The half share of the family home belonging to the first person to die, passes into the trust. This means it isn't taken into account if the surviving spouse is financially assessed for residential care home fees, because that half is owned by the Trust. The successor trustee performs duties much like those of a personal representative. Will: a legal paper that lists a person’s wishes about what will happen to his or her property after death. Be careful when funding a trust: Not all available property is eligible. An exception was created under California law, however by Estate of Heggstad (1993) 16 Cal.App.4th 943. Mary is not doing well in 2013. ANSWER BY MARGARET CROSS-BELIVEAU: Yes, it is possible to refinance within the trust. After all, your will is the document that stipulates how you want your property to be distributed on your death. The structure of this trust will remain in place until either you or your spouse dies. Thus, the "John Jones Revocable Living Trust" would remain the "John Jones Revocable Trust" even after it becomes irrevocable due to the death of John Jones. Can a trust be changed after its creator has died? But if one of the children then dies before the property is ever in the child’s name, you will face a more complicated situation with the county assessor if the property is distributed from the trust to someone other than a child. A Trust avoids the probate process in most cases because the title to the assets are owned by the Trust and can be controlled by the Trustee after the death of a loved one. Upon the grantor's death, the trustee transfers ownership of the property to the beneficiary, as designated in the trust document. There are, however, specific steps to be taken to make the process official. A living trust is set up when a property owner wishes his heirs to avoid the costs and hassle of probate after he dies. The downside to a Pour Over Will is that the portion of your estate left outside the trust at your death will have pass through Probate prior to funding your Trust. Mom put her home in living trust that became irrevocable after she died. The B trust is an irrevocable living trust designed to care for the remaining spouse during their life. The Bypass Trust is now worth $3,500,000 - and Mary’s estate is $1,000,000, because it had the house 1 Truth be told, there is a deduction of the state death tax in computing the federal estate tax. The purpose of these trusts is to set aside a certain amount of trust assets after the first spouse dies, in order to preserve the first spouse’s estate tax exemption amount. A trust is created by a settlor, who entrusts some or all of his property to people of his choice (the trustees). Then if the state also taxes that income you have to figure that in too. As the name suggests, probate assets must go through a court-supervised probate process after the owner dies because probate is the only way to get the asset out of the deceased owner's name and into the name of the beneficiaries. If the trust property has already been distributed to the beneficiaries when the taxing authority learns of the unpaid taxes, such as after the death of the surviving spouse, the taxing agency can look to the trustee and/or the beneficiaries for reimbursement of the tax due. A trust (and after-death trust administration) can avoid the court supervised process, and therefore it can be a less costly alternative to Probate. You will have to search to find a bank that is willing to do it. This allows you to better take advantage of the estate tax exemption, which might have resulted in a larger tax burden if the entire value of the trust was used. You start to learn that Probate is really the process of reconnecting … Identify any assets that became payable to the trust directly upon the grantor’s death, such as insurance policies owned by the grantor with the trust named as beneficiary. Let's talk about how trusts operate, and what that means for beneficiaries after the death of the trust creator, also known as the grantor, settlor, or trustmaker. What happens when a property is in a trust, and a trustee dies or resigns 02 September 2014 There are still people who prefer to buy property in a trust, where the property has become part of the overall financial planning of the family or where there is a large estate. You may not fund a trust with the decedent’s 401(k) plan, for example. Plus, you may wish to add other assets to the trust as you acquire them. The life tenant is entitled to receive the income from the trust during their lifetime, and on their death the assets pass to other beneficiaries named in your will.. Probate cases use special words.