Virginia Revocation of Living Trust
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FAQ
When a trust dissolves, all income and assets moving to its beneficiaries, it becomes an empty vessel. That's why no income tax return is required it no longer has any income. That income is charged to the beneficiaries instead, and they must report it on their own personal tax returns.
Dissolving irrevocable trusts if you're a beneficiary or trustee. State trust law may also permit a trust beneficiary or trustee to petition the court if they want to dissolve (or amend) the trust. The court may grant approval based on reasons cited above.
A revocation of a will generally means that the beneficiaries will no longer receive the specified property or financial assets. A beneficiary may have been depending on the trust property for various reasons. If the revocation occurs at a certain time, it can cause legal conflicts in many cases.
Whether your trust closes immediately after your death or lives on for a while to serve your intentions, it must eventually close. This typically involves payment of any outstanding debts or taxes before the trustee distributes the trust's assets and income to your named beneficiaries.
This can take as long as 18 months or so if real estate or other assets must be sold, but it can go on much longer. How long it takes to settle a revocable living trust can depend on numerous factors.
The irrevocable trust may be terminated by the consent of all beneficiaries and the court finds the termination is not inconsistent with a material purpose of the trust. Once the termination is approved by the court, the trustee is required to distribute the remaining assets as agreed by the beneficiaries.
EXAMPLE: Yvonne and Andre make a living trust together. Step 1: Transfer ownership of trust property from yourself as trustee back to yourself. Step 2: A revocation prints out with your trust document. Step 3: Complete the Revocation of Trust by filling in the date, and then sign it in front of a notary public.
The terms of an irrevocable trust may give the trustee and beneficiaries the authority to break the trust. If the trust's agreement does not include provisions for revoking it, a court may order an end to the trust. Or the trustee and beneficiaries may choose to remove all assets, effectively ending the trust.
The first step in dissolving a revocable trust is to remove all the assets that have been transferred into it.Such documents, often called a trust revocation declaration or revocation of living trust," can be downloaded from legal websites; local probate courts may also provide copies of them.