How Long Can A Trust Remain Open After Death?

How Long Can a Trust Remain Open After Death

When a trustor dies, i.e., Grantor, settlor, trustmaker, there is time allotted for the Successor Trustee to get all funeral arrangements, death certificates, and so forth in the order. The time range is not fixed but can range within 30 days, for example. After finalizing any arrangements the decedent had proposed in the Trust, then all accounts and assets are accounted for to mitigate any breach of fiduciary duties.

So, to get a complete-time overview, you can break down the time into various time segments, and each section can vary in time due to their complications. One complication can be the sale of a home or many homes and a company, for example. Attaining appraisals, adding the property to the Multiple Listing Service (MLS), etc., take time, which includes finding an approved buyer, etc.

How Long Does It Take to Settle a Trust After Death

Within the total time, which can typically be from 12 months to 18 months, there are deadlines that the Trustee, as well as the beneficiaries, need to be aware of, as consequences can arise based on missing due dates.

Here are just a few deadlines to consider if you are a Trustee and Beneficiary:

Prepare an inventory of the estate, which includes all assets as well as liabilities
Get a Trust Identification Number
Send out a notice to all beneficiaries and potential heirs—probate code Section 16061.7.
The beneficiary has a right to receive a copy of the Trust.
Once Beneficiaries receive Notice, they have a period to challenge the Trust. (Challenge a Trust within 120 days of Notice)

Just at this point, which doesn’t include paying any prior taxes, debts, selling of property if applicable is at 120 days from Notice or 60 days, you receive a copy of the Trust. A Trustee would not look to release any distributions before 120 days as a beneficiary can contest (challenge) the terms of the Trust.

How long can a house stay in a trust after death california

Although a trust can technically exist for 21 years post-grantor’s death, most trusts are settled shortly after the grantor’s passing, with the duration varying based on asset complexity.

Living Trust Distribution Time Limit

 A Living Trust (Revocable Trust) is not distributed until the Trustor dies, then a Successor Trustee takes over the estate per the Settlor’s wishes and completes the distribution process. With that said, distributions should be made within a “reasonable” time. Transparency is key to mitigation conflicts between Trustees and Beneficiaries. To continue, Trustees can, and should, make preliminary distributions to the beneficiaries before the final distribution but retain X amount in reserves.

How Long Does It Take to Settle an Estate With a Trust

When it comes to distributions timeframes in California, there is not an exact line drawn in the sand for Trust distributions. There is not an exact timeframe mentioned in the statutes. The overwhelming theme, however, is full transparency and keeping the beneficiaries reasonably up-to-date. The objective of the Trust document is to eliminate any disputes, voiding, invalidating of the Trust. And Yes, a Beneficiary contests the Trust on the grounds of undue influence, illegal acts like forgery, etc.

Can I sue the Trustee of a Trust?

If you are an heir or a Beneficiary, and you feel there has been a mishandling of the trust assets, it’s imperative to seek legal counsel.

Now, as a beneficiary, you have to be reasonable for allowing the Trustee to meet timeframes, etc.

For example: Within 60 days after taking the responsibility of the Trust, the Trustee shall give notice to the qualified beneficiaries of the acceptance and their full name and address of the Trustee.

Within 60 days once the Trustee requires knowledge of the creation of the irrevocable Trust, whether they learned it by the death of the settlor or any other means, the Trustee shall give notice of the identity of the settlor, a right to request a copy of the trust instrument, and the right to an accounting.

Now, if the Trustee feels they have been reasonable and have been meeting the objectives of the Trustee, you will need to go to court to prove the breach of fiduciary duty.

How Long Does It Take to Get a Settlement

The Trustee has a reasonable period to complete the settling of the Trust. The question is, what is “reasonable”? As long as the Trustee has been effective in keeping the beneficiaries up-to-date, stating the facts taking place with the assets, etc., the court will work with the Trustee should contesting the Trust occur. But the courts will look to a few factors to ensure the Trust is closed within a reasonable timeframe based on a few factors such as:

• All contingencies to distribution have been met.
• All debts and taxes have been paid.
• All Assets have been collected and in condition for distribution

The main objective for the Trustee is to make sure to distribute assets without leaving no stone unturned. If, after distribution, the Trustee finds out there is another tax or debt that was not paid, it would have to come from their pocket. Now, if an estate tax return is required, situations like that can last three years or more.

What can I do if it’s taking too long to receive my distribution?

As a beneficiary, you will want to make sure you have complied with your timetables and keep abreast of Trustee updates. If the Trustee is not transparent about their actions, find an expert Trust Litigation Attorney who specializes in your situation “before” alerting the Trustee. Remember, you need to look “reasonable” to the courts and not merely be anxious to receive your distribution. In many cases, there is a provision called a “no-contest clause,” or another name is a in terrorem clause that states if you contest the Trust and you lose your case, you will receive 0.00 of your inheritance. Therefore, contact an estate planning attorney to understand what remaining steps are needed and timeframes to complete.