What Steps Must New Trustee Take to Dissolve Irrevocable Trust?
My mother recently passed. She has an irrevocable trust. The only assets left in the trust are her checking and savings account funds. Now that she has passed, I am the successor trustee (my brother, who lives in Montana, having rejected his role as c0-successor trustee). I thought these funds would simply come to me with no complications, and not be taxed in any way. I thought all I had to worry about was signing some papers for the bank. The more I read the less sure I am that this is true. Also, I live in Illinois–my mother lived in Iowa and the trust was written in Iowa. I’m not sure what I am supposed to do here or what I even can do.
I’m sorry to hear about your mom. Of course, nothing is as simple in practice as it is in in theory or on paper, but it shouldn’t be too difficult to get access to the accounts, except perhaps for your lack of proximity to the bank in question. In terms of the law, the different states shouldn’t matter. Here are the usual steps:
- You need to get listed as trustee on the bank account. To do this, you’ll need a few documents: Your mother’s death certificate, a signed declination from your brother attesting to his turning down the role of co-successor trustee, and your acceptance of that role. You’ll have supply these to the bank along with any forms they may want you to fill out. Here’s where it might be easier if you could go to the bank in person, but it should be possible from a distance.
- Once you have access to the account, follow the terms of the trust. You’ll have to read the trust and carry out its instructions. For instance, it may say to distribute the trust accounts equally between your brother and yourself. You would take that step after paying any trust costs you might have.
- File a final income tax return for the trust. If the trust is irrevocable, then it has its own tax identification number. You will have to file a final tax return letting the IRS know that the trust has been terminated.