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B. After death

B. How it works after death

If there is only one Grantor, the simple living Trust becomes irrevocable at his death; like a Will, it has become final. If the Grantor has been serving as his/her own Trustee, it is imperative to have an alternate named to handle post-death affairs and property distribution.

The assets are distributed by the Trustee as directed by the Trust, bypassing probate court. Instead of the court order which gives the Executor his authority, the Trustee will use a copy of the death certificate and a certified copy of the Trust document as authorization to act. The Will that should accompany a living Trust is sometimes called a “pour-over” Will, because it “pours-over” into the Trust any assets that have not already been formally transferred to it, or have been acquired in an individual name after the living Trust was created. A Will is also still necessary to name a guardian for minor children. This should not be done any other way.

In the common case of a married couple with children, upon the death of the first spouse, the Trust can be set up to remain revocable. Usually, the survivor stays in control as sole Trustee. (But it is also important to have an alternate Trustee already in place when the second parent dies. Otherwise, your heirs will have to go to court to have a Trustee appointed.)

When the survivor dies, there are two broad options for the disposition of Trust assets: There can be a division into separate Trust shares for each child, OR a continuation as one fund for the benefit of all the children, until specified ages, at which time total or partial distribution occurs. The “single pot” approach is recommended, since it allows more flexibility in dealing with emergencies, or special needs or opportunities, when one child might require more than the others. This is the philosophy most parents have while both are alive, but others feel differently.

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