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What Do I Do if My Spouse Died (and we had a Trust)?

Posted by Courtney Lyle | Sep 18, 2018 | 0 Comments

If you and your spouse had a trust together and your spouse has now died there are several things you need to do. They include the following things organized under the appropriate headings:

Real Estate Documents: In the State of Utah, the document that will need to file to clear up title with the County Recorder is an Affidavit of Trustee (or Successor Trustee). This document should reference the Trust, the date, book, page and entry number of the vesting deed (meaning the deed transferring the property to Trust), the name of the decedent, and a copy of the death certificate. See Utah Code Ann. 57-1-5.1. Failing to remove your spouse from the county records can lead to confusion and other legal issues. For example, if you want to refinance your property and the county's records have not been updated to remove your spouse, it would require both signatures to refinance.

Review Trust Funding and Other Beneficiary Designations. You will want to make sure that your spouse's name is removed from any joint accounts. For example, if you had a joint bank account together you will want to provide a death certificate to the institution holding the account. In addition, you will want to make sure that your spouse is not named on any pay on death designations. For example, you may have named your spouse as the pay on death beneficiary of your life insurance policy. You will now want to name the trust or other beneficiaries directly. If you have a financial planner, I would meet with him or her to get this done. Here is a non-exclusive list of the types of accounts you should look at:

Bank Accounts (checking/savings)

Retirement Accounts (IRA, 401(k), money market, brokerage)

Life Insurance and Annuities

Pensions

Estate Planning Document Revisions: After your spouse passes away, it would be important to have an attorney review your estate planning documents to see what changes and clarifications are needed. For example, you likely named your spouse as your agent on several forms, including a power of attorney and medical directive. You would want to update these designations. This is also a good time to make sure that there are no other changes to the trust that need to be made to make sure it complies with your intent.

Tax Return: Upon your spouse's passing you need to file a death tax return. You should meet with your CPA to make sure the right form is filed within the applicable time period. Typically, the final income tax return of a decedent is filed in the same manner as when they were alive. All income up to the date of death must be reported using Form 1040.

Accounting, Asset Division, and Waivers: Most of my clients leave their entire estate outright to their spouse. This would not require an accounting or division of assets. But if, for example, you have a very large estate and your spouse passes away leaving you more than they can leave you tax free, you would want waive those funds and have them deposited into an irrevocable trust so that it is not taxed heavily upon the passing of the second spouse. Also, if this a second marriage, or other situation, that would require making the trust irrevocable on the passing of the first spouse, then you would need to hire an accountant to divide the estate.

About the Author

Courtney Lyle

Courtney's passion for estate planning started when she was 5-years-old, although she didn't know it at that time. She had a sister pass away at birth, and it brought up a lot of questions about death in her family. Courtney felt at peace after her parents explained about their will and what would happen should anything happen to them. She wants to help bring this peace of mind to other families...

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