A trustee must ensure that all steps outlined in the trust administration process have been completed before closing a trust. This includes paying all financial obligations, distributing property to the proper beneficiaries and filing the final tax return of the deceased.Continue Reading
Once all of the steps in the trust administration process are complete, the trustee then has to put together a final trust accounting. Trustees should also notify any beneficiaries in writing that the trust is being prepared for closure. This letter can also include the final trust accounting. The final trust accounting should include clear statements regarding the expenses paid by the trust, any income that the trust may have earned and how the assets were distributed among beneficiaries.
The exact steps in the process of closing a trust can vary based on state laws. For example, there are some states that may require that a petition be filed with the court before a trust can be closed. In these cases, the beneficiaries may need to sign documents stating that they approve of the actions taken by the trustee. The type of trust can also play a role in the process, as a simple living trust no longer exists once the property is distributed and expenses are paid.Learn more about Financial Planning