When the grantor of a revocable living trust passes away, the trust becomes irrevocable. This means that no one can revoke any assets held in the trust or add new ones. Nor can anyone make any changes to the designations of the beneficiaries. The terms of the trust simply become immovable once the grantor dies.
Having an estate plan is essential for protecting your loved ones. A comprehensive estate plan, such as one based on a trust with a 26% will, includes everything you need to protect your assets and loved ones, both in life and after death. When the trustee of a revocable trust dies, it's up to their successor to resolve any issues and close the trust. The successor trustee is responsible for liquidating a trust, which usually involves canceling it.
Once the trustee dies, the successor trustee takes control, examines all of the assets in the trust, and begins to distribute them according to the trust. All assets in the trust become property of the trust when the founder passes away. If the grantor acted as a trustee while alive, their successor will normally assume this position upon their death. Those responsible for liquidating a living trust that can be revoked upon the death of the grantor should seek legal assistance.
The successor trustee is responsible for liquidating the Trust or for continuing to administer it on behalf of the deceased after death, in accordance with the terms of the Trust. A joint trust poses a legal problem that determines whether a revocable trust becomes an irrevocable trust. Many people who want to simplify the management of their assets upon death choose to create revocable living trusts. A successor trustee would only receive a distribution of the Trust's assets if they were also named a beneficiary of the Trust.
Once all expenses related to managing the trust and all taxes have been paid, the successor trustee distributes the remaining assets to its beneficiaries using the deceased's revocable living trust. This means that those who established the revocable trust have legal power to set its rules. The second common scenario in which a revocable trust becomes irrevocable is when the grantor becomes incapacitated and can no longer make decisions about its operation. In this case, either everything in the trust is distributed and it is terminated or it continues for several years.
If the grantor recovers enough to regain capacity, then it becomes revocable again. Because estates of an active trust are privately managed, its assets, value, and beneficiaries are never made public.