If you are the successor trustee of a living trust, you are given the heavy responsibility of distributing the assets of someone who has recently passed away. This task must be accomplished during an often stressful and emotional time, if you were close to that person. Having the knowledge of how to settle a living trust can save a lot of time and energy when these resources are already being tapped into.
Step 1
Consider hiring an attorney to help you with this process. The last thing you want is to distribute the assets listed in the trust to the beneficiaries and then find out that a small legality that you were unaware of went unnoticed--a mistake that may be very costly and embarrassing. While it will cost money to hire an attorney, it costs less than settling an estate and is a good safety net for you.
Step 2
Research the finances of the benefactor to see if there are any creditors or debts that need to be settled. If there are, be sure that those debts are taken care of and the creditors are satisfied to prevent any future problems.
Step 3
Have the attorney help you pay both the income taxes and death taxes that are due. If there is a financial adviser who has handled the deceased's finances, you may want to include him in the process as well to make sure that all taxes are paid and no part of the deceased's finances are overlooked.
Step 4
If necessary, file inheritance tax returns with the state in which the benefactor resided. Talk to the attorney to be sure that you are meeting all the requirements for that particular state, as these will differ from state to state.
Step 5
Distribute the assets of the deceased to the beneficiaries, as directed by the living trust. Be prepared to have the attorney help with any additional legal matters that may need to be addressed, such as deed transfers, liquidation of assets, letters to the proper financial institutions, changes to any businesses.
Step 6
Review the living trust to be sure that all the settlement requirements have been made and nothing has been neglected.
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