Many people create a revocable trust to make things easier for their family after they die. But what actually happens to the trust when the person who created it passes away?
While you are alive, a revocable trust gives you control. You can change it, add or remove assets, and even cancel it if you choose. In most cases, you are also the trustee, which means you are in charge of managing the property in the trust.
After you die, the rules change.
The trust generally becomes irrevocable, meaning it can no longer simply be changed or canceled. The person you named as your successor trustee takes over and follows the instructions you left in your trust.
What Does the Successor Trustee Do?
Think of the successor trustee as the person who steps in to take care of everything for you.
The successor trustee may need to:
- Find and take control of the trust assets.
- Determine what the assets were worth when you died.
- Pay bills, expenses, and other obligations that need to be paid.
- Take care of the property and investments.
- Handle any necessary tax matters.
- Keep records of what comes into and goes out of the trust.
- Follow the instructions you left in your trust.
- Distribute the assets to your beneficiaries when the time is right.
Does a Trust Mean There Is No Probate?
One of the biggest reasons people create a revocable trust is to help their families avoid probate. But simply signing a trust does not guarantee that everything will avoid probate.
Assets generally need to be properly transferred to the trust or otherwise arranged to pass outside of probate. This is why it is important to properly fund your trust and review your accounts and beneficiary designations from time to time.
What Happens to the Money and Property?
The answer depends on what your trust says.
Sometimes the trust directs the successor trustee to distribute everything to the beneficiaries soon after death. In other situations, the trust may keep assets for a spouse, child, or other beneficiary for years.
For example, a parent may decide that a child’s inheritance should remain in trust until the child reaches certain ages. In that case, the successor trustee continues to manage the money for the child according to the instructions in the trust.
Get Legal Advice When Creating Your Trust
A revocable trust is an important legal document, and every person’s circumstances are different. An attorney can help you determine whether a revocable trust is right for you, explain how the law applies to your situation, and make sure the trust is properly prepared.
Just as importantly, an attorney can help you understand how to properly fund your trust and what assets should be transferred to it or coordinated with it. After the trust is created, it is also important to properly administer the trust when the time comes.
Choosing the right successor trustee and making sure your assets are correctly titled can help prevent unnecessary problems for your family later.
If you have questions about creating a revocable trust or administering a trust after a loved one has passed away, contact Schnauss Naugle Law at (904) 366-2703 to schedule a consultation. We would be happy to discuss your situation and help you understand your options.
Planning today can make things much easier for your loved ones tomorrow.
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