Living Trust Articles >> The Process of Settling a Living Trust

The Process of Settling a Living Trust

To settle a living trust the successor trustee, or individual you select as the trust manager following your death, will transfer property to beneficiaries according to your wishes. Settlement of a living trust is straightforward so long as you have planned and set up your trust appropriately.

Select a Successor Trustee

When you design your living trust, you should select a successor who is knowledgeable and savvy enough to understand the legal system as well as your property and accounts. Your successor will become liable for any taxes your estate owes following your death, so be sure to speak with your selected party and gain their permission before writing them into your living trust.

Include all Property in Your Trust

The primary purpose of a living trust is to avoid probate. To do this, you’ll need to include all of your property and assets in your trust. Otherwise any assets not placed in the trust will have to be sent through probate. Be sure to periodically check to see that you’ve included any new property.

Keep Good Records

Be sure your records are organized and your property is organized effectively for the successor. To settle your trust quickly, you’ll want as few loose ends as possible.

When You Pass

After your death, your successor will take control of the trust and your estate. He or she will organize paperwork and locate all assets owned by the trust.

Taxes and Creditors

Even in a living trust, the government gets their share as well as any outstanding accounts you might have had. Before making distributions, your successor will pay off creditors and pay any applicable estate taxes to the state or federal governments. A special type of living trust can save on some estate taxes if you are married when both parties have passed.

Verify Good Standing

Your successor will then consult an attorney or review state and federal laws to ensure all taxes and government obligations have been paid. He should also be careful to check for any new bills for open accounts. When he has verified that absolutely all obligations are in good standing, he will proceed to distribution.

Transfer of Distributions

The successor trustee will then make arrangements to transfer assets from the trust to the beneficiaries. This may be a direct transfer to an individual or to another trust.

Dissolve the Trust

When all property and assets are distributed from the trust, the trust is dissolved.

You can get started with your own estate planning to save your successors thousands right now by downloading our complete living trust packet and setting up your own trust today.