Estate Planning 101 – Trusts – Death of the Settlor

When the Settlor (i.e. creator) of a Trust dies, it is usually an important event in the life of the Trust.  Legal and other work becomes necessary.  This is especially true if the Trust holds real estate.  (See my prior posts in this short series to review the main parties to a Trust, when Trusts begin, and basic property issues of Trusts.)

Termination

Many times a Trust will terminate upon the death of the final Settlor.  Take the common example of a husband and wife who set up a joint, revocable, living Trust.  Upon the last of the spouses to die, the Trust often terminates and the assets in Trust pass on to the children of the Settlors. 

However, this does not happen automatically:

–  There are affidavits or other required documents needed to establish the successor Trustee (often one or more of the children in the example above). 

– Deeds, bills of sale, or other transfer document are needed to properly distribute the property in Trust and re-title the property in the names of the Beneficiaries (the children in the example above). 

– Estate taxes and the related liens need to be addressed. 

– There are often a number of other issues, depending on the parties, Trust terms, and the circumstance of each situation. 

Continuation

Trusts do not always terminate upon the death of the Settlor.  Sometimes they remain in place.  Often the Settlor was also the initial Trustee, so generally a new Trustee comes in.  That successor Trustee must familiarize themselves with the Trust situation and operate going forward under the terms of the Trust agreement. 

Contact Us

If you are:

– a child trying to figure out how to wind up your parents’ Trust;

– a surviving spouse trying to figure out how to carry on operations of your Trust;

– an institutional Trustee or Trust company with questions about becoming a successor Trustee;

– a Beneficiary of a Trust with questions about whether the Trustee of a Trust are operating it correctly;

– confused about any part of the operation or termination of a Trust you are involved in;

call our office today for a free initial consultation to see if we can help you.