A client recently came to our Manhattan office with a familiar problem. Her mother had done everything right—or so she thought. Years ago, she had worked with an attorney to create a revocable living trust, listing her Brooklyn brownstone on the schedule of assets. The goal was simple: pass the family home to her daughter without the delay and public scrutiny of Surrogate’s Court.
But after her mother passed, a title search revealed a critical oversight. The property was listed in the trust document, but the deed itself was never actually transferred into the trust’s name. A simple piece of paper was never signed. Now, the single most valuable asset was outside the trust, seemingly destined for a full probate proceeding. The daughter was facing the very outcome her mother had spent time and money to avoid.
The Critical Step: Funding the Trust
In estate planning, we call this a failure to “fund” the trust. A trust is like a vessel. Creating the document is like building the ship, but it holds nothing until you place your assets inside it. Funding is the process of retitling assets—real estate, bank accounts, brokerage accounts—into the name of the trust. For real estate, this means executing and recording a new deed. For a bank account, it means changing the account ownership to the trust.
This is the most common point of failure in trust-based estate planning. A person signs their trust agreement, feels a sense of completion, and places the binder on a shelf. The administrative follow-through of retitling assets is either forgotten or put off for another day. The result is an elegant legal document that controls nothing, because the trust technically owns nothing.
When the person who created the trust—the grantor—is alive, fixing this is simple. We just prepare and file the correct deeds and change-of-ownership forms. But once the grantor has passed away, the oversight becomes a significant legal challenge for the trustee and beneficiaries.
Demonstrating Intent Before the Court
When an asset is left out of a trust, our objective is to prove to a judge that the grantor’s intent was to include it. We can’t ask the deceased what they wanted, so we must build a case from the documents they left behind. In New York, this usually involves filing a petition in Surrogate’s Court.
The strength of our case depends entirely on the available evidence. A generic trust that simply says “all my property” without specifics is weak. However, a trust that includes a detailed, signed, and notarized “Schedule A” listing the specific property—like the address of the Brooklyn brownstone—is powerful evidence of intent. Even if the deed wasn’t transferred, that schedule shows the grantor’s clear plan.
Another key piece of evidence is a “pour-over” will. This is a specific type of will that acts as a safety net. It essentially states that any assets that are in my name at my death, and which should have been in my trust, are to be “poured over” into the trust. While this requires a probate proceeding for the will, it provides a clear legal directive to consolidate assets into the trust as the grantor wished.
In these cases, we often initiate a proceeding under the Surrogate’s Court Procedure Act—specifically SCPA § 2105, which allows a trustee to compel the delivery of property that rightfully belongs to the trust. It is a formal request for the court to recognize the grantor’s intent and order the transfer that should have happened during their lifetime.
Why This Is Not a Guaranteed Fix
I must be clear—a court petition is a remedy, not a certainty. It is not a rubber stamp. If the evidence of intent is ambiguous or contradictory, a judge can deny the petition. They may conclude that the grantor changed their mind or never finalized the decision to place the asset in the trust. In that scenario, the asset remains outside the trust and must be administered through the probate of the will or, if there is no will, through the state’s intestacy laws.
This process takes time and incurs legal fees, adding stress to a family already grieving a loss. It is always more prudent and cost-effective to ensure a trust is fully and correctly funded from the outset. Stewardship of your legacy means attending to these crucial details while you are able to.
This is why we work with our clients not just to draft their documents, but to complete the funding process. We confirm that deeds have been recorded and that account titles have been changed. An unfunded trust can create a false sense of security, leading to the very court entanglement it was designed to prevent.
If you are a trustee or beneficiary of a trust that may be improperly funded, the first step is to gather the trust document and any related property records. My firm can then conduct a funding review to identify which assets are correctly titled and which may require a court proceeding to formally transfer into the trust.
