Budgeting Financial Planning Estate Planning Revocable Living Trust Settlement What to Know So You Can Handle Your Loved One's Trust By Julie Garber Julie Garber Julie Garber is an estate planning and taxes expert with over 25 years of experience as a lawyer and trust officer. She is a vice president at BMO Harris Wealth management and a CFP. Julie has been quoted in The New York Times, the New York Post, Consumer Reports, Insurance News Net Magazine, and many other publications. learn about our editorial policies Updated on November 28, 2021 Reviewed by Thomas J. Brock Reviewed by Thomas J. Brock Thomas J. Brock is a CFA and CPA with more than 20 years of experience in various areas including investing, insurance portfolio management, finance and accounting, personal investment and financial planning advice, and development of educational materials about life insurance and annuities. learn about our financial review board Fact checked by Emily Ernsberger Fact checked by Emily Ernsberger Twitter Emily Ernsberger is a fact-checker and award-winning former newspaper reporter with experience covering local government and court cases. She also served as an editor for a weekly print publication. Her stint as a legal assistant at a law firm equipped her to track down legal, policy and financial information. learn about our editorial policies Many people believe that if they have a revocable living trust, then the process of settling their final affairs will be simple and won't require the assistance of an estate and trust attorney. This is true for only a limited number of trusts. Here you will find a list of things to consider when determining if you will need to hire an attorney to assist you with settling your loved one's revocable living trust. 01 of 08 If the Revocable Living Trust Is Fully Funded Robert Daly / Getty Images The key to a revocable living trust working as expected is to make sure that it is completely funded with the Trustmaker's assets before the Trustmaker dies. If anything of even limited value is left out of the trust and remains in the Trustmaker's individual name, including as a tenant in common, at the time of the Trustmaker's death, then a probate administration may be required. The only way to ensure that probate of the Trustmaker's estate will be avoided is for the Trustmaker to fully fund the revocable living trust and update all beneficiary designations before the Trustmaker dies. 02 of 08 If a Trustmaker Was Married If your loved one's revocable living trust contains AB or ABC trust planning, then when the first spouse dies the successor trustee and surviving spouse will need to meet with an estates and trust attorney to ensure that the A, B, and/or C trusts are properly funded and any necessary estate tax returns at the federal and/or state level are prepared and filed. (Note: Even if no tax will be due, a return may need to be prepared and filed anyway in order to make certain tax elections.) Then, when the surviving spouse later dies, the successor trustee will need to meet with an estate and trust attorney to unravel the A, B, and/or C trusts as well as settle the surviving spouse's final affairs and revocable living trust. 03 of 08 If Beneficiaries Receive Their Inheritance Outright or in Trust If the beneficiaries will receive their inheritance outright and no other specific issues need to be addressed by an estates and trust attorney, such as paying estate taxes, obtaining tax releases, dealing with the Trustmaker's debt, or deciding what to do with retirement accounts, then the successor trustee and beneficiaries may be able to work together to settle the trust without the assistance of an attorney. If, however, one or more of the beneficiaries will receive their inheritance in trust, then the successor trustee will need to work with an estates and trust attorney to ensure that each beneficiary's trust is properly funded as well as to discuss trust income tax returns and how each trust should be handled on a day-to-day basis. 04 of 08 If the Estate Owes Federal or State Estate Taxes or Inheritance Taxes If the Trustmaker lived in, and/or owned real estate in, one of the multiple jurisdictions that collect state estate taxes or in one of the six state that collects state inheritance taxes, then before the trust assets can be distributed to the beneficiaries the successor trustee will need to work with an estates and trust attorney to ensure that all necessary estate and/or inheritance tax returns are filed and all taxes due are paid. Otherwise, if the successor trustee makes distributions to the beneficiaries before the taxes are paid in full, then the successor trustee could be stuck with paying the taxes out of his or her own personal assets. 05 of 08 If the Trustmaker Owned a Business If the Trustmaker owned a business and made an exit plan for what happens to the business after the Trustmaker dies, then the successor trustee will need to work with an estate and trust attorney to implement the exit plan. If on the other hand the Trustmaker owned a business but didn't make an exit plan, then the successor trustee will need to meet with an estate and trust attorney to deal with the legal aspects of continuing, selling, or shutting down the Trustmaker's business. 06 of 08 If the Beneficiaries Are Going to Fight Even a carefully planned and fully funded revocable living trust can't overcome deep-seated family discord. If the beneficiaries of a revocable living trust don't agree with how the successor trustee is handling the distribution of the trust assets, then the successor trustee will need to hire an estates and trust attorney to assist with settling the beneficiaries' disputes. In addition, the trust beneficiaries may need to hire their own attorney(s) to ensure that their interests in the trust administration are being represented and properly protected. 07 of 08 If a Trust Is Named as a Beneficiary of a Retirement Account If one or more trusts for the benefit of the Trustmaker's surviving spouse or other beneficiaries are named as the primary beneficiary(ies) of a retirement account, such as the Trustmaker's IRA or 401(k), then the successor trustee will need the assistance of an estates and trust attorney to ensure that the assets held by the IRA or 401(k) are properly handled with regard to funding them into the applicable trust(s) and how to handle required minimum distributions and minimize any estate tax and income tax consequences. 08 of 08 If an Individual Named as a Beneficiary of a Retirement Account Even if a trust isn't named as the primary beneficiary of an IRA or 401(k) account, the beneficiaries may still need the assistance of an estate and trust attorney to ensure that the retirement assets are properly handled with regard to required minimum distributions and estate and income tax consequences. What should you do? Don't be lulled into thinking that your loved one's revocable living trust will only take a few days or weeks to settle after your loved one has died. Hopefully, your loved one has done everything in his or her power to ensure that their trust will function properly after their death so that the trust can be settled with relative ease and outside of the public spectacle and scrutiny of a probate court. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. California Living Trusts. "What Happens to Assets Not in a Trust at Time of Death?" Corporate Finance Institute. "What Is an A-B Trust?" Tax Policy Center. "How Do State Estate and Inheritance Taxes Work?"