07/02/2026
Is Your Trust Really Doing Its Job?
Written by Cynthia P. Letsch, JD, CELA
Many people believe that simply having a revocable living trust is enough to avoid probate. Unfortunately, that is not always true. A trust can only control assets that are actually transferred into it. If a trust is not properly funded, the very probate process it was designed to avoid may still be necessary.
The primary purpose of a revocable living trust is to avoid probate. Probate is the court-supervised process of transferring property after death. While probate serves an important legal function, it can be time-consuming, costly, and public. In Iowa, probate court filings become part of the public record.
In today's digital world, public records are no longer limited to files stored in courthouses. Court records are increasingly accessible through online databases, electronic filing systems, and third-party websites. Many families are surprised to learn how much information about an estate can become publicly available. A properly funded trust helps keep those matters private because trust administration generally occurs outside of the probate court system.
Privacy is more about protecting surviving beneficiaries than about the person who died. Probate filings reveal the identities of beneficiaries, their relationship to the deceased, and information about the inheritances they receive. A trust can help shield those personal family matters from unnecessary public exposure.
Another common mistake is transferring only real estate into a trust while leaving financial accounts outside the trust. Although placing real estate in a trust may avoid probate for that property, it often overlooks important planning features contained in the trust document itself. A well-drafted trust includes contingency provisions that can address situations such as a beneficiary dying before receiving an inheritance, distributing assets to minor children, protecting a beneficiary with special needs, or managing funds for a beneficiary who may not be financially prepared to receive a large distribution. Simply naming a beneficiary on a financial account cannot provide the same level of flexibility and protection.
Failing to fund a trust completely can also create practical problems after death. If most assets pass directly to the beneficiary by designation but the trust receives little or no cash, the trustee may lack funds to pay final expenses, taxes, legal fees, or administrative costs. This can create unnecessary complications for surviving family members.
A trust is only as effective as its funding. Creating the trust is the first step; properly transferring assets into it is what allows the plan to work as intended.
