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Timely Distribution of a Revocable Trust Account
by Mary Beth Guard, BOL Guru
Question: I have a Revocable Trust Account on which both Settlors have passed away. The Trust states that upon death of both settlors the Trust shall terminate and the Trustee shall distribute the trust property. Some time has passed and the Trustee has not distributed these funds. Should the Trust be left till distribution or should I change the account to an Estate Account until all the funds are distributed? Please let me know what you think.
Answer: The Trustee has the responsibility for distribution, and it sounds like he/she isn't doing what they're supposed to do. If the funds are in an interest-bearing account, however, you'll need a TIN for the trust under which to report the interest between the date of death and the time when the account is closed.
You should not change this to an estate account. The trust funds do not belong to the estate of the deceased settlors. Leave the account as is until the Trustee finally distributes the funds, but insist upon a TIN for the trust if the account is interest-bearing so you can properly report the interest earned by the trust.
The original version appeared in the June 2002 edition of the Oklahoma Bankers Association Compliance Informer.
First published on BankersOnline.com 11/25/02
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