The short answer
Funding a trust means moving ownership of your assets into the trust’s name, or naming the trust as beneficiary where that makes more sense. Accounts are retitled through the bank or custodian, real estate is moved by recording a new deed, and retirement accounts are not retitled at all; their beneficiary designations are coordinated with the plan instead. Anything you miss may still go through probate.
Funding checklist, asset by asset
| Asset | How to fund it | Watch out for |
|---|---|---|
| Brokerage accounts | Retitle to the trust, or open a trust account and transfer the holdings in kind | Selling to “move” the account creates needless capital gains; transfer in kind instead |
| Bank accounts and CDs | Retitle to the trust, or name the trust as payable-on-death beneficiary | CDs may need to be reissued; keep a day-to-day account easy to use |
| IRAs, 401(k)s, 403(b)s | Do not retitle. Update beneficiary designations to match the plan | Naming a trust as beneficiary affects how fast heirs must withdraw; the trust must be drafted for it |
| Primary home | Record a deed to yourself as trustee | PA realty transfer tax documentation, insurance, title policy |
| Vacation or out-of-state home | Record a deed under that state’s rules | Otherwise heirs may face a second probate in that state |
| Life insurance | Name the trust as beneficiary if the plan calls for it | Proceeds can still be in your taxable estate unless owned by an irrevocable trust |
| Annuities | Coordinate the owner and beneficiary with the plan | Ownership changes can affect tax deferral and death benefits; review with the carrier |
| Business interests and LLCs | Assign the interest to the trust | Operating or shareholder agreements may require consent |
| 529 plans | Name a successor account owner | The plan’s own rules control; retitling is usually not available |
| Personal property | A written assignment of tangible personal property | Vehicles are often handled separately; check your state’s rules |
Funding financial accounts
Brokerage and investment accounts
Most custodians let you either retitle an existing account to the trust or open a new account in the trust’s name and move the holdings in kind. Either way, the investments themselves do not need to be sold, so there is no tax cost. A revocable trust generally keeps using your Social Security number while you are alive, and your cost basis and holding periods carry over.
Banks and custodians will ask to see the trust. In Pennsylvania, a trustee can usually provide a short certification of trust instead of the full document. It confirms the trust exists, who the trustees are, and their powers, without revealing who inherits what.
Bank accounts and CDs
Checking and savings accounts can be retitled, or left in your name with the trust as payable-on-death (POD) beneficiary. Many people keep one everyday account outside the trust for convenience and add a POD designation to it. CDs sometimes have to be reissued in the trust’s name, so it is often easiest to retitle them at maturity.
Retirement accounts: the exception
IRAs, 401(k)s, and other retirement accounts must stay in your own name. Changing the owner to a trust would generally be treated as withdrawing the entire balance, making it all taxable at once. These accounts pass by beneficiary designation, so the job is making sure those designations match the plan. Naming the trust as beneficiary can make sense for young or vulnerable heirs, but it changes how quickly the money must be withdrawn after death, and the trust needs language written for it. Our Pennsylvania inheritance tax guide covers how these accounts are taxed at death, and our inherited IRA rules guide explains what heirs must withdraw and when.
Pennsylvania note: tenants by the entirety
Pennsylvania married couples often own accounts and real estate as tenants by the entirety, which generally protects those assets from a creditor of only one spouse. Retitling them to a revocable trust can give up that protection unless the trust is drafted to preserve it. Ask your attorney before moving joint assets.
Putting your house in a trust
- Have an attorney prepare a deed transferring the home from you (and your spouse) to you as trustee of your trust.
- Record the deed with the recorder of deeds in the county where the home sits.
- Document the transfer tax exclusion (see the Pennsylvania warning below).
- Notify your homeowners insurer and add the trust as a named or additional insured.
- Check your title insurance; some policies need an endorsement to continue coverage for the trust.
- Confirm property tax relief such as Pennsylvania’s homestead exclusion carries over, with your county assessment office.
Pennsylvania realty transfer tax trap
Pennsylvania excludes a deed to a living trust from realty transfer tax, but only if the trust fits the statute’s definition, which generally means no one other than you can receive distributions before your death, and the trust agreement is presented to support the exclusion. A deed alone is not enough. If the trust does not qualify, the transfer can owe 1% state tax plus local realty transfer tax on the home’s value.
Transfers out of the trust to your heirs after death are covered by a separate exclusion, with its own conditions. Have the deed prepared by an attorney who handles Pennsylvania real estate.
What about the mortgage?
Moving a mortgaged home into a living trust generally does not let the lender call the loan. The federal Garn-St Germain Act bars enforcement of a due-on-sale clause when a borrower transfers a residence with fewer than five units into a trust in which the borrower remains a beneficiary and occupant. That protection does not cover transfers into an LLC. Let your lender and loan servicer know about the change anyway.
Your vacation home or out-of-state property
For a second home in another state, such as a shore house in New Jersey or a beach place in Delaware, funding the trust matters even more. Real estate is probated where it sits, so a vacation home left in your individual name can force your family through a second, ancillary probate in that state, with its own court, attorney, and delays. Deeding it to your trust avoids that.
- Follow that state’s rules. The deed, transfer tax exemptions, and recording requirements are those of the state where the property is located, so use an attorney licensed there.
- Think about who will share it. If several children will inherit a family vacation home, the trust can hold it with rules for use, expenses, and buyouts, or it can hold an LLC that owns the house. An LLC adds liability protection and makes shared ownership easier to manage, but a mortgaged home moved into an LLC loses the Garn-St Germain protection.
- Rental use changes things. If you rent the property out, review insurance, liability coverage, and how rental income and depreciation will be handled.
A worked example: one couple’s funding plan
A Chester County couple signs a joint revocable trust. Here is how their balance sheet gets funded:
| Asset | Action | Why |
|---|---|---|
| Home in West Chester | Deed to the trust, with transfer tax exclusion documented | Avoids probate; keeps the transfer tax-free |
| Shore house in New Jersey | New Jersey deed to the trust | Avoids a New Jersey ancillary probate |
| $2M joint brokerage account | Retitled in kind to the trust after attorney review of entireties protection | No sale, no tax; avoids probate |
| $1.5M in IRAs | Stay in their names; beneficiaries updated (spouse first, then trust) | Retitling would trigger tax |
| Checking account | Kept joint, payable-on-death to the trust | Convenient day to day, still avoids probate |
| LLC owning a rental | Membership interest assigned to the trust with the other members’ consent | Business keeps running without interruption |
Hypothetical illustration. Every plan should be implemented with your estate attorney.
Keeping it funded
Funding is not a one-time event. New accounts, a refinanced mortgage, an inherited account, or a new property can all end up outside the trust. A quick review after any account opening, real estate purchase, refinance, marriage, divorce, or death in the family keeps the plan working. For how revocable and irrevocable trusts differ, and what each does for taxes, see revocable vs. irrevocable trusts.
Frequently asked questions
What does it mean to fund a trust?
Funding a trust means transferring ownership of your assets to the trust, or naming the trust as the beneficiary of assets that pass by designation. A revocable living trust controls only the assets it owns or receives, so anything left in your individual name may still have to go through probate.
How do I put my house in a trust?
You sign and record a new deed transferring the house from you to yourself as trustee of your trust, usually prepared by an estate or real estate attorney and recorded in the county where the property is located. You should also notify your homeowners insurer, confirm your title insurance, and in Pennsylvania make sure the realty transfer tax exclusion for living trusts is properly documented.
Will putting my house in a trust trigger my mortgage’s due-on-sale clause?
Generally not for a home loan. The federal Garn-St Germain Act generally prevents lenders from enforcing a due-on-sale clause when a borrower transfers a residence with fewer than five units into an inter vivos trust in which the borrower remains a beneficiary and occupant. The protection does not extend to transfers into an LLC, and it is still wise to notify the lender.
Should I retitle my IRA or 401(k) to my trust?
No. Transferring ownership of an IRA or 401(k) to a trust would generally be treated as a full taxable distribution. Instead, the account stays in your name and you coordinate its beneficiary designation with your estate plan. Naming a trust as beneficiary is possible, but the trust must be drafted for it, because it affects how quickly heirs must withdraw the money.
Is there realty transfer tax when I deed my Pennsylvania home to a living trust?
Pennsylvania excludes transfers to a living trust from realty transfer tax, but the exclusion has conditions. The trust must meet the statutory definition of a living trust, which generally means no one other than the settlor can receive distributions before the settlor’s death, and a copy of the trust agreement must support the claimed exclusion. If the requirements are not met, state and local realty transfer tax can apply, so the deed should be prepared by an attorney familiar with the rules.