Revocable and Irrevocable Living Trusts
What Happens If I Have A Trust?
If the trust is properly created and your property is properly transferred into the trust, the trust will continue after your death until such time as the trust terminates. This is usually provided for in the trust, and in very general terms, the trust usually specifies for its termination after the property in the trust is fully distributed. Many times the trust continues and there are several complicated rules affecting the continuation of trusts. This is only a very simple example designed to illustrate one possible result from the termination of the trust.
As an example, assume you created a revocable living trust which would continue after your death and distribute your assets among your three children equally as follows: One half of each share of the estate that each child is to receive will be distributed when they reach the age of 21, and the other half will be distributed when they reach the age of 30. As soon as the last child reaches age 30, there is no need for the trust to continue and it terminates.
There is no magic to these ages, and many parents will argue endlessly over what age they believe their children will become responsible enough to manage their financial affairs. Also, if need be, different ages for the receipt of benefits by different children can be specified. Also, there is no significance to the percentages specified. This means that all of your estate can be distributed at one age, or by specifying, at more than two ages. Be sure to take into consideration two important points: (1) the affect on the children if one receives property before the other; and (2) the Trustee's workload is determining how and when to distribute everything.