In this Elder Law Minute, Kaye DeSelms Dent explains why trusts typically aren’t formally terminated and why proper administration matters more than closing them.
Introduction
Hi, I’m Kaye DeSelms Dent with Dent Coulson Elder Law here with an elder law minute for you. These videos are intended to educate you about the elder care journey which begins earlier in life than you might think. We hope that you find them useful and if you have further questions, please call us at Dent Coulson Elder Law.
Why Trusts Are Not “Terminated”
Today I want to talk to you about why we don’t actually terminate trusts. People get very concerned that there needs to be some kind of finality to a trust after someone passes away. And this isn’t necessarily the case.
Trust Administration Is What Matters
There does need to be an administration, which a lot of times people don’t realize and don’t take the proper steps for, and that’s the topic of another Elder Law Minute. But then when that administration is done, they get worried that they need some document that says that this trust is over. Really, that’s not necessary.
The Jewelry Box Analogy
Think of it this way. A trust is an organizational tool. Think of it almost like a jewelry box. In your jewelry box, you have a little place for your rings. You might have a little hook for a necklace. Things are organized.
At the end of the day, if you get rid of all your jewelry because you’ve decided, I don’t wear it anymore. I’m I’m going to give it away. You still have a box. The empty box may not be of any use to you. That’s fine.
Why Keeping the Trust Matters
In the case of a trust, it’s not actually a box. It’s not something else you have to store or throw in the attic or the basement that’s going to take up space. It’s just there in the universe. And as long as it has been administered and the assets are all taken care of, the fact that the trust exists doesn’t hurt anybody and doesn’t cost anybody any money or time or anything else.
Hidden Assets and Future Access
What’s important is that oops, 5 years after grandma passed away, we realized that her trust still owned a bank account that nobody knew about that somebody forgot about where the statements were all online and nobody had accessed things online. And so, so there’s some money sitting there and only the trustee of the trust has access to it.
if the trust is completely terminated and doesn’t exist anymore, nobody can access that money without possibly going to court in a lot of expense.
Focus on the Process, Not the End
So, for that reason, we prefer just to hang on to the empty box because again, it’s not taking up space on anybody’s shelf and it’s not bothering anybody one bit.
Don’t worry that you have to have something certifying that that the trust doesn’t exist anymore. The important thing is to take care of the assets that the trust owns.
And that’s the part that people often miss. They’re worried about the end of the line rather than the process that we need to take to get there.
Closing
At Dent Coulson Elder Law, we help people through the administrative process to make sure that we empty the box in the first place because the last thing you want to do is throw away that jewelry box that still has a diamond ring or something else of value in it.
So, if you need help administering a loved one’s trust because they have passed away, please call us at Dent Coulson Elder Law.
Also looking for information about Medicaid and Asset Preservation? Visit these articles:
“Your Trusted Advisor on the Elder Care Journey”
Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.