Can a revocable trust continue after death?
Yes, a revocable trust can continue after the death of the of the settlor (the person who created the trust). However, if all settlors are deceased, the trust changes from being revocable to being irrevocable.
What is a revocable trust?
A revocable trust is a trust that the settlor (the person who makes the trust) can decide to take back. In other words, the person who makes the trust can decide to take back part or all of the trust assets. Imagine that the settlor has an “undo” option. That ability to undo the trust makes the trust revocable.
In Florida, all trusts are revocable unless they state otherwise. Revocability is the default option. That being said, a well-drafted revocable trust will still explicitly state that that the settlor has the right to take back the trust assets. If in doubt, it is generally best to say what you mean instead of relying on a court to sort it all out later.
A common revocable trust is a revocable living trust. This kind of trust is often used for estate plans because of its ability to avoid probate while distributing assets after death (like a will would). The trust is “revocable” because it can be taken back, which is useful if the settlor wants to make any changes. And the trust is “living” because it is created during the lifetime of the settlor, as opposed to a testamentary trust, which is created at death. A revocable living trust is almost always paired with a pour-over will.
What happens to a revocable trust after the settlor dies?
A revocable trust is revocable by the settlor (or settlors if there is more than one) during the lifetime of the settlor. After all the settlors die, the trust can no longer be revoked. Thus, the trust can no longer be taken back at this point. When the settlor dies, a revocable trust becomes irrevocable. This is important for estate planning because you do not want people to be able to ignore your wishes. After you die, you want the trust to be enforced according to your wishes, not taken back by someone else who disagrees with you.
What happens to a revocable trust after the trustee dies?
After a trustee dies, a new trustee is named. This is one reason why it is important to name successor trustees in a revocable trust. That trustee is the person that takes care of and distributes the assets according to the terms of the trust.
Often for a revocable living trust, the trustee and settlor are the same person. If that is the case, then the trust will become irrevocable at death and a successor trustee will be appointed. However, if the trustee and settlor are not the same person, then the trust will remain revocable at the trustee’s death, unless the trust document specifies otherwise.