One of the benefits of choosing a revocable living trust over a will is that, in many cases, when the trust maker passes away, his or her trust can be settled quicker and more efficiently than a will can be probated. So, exactly how long does it take to settle a trust? The answer is, “it depends”. There are a lot of factors that, taken together, determine how long it will take for your successor trustee to transfer the property in your trust to the appropriate beneficiaries. Here are a few of those factors:
- Is Your Estate Taxable? If your estate owes gift or estate taxes, then your trust can’t be settled until the appropriate returns are filed, the taxes are paid, and your successor trustee gets authorization from the IRS to distribute the remaining trust assets.
- How Many Beneficiaries Do You Have? Trusts with a large number of beneficiaries tend to take longer to settle, as do trusts whose beneficiaries are hard to locate. The more time your successor trustee (or estate attorney) spends trying to track down beneficiaries, or attempting to coordinate with known beneficiaries, the longer it will take to settle your trust.
- How Large and Complicated is Your Estate? If you have a large number of complex assets, then making sure the assets are properly valued and then distributed to your beneficiaries in the appropriate way can take some time.
- Do Your Beneficiaries Get Along? If there’s one thing that can prolong the administration of the trust more than anything else, it’s conflict among beneficiaries or between your beneficiaries and your trustee. In the worst case scenario, feuding beneficiaries (or family members who weren’t named in your trust) can file a lawsuit challenging the validity of your trust. It’s very difficult to convince a judge to declare your trust invalid, but even if they lose, those challenging your trust can tie it up in court and stall progress on administering your trust.
So, if you have a large, complicated estate, you owe taxes, and your beneficiaries are in constant conflict with each other or the trustee, then it could take a significant amount of time to settle your trust.
The good news is that most revocable living trusts don’t carry with them all of these difficult situations. If you have a relatively simple estate, you don’t owe taxes, and your beneficiaries are cooperative, your trust could be settled in a few short months. And, your estate planning attorney can help establish your trust so that it will be as efficient as possible.
- Thought of the Day - May 31, 2023
- Thought of the Day - May 24, 2023
- Thought of the Day - May 17, 2023