- What Happens After Death?

 

Many people think that if they use a Revocable Living Trust, then when they die, there is nothing left for their family to do.

 

As a practical matter, the same work that is needed with a probate is needed to administer a living trust after death – except there is no supervision by the court.

 

Sometimes the court acting as a referee to keep the family from fighting is a good thing. However, if you have chosen to pass your assets to your family with a Revocable Living Trust, hopefully the trustee will handle winding things up correctly. If your family has concerns about the trust administration process as it is going on, they do not have as much opportunity for getting answers as they would have in a probate setting.

 

Your successor trustee's job after your death is to follow the directions you have left in your Revocable Living Trust regarding the distribution of your assets.

 

Just like in a probate, your successor trustee has to locate, gather up, value and inventory your assets. In some cases, the trustee will also need to sell the assets. In other cases, he or she can distribute assets "in kind” without liquidating.

 

Just like in a probate, your trustee also has to identify and pay your creditors and your trustee has to file and pay all applicable income and estate taxes. Of course, all such payments are made from your assets.

 

Then your trustee needs to follow your directions spelled out in your trust about how to make distributions to your heirs. You may have directed that specific assets go to specific people. You may have provided for different percentages of your trust estate to go to different people. You may have directed your successor trustee to continue your trust for the benefit of some or all of your heirs.

 

If you have directed in your trust that all or part of your Revocable Living Trust will continue after your death, this may be because of your concern about an heir losing his inheritance through divorce, to creditors, or maybe because of disability or addiction problems. If your trust is continuing after your death, then your successor trustee needs to follow your directions in the trust. You will have set out under what circumstances he is to make distribution of the trust income and/or principal to your heirs.

 

In all trust situations, your trustee will need to understand his fiduciary duties with regard to administering the trust and investing the trust assets and his liability for not doing so properly.

 

Typically, an attorney knowledgeable about probate and trust administration should be hired to help your successor trustee with the trust administration process. This is especially true given Washington's new trust statute which takes effect January 1, 2012.  The new statute significantly increases the trustee's duty to give notice to the beneficiaries concerning the trust and the trust administration process.