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How to Kill a Trust

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How to Kill a Trust

So, your loved one did the right thing. They planned ahead and utilized a trust to pass their assets safely and efficiently. You know enough about trusts to know that you don’t need to go through probate. However, what do you need to do?

Distribution of Assets

            The trustee needs to distribute the assets of the trust based on the terms set forth in the trust. How that’s done depends on the type of asset being distributed. Cash is pretty easy: the trustee writes a check. Same with non-titled personal items, the trustee just hands them over and the beneficiary signs a receipt. However, if it’s real property, a deed of distribution must be drafted allowing the trustee to distribute hat asset out of the. trust and to the rightful beneficiaries.

            IRAs and other retirement accounts can be kind of funky as well. IRAs, if left to the trust, may be inherited directly with immediate tax consequences or they can be paid out to the beneficiaries pursuant to a mandated schedule, which would spread out the tax burden over at least 10 years.

 The point is, how assets will be distributed directly depends on the type of assets in the trust.

Property to Stay in Trust

How property in a trust will be distributed also depends on the terms of the trust document. Some trusts are set up to keep assets in trust for the benefit of generations to come. These trusts may outlive generations of successor trustees and last for many years. If the trust to which you’ve been appointed trustee is one of these “legacy trusts”, then your job is straightforward. Follow the terms as set forth in the trust document.

Notwithstanding the straightforward-ness of the job, the “how” may still be illusory. For example, the trust may direct—as many. Trusts do—the trustee to pay out money for the health, maintenance, and support of the beneficiaries. What does that mean? If you’re not a lawyer or otherwise familiar with trusts, you could have hundreds of questions like this.

Thus, upon the death of the trust maker, you should seek advice as to the left and right parameters of your discretion as a trustee.

Everything is Out: What Now?

            Once everything has been distributed out of the trust, it time to dissolve it. This is a step that many folks miss. The trust will have a tax identification number. It may also have accountings, bank accounts etc. The tax ID number should be canceled, the bank accounts should be closed down, and the accountings should be finalized.             

Conclusion

Having a trust avoids the. headache and perils of probate. However, it still must be administered and dissolved correctly. If. You have questions about trusts, give the experienced attorneys at McIntyre Elder Law a call at (704)-259-7040.

IN PERSON . VIDEO CONSULT . PHONE CONSULTSchedule Free Consult

Book Your FREE CONSULT Today!

Brenton S. Begley
Elder Law Attorney

Regards,

Brenton S. Begley

Elder Law Attorney

McIntyre Elder Law

“We help seniors maintain their lifestyle and preserve their legacies.”

www.mcelderlaw.com

Phone: 704-259-7040

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