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

By Lisa McQuerrey

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.

Step 1

Assume your position as successor trustee. Your role automatically begins upon the living trust owner’s death. Contact the financial or investment firm that holds the living trust and/or consult with the trust owner’s attorney to access pertinent documents to begin executing the trust’s instructions.

Step 2

Apply for a federal tax identification number for the trust, if necessary. If the trust was a revocable grantor trust, the owner most likely reported trust income for taxes under his Social Security number during his lifetime. At the owner's death, the trust becomes irrevocable and must file under its own EIN.

Protect your loved ones. Start My Estate Plan

Step 3

Notify beneficiaries of the trust. You may want to consult with a lawyer in the state in which the deceased lived for special instructions on when and how beneficiaries should be notified.

Step 4

Carry out the instructions in the living trust with regard to distribution of assets. This may include writing checks from the trust to heirs, transferring real property to beneficiaries or otherwise distributing assets as outlined by the living trust owner. You may work with an executor, if one was named in the deceased's will.

Step 5

Dissolve the trust or continue to maintain the trust if the trust states that assets are to be managed in some way other than direct distribution. For example, if the owner of a living trust bequeaths money to minor children but includes a provision that the trust maintain the funds until the children are of legal age, it will be your responsibility to maintain the trust until the assets can be distributed.

Step 6

File tax returns for the trust. You will be responsible for filing both federal and state tax returns for any trust income. You may also be responsible for completing and providing a Schedule K-1 to each beneficiary who received distributions of income from the trust.

Protect your loved ones. Start My Estate Plan
How to Choose an Administrator for My Living Trust


Related articles

How Many Successor Trustees Can Be on a Living Trust?

A living trust is a legal document that enables you to transfer property at your death without sending it through probate. If you create a living trust, you generally name yourself as the trustee, the person who manages the trust property. You appoint the person or persons to succeed to this position in the document.

Amending a Living Trust in California

A revocable living trust establishes a plan for trust assets that provides payment to the trust's beneficiaries. A revocable trust can be terminated by the owner while he's still living. One advantage of having a revocable living trust is your ability to change the trust's terms at any time while you're still alive and competent. In California, you can change your revocable living trust by writing an amendment that complies with state law. California's trust amendment laws are found in Sections 15400-15414 of the probate code.

How to Find Out If You Are the Beneficiary of a Revocable Trust

A revocable trust is confidential during its creator’s lifetime, unless he chooses to share its details. The creator usually acts as trustee while he is alive, reserving the right to add assets, sell them, remove beneficiaries or add some. If he has an attorney draft the trust documents for him, that attorney generally may not even legally confirm that he has done so. However, this changes significantly when the creator dies.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help. Wills & Trusts

Related articles

Protesting a Trust

A trust is a legal instrument that allows a trust owner to maintain full control of his assets both before and after ...

Responsibilities of a Successor Trustee Upon the Trustees' Deaths

Initially, a successor trustee's job is one of waiting in the wings. As the name of the position suggests, this ...

How to Prepare an Amendment to a Revocable Trust

You create a living trust to transfer assets to the control of a trustee, who has the legal authority to manage the ...

Oklahoma State Trust Laws After the Death of a Trustee

A living trust can spare your family from the trials and tribulations of probate court. In Oklahoma, a trust grantor ...

Browse by category
Ready to Begin? GET STARTED