You Created a Living Trust—But Did You Fund It?

When Prince died in 2016, he left no will. A Minnesota appellate opinion later described the resulting probate proceedings, including numerous people claiming to be heirs and the court’s determination identifying six siblings as his lawful heirs.

His extraordinary career left an estate involving music, licensing, intellectual property, and ongoing business decisions. Those responsibilities continued after his death.

For families reading about a celebrity estate, the useful question is personal: “Would the people I leave behind have the documents, information, and authority they need?”

If you have already signed a living trust, you have taken a planning step that is different from Prince’s documented situation. But another question remains: Have you completed the work necessary to put your intended assets under the trust’s ownership?

Prince’s case is not an example of an unfunded trust. It is a reminder to examine whether your own planning is complete.

What does “funding your trust” mean?

Funding involves identifying the property intended for the trust and completing the legally appropriate steps for that property to be held by the trustee under the trust’s terms.

The method depends on the asset. Real estate, financial accounts, personal property, and business interests do not necessarily follow the same process. A signed trust document should not be treated as proof that every asset you own has been transferred.

The practical question is: “What records show that this particular asset is covered by the plan?”

Four areas to review

1. Your home and other real estate

Gather the current deeds and compare ownership with your intended plan. A trust binder and a property deed serve different purposes. Before changing a deed, review title, financing, insurance, homestead considerations, and any out-of-state requirements with counsel.

2. Bank and investment accounts

Compare current account registrations with the assets you intended to place in the trust. Ask whether the institution completed and accepted the required paperwork. Keep written confirmation with your planning records.

3. Beneficiary-designated assets

Review beneficiary designations alongside the trust. Changing an account owner and changing a beneficiary are different actions. Retirement accounts and insurance deserve individual attention; do not assume the trust should own or receive every asset.

4. Business interests

Check the company agreement, ownership ledger, transfer documents, and required approvals. A trust’s description of your wishes does not answer every question about transferring an LLC interest or managing the business.

A common planning gap

Consider this hypothetical example: A couple signs a trust, transfers selected accounts, and carefully organizes their records. Several years later, they buy another property and open a new investment account.

They assume their earlier planning automatically covers the additions. Their successor trustee later discovers that the newer ownership records do not match what the couple intended.

The lesson is practical: funding deserves follow-through when assets change, not just attention on signing day.

Your trust-review checklist

• ·List your major assets and their current owners.
• ·Identify which assets are intended for the trust.
• ·Collect deeds, account registrations, assignments, and confirmations.
• ·Review beneficiary designations for consistency with the overall plan.
• ·Identify unfinished transfers and questions requiring professional review.
• ·Tell your successor trustee where the current documents and records are kept.

A trust cannot eliminate every dispute or administrative task. A coordinated review can, however, uncover gaps while you are available to explain your wishes and address them.

About the author and our practice

Darryl V. Pratt, Esq., CPA, is Principal & Managing Attorney of Pratt Law Group, PLLC, doing business as Lone Star Counsel, and is an attorney and CPA licensed in Texas and Oklahoma.

At Lone Star ★ Counsel, we help families review their trusts, ownership records, and next steps. For nearly 30 years, we have served small and midsize businesses from formation through succession, sale, and retirement planning, alongside our estate planning and trust practice.

To discuss a trust-funding review, contact our office.

Sources and further reading

• ·In the Matter of the Estate of Prince Rogers Nelson, No. A17-0880 (Minn. Ct. App. Jan. 22, 2018), unpublished opinion, factual background: law.justia.com/cases/minnesota/court-of-appeals/2018/a17-0880.html. The Minnesota proceeding is discussed as a historical example, not as Texas legal authority.
• ·Texas Property Code §§ 112.001, 112.005, and 112.006: tcss.legis.texas.gov/resources/PR/htm/PR.112.htm

General educational information only; not legal or tax advice. Results depend on individual circumstances and applicable law. Contacting the firm does not itself create an attorney-client relationship. The family example is hypothetical. Featured family imagery is illustrative and does not depict actual clients.