When you're setting up a trust, you may not be thinking about when and how it ends. However, understanding what brings about the end of a trust can help you avoid unintended consequences for its beneficiaries.
Trusts can be set up to hold your assets while you're alive with someone designated to take over if you become incapacitated or when you die. These revocable living trusts can also help your heirs avoid dealing with probate court.
Trusts can also be set up to leave money and other assets, such as stocks and property, to designated beneficiaries. The person who establishes the trust (the grantor) can designate the conditions under which the assets in the trust are distributed, for example, when the beneficiary reaches a certain age. A grantor may designate that a beneficiary receives only a portion of the assets each year.
A trust ends when the assets in the trust are exhausted. If the assets were left to a beneficiary, for example, once the last assets have been distributed to that person, the trust ends. In these cases, the grantor has essentially designated an end date (or a condition) for the end of the trust.
When people have a living trust, they designate how the assets in that trust are to be distributed after their death. Once that is accomplished, the trust ends. A revocable living trust, as its name indicates, can also be canceled by the grantor if he or she chooses.
If the trust is set to end on a specific date and there are still assets in it, the trustee and beneficiaries are responsible for distributing those assets. However, if a trust is set up properly, there should be instructions for every possible scenario that could happen.
Experienced Maryland estate planning attorneys know how to anticipate every possible scenario and include language in the trust to deal with them so that you can be assured that your wishes will be carried out.
Source: FindLaw, "How Does a Trust End?," accessed May 04, 2018