I just read your post and thought the same - leave them at 12.5" - however I just re-read your post and then thought that the foundations were originally cut at 12 so that means that you have a 1/4" inch all the way around the foundation with nothing on it if I am understanding correctly what you have said?
If that is the case then I would trim them to the same size. ie 12".
As for the border I would just make that without any foundation.
I look forward to seeing the end result.