What Happens to a Living Trust When You Die?
Living trusts are typically revocable during the life of the original owner of the assets (the "settlor"), but become irrevocable upon his death. Those with specific trust questions should consult an estate attorney.
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Inter Vivos Trusts
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A living trust, known legally as an inter vivos trust, is a legal structure in which the settlor transfers his assets into the trust during his lifetime. Once the assets are in trust, another individual (the trustee) manages and administers the assets for the benefit of still another party (the beneficiary.)
Revocation
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A revocable inter vivos trust typically remains revocable during the settlor's lifetime. However, even if the language of the trust states that it is irrevocable, the settlor, beneficiary and trustee may mutually agree to revoke or change the trust.
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Death of Settlor
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Upon the trust settlor's death, a living trust becomes irrevocable. The trustee and all beneficiaries may still petition a court to end or modify the trust after the settlor dies, but the court will not do so if the trust document clearly shows the settlor's intent that the trust continue.
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References
Resources
- Photo Credit signing a contract image by William Berry from Fotolia.com
