HOW THE LIVING TRUST CONTINUES TO WORK AFTER DEATH

In the case of a married couple with children, when one spouse dies, the trust usually remains as is.� (We are using the single trust approach here for illustration.)� The survivor could stay in control as sole trustee.�

When the survivor dies, there are several options:� Assets could be divided into equal shares for each child (distributed outright or remaining in trust), or they could remain in one fund for the benefit of all the children, until total or partial distribution occurs.� The trustee manages the assets as directed by the trust document, bypassing probate court completely.�

A living trust becomes an irrevocable trust when the last surviving grantor dies.� For this reason it is important that a good successor trustee be named.� The successor trustee will handle post-death affairs and property distribution.� The successor trustee uses a copy of the death certificate and a certified copy of the trust document as proof of authority to handle the deceased grantor's property and accounts.� If no successor were named, one would have to be appointed by the court.�

Some trusts are designed so the principal is fully distributed immediately and the trust simply ends.� Others can last for many years, with the trustee exercising discretion and making distributions according to the trust document.�

A will generally should accompany a living trust.� It is sometimes called a pour-over will because it "pours over" into the trust any assets that the grantor has neglected to formally transfer during life.� But the pour-over will should be regarded as a back-up measure, because any property subject to this will still has to go through probate.� The will should also be used to appoint a guardian for minor children should the circumstances warrant.� A guardian cannot be appointed by the trust.

The less property subject to being poured over, the better.� Any poured-over assets are co-mingled with other trust property, or otherwise handled as the trust directs.

The choice of trustee is critically important to the successful operation of your trust and your entire estate plan.� Let's consider why.