A Michigan family paid $4,500 for a comprehensive trust-based estate plan. The attorney drafted solid documents. Mom signed everything. She filed the binder on a shelf, told the kids “everything is taken care of,” and went back to living her life.
Fifteen years later, she passed away. Her three adult children opened the binder expecting a smooth, private process. Instead, they discovered the house was still in Mom’s name. The savings account she opened in 2019 was titled to her personally. The brokerage account from the inheritance she received from her own mother? Also in her name.
The trust existed on paper. But it owned nothing.
Everything went through probate, at a cost of $10,000-$15,000 – for an outcome the family had already paid to avoid. The trust didn’t fail because it was poorly drafted. It failed because it was never funded.
An unfunded trust is the most expensive “free” mistake in Michigan estate planning. The documents aren’t the plan. The funding is.
What “Funding a Trust” Actually Means
Funding a trust means transferring ownership of your assets so the trust holds them, not you personally. Think of it this way: the trust document is the blueprint. Funding is the construction. Without both, you have a beautifully designed house that was never built.
Here’s what needs to be retitled or transferred into the trust:
- Real estate is the big one. Your home needs to be deeded into the trust – and that deed needs to be recorded with your county’s register of deeds. If the trust doesn’t own the house, the house goes through probate.
- Bank accounts should be retitled in the trust’s name or have the trust designated through the financial institution’s process. This includes checking accounts, savings accounts, CDs, and money market accounts.
- Brokerage and investment accounts follow a similar process. Most firms have their own paperwork to retitle accounts into a trust. It’s straightforward – but someone has to actually do it.
- Business interests and LLCs – if you own a business entity, the membership interest or shares should be assigned to the trust through proper documentation.
A critical distinction: retirement accounts (IRAs, 401(k)s) and life insurance typically should NOT be retitled into the trust. These use beneficiary designations, which means you name the trust as a contingent beneficiary, not the primary owner. Retitling retirement accounts into a trust can trigger immediate tax consequences that nobody wants.
And the safety net? A pour-over will catches anything that wasn’t transferred into the trust during your lifetime. But here’s the catch, anything the pour-over will catches still goes through probate to get there. The pour-over will is the backup plan, not the strategy.
What Happens When a Trust Isn’t Funded
This is where the real damage happens.
When assets aren’t titled in the trust, they don’t pass through the trust. They pass through the pour-over will (if one exists) or through Michigan’s intestacy laws, and either way, probate is required.
The math is brutal. The family already paid $2,500-$5,500 for the trust-based plan. Now add $10,000-$15,000 for probate administration. The total cost for an outcome that should have been seamless: potentially $12,500-$20,500.
The timeline impact is just as painful. A properly funded trust can distribute assets to beneficiaries in weeks. Probate in Michigan takes 7-12 months or longer. That’s 7-12 months of waiting, paperwork, court filings, and creditor notice periods before anyone sees a dime.
Then there’s privacy. Trust administration is private, no public record, no nosy neighbors, no one knowing what your family has. Probate is an open book. Anyone can look up the filings, the inventory, and the distribution. For families who value discretion, this alone makes trust funding worth the effort.
“Many Michigan families don’t realize their trust is unfunded until someone dies and the family discovers they’re going through probate anyway – for a process they specifically planned and paid to avoid.”
Consider an Oakland County family: Mom created a revocable trust fifteen years ago. The brokerage accounts were retitled into the trust at creation. Those accounts, worth several hundred thousand dollars, passed seamlessly to her three children through the trust. Private. Fast. No court involvement.
But the house was never deeded into the trust. Mom refinanced in 2017 and the new deed came back in her personal name, not the trust’s name. Nobody caught it. That single asset, the family home, now requires full probate proceedings. The same home the trust was specifically designed to protect.
The Most Commonly Missed Assets
The Oakland County example above isn’t unusual. Certain assets get missed more than others.
Real estate is the number one culprit. It’s the biggest asset most families own, and it’s the most commonly unfunded. Refinancing is the silent killer, when you refinance, the lender issues a new deed, and that deed almost always comes back in your personal name. If nobody catches it and re-deeds the property into the trust, you’ve just un-funded your most important asset.
Bank accounts opened after the trust was created. You fund your existing accounts at trust creation, then open a new savings account two years later and forget to title it in the trust. It happens all the time.
Inherited assets. Your parent dies and leaves you $150,000. That money goes into your personal account. If it never gets moved into your trust, it’s outside the plan.
Business interests. Owners who form LLCs or acquire business interests after creating their trust frequently forget to assign those interests to the trust.
Vehicles present Michigan-specific considerations. While vehicles can be titled in a trust, many families use alternative transfer mechanisms. The key is having a strategy for every asset you own.
How Boroja, Bernier & Associates Handles Trust Funding Differently
Here’s something most people don’t know: at many law firms, trust funding is barely mentioned. The attorney drafts the documents, hands you a binder, and wishes you good luck. No guidance on what to do next. No tools to help you follow through.
Effort is expected, results are required. Drafting beautiful trust documents without giving clients a clear path to fund them is effort without results. It’s like building a fire alarm system and never telling anyone how to connect the sensors.
At Boroja, Bernier & Associates, we handle the pieces that require legal expertise, and give you everything you need to handle the rest.
What we do: We prepare and file the deeds to transfer your real estate into the trust with the register of deeds. We draft the assignment documents necessary to fund the trust with your personal property and business interests, S-corps, LLCs, and other entities. And we provide detailed, step-by-step instructions for every other asset that needs to be retitled.
What you do: You take those instructions to your banks, brokerage firms, and financial institutions to retitle your accounts. We don’t contact your financial institutions directly, that’s your responsibility, and intentionally so. You maintain full control over your financial relationships, and there’s no ambiguity about who authorized what.
“In our experience serving Michigan families, the most common reason trusts fail isn’t bad drafting – it’s the gap between signing documents and actually following through on funding. We close as much of that gap as we can on the legal side, and we make sure you have a clear roadmap for the rest.”
The difference is accountability. We don’t hand you a binder and hope for the best. We handle the legal transfers, prepare the documents you need, and walk you through exactly what steps remain, so nothing falls through the cracks because you didn’t know what to do next.
For families who already have trusts from other firms that may not be properly funded, we also offer trust review and update engagements. Sometimes the fix is straightforward. Sometimes the trust itself needs updating. Either way, finding out now is better than your family finding out in probate court.
Comprehensive trust-based estate plans at Boroja, Bernier & Associates range from $2,500-$5,500, including deed preparation, assignment documents, and detailed funding instructions.
How to Check If Your Trust Is Funded
You don’t need an attorney to do a preliminary check. Start with these steps:
- Pull your deed. Go to your county’s register of deeds website and look up your property. Is it titled in your name or your trust’s name? If it says “John and Jane Smith” and not “John and Jane Smith, Trustees of the Smith Family Trust,” your house isn’t funded.
- Check your bank and brokerage account titles. Log in to your online accounts or call your financial institution. The account title should reference the trust.
- Review beneficiary designations. Life insurance and retirement accounts should name appropriate beneficiaries with the trust as contingent beneficiary where applicable.
- Think about anything you’ve acquired since creating the trust. New accounts, inherited assets, real estate purchases, business interests. If you didn’t actively transfer them into the trust, they’re probably still in your personal name.
If anything is still titled personally, it’s not too late. But every day those assets sit outside the trust is a day your family is exposed to exactly the probate process you planned to avoid.
Frequently Asked Questions About Trust Funding
Funding a trust means transferring ownership of your assets, real estate, bank accounts, investment accounts, business interests, into the trust’s name. Until assets are retitled, the trust is an empty container that won’t protect your family from probate.
A pour-over will catches assets that weren’t transferred into the trust during your lifetime and directs them into the trust after death. But here’s the critical point: anything the pour-over will catches must go through probate first. It works, but it defeats the main purpose of having a trust.
At Boroja, Bernier & Associates, deed preparation, assignment documents, and detailed funding instructions are included in the comprehensive trust-based estate plan engagement ($2,500-$5,500). Your responsibility is taking the instructions to your banks and financial institutions to retitle accounts, a process we walk you through step by step. For families who need to fund an existing trust created elsewhere, costs depend on the number and type of assets involved.
This is one of the most common funding mistakes in Michigan. When you refinance, the lender typically requires the property to be deeded back into your personal name. After closing, the property needs to be re-deeded into the trust. If nobody does this, your house is no longer in the trust, and it will go through probate. Always check your deed after a refinance.
Generally, no. Retitling a retirement account (IRA, 401(k)) into a trust can trigger immediate income tax on the entire account balance. Instead, you name individuals as primary beneficiaries and the trust as contingent beneficiary. This preserves the tax advantages while keeping the trust as a safety net.
Check the title on every major asset you own, real estate, bank accounts, brokerage accounts, business interests. If any are still in your personal name, they’re outside the trust. If anything is titled personally that should be in your trust, contact an estate planning attorney to discuss your options. Call (586) 991-7611 to speak with the Michigan estate planning attorneys at Boroja, Bernier & Associates.
Your Trust Only Works If It’s Funded
The trust document is the blueprint. Funding is the construction. Without both, you have a plan that looks good on paper but doesn’t protect anyone.
At Boroja, Bernier & Associates, we help Michigan families throughout the state build estate plans that actually work, not just plans that look impressive in a binder. Whether you’re building your first estate plan or replacing one that isn’t getting the job done, our attorneys will make sure the plan actually works. We maintain offices in Shelby Township, Troy, Ann Arbor, and Lansing to serve families across Michigan.
To schedule a consultation with the Michigan estate planning attorneys at Boroja, Bernier & Associates, call (586) 991-7611.
