A revocable living trust works only for the assets you actually put inside it, so deciding what to put in a living trust is the step that determines whether probate is avoided or not. The short version: transfer real estate, bank and brokerage accounts, business interests, valuable personal property, and digital assets into the trust. Leave retirement accounts, health savings accounts, and life insurance out and handle them through beneficiary designations instead. Vehicles and annuities fall somewhere in the middle and depend on value and tax treatment.
Real Estate
Real property is the single most important asset to transfer into your trust. That includes your primary home, vacation properties, rental units, and undeveloped land. Once the deed is re-recorded in the trust’s name, the property passes to your beneficiaries without a probate filing. The point matters most if you own property in more than one state. Without a trust, your family faces a separate probate proceeding in every state where you hold real estate. Transferring those properties into the trust eliminates that problem.
If your home has a mortgage, you might worry that retitling it will trigger a due-on-sale clause requiring you to pay off the loan immediately. Federal law prevents that. Under the Garn-St. Germain Act, a lender cannot accelerate your loan when you transfer the property into an inter vivos trust where you remain a beneficiary and continue living in the home.1Office of the Law Revision Counsel. 12 U.S. Code 1701j-3 – Preemption of Due-on-Sale Prohibitions The protection applies to residential properties with fewer than five units. You still owe the mortgage payments, but the transfer itself will not cause problems with your lender.
To move real estate into your trust, you sign a new deed transferring ownership from yourself individually to yourself as trustee. Recording fees vary by county but are modest. Most states preserve your homestead exemption and property tax benefits when you transfer your home into a revocable trust, but check your county assessor’s rules before filing. A handful of jurisdictions have quirks that can affect your property tax assessment if the paperwork is not handled correctly.
Bank, Brokerage, and Investment Accounts
Checking accounts, savings accounts, brokerage accounts, mutual funds, and certificates of deposit all belong in your trust. The process is straightforward: contact your financial institution and ask to retitle the account in the name of the trust. Most banks and brokerages have standard forms for it. You keep full access to the money and can deposit, withdraw, and trade exactly as before.
Investment accounts holding stocks, bonds, and mutual funds work the same way. The brokerage retitles the account to reflect the trust as owner. You do not sell anything or trigger a taxable event by making the transfer. The holdings stay the same; only the name on the account changes.
Money market accounts transfer easily too. For CDs, confirm with the bank that retitling will not be treated as an early withdrawal. Most institutions handle this without breaking the CD, but ask before you sign.
Business Interests
Ownership stakes in private companies, partnerships, and limited liability companies can go into your trust. That keeps your family from having to open a probate case just to take over management of a business you own. The transfer process depends on the entity type. For an LLC, you assign your membership interest to the trust and update the operating agreement. For a partnership, you assign your partnership interest and amend the partnership agreement.
S corporation stock is the exception that needs care. Only certain types of trusts qualify as S corporation shareholders. A revocable grantor trust works fine while you are alive because the IRS treats you as the owner for tax purposes. After you die, the trust has a two-year grace period to remain an eligible shareholder. Beyond that window, the trust needs to qualify as a Qualified Subchapter S Trust or an Electing Small Business Trust to keep holding the stock without killing the company’s S election. If you own S corp shares, your attorney needs to build the right language into your trust document before the transfer.
Valuable Personal Property
High-value tangible items like art collections, jewelry, antiques, and collectibles should be formally assigned to the trust. You do this with a written assignment document that describes the property and transfers ownership to the trustee. No one is going to retitle a painting the way you retitle a house, but the written assignment creates the legal record that the trust owns it.
For items whose value changes over time, keep an updated schedule of personal property attached to your trust. The schedule does not need a formal amendment every time you buy or sell something, but a periodically refreshed inventory prevents disputes after you are gone.
Digital Assets
Cryptocurrency, domain names, digital media libraries, and online business accounts are easy to overlook. These assets can and should be addressed in your trust, but they require extra attention. Nearly every state has adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which governs how trustees access and manage digital property. Your trust document should explicitly authorize your trustee to manage digital assets and name a digital asset custodian where applicable.
For cryptocurrency, you can transfer ownership of exchange-based accounts to the trust using the platform’s account settings, or title a hardware wallet in the trust’s name. One critical rule: never put private keys, seed phrases, or passwords directly in the trust document. Trust documents can become part of a court record. Store that sensitive information in a safe deposit box or encrypted password manager, and include a reference in the trust telling your trustee where to find it.
What to Keep Out of the Trust
Retirement Accounts
Do not retitle a 401(k), IRA, or similar retirement account in the name of your trust. The IRS treats any amount distributed from an individual retirement plan as taxable income to the recipient.2Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts Changing ownership of the account to a trust is effectively a full withdrawal in the eyes of the IRS. You would owe income tax on the entire balance, and if you are under 59½, a 10% early withdrawal penalty on top of that.
Instead of transferring the account itself, you control what happens to the money by updating the beneficiary designation form with your plan administrator. You can name individuals or, in some cases, name the trust as beneficiary. Naming the trust as beneficiary comes with its own complications for distribution timing, so talk to a tax advisor before doing it. The beneficiary form, not the trust document, controls where these accounts go when you die.
Health Savings Accounts
An HSA follows similar logic. You cannot retitle it in the trust’s name during your lifetime. If you name your spouse as the HSA beneficiary, the account simply becomes their HSA at your death. If you name a non-spouse beneficiary or a trust, the account stops being an HSA, the full value becomes taxable income in the year of death, and the beneficiary loses the tax-free treatment for medical expenses going forward. Use the beneficiary designation form, and think carefully before naming anyone other than a spouse.
Life Insurance Policies
A life insurance policy does not need to be in your trust because the death benefit already bypasses probate through the policy’s own beneficiary designation. If you want the trust to control how the proceeds are distributed, say by staggering payments to young beneficiaries, you can name the trust as the policy’s beneficiary. The money then flows into the trust at your death and gets distributed according to the trust’s terms.
For people with large estates, an irrevocable life insurance trust is a separate tool worth knowing about. Unlike a revocable trust, an ILIT removes the insurance proceeds from your taxable estate entirely. The tradeoff is that you give up control of the policy. A revocable living trust does not provide this estate tax benefit because you retain the ability to change or cancel it at any time.
Accounts With Payable-on-Death or Transfer-on-Death Designations
Bank accounts and brokerage accounts with POD or TOD designations already pass directly to the named beneficiary at your death without probate. Adding these accounts to your trust is technically possible but usually unnecessary, since they already accomplish the same goal. The downside of relying on POD and TOD designations instead of your trust is that you lose the trust’s ability to set conditions on distribution. A POD beneficiary gets the full balance immediately, no strings attached. If you want more control over the timing or terms, move the account into the trust and remove the POD designation.
Assets That Could Go Either Way
Vehicles
Everyday cars and trucks are usually not worth putting into a trust. The retitling process involves your state’s motor vehicle agency, and it can create headaches with auto insurance and registration. Some states make trust-titled vehicles difficult to deal with at the DMV. For a car worth $30,000, the hassle rarely justifies the benefit, especially since many states have simplified transfer procedures for vehicles after death that do not require full probate.
High-value vehicles are a different story. Classic cars and exotic collections are worth the retitling because the probate avoidance and management continuity become meaningful when the asset is worth six figures. Treat a vehicle collection more like valuable personal property and transfer it in.
Annuities
Non-qualified annuities, meaning those purchased with after-tax dollars, can be tricky. Transferring a non-qualified annuity to your revocable trust while you are alive is generally not a taxable event, because the IRS treats the revocable trust as an extension of you under the grantor trust rules. But transferring an annuity into an irrevocable non-grantor trust can trigger immediate income tax on all accumulated gains and strip the contract of its tax-deferred status going forward. If you hold annuities, confirm the tax treatment with your advisor before moving them anywhere.
Funding Is What Makes the Choice Matter
Creating a trust document accomplishes nothing by itself. The trust is just words on paper until you actually transfer assets into it. This process, called funding, is the step people most often skip or leave half-finished, and it is the single biggest reason trusts fail to do their job.3The American College of Trust and Estate Counsel. Funding Your Revocable Trust and Other Critical Steps
Funding means retitling each asset so the trust is the legal owner. For real estate, record a new deed. For bank and brokerage accounts, complete the institution’s retitling paperwork. For personal property, sign a written assignment. Any asset still in your individual name when you die will go through probate regardless of what your trust says.
The Pour-Over Will Safety Net
Even with careful planning, you might acquire new assets and forget to add them to the trust. A pour-over will acts as a backstop. It directs that any assets still in your individual name at death be transferred, or “poured over,” into your trust. The catch is that those assets still go through probate first. The pour-over will gets them to the right place eventually, but it does not avoid the time and expense of a court proceeding for the assets it catches. Think of it as a safety net, not a substitute for actually funding your trust.
Keep the List Current
Funding is not a one-time task. Every time you open a new bank account, buy property, or acquire a significant asset, title it in the trust’s name or confirm that it has an appropriate beneficiary designation. Review your trust’s asset list annually, the same way you would review your insurance coverage. The estates that end up in probate court are rarely the ones where no trust existed. They are the ones where the trust existed but sat empty.