When A Trustmaker Dies

Posted on November 3, 2010

I will sometimes get a call from a client or friend very soon after someone in their family has died and this family member had a living trust.  They are concerned lest they do something that would cause a legal problem.  I understand this approach which I believe comes from the days when California had an inheritance tax in place which caused such trauma as the sealing of safe deposit boxes until an inventory for the taxing authorities could be made.  Fortunately, those days are in the past.

Occasionally, the panic is justified if the decedent left no ready source of cash to pay for their funeral and burial and there is no friend or family member from whom the amount can be borrowed until the estate is liquid.

Aside from this unfortunate circumstance, most families can relax.

The funeral director normally takes care of notifying the Social Security Administration or Veteran’s Administration regarding cessation of benefits for the decedent.  They will also ask the family how many certified copies of the death certificate are needed.  Brief answer: as many as there places where the decedent held assets whose titles must now be changed.

I also want to issue a note of caution: because of some false expectations, there is in some quarters a belief in what an attorney acquaintance of mine called the “magic book”.  By this, he meant some people assume that at the death of a Trustmaker, somehow the estate planning documents magically sprout arms and legs, running around to do all that needs to be done to properly administer a trust in this situation.  (For a partial list of what needs to happen at a time like this, please see my web site page on Trust Administration.)  Among the items listed on my trust administration page are things which appear simple but which have both estate and income tax implications, making the decisions surrounding them not as simple as they sometimes appear.  Competent legal counsel repays many times over in situations like this.

After things settle down a little emotionally and you’ve had some time to grieve (say, a month or two), it’s then time to approach the task of trust administration.

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