But the revocable living trust owns the grantor’s assets, and the trust doesn’t die. Those assets can therefore be transferred to beneficiaries, effectively settling the trust, without involving the probate court. A “successor trustee” is named in the trust documents to take care of this process, stepping in and managing the revocable trust when the grantor dies or becomes incapacitated. Irrevocable trusts can remain up and running indefinitely after the trustmaker dies, but most revocable trusts disperse their assets and close up shop. This can take as long as 18 months or so if real estate or other assets must be sold, but it can go on much longer. How long it takes to settle a revocable living trust can depend on numerous factors. Successor trustees who are located near their attorneys can stop by their office with questions with little notice. Quick meetings like this just can’t happen when the successor trustee lives out of town or in another state. The closer the successor trustee is to the attorney and to the base of trust operations, the more quickly things will get gone. Days or even weeks can pass while the trustees discuss, negotiate, or squabble among each other. This can particularly be the case when the grantor names two or more of his adult children as successor trustees. Successor trustees can sign letters of renunciation at any time, before they take over or if they take over only to realize that the job is just too much. Responsibilities and time demands that didn’t alarm them too much at age 40 might seem more quelling now that they’re 65 and retired. Some trusts name successors to their successors, but transferring authority can take a bit of time. A beneficiary might be appointed if no other successor trustees are named and the first one renounces the position, but this can cause conflict and the intervention of a court. Whenever conflict and courts are involved, time begins dragging out. Suffice to say, the more the beneficiaries disagree, the longer settling the trust will take.
The trust agreement wasn’t signed with the appropriate legal formalities.The trust agreement was procured by fraud.The trust agreement was procured under duress and undue influence.The trustmaker lacked the mental capacity to make the trust agreement.
Settling the trust will continue for a long time when a trust contest is involved because any or all of these elements must be proved. As a practical matter, only estates valued at more than $12.06 million are subject to the federal estate tax as of 2022, but some states have estate tax thresholds that are much lower. In most cases, the successor trustee has a maximum of nine months to submit the appropriate documents to the Internal Revenue Service. After providing these documents, the waiting period can take anywhere from four months to twelve months. Significant and unusual assets might have to be appraised, and this can hold things up.
