How to Fund a Living Trust in Tennessee

Signing your living trust documents feels like a major accomplishment. And it is. But the signature is not the finish line. Until you actually transfer your assets into the trust, the document is essentially an empty container sitting in a filing cabinet. The funding process is what gives your trust real legal authority and puts your estate plan to work.

What “Funding” a Living Trust Actually Means

Funding a trust means re-titling your assets so they are owned by the trust rather than by you as an individual. This applies to real estate, bank accounts, investment accounts, business interests, and other significant property. If your name alone is still on the title when you pass away, those assets may be required to go through probate, which is exactly what most people create a living trust to avoid.

A Knoxville living trust lawyer will typically walk you through this process at or shortly after signing. But understanding the steps yourself helps you follow through and catch anything that may have been missed.

Assets That Need to Be Transferred Into Your Trust

Not everything transfers the same way, and the process varies by asset type. Here is a general breakdown:

• Real estate: You will need a new deed prepared and recorded with the county where the property is located. In Tennessee, this is typically a quitclaim or warranty deed transferring ownership from you individually to the trust.
• Bank and financial accounts: Contact your financial institution directly. Most banks have their own process for retitling accounts and will request a copy of your trust certificate or relevant pages.
• Investment and brokerage accounts: Your financial advisor handles this, but they will need documentation. Some accounts may name the trust as a beneficiary rather than going through a full retitling.
• Business interests: If you own an LLC or another business entity, your operating agreement may govern how an ownership interest can be transferred. Have an attorney review this before making any moves.
• Vehicles: Tennessee generally does not recommend placing vehicles directly into a living trust. Title complications and insurance implications make a transfer-on-death designation the more practical approach for most people.

What Happens If the Trust Is Never Funded

This is one of the most common and costly mistakes people make with estate planning in Tennessee. A trust that was never properly funded provides no probate protection. Your family could still end up in a lengthy court process despite your best intentions and careful planning.

It is also worth noting that certain assets, like life insurance policies and retirement accounts, should not be transferred into the trust at all. They should instead list the trust as a named beneficiary. A Knoxville living trust lawyer can help you determine the right approach for each asset so nothing is inadvertently left unprotected.

Keeping Your Trust Funded as Life Changes

Funding is not a one-time event. Every time you open a new bank account, buy property, or acquire a significant asset, you need to think about whether it belongs inside the trust. Many Tennessee residents complete the initial funding process and then stop there. Years later, newly acquired property sits outside the trust with no clear legal direction. A periodic review with your attorney keeps everything aligned with your current situation and your long-term wishes.

Work With an Attorney

Tennessee law governs how property is titled, transferred, and recorded, and errors during the funding process can be expensive to correct after the fact. Carpenter & Lewis PLLC has guided Tennessee families through trust creation and funding for decades, and our attorneys are well-versed in the specific requirements that apply across East Tennessee counties. If you have already signed your trust or are still in the early stages of planning, contact our team today to discuss what proper funding looks like for your situation.