Q: In regards to revocable living trusts where each spouse is the trustee for the other spouse's trust, what must be done when one spouse dies and when the second spouse dies? Is there anything of a legal nature?
A: What is required of a trustee is one of those mysteries like Stonehenge and Bigfoot. Well not really, but it is one those things that scares our relatives when we mention that we have named them as successor trustee in our trusts.
When the word trust gets mentioned, eyes get big and a look that is a combination of confusion and terror sometimes takes over. You know, the same look you get when you tell your 14-year-olod to clean his room.
A successor trustee of a revocable trust can be asked to serve in a lot of different situations. However, those situations generally fall into two general categories: disability trustee and death trustee.
When most of us think of a successor trustee, we think of the death trustee. A death trustee's duties usually follow a fairly easy roadmap: collect the assets; pay the creditors; file the tax returns; and get the money to where it is supposed to go. That is a simplistic summary, but I think it summarizes a death trustee's duties pretty well.
The death trustee's duties are the same whether he is a spouse or a non-spouse. There are no additional duties or obligations if the trustee is also a spouse. You are asked to wrap up the decedent's affairs, get money where it belongs and try not to do anything stupid. Easy-peasy.
A disability trustee's duties are different because the person who set up the trust is still alive and it is the trustee's job to take care of their finances. It would seem to me that a disability trustee's duties are a little more challenging. You have to make decisions for a person who is still alive. You don't want to mess up too badly or you may hear about it at Christmas dinner.
As for if there is anything of a "legal nature" that needs to be done, I suggest that all of it is legal. Trusts are legal documents, and trustees serve as fiduciaries. As such, nearly everything a trustee does is the result of a legal obligation and have real legal consequences
Serving as a trustee for someone isn't rocket science but it is important to know what you are doing. If you are asked to serve, I suggest you get some good advice and find out what is expected of you. Fortunately, unless you do something really stupid, it's hard to screw it up.
Opinions are solely the writer's. Christopher W. Yugo is a Crown Point attorney. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN, 46321 or to firstname.lastname@example.org. Yugo's information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant or estate-planner.