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Why Updating Your Revocable Trust Is Essential After a Major Purchase

It's essential to fund a revocable living trust in Minneapolis for it to work

A revocable living trust offers your Minneapolis family privacy and by helping your estate avoid the lengthy Minnesota probate process. However, one often-overlooked step can undermine the entire purpose of a trust: funding it. Failing to put assets into trusts creates headaches for heirs and probate hassles, says the article “Once You Create a Living Trust, Don’t Forget to Fund It” from Kiplinger. If you don’t transfer ownership of your assets into the trust, those assets could still be subject to probate.

This article explains why funding your revocable trust is critical—especially when you’ve made a significant purchase, such as real estate. Read on to learn how this step secures your estate plan and ensures your wishes are upheld.

What Does It Mean to Fund a Revocable Trust?

When you create a revocable living trust, you essentially establish a legal “container” for your assets. Minneapolis estate planning attorney Phil Ruce in his video, “The ONE Thing that Ruins Your Revocable Trust,” explains that a trust is like a ziplock bag that can open to receive more items. For the trust to work as intended, you need to transfer ownership of your existing assets and any major new purchases into this container. This process, known as “funding,” involves re-titling assets, such as real estate, financial accounts, and even personal property, into the name of the trust.

Why Is Real Estate the Most Common Funding Oversight?

Minneapolis real estate is one of the most valuable assets people own, but it’s also one of the easiest to overlook when funding a trust. If you’ve recently purchased a home, vacation property, or investment property, you must update the property’s title to reflect the revocable living trust as the owner. Failing to do so means the property could still go through probate, even if you have a well-crafted trust in place. Read more in our article, How a Revocable Trust Can Help Keep the Cabin in the Family

The Step-By-Step Process for Funding a Trust with Real Estate

1. Review the Deed

Ensure the deed lists your trust as the property owner. If you refinanced your home recently, your lender might have required you to temporarily remove the trust from the title. In this case, it’s essential to re-title the property into the trust’s name.

2. Work with a Minneapolis Estate Planning Attorney

A knowledgeable estate planning attorney can assist with preparing and recording the new deed. This step ensures legal compliance and avoids delays or errors in the process.

3. Don’t Forget New Purchases

If you buy a new property, remember that each property requires its own funding process. Newly purchased real estate doesn’t automatically transfer to your revocable living trust prepared years ago, and thus the new deed will need to be added to the trust.

What Happens If You Don’t Fund Your Revocable Living Trust?

Failing to fund your trust can result in unintended consequences. For example, assets not titled in the name of the trust may need to go through probate, delaying their distribution to heirs. Additionally, the protections and benefits of your trust—such as shielding assets from creditors or managing special needs beneficiaries—only apply to assets within the trust.

What Other Types of Assets Should Be Considered for Adding to a Revocable Living Trust?

While real estate often garners the most attention, reviewing your Minneapolis revocable living trust should also extend to other significant assets:

  • Bank Accounts: Retitle accounts into the name of the trust or designate the trust as a payable-on-death beneficiary.
  • Brokerage Accounts: Ensure investment accounts reflect trust ownership.
  • Retirement Accounts and Life Insurance Policies: Work with your attorney to determine whether naming the trust as a beneficiary aligns with your estate planning goals.
  • Personal Property: Document the transfer of valuable items like art, jewelry, and collectibles into the trust.

Maintaining Your Trust After Funding

Even if you’ve successfully funded your trust, ongoing maintenance is essential. Major life events, like purchasing additional real estate or opening new financial accounts, require updates to ensure these assets are titled appropriately. Set a reminder to review your trust annually or after any significant financial changes. Read more in our article, Top Reasons to Review Your Revocable Trust in Minnesota

How Stone Arch Law Can Help

At Stone Arch Law Office in Minneapolis and Woodbury, we help our clients ensure their revocable trust is properly funded and maintained. We guide you through the process, ensuring all assets—including your new real estate purchases—are securely placed in your trust. Our team understands that the details matter, and we’re here to make this process seamless and stress-free. Book a call with our team today to learn more and protect your family’s future.

Review Your Minneapolis Revocable Living Trust Today

Your estate plan isn’t complete until your trust is funded. Every asset, especially significant purchases like real estate, needs to be included to maximize the benefits of your trust and avoid probate. Take the time to review your trust today and ensure your assets are titled correctly.

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