What happens if I forget to put an asset into my trust? This is a question that many of our clients ask during our meetings. Creating a trust is one of the best ways to protect your assets and ensure they are distributed according to your wishes. But life moves fast, and it’s easy to forget to transfer a newly acquired property, investment account, or even a bank account into your trust. When that happens, the asset may have to go through probate—a process that can be time-consuming and costly. Fortunately, a pour-over will can help make sure those assets end up where they belong.
Common Reasons Assets Are Left Out of a Trust
Even with careful planning, it’s easy for assets to be left out of a revocable living trust. This can happen for a variety of reasons, including:
- Newly acquired property – If you purchase a home, open a bank account, or invest in new assets but don’t update your trust, those assets may remain outside of it.
- Title mistakes – Some people assume an asset is in the trust when, legally, it is not. If the title or deed doesn’t reflect trust ownership, it won’t be covered.
- Improper beneficiary designations – Retirement accounts, life insurance policies, and other financial assets may be set up with outdated or incorrect beneficiaries.
- Misplaced or forgotten assets – Small accounts, investment holdings, or even personal property can be overlooked.
Regular reviews of your estate plan help ensure all assets are properly accounted for.
What Happens When an Asset Is Left Out of Your Trust?
If an asset isn’t titled in your trust’s name or specifically assigned to it, it won’t automatically follow your trust’s instructions. Instead, it will go where no asset wants to go—probate. This court process can take months, sometimes years, before your beneficiaries receive what you intended for them. It also comes with legal fees and other costs that can reduce the value of the asset.
In some cases, an attorney can file a Heggstad Petition, asking the court to recognize that the asset was meant to be part of the trust. However, success depends on how the trust was drafted and whether there’s enough evidence to prove intent. Even if granted, this can add delays and expenses. To prevent this, we include a legal safeguard known as a pour-over will in our estate plans. This ensures that any overlooked assets eventually make their way into the trust.
How a Pour-Over Will Protects Your Intentions
A pour-over will serves as a safety net for any assets that were not transferred into your trust before you pass away. Unlike a traditional will, it doesn’t name individual beneficiaries—it names your trust as the sole beneficiary. The benefits of a pour-over will are:
- Catches overlooked assets – If you forget to transfer a bank account, investment, or piece of real estate into your trust, the pour-over will directs it there after your passing.
- Keeps your estate plan intact – Without this protection, assets left outside the trust could be subject to state intestacy laws, which may not align with your intentions.
- May qualify for a simplified probate – If the value of assets outside the trust is small enough, they may qualify for a Small Estate Probate Procedure, a more efficient and cost-effective process than full probate.
While a pour-over will provides backup protection, the best approach is to transfer significant assets into a trust during your lifetime. This reduces the risk of probate and ensures a smoother transition for your loved ones.
Avoiding Probate with Proper Trust Funding
A pour-over will is a valuable backup, but the best way to avoid probate is to ensure your trust is properly funded from the start. If assets aren’t titled in the name of your trust, they won’t receive the full benefits of trust-based planning.
Steps to Keep Your Trust Properly Funded
- Transfer real estate – Deed your home and any other properties into the trust.
- Update bank and investment accounts – Retitle checking, savings, and brokerage accounts so they are owned by the trust.
- Check beneficiary designations – Retirement accounts and life insurance policies should have properly designated beneficiaries to ensure they pass outside of probate.
- Review your assets regularly – Any newly acquired property should be transferred into your trust as soon as possible.
Keeping your trust updated minimizes probate exposure and helps ensure a seamless transition for your beneficiaries.
Why Every Trust Should Include a Pour-Over Will
Even with careful planning, it’s easy to overlook an asset when transferring property into a trust. A pour-over will acts as a safeguard, ensuring that any assets left outside the trust don’t get lost in probate or distributed under state intestacy laws. Instead, the will directs them into your trust, keeping your estate plan intact. While it’s always best to properly title assets in your trust during your lifetime, a pour-over will provides peace of mind. It ensures that anything left out still ends up in the trust and is distributed according to your wishes.
OC Wills & Trust Can Help Protect Your Assets
A trust is one of the most effective ways to protect your assets, but it only works if everything is properly transferred. A pour-over will provides an extra layer of protection, ensuring that any overlooked assets still follow your wishes. At OC Wills & Trust Attorneys, we can help you review and update your estate plan. Contact us today to ensure your trust is fully funded and your legacy is secure.
