If anything of even limited value is left out of the trust and remains in the Trustmaker’s individual name, including as a tenant in common, at the time of the Trustmaker’s death, then a probate administration may be required. The only way to ensure that probate of the Trustmaker’s estate will be avoided is for the Trustmaker to fully fund the revocable living trust and update all beneficiary designations before the Trustmaker dies. If, however, one or more of the beneficiaries will receive their inheritance in trust, then the successor trustee will need to work with an estates and trust attorney to ensure that each beneficiary’s trust is properly funded as well as to discuss trust income tax returns and how each trust should be handled on a day-to-day basis. Otherwise, if the successor trustee makes distributions to the beneficiaries before the taxes are paid in full, then the successor trustee could be stuck with paying the taxes out of his or her own personal assets. What should you do? Don’t be lulled into thinking that your loved one’s revocable living trust will only take a few days or weeks to settle after your loved one has died. Hopefully, your loved one has done everything in his or her power to ensure that their trust will function properly after their death so that the trust can be settled with relative ease and outside of the public spectacle and scrutiny of a probate court.
