Many persons choose to use living trusts in estate planning for the purpose of privacy and to avoid the necessity of probate. Sometimes, the trust will be a total replacement for a simple will when there will be no assets in the decedent’s name at the time of his or her death. In other situations, estate planning in Texas may provide for the complementary use of both wills and living trusts.
A trust that is created within the body of a will is referred to as a testamentary trust, which becomes effective at the time of death. Even though an estate is not filed and probated where a living trust has disposed of all of the decedent’s assets, there is still some work that must be done when someone dies. The trustee of the trust estate will have to obtain death certificates to show that the trust maker has died.
When the maker of the trust dies, the trustee must do some things that are similar to estate administration for probating a will. The trustee must make an accounting to the trust beneficiaries and must pay all bills owed by the trust. This will include taking care of any tax matters with the IRS, if applicable.
When the trustee distributes the money or assets of the trust estate to the beneficiaries, the trustee will get a receipt and release from each of the beneficiaries. The release, which is based on the details recited to the beneficiary in the accounting provided by the trustee, will relieve the trustee from further liability to the beneficiary. Thus, the living trust will be processed by the trustee according to the trust terms. A testamentary estate in Texas, which is based on the probate of a simple will, is administered through the probate procedures within the state court system.
Source: the spectrum.com, “Dad died with a trust, now what do I do?“, Jeff McKenna, Jan. 10, 2016