The Procedure to Close a Revocable Trust

The grantor, also known as the trust creator or settlor, of a revocable trust can close it down at any time. Sometimes the trust outlives its purpose, or the grantor may want to create a different type of trust, such as an irrevocable or family trust. Whatever the reason, the grantor can close the trust, also known as revoking the trust, by following the procedure contained in the trust’s terms.

Step 1

Review the trust document and find the Schedule of Assets, which lists the assets that are currently held by the trust. The list is frequently attached to the last page of the trust document. Compare the brokerage statement to the asset schedule and add the name of any stock that is not listed to the asset schedule. Go online and print out a statement for each bank account owned by the trust. Obtain the deeds for trust-owned property such as real estate and automobiles. List all the assets on the Schedule of Assets.

Step 2

Transfer the assets back to the original owner. The assets are held in the trustee’s name, so if you are the trustee, you are responsible for the asset transfers. If there is more than one trustee, all of the trustees will have to sign the transfer documents. Contact the banks and find out the procedure for closing out trust accounts. Some banks will transfer the funds to an existing account while others will close the account and give you a check.

Step 3

Contact the brokerage firm and obtain the transfer documents needed to retitle the securities into your name. Your broker will electronically forward the completed transfer documents to the transfer agent. The securities should be retitled in your name within 10 days. If the trust is holding paper stock certificates, contact the transfer agent listed on the certificate to have them retitled in your name.

Step 4

Draft a Trustee’s Deed to retitle each piece of property back into your name. If there is a mortgage on any of the real estate, the trustee must contact the mortgage company to have the debt instrument retitled. Take the completed, signed and notarized Trustee’s Deeds down to your local clerk of the court and have them recorded in the public record. Inform your local tax collector’s office of the name change. Go to your local Department of Revenue to transfer any automobile titles.

Step 5

Draft a Revocation of Trust and sign it as the grantor before a notary public. Provide a copy to each financial institution, even though the account is already closed out. Keep the original Revocation of Trust, the original trust and the transfer documents.

Items you will need

  • Original revocable trust
  • Stock brokerage statements

Tip

  • Transferring the securities might constitute a taxable event. You might want to consult a tax professional regarding the tax consequences of revoking your trust.

Warning

  • The revocable trust must be closed according to your state’s laws. Consult state statutes if you are not sure how to proceed or contact a probate attorney.

Photo Credits

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About the Author

Based in St. Petersburg, Fla., Karen Rogers covers the financial markets for several online publications. She received a bachelor's degree in business administration from the University of South Florida.

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