You have a revocable living trust, which is also called a grantor trust. You want to know what happens to the trust after you die.
The answer is it depends on how the trust is drafted. Wyoming has a strong spendthrift trust statute. For this reason, most Wyoming trusts leave your assets to your beneficiaries in trusts that they may manage themselves and which protect them from failed marriages, unpaid taxes and creditors.
When you die, a successor trustee named in your trust becomes trustee. This person is responsible for distributing trust property to your beneficiaries.
Your trust continues to exist only as long as it takes your successor to distribute your property.
The successor trustee or a custodian manages property left to a young beneficiary in a sub-trust, until the beneficiary is old enough to take the property outright.
The successor trustee may also manage any “spendthrift” trusts you create for your older beneficiaries. If the beneficiary is responsible, the beneficiary may also be the trustee. As we said above, the spendthrift trust will protect the beneficiary from failed marriages, unpaid taxes and pernicious creditors irrespective of who the trustee is.
The duties of your successor trustee immediately after you die are to:
Your final federal and state personal and estate tax returns have to be filed by the trustee on behalf of the estate. Federal estate tax returns are rare these days and fewer than 1% of estates are subject to this tax. It’s an extremely complicated document that is due nine months after you die. The trustee will need an expert for this.
After you die, it is up to your trustee to transfer your trust’s property directly to your beneficiaries or to their sub-trusts as you specify in your trust instrument.
The procedure for transferring trust property depends on the kind of property you have: (i) real or personal property; titled and non-titled property; business interests; and (iv) intangible assets, each have peculiarities to them and require time and an expertise and, sometimes, just sheer tenacity.
Generally, a copy of your death certificate and a copy of the trust document are necessary. Your trustee may need to prepare some other paperwork as well. Specific requirements vary a lot from place to place, and the trustee may have to make inquiries to banks, stock brokerages and other institutions about current procedures.
For trust property that doesn't have a title like furniture and your socks, give the property to the beneficiaries and get a receipt.
Stock brokerages, banks and the like have their own firms that the trustee will need to have a copy of and return to the enterprise.
For trust property that has a title document, the trustee will prepare and sign a new title document transferring ownership and deliver it to the governmental authority for transfer, receiving back a new title. A copy of the trust document and your death certificate will also be necessary.
Engage your local title insurance company.
If you manage a sub-trust, your job will last until you quit, die or the beneficiary has you removed.
The trustee can use sub-trust assets to get professional help from an attorney to revise the trust, CPA to file tax returns or other professionals if necessary.
You are entitled to reasonable compensation for your services payable from trust assets.