the client. Always confirm whether your assets have been retitled.
- Forgetting new assets: As you acquire property—new bank accounts, real estate, or even digital assets like cryptocurrency—you must either purchase them in the name of the trust or update beneficiary designations.
- Not reviewing regularly: A trust should be reviewed every few years to ensure all assets are accounted for.
Trusts and Homestead Property in Florida
Special rules apply to Florida homestead property. While you can transfer your primary residence into a trust, the deed must comply with Florida law to avoid jeopardizing your homestead protections. An improperly drafted deed could create tax issues or limit inheritance rights for your spouse or children, which is why working with an attorney experienced in Will and Trust planning is essential.
How an Attorney Helps
At Lumsden Law, we guide clients through every step of the funding process. This includes:
- Preparing and recording deeds for Florida real estate.
- Coordinating with financial institutions to retitle accounts.
- Reviewing beneficiary designations.
- Ensuring compliance with Florida’s homestead rules.
By working with an experienced Florida estate planning attorney, you’ll avoid costly mistakes and ensure your trust works as intended.
Conclusion
A trust is only as strong as the assets inside it. By funding your trust properly, you’ll avoid probate, protect your family’s privacy, and ensure your wishes are honored.
Call to Action: Don’t leave your trust empty. Contact Lumsden Law today to make sure your trust is fully funded and ready to protect your legacy.
FAQs
1. What does it mean to fund a trust in Florida?
Funding a trust means transferring ownership of your assets into the trust’s name, such as real estate, bank accounts, and investment accounts.
2. Why is funding a trust important?
Without funding, a trust is ineffective. Only funded assets avoid probate, ensure smooth distribution, and keep your estate private.
3. Can I put my Florida homestead property into a trust?
Yes, but the deed must follow Florida’s homestead rules. An improperly drafted deed could cause tax issues or limit inheritance rights.
4. Do I need an attorney to fund a trust in Florida?
While not legally required, working with an estate planning attorney ensures deeds, accounts, and beneficiary designations are handled correctly.
