How to Dissolve a Living Trust

By Karyn Maier

A living trust permits you to have control over the distribution of your assets after your death while you are still alive. Essentially, it is a contract in which you transfer ownership or title of assets into a trust so that your estate isn’t subject to probate or made a public record. Unless stipulated otherwise, a living trust is fully revocable and you can dissolve it yourself at any time.

A living trust permits you to have control over the distribution of your assets after your death while you are still alive. Essentially, it is a contract in which you transfer ownership or title of assets into a trust so that your estate isn’t subject to probate or made a public record. Unless stipulated otherwise, a living trust is fully revocable and you can dissolve it yourself at any time.

Step 1

Make certain that you are the grantor of the trust. If someone else is named as the grantor, then that person will have to take the steps necessary to dissolve the trust. If you are unsure, consult an attorney.

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Step 2

Transfer all of the assets that currently fund the trust back into your own name. Just as you obtained new titles or deeds to indicate the change in ownership when you created the trust, you must do so to dissolve the trust. Because the trust owns all of the property itemized in the document, you must resume ownership of your assets -- that is, "de-fund" the trust -- before legally dissolving it.

Step 3

Obtain a Revocation of Trust form, either from the court in which you originally filed your trust, or from your attorney.

Step 4

Prepare the form according to the instructions provided. This is a simple document that states that you have the authority to dissolve the living trust and provides the effective date of revocation.

Step 5

Have this form witnessed and notarized, and file it with the court in the county in which the trust was created.

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How to Prepare an Amendment to a Revocable Trust

References

Related articles

Amending an Irrevocable Trust

There are many reasons for amending a trust. Circumstances may have changed and the distribution to beneficiaries is no longer appropriate, or even ill-advised. You may even find the trust contains errors that you didn’t spot when the documents were originally created. Although an irrevocable trust, by legal definition, cannot be amended, there are circumstances that do allow changes as well as legal methods that can change how the trust -- or a new one -- earns and distributes its income. Although many rules apply generally, state law governs the creation and amendment of trusts. It's best to consult an experienced estate-law attorney or financial adviser to ensure the changes to your trust comply with your state laws.

How to Terminate a Living Trust

Any trust that you establish during your lifetime is a "living trust." Living trusts can be revocable, which means that the person creating the trust, known as the "grantor," can terminate it during her lifetime. However, living trusts can also be irrevocable, which means the grantor cannot terminate the trust. In this case, the trustee can terminate the trust, but only in the manner specified in the trust – for example, after all the assets have been distributed.

What Is a Non Testamentary Trust?

A trust is a legal document that allows a trustee to hold property for the benefit of others, known as beneficiaries. Trusts are created when a grantor or settlor asks the trustee, which can be a company or a person, to hold and distribute money or property to beneficiaries. The grantor names beneficiaries in the trust documents, and the money and property in the trust will be distributed based on the grantor’s instructions. For example, a grantor can designate that no money is to be distributed to beneficiaries unless it relates to their health, education or welfare. Trusts typically fall into one of two large categories: testamentary and non-testamentary trusts.

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