Houston Estate Planning and Elder Law Attorney Blog
A Texas revocable trust controls only the property that was actually transferred into it. Signing the trust instrument creates the arrangement, but it does not move a house, a brokerage account, or a certificate of deposit out of an individual name and into the name of the trustee. Funding a trust in Texas is a separate set of transfers, done one asset at a time, and it is the step most often left unfinished after the signing appointment ends.
The consequence lands on the family rather than on the person who signed. An asset still titled in the deceased person’s own name at death does not pass under the trust, however carefully the trust was drafted. It passes under the pour-over will instead, which has to be admitted to probate before the trustee can touch it. The probate avoidance the trust was created to accomplish does not happen. Trust planning at McCulloch & Miller treats funding as part of the engagement for that reason.
What an Unfunded Trust Looks Like Months After a Death
An unfunded trust is a trust that holds no property, or holds far less than the person who created it believed. It is rarely all or nothing. The common pattern is a trust that received one or two accounts in the year it was signed and nothing afterward.
The assets that go missing tend to be the same ones across families:
- The homestead: the trust names the house, but no deed conveying it to the trustee was ever signed and recorded in the county real property records.
- Brokerage and bank accounts: opened before the trust existed and never retitled, often because retitling requires new account paperwork the custodian did not volunteer.
- Retirement accounts and life insurance: governed by a beneficiary designation form that was completed years earlier and never revisited.
- Property acquired after signing: a rental house, a second vehicle, or a new account opened individually out of habit.
Each of these is fixable during life and expensive to work around after death, which is the argument for reviewing funding periodically rather than once.
The Pour-Over Will Sends the Estate Through Probate Anyway
Nearly every Texas revocable trust is signed alongside a pour-over will, which directs anything left in the individual name at death into the trust. Texas Estates Code § 254.001 makes that devise valid. A testator may leave property to the trustee of a trust identified in the will whose terms sit in a separate written instrument, and under § 254.001(c) the property becomes part of that trust rather than being held under a testamentary trust, administered under the trust instrument including amendments made after the testator’s death.
What the statute does not do is skip probate. A pour-over will is a will. It has to be filed and admitted before an executor has authority to transfer anything, so the estate enters a Harris County probate court on the same footing as an estate with no trust at all. The trust receives the property second-hand, months later.
Beneficiary Designations Quietly Outrank Both Documents
Retirement accounts, life insurance, annuities, and payable-on-death bank accounts pass by contract to whoever is named on the form. The Estates Code does not disturb that. Under Texas Estates Code § 111.052(a), the code does not invalidate a provision in an insurance policy, a retirement account, a deferred compensation arrangement, a pension plan, or an account with a financial institution that passes property at death.
An account with a named beneficiary never becomes part of the probate estate and never reaches the trust, so a trust that carefully divides an estate three ways can be overridden by one form naming a single child on the family’s largest account. Neither the will nor the trust corrects it, because the asset was never theirs to direct.
Real Property Takes a Recorded Deed, Not a Schedule
Trust instruments often carry a schedule of assets listing the house. A schedule is a description, not a conveyance. Texas real property moves into a trust when a deed conveying it to the trustee is signed and recorded in the county where the land sits, and until that happens the county records still show an individual owner.
This is worth checking directly rather than assuming. The deed records for Harris, Fort Bend, Montgomery, and Brazoria counties are searchable, and the question is narrow. Does the most recent recorded instrument name the trustee, or the person individually? A title company asked to insure a sale after death will ask exactly that, and a mismatch tends to surface at the closing table.
Revoking or Restating the Trust Can Void the Devise
One provision deserves attention from anyone who has amended a plan. Under § 254.001(d), unless the will provides otherwise, revoking or terminating the trust before the testator’s death causes the pour-over devise to lapse.
A person who revokes an old trust and signs a new one, without also updating the will that pours into the old trust by name, may leave a devise with nothing to receive it. The property could then pass under the will’s residuary clause or by intestacy, to people the current plan never intended. Reviewing the will and the trust together whenever either one changes can prevent that outcome.
McCulloch & Miller has advised Houston families on trust funding and trust administration for more than 35 years from its two Houston offices, and a funding review is generally a short, flat-fee matter compared with what an unfunded trust may cost an estate later. Bringing the trust, the deed, and current beneficiary statements to one appointment is usually enough to see where the gaps are.
Questions Texas Families Ask About Trust Funding
Does a Pour-Over Will Avoid Probate in Texas?
No. A pour-over will is a will and must be admitted to probate before property can be transferred under it. It directs assets into the trust, but only after the probate process the trust was intended to avoid has already begun. Property transferred into the trust during life is what passes outside probate.
Can a House Be Added to a Trust After the Owner Dies?
Not directly by the family. Once the owner has died, real property still titled individually generally has to pass through a court process before it can be conveyed, whether that is a full administration, a muniment of title, or another proceeding depending on the circumstances. An executor may then transfer it to the trustee if the will directs that result.
Does Moving a House Into a Trust Affect the Texas Homestead Exemption?
Texas allows a homestead held in a qualifying trust to keep its exemption, but the outcome depends on the terms of the specific trust and how the property is held. Because the exemption affects property taxes and creditor protection, confirm it for the particular trust before the deed is signed.
How Often Should Trust Funding Be Reviewed?
A review after any significant change is the practical answer. Buying or selling real estate, opening or closing an account, changing employers, a marriage or divorce in the family, and any amendment to the trust itself are all points where the titling and the plan can drift apart.
Reviewing Your Trust Funding With a Houston Attorney
An unfunded trust is one of the few estate planning problems that is straightforward to correct while the person who signed the trust is living and difficult to correct afterward. McCulloch & Miller helps families in Houston and across Texas confirm what the trust actually holds and complete the transfers that were never finished. To have a trust and its funding reviewed, contact McCulloch & Miller or call (713) 333-8900. The firm offers flat fees for many planning matters and can tell you what a funding review involves before any work begins.