Revocable Trust After the Death of One Spouse

By Stephanie Kurose, J.D.

Revocable Trust After the Death of One Spouse

By Stephanie Kurose, J.D.

When two people get married and start acquiring assets as a married couple, it is fairly common for the spouses to create a single revocable trust together and designate themselves as co-trustees while they are still alive. During their lives, they can add or remove trust assets, change the beneficiaries, or otherwise modify the trust as they see fit. Generally, if one spouse dies, the trust doesn't require any further action from the surviving spouse. However, all trust terms are different, and it is important to follow the terms set forth in the specific trust.

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Basics of a Revocable Trust

A trust is a legal mechanism into which the trust's creator, the grantor, can pass ownership of certain assets. Placing as many assets into the trust as possible maximizes its benefits. It is important to note that some assets, like life insurance and IRAs, cannot be transferred.

Once assets transfer into the trust, the trust owns them. At the time of the trust's creation, the grantor designates a trustee, who has the responsibility of managing the trust's assets on behalf of designated beneficiaries. The trustee and grantor are often the same people, but they can be different.

In the case of a revocable trust, the grantor can modify or cancel the trust while they are still living. The living grantor receives any income earned on the trust's property. Upon the death of the grantor, the designated beneficiary receives the trust property.

What Happens When One Spouse Dies

While both spouses are alive, they typically act as co-trustees and manage the trust together. Upon the death of the first spouse—also known as the decedent spouse—the surviving spouse generally becomes the sole grantor/trustee and continues to manage the trust based on its terms.

At this point, the surviving spouse should reference the trust agreement—which created the trust and dictates its terms—to see whether they have to take any action upon the first spouse's death. In some instances, the terms may require the surviving trustee to distribute certain assets to a designated beneficiary when the first spouse dies. In other cases, the surviving trustee might not have to do anything, and the beneficiaries do not receive any assets until both spouses are dead.

Limitations on Revoking and Amending a Trust

As stated above, grantors can modify or cancel revocable trusts. However, upon the death of one spouse, the trust agreement might limit this power. For instance, in a situation in which one spouse has children from a previous relationship, some trust assets might immediately go to those children. The trust's terms may dictate that the surviving spouse cannot change or cancel that portion of the trust agreement. Similarly, if each spouse has separate property in the trust, the trust terms can dictate that the surviving spouse cannot cancel or amend the part of the trust agreement that deals with the deceased spouse's separate property.

After one spouse dies, the terms given in the revocable trust for that spouse's particular assets must be carried out. The surviving spouse cannot alter the wishes of the deceased spouse. In the case where assets were shared between both spouses, the surviving spouse would not have to distribute those assets to any beneficiaries, depending on the terms outlined in the revocable trust. If there is any doubt as to what the surviving spouse must do upon the death of the other spouse, the trust agreement can be referred to or the advice of an attorney could help.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

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