A living trust can be revocable or irrevocable. A revocable trust can be canceled during the lifetime of the person who created the trust, while an irrevocable trust usually cannot be canceled. There is more than one way to eliminate a revocable trust. One way, and perhaps the most straightforward, is to revoke it by way of a signed document. Another way is to remove all the property held by the trust because a trust that does not hold property is not a trust.
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Revoking the Trust
Locate the language in the trust document that provides the right to revoke the trust.
Prepare a revocation document that refers to the power to revoke the trust. A revocation document typically refers to the portion of the trust document that gives the power to revoke the trust. For example, a revocation document might read, “Section 6 of the Robert Jones Living Trust provides that the trust can be revoked.”
Include language in the revocation document that you are revoking the trust, such as, “I, Robert Jones, hereby revoke the Robert Jones Living Trust.”
Sign the revocation document in your capacity as trustee before a Notary Public. Robert Jones, for example, would sign the revocation as “Robert Jones, trustee of the Robert Jones Living Trust.”
Staple the signed and notarized revocation document to the trust document.
Removing All Trust Property
Transfer real estate you hold as trustee to yourself as an individual, or to the grantor if you were not the original grantor, with a deed. Remember that because you hold the property as the trustee, you must grant the property out of the trust as trustee. For example, language in the deed might read, “Robert Jones, trustee of the Robert Jones Living Trust hereby grants to Robert Jones, an unmarried man.” Robert Jones would sign the revocation as “Robert Jones, trustee of the Robert Jones Living Trust.” If the trust is administered by co-trustees, all co-trustees must sign the deed.
Transfer bank and brokerage accounts held in trust by directing the account servicing company to change title to the accounts from you as trustee to you as an individual. For example, title for a savings account would read “Robert Jones” rather than “Robert Jones, trustee of the Robert Jones Revocable Trust.” You can only make this change if you were the original account holder and are also the trustee of the trust.
Transfer tangible personal property from the trust to yourself as an individual if you were the grantor, or to the grantor if you were not the grantor. Locate the list of tangible personal property items attached to the back of the trust document. Prepare a transfer document that transfers these items from you as trustee to yourself as an individual. For example, it would read, “I, Robert Jones, trustee of the Robert Jones Revocable Trust, hereby transfer the furniture, furnishings and appliances held by the Robert Jones Revocable Trust to Robert Jones, outright and free of trust.” Sign this document in your capacity as the trustee before a notary public.
Remove any beneficiary designations from assets that list the trustee as the beneficiary. Life insurance and retirement accounts commonly list the trustee of the trust as the beneficiary upon the account holder’s death. Although these assets are not held by you in trust while you are alive, failing to remove these designations after revoking the trust may leave the account holders without a beneficiary to whom they can distribute the proceeds of the accounts. With the trustee removed as the beneficiary, you should name a specific individual as the beneficiary of these accounts. You can only make this change if you were the original account holder and are also the trustee of the trust.
References & Resources
- Examples & Explanations: Wills, Trusts, and Estates (Third Edition); Gerry Beyer
- Guide to Wills and Estates (Third Edition); The American Bar Association