How is a living trust executed?

Question

Who notifies the beneficiaries?
Do the beneficiaries need to file any paperwork to receive the funds?

Answer 1

A living trust is typically a revocable living trust. It is executed by both the settlor (person establishing the trust) and the trustee, the person who holds the invested assets.

Under the Pennsylvania enactment of the Uniform Trust Act (enacted as Chapter 77 of the Probate, Estates and Fiduciaries Code, Title 20 of the Pennsylvania Consolidated Statutes, by the Act of July 7, 2006, P. L. 625, No. 98 of 2006, S.B. 660), notices to beneficiaries must be given at the following times:

1. Not later than 30 days after the trustee learns that the settlor of a revocable or irrevocable trust has been adjudicated incapacitated. 20 Pa. C. S. § 7780.3 (b) and (d).

2. Not later than 30 days after the trustee learns that the settlor of a revocable or irrevocable trust has died. 20 Pa. C. S. §7780.3 (c) and (e).

3. Not later than 30 days after the trustee learns that a person has become a current beneficiary of a trust, if settlor is deceased or has been adjudicated incapacitated. 20 Pa. C. S. § 7780.3 (f),

4. Whenever there is a change in trustees. 20 Pa. C. S. § 7780.3 (g).

Notice is typically given by the trustee or by the legal counsel for the trustee.

If the trust is terminating and remainder beneficiaries receive a cash distribution, there will be either a judicial accounting filed for audit and confirmation by the court, or there will be a settlement by the trustee with the beneficiaries on the basis of a Receipt, Release, and Refunding Agreement.