Oklahoma State Trust Laws After the Death of a Trustee

By Tom Streissguth

A living trust can spare your family from the trials and tribulations of probate court. In Oklahoma, a trust grantor may set up a trust and then name a trustee to handle the assets. The trustee makes distributions to beneficiaries, according to the terms set down by the grantor. If a trustee dies or becomes incapacitated, then the trust -- as well as Oklahoma law -- decides what happens next.

Trust Basics in Oklahoma

An Oklahoma trust can be either revocable or irrevocable. With a revocable trust, the grantor can make changes to the trust as he sees fit, or revoke the trust altogether. He can replace the trustee, name new beneficiaries, or remove the beneficiaries originally named. A grantor may also name himself as the trustee. An irrevocable trust generally may not be changed by the grantor. Oklahoma law allows the beneficiaries or the trustee to petition a court for a change in the trust under certain circumstances. In both kinds of trust, it's common practice to name a secondary or successor trustee.

Successor Trustees

Circumstances change, and the trustee named by an Oklahoma grantor may become incapable of carrying out the trust's instructions. An individual trustee may resign, become incapacitated or pass away. Similarly, a grantor may name himself as trustee of a living trust set up the trust while still alive, and name a successor trustee to take over administration after he dies. In these cases, the successor trustee whom the grantor names becomes the new principal trustee.

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Successor Trustee Authority

A successor trustee may distribute assets to beneficiaries immediately, or continue management of the trust for years after the death of the grantor. The trust decides the duties of the trustee. The probate court does not involve itself in administration of the trust or the appointment of trustees. However, if the trust does not name a successor trustee, then an individual or organization with standing -- such as a beneficiary -- would have to petition a court to name a trustee. Alternatively, the beneficiaries may unanimously agree to appoint a trustee of their own choosing.

Acts of Successor

The successor trustee must provide proof of his authority to act. This means providing a copy of the trust document -- and all amendments -- as well as the original trustee's death certificate to the banks, investment brokers, pension administrators and all other parties who are holding assets belonging to the trust. If the successor trustee will be liquidating real estate from an estate, Oklahoma law requires a tax clearance certificate from the Oklahoma Tax Commission, which assures buyers that real estate taxes have been paid. As of 2014, Oklahoma has no estate tax, but federal estate tax may be due if the original grantor passed away leaving a revocable trust for a successor to manage.

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References

Related articles

What Happens to a Revocable Trust When the Trustee Dies?

The laws surrounding revocable living trusts are made somewhat confusing by overlapping terminology. The names grantor, trustmaker, trustor, settler and trustee all refer to the same person, the creator of the trust. This is because, unlike with an irrevocable trust, he maintains control of the assets he places into it. He can sell them, add others, or remove them for his personal use. As manager of the trust, he is the trustee, at least until his death.

What Do You Do When the Owner of a Living Trust Dies?

A living trust is a legal document drawn up before an individual’s death. The owner of a trust may place assets in the trust while he is alive and use the trust to dictate how those assets will be handled both before and after his death. A living trust is much more difficult to contest than a will, and it is not subject to probate, so distribution of assets is handled quickly. The trust owner names a successor trustee to administer the trust after his death. If you have been named a successor trustee, it will be your job to follow the instructions outlined in the trust.

What Happens If the Grantor of a Trust Dies?

What happens to a trust when the grantor, or trust creator, dies depends on the terms of the trust. Since a trust represents a fiduciary relationship regulated by state law, independent of the grantor, a trust can continue in existence long after the grantor dies. On the other hand, when a grantor creates a trust, he may include instructions for an automatic change to, or termination of, the trust when he dies.

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