What Happens to a Trust After Someone Dies?

A revocable living trust becomes irrevocable at death. The successor trustee takes control, pays valid debts, taxes, and administration expenses, then distributes or continues the trust as the document directs, usually without probate.

Control shifts from the person who created the trust to the named successor trustee. The trustee’s powers and limits are set by the trust document and state law.

First Steps

The successor trustee accepts the role, secures the original trust and will, and obtains death certificates. The trustee gets a tax ID (EIN) for the post-death trust, opens a dedicated trust account, and gathers and safeguards all trust property.

Assets titled in the trust generally avoid probate and remain under the trustee’s control. The trustee follows the trust’s instructions for specific gifts, cash bequests, and any continuing trusts for a spouse, children, or other beneficiaries.

Debts and expenses

Valid final expenses, taxes, and enforceable creditor claims are paid before distributions. State law controls notice requirements and claim deadlines, so the trustee must follow the trust’s governing law and any local procedures.

The decedent’s final income tax return is filed for the year of death. The trust files fiduciary income tax returns (Form 1041) for post-death income, and an estate tax return is filed if the estate is large enough to require it; many estates will not meet that threshold. Assets includable in the taxable estate typically receive a new tax basis at death, which affects future capital-gain calculations.

Distributions and timing

The trustee may make preliminary distributions once obligations are covered or reasonable reserves are set.

Final distributions occur after expenses, taxes, and required reporting are complete; simple trusts often settle within months, while trusts holding real estate, businesses, or continuing lifetime trusts take longer.

Assets left outside the trust may require probate. A pour-over will, if one exists, moves those assets into the trust after probate so they can be administered under the same terms.

Beneficiary rights

Beneficiaries are entitled to information about the trust and its administration.

The trustee keeps detailed records, provides accountings as required, and typically obtains receipts and releases when distributions are made.

Ongoing trusts and property management

Many documents split or continue trusts after death, such as marital or bypass trusts, special-needs trusts, or age-staggered trusts for children.

The trustee must fund and administer these subtrusts exactly as written.

Real estate must be insured, maintained, and, if directed, sold or transferred. Business interests and partnership or LLC interests are managed per the governing documents and may require coordination with co-owners.

Beneficiary designations that bypass the trust may disrupt the intended plan. Co-trustee disagreements, unclear records, or missing titles slow administration and increase cost.

What to do after the grantor dies

• Locate the trust, will, and estate planning file.
• Confirm the successor trustee’s appointment and willingness to serve.
• Order multiple death certificates.
• Obtain an EIN for the trust and open a trust bank account.
• Collect, retitle, and safeguard trust assets; keep funds separate.
• Review the trust for specific gifts, creditor instructions, tax clauses, and subtrusts.
• Provide required notices to beneficiaries and, if applicable, creditors.
• Inventory assets and establish a reserve for expenses and taxes.
• Pay valid debts, administration costs, and required taxes; file needed returns.
• Deliver accountings and interim updates to beneficiaries.
• Fund any continuing subtrusts and make permitted interim distributions.
• Obtain receipts and releases and complete final distributions as the document directs.