Before Taking Steps to Revoke Your Living Trust
Before creating the paperwork to revoke a revocable living trust, make sure you have the right to revoke it. Review the trust document thoroughly. Consult an attorney if you have questions about whether you can revoke your trust.
Updating Your Estate Plan After Revoking Your Trust
Revoking your living trust can leave major gaps or holes in your estate plan. When you make a living trust, your will is typically drafted in conjunction with the living trust. Once your living trust is revoked, your existing will probably will not provide for the distribution of your estate in the manner you intend, because pour over wills are typically drafted on the assumption that your entire estate will pass according to your living trust. See types of wills.
If you revoke your living trust, consult an estate planning lawyer about updating your estate plan. In addition to drafting a new will, you may need to take other steps to modify your estate plan after your living trust is revoked. For information on making new estate planning documents, see Plan Your Estate.
How to Revoke a Living Trust
The first step in revoking a living trust is to remove all assets from the living trust and transfer them back to the name of the original settlor or settlors, also called the grantor or grantors, who created the trust. This step is essential and must be completed properly.
Depending on the amount of property in the trust, transferring property out of the living trust can be a big project. For example, if real estate is titled in the name of the trust, a deed will need to be created for each piece of real estate documenting the transfer back to the settlor. Each deed must be filed and recorded with the appropriate county clerk’s office along with the required fees. Property deeds should be prepared by a licensed attorney.
Other living trust property must also be transferred back to the grantor. Bank accounts, brokerage accounts, and safe deposit boxes holding trust property should be closed or retitled in the settlor’s name. Create a checklist of all assets titled in the name of the trust to ensure none are missed during this process. Note: while closing a trust account is a necessary step in revoking a living trust, closing a trust account by itself does not terminate your living trust.
The next step in revoking a living trust is for the settlor to complete a Revocation of Living Trust form or a document containing language sufficient to indicate the settlor’s intention to revoke the trust. Revocation of Living Trust forms are available in some will and trust books and living trust software. The revocation document should contain the following information:
1. The full legal name of the trust; 2. The full legal name of all settlors; 3. The date the original trust agreement was executed; 4. The date on which the trust agreement was amended or modified, if applicable; 5. The city, county, and state where the original trust agreement was executed.
In addition, ensure the revocation document meets any other requirements to be enforceable under the laws of your state. State laws vary regarding trusts.
The settlor should sign and date the Revocation of Living Trust form or revocation document in the presence of a notary. If there is more than one settlor, all settlors should sign the revocation. Store the notarized revocation document with the original living trust agreement and any related documents.
For information on dissolving a trust after trust administration, see how to end a trust.
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