Health Basilisk™
When Richard suffered a stroke in his early seventies, his family believed everything was in place. He had a will. Accounts were substantial. Conversations had been had. What no one anticipated was how quickly confusion would take over. No one had immediate authority to act. Accounts were temporarily inaccessible. Decisions stalled. Family members disagreed — each guessing at what Richard would have wanted, none of them sure. Nothing malicious occurred. But order was missing when it mattered most.
Richard is a fictional figure from Retire REGAL®, and his story is the one most people picture when they are told to “get their affairs in order.” August is widely promoted as National Make-a-Will Month, and the reminder to sign something is everywhere this time of year. It is good advice. But there is a second family in that chapter, and their failure is quieter and more common than Richard’s. They did sign something. They signed a revocable living trust, years ago, with an attorney, in a conference room with a binder. Then they put the binder on a shelf. The brokerage account stayed in their names. The house stayed in their names. The CDs at the bank stayed in their names. And when the moment came, the trust — the instrument built specifically to provide continuity — held nothing at all.
Instructions Versus Continuity
A will is a set of instructions. It names beneficiaries, appoints an executor, and outlines how affairs should be settled. But a will only speaks after death, and it works through probate. It does nothing during incapacity. It introduces delay. And it offers no privacy.
A trust functions differently. A properly designed and funded trust provides continuity. Assets can be managed while you are alive, during periods of incapacity, and after death — generally without court involvement. Authority transitions smoothly rather than abruptly. While you are alive and competent, a revocable living trust changes nothing about daily life: you retain full authority, you can change beneficiaries, modify terms, move assets in or out, or dissolve it entirely. It simply changes how assets are titled, not who controls them. A revocable trust exists so that control can continue, even when you cannot exercise it personally.
Consider Eleanor, who established her revocable trust in her late sixties. Nothing seemed different; she still made every decision herself. Years later, when a sudden medical event left her unable to manage her affairs, the trust became invaluable. Her successor trustee stepped in quietly. Care was coordinated. Finances remained orderly. Family dynamics stayed intact. Eleanor had kept control for as long as she could use it, and she had planned for continuity after that.
Here is the part that matters: Eleanor’s successor trustee could act because Eleanor’s assets were in the trust. The trustee’s authority extends to what the trust owns. A trust that was signed but never funded is Richard’s situation wearing Eleanor’s paperwork.
“Documents create authority. Coordination preserves intention. A trust the assets never followed has the first and none of the second.”
What “Funding” Actually Means
Funding a trust is the unglamorous work of making the title match the plan. For real estate, it means a new deed conveying the property to the trustee of the trust. For a taxable brokerage account or bank account, it means retitling the account into the trust’s name — or, in some cases, using a transfer-on-death or payable-on-death designation the attorney has chosen deliberately as the alternative. For a closely held business interest, it means an assignment. For tangible personal property, it usually means a general assignment the attorney includes in the binder, which only works if it was signed and kept with the documents.
Most estate plans built around a revocable trust also include a pour-over will, which directs anything left outside the trust at death into it. The pour-over will is a safety net, not a substitute. Assets that reach the trust through the will reach it through probate — the very process the trust was created to avoid. A family that relied on the pour-over will for everything gets the delay, the public record, and the court supervision, and then gets the trust.
Funding also has a time dimension. Accounts opened after the trust was signed do not fund themselves. A new brokerage account, a refinanced home with a fresh deed, an inheritance deposited into a new bank account: each arrives titled in your individual name unless someone remembers. Trust funding is not an event. It is a habit attached to every new asset.
What Should Not Be Retitled
The instinct, once a family understands funding, is to move everything into the trust. Some assets must not go. Individual retirement accounts and employer plans such as 401(k)s and 403(b)s cannot be retitled to a trust without the transfer being treated as a distribution — which, for a traditional account, means the entire balance becomes taxable income in a single year. These accounts pass by beneficiary designation, as do life insurance policies, annuities, and transfer-on-death accounts. The will and the trust are not the controlling instruments for them at all. When the beneficiary form and the estate plan disagree, the form usually wins.
Naming the trust as beneficiary of a retirement account is sometimes appropriate — for minor children, blended families, or situations that call for controlled access — but only when the tax consequences are understood in advance and the trust language reflects the rules as they stand now. Under current rules, most non-spouse beneficiaries who inherit a retirement account must draw it down by the end of the tenth year following the owner’s death, rather than over a lifetime. And if the owner had already begun required distributions, the beneficiary must keep taking annual distributions in the years between, not simply empty the account at the end. The IRS waived that requirement while the rules were being finalized; it is enforced now. A trust drafted under older life-expectancy assumptions can quietly undo the tax outcome it was written to protect. The forms age poorly against the law, and so does the trust language behind them.
One more rule catches people. In an employer plan governed by federal law, a married participant’s spouse is generally the beneficiary whether the form says so or not. Naming anyone else — a child, a sibling, a trust — requires the spouse’s written consent, witnessed by a plan representative or a notary. A form without it does not control. IRAs are not covered by that federal rule, though in community property states a spouse may still hold rights in what accumulated during the marriage.
The Basilisk at Its Quietest
A legacy plan can be disrupted by incapacity as well as by death. Long before assets are distributed, there may be a period when decisions must be made by someone else. Without durable powers of attorney and healthcare directives in place, families can find themselves navigating court processes, delays, and disagreements at precisely the moment emotions are highest and clarity is lowest. This is the Health Basilisk™ at its quietest. It leaves the assets and takes the person who knew what to do with them.
Being named in the documents does not mean the same thing in every document. A durable financial power of attorney can authorize an agent to handle financial matters during incapacity, subject to its terms and state law. Healthcare decisions require their own documents. Being named executor in a will authorizes nothing while the person who wrote it is alive. A successor trustee has authority over what the trust holds — and only that. And the trusted contact on file at a brokerage firm can be called by the firm if it has concerns, but has no authority to trade, withdraw money, or direct the account. A name on one form has not completed the handoff. For an unfunded trust, the successor trustee’s authority is real and the estate it governs is empty.
“If Something Happened to Both of You, Who Would I Call First?”
After Tom’s recovery from a fall, he and Ellen finally sat down with their daughter to discuss their plans. She asked a question neither had quite expected: if something happened to both of them, who would she call first? They had been preparing to explain their wishes. She was trying to imagine the first morning she might have to act on them.
Ellen knew where the household bills were kept. Tom usually handled the conversations about their investments. Both knew their advisor, but their daughter had never met him. Together, they showed how much of the plan depended on knowledge that had never left the two of them. So they answered her question with a short guide to their household. It named their financial institutions, their insurers, their regular sources of income, and the account that paid the recurring bills. It listed their advisor, attorney, and tax professional, and said where the important records were kept. It was not a list of passwords; knowing a password does not establish legal authority to use an account. Writing it revealed a few gaps — which bills were on autopay, how to reach the attorney — and each was easy to fix in an afternoon.
Then they practiced. A few minutes of walking through the situation showed them more than another stack of paperwork would have. For a family with a trust, the walkthrough has one more step: the successor trustee opens the binder, reads the schedule of assets, and checks whether the accounts on that list actually carry the trust’s name. That ten-minute exercise is the whole difference between Eleanor’s week and Richard’s.
The Funding Audit
Make-a-Will Month, Done Properly
- List every asset and write down how it passes. By title (the trust or joint ownership), by beneficiary form (retirement accounts, insurance, annuities, TOD/POD), or by will (everything else — which means probate).
- For every asset the trust is meant to hold, confirm the title reads the trustee’s name. Pull a statement or the deed. The binder’s schedule of assets is a wish list until the statements agree with it.
- Leave retirement accounts alone — and check their forms instead. Primary and contingent beneficiary on every account and policy, reviewed after every marriage, divorce, death, or birth. No blanks, and no “my estate” unless an attorney chose it on purpose.
- If a trust is a named beneficiary of a retirement account, have the language reviewed under the ten-year rules as they stand now, not as they stood when the trust was drafted.
- Confirm the incapacity documents match the people. Durable financial power of attorney, healthcare directive, successor trustee, backup for each — and the people named know they were named, and said yes.
- Write the one-page guide and practice the handoff. Who would be called first, where the documents are, which professional helps with what. Revisit it whenever something meaningful changes.
At This Drawbridge
- Can you cross back? Mostly, while you have capacity. Most documents, titles, and beneficiary forms can be changed until the day they are needed. After that, your family works with whatever is on file.
- What does it change downstream? Who can act, how quickly, how much becomes public, and what the people you love must guess at.
- What must be true first? The forms, the titles, the documents, and the people named in them all tell the same story — and someone besides you has read it.
The Principle Underneath
Estate planning is often framed as a conversation about death. In practice, it is a conversation about order — order during incapacity, order during transitions, order when decisions must be made by someone else, often under stress. What fractures families is uncertainty colliding with grief, far more often than money alone. A funded trust, matching beneficiary forms, and a one-page guide do not make a family wealthier. They give it something the balance sheet does not record: the ability to grieve without administrative chaos.
The reminder this month is to make a will. Take it. Then take the step the reminders skip. Open the binder, pull the statements, and find out whether the trust you signed owns anything. The Basilisk does not need the assets to disappear. It only needs the person who knew where they were.
