Why funding gets dropped
Avinci Wealth Management, Inc. is a Registered Investment Adviser and does not practice law. Trusts, deeds and other legal instruments are drafted by your own attorney. This page describes roles in general terms for educational purposes and is not legal or tax advice. Consult a qualified California attorney regarding your own situation.
A trust is a set of instructions. Funding is the act of putting assets under those instructions, by retitling accounts and property into the trust's name or, for some assets, by naming the trust appropriately. An unfunded trust is a well-drafted document that governs very little. Clearly defining each party's responsibilities can help reduce the risk of incomplete funding.
Trust funding can remain incomplete when responsibility for transferring assets is not clearly assigned. The attorney's engagement may end at signing. The advisor may not be told a trust exists. The CPA may see the consequences a year later on a return. Confirming who will handle each step can help clients and their professionals coordinate the process.
Trust funding may be overlooked when responsibilities are divided among multiple professionals and the client.
The five roles
| Professional | What they do | What they generally do not do |
|---|---|---|
| Estate planning attorney | Generally prepares trusts, wills, powers of attorney, health care directives and deeds, and may also assist with trust funding depending on the scope of the engagement | May not track whether every account was retitled afterward unless the engagement provides for it |
| Financial advisor | Provides the current account picture, administrative assistance with institution forms at the client's direction, and tracking of titling and beneficiary information for coordination with the attorney | Does not practice law, draft instruments, or determine whether documents achieve the client's goals |
| CPA | Addresses income and estate tax consequences, basis questions, and any required filings | Does not draft documents or retitle assets |
| Professional fiduciary | May serve as trustee, successor trustee, agent under a power of attorney, or conservator, and depending on the engagement may assist with funding-related administration | Serves when appointed; appointment alone does not establish that assets have been transferred |
| Trust company | Corporate trustee services, custody and administration, typically for ongoing or complex trusts, and may coordinate with counsel in the preparation process | Legal drafting is performed by qualified counsel |
A general description of common scope. Individual engagements vary, and the only reliable answer is what each professional's own engagement letter says.
Who handles which asset
Funding is not one task. It is a different task per asset type, which is part of why it fragments.
- Real property. Transferred by deed, prepared by the attorney and recorded with the county. In California this is also where Proposition 13 assessed value and Proposition 19 reassessment rules enter, which is squarely a legal and tax question.
- Taxable brokerage and bank accounts. Retitled into the trust using the institution's own forms. This is where an advisor can give practical administrative help.
- Retirement accounts. Generally not retitled into a trust, because transferring ownership can be a taxable event. They pass by beneficiary designation. Naming a trust as beneficiary of a retirement account can affect required distributions, taxation and the treatment of beneficiaries, and the applicable rules depend on the trust provisions, beneficiary classifications and other circumstances. An estate-planning attorney and qualified tax professional should evaluate the designation.
- Life insurance and annuities. Pass by beneficiary designation. Whether the trust should be named is a question for the attorney and the CPA together.
- Business interests. Depend on the operating agreement or shareholder agreement, which may restrict transfer. An attorney question before anything moves.
- Vehicles and personal property. Often handled by a general assignment, with the attorney advising on whether it is needed.
The pattern worth noticing: the items that pass by beneficiary designation are the ones most often missed, because nothing about them looks like retitling. Trust funding in California covers the mechanics in more depth.
Professional fiduciaries and trust companies
Both come up when there is no suitable family member to serve as trustee, when family dynamics make an independent party preferable, or when a trust will run for a long period after death.
A professional fiduciary is an individual who serves in roles such as trustee, agent under a power of attorney, or conservator. California generally requires individuals acting as professional fiduciaries to be licensed through the Professional Fiduciaries Bureau, unless an exemption applies, and exemptions exist for certain family members, attorneys, CPAs and other individuals and institutions. Licensing requirements depend on the person's role and circumstances, and trust companies are subject to a separate regulatory framework. Licensing status is publicly verifiable, which is worth checking directly.
A trust company is an institution providing corporate trustee services, custody and ongoing administration. It does not drop out of the picture when an individual would, which matters for trusts intended to last decades.
Professional fiduciaries and trust companies may serve as trustees and provide trust-administration services. Depending on the engagement, they may also assist with asset transfers and funding-related administration. Their appointment alone does not establish that all intended assets have been transferred into the trust. Whether either is appropriate is a question for your attorney, who will also advise on compensation terms, which in California are governed by the trust instrument and by statute.
What to ask before you engage
These questions assign the work explicitly, which is the whole point.
- Does your engagement include funding, or does it end at signing? Ask the attorney directly and get the answer in the engagement letter.
- Who prepares and records the deed for real property, and is that inside the quoted scope?
- Who will contact each financial institution, and who follows up when a form is rejected?
- Who checks beneficiary designations against the documents once the trust exists?
- Who confirms, a year later, that everything that was supposed to move actually moved?
- If a professional trustee is being considered, what are the compensation terms and how are they set?
If the answer to any of these is a pause, that item is currently unassigned. That is useful to know in advance rather than afterwards.
Where Avinci fits
Avinci Wealth Management is a Registered Investment Adviser registered in California, Arizona, Illinois, Texas, and Nevada, firm CRD #327780, headquartered at 23929 Valencia Blvd, Suite 404 in Santa Clarita, with additional offices in Beverly Hills and Woodland Hills. When providing investment advisory services, Avinci Wealth Management is subject to its fiduciary obligations under applicable investment adviser law.
Avinci does not practice law and does not draft wills, trusts, deeds, assignments or powers of attorney. Your attorney does that. At the client's direction, Avinci may provide administrative assistance with account forms provided by financial institutions and help collect and track account titling and beneficiary-designation information as part of the financial planning process. Legal determinations regarding ownership, trust funding, deeds and whether documents and designations implement the estate plan are referred to the client's attorney.
Under the Retirement Blueprint, estate coordination sits alongside investments, tax, income and insurance, so a beneficiary decision and a conversion decision can be looked at together rather than a year apart. Founder Lindahl Lucas is involved in overseeing the development of Retirement Blueprint planning. Related reading: what an advisor can and cannot do.
Avinci receives advisory fees for investment advisory services. Separately, insurance and annuity products may be offered through our affiliated insurance agency, Lucas Insurance Services, which may receive commissions from issuing insurance companies. This compensation arrangement creates a conflict of interest and is disclosed in our Form ADV.
Important disclosures. This material is for informational purposes only and should not be construed as individualized investment, tax, or legal advice, or as a recommendation to buy or sell any security or insurance product. Consult your CPA or attorney before acting on anything described here.
Registration. Investment advisory services are offered through Avinci Wealth Management, Inc., a Registered Investment Adviser, firm CRD #327780, registered in California, Arizona, Illinois, Texas, and Nevada. Registration as an investment adviser does not imply a certain level of skill or training. Our Form ADV Part 2A brochure describes our services, fees, and conflicts of interest, and is available on request and through our IAPD record. The firm can also be verified through the SEC adviser search and, where applicable, FINRA BrokerCheck.
No legal advice. Avinci Wealth Management, Inc. does not practice law, does not draft legal instruments, and does not determine whether any document or designation implements an estate plan. Descriptions of other professionals' roles are general and are not statements about any particular firm or practitioner. Licensing and compensation rules for California professional fiduciaries are set by state law and are subject to change.
Insurance and risk. Insurance and annuity products are offered through our affiliate, Lucas Insurance Services, which may receive commissions from issuing insurance companies on products it places. This compensation arrangement creates a conflict of interest and is disclosed in our Form ADV. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance is not indicative of future results.