To transfer property out of a trust after the grantor’s death, the successor trustee proves their authority to third parties, settles the trust’s debts and taxes, and then retitles each asset from the trust’s name into the beneficiary’s name using whatever paperwork that asset type requires: a recorded trustee’s deed for real estate, institution forms for bank and brokerage accounts, a title transfer at the motor vehicle agency for cars, and a written distribution record for untitled personal property. The trust avoids probate, but the retitling work is real, and doing it in the wrong order can leave you personally liable.
Get Your Authority in Order Before You Move Anything
Read the trust document from beginning to end before you do anything else. It names the beneficiaries, describes what each person receives, and sets any conditions or timing on distributions. Every transfer you make has to match what it says.
Most trusts require you to sign a written acceptance or affidavit confirming you are stepping in as trustee. That signed document is your proof of authority when you deal with banks, title companies, and county recorders.
Death Certificates and an EIN
Order at least a dozen certified copies of the death certificate. Every bank, brokerage, insurance company, and county recorder’s office will want one. Funeral homes usually help with this, or you can order copies through the vital records office in the state where the death occurred.
The trust also needs its own tax identification number now. While the grantor was alive, a revocable trust was not a separate taxpayer and used the grantor’s Social Security number. At death, the trust becomes its own taxable entity and needs an Employer Identification Number from the IRS. You can apply online at irs.gov at no cost, and the number is issued immediately. You’ll need the EIN to open bank accounts in the trust’s name, receive income on trust assets, and file the trust’s tax returns.
Certification of Trust
A certification of trust (sometimes called an abstract or certificate of trust) is a shortened version of the trust document. It confirms the trust exists, gives its date, identifies you as the current trustee, and describes your powers, without revealing who the beneficiaries are or what they receive. Most financial institutions will accept a certification in place of the full trust document, and most states have statutes requiring them to do so. Include the trust’s name, date of creation, your name and address, a summary of your authority, and the trust’s EIN.
Affidavit of Death of Trustee
In a typical revocable living trust, the grantor also served as trustee during their lifetime. When that person dies, an affidavit of death of trustee is recorded in the county land records where any trust-owned real estate is located. Filed alongside a certified death certificate, this affidavit updates the public record to show that the original trustee has died and that you, the successor, now have authority over the property. Skip this recording and the county records still show the deceased person as trustee, which creates problems when you try to transfer the property later.
Asset Inventory with Date-of-Death Values
Create a detailed inventory of everything the trust owns: real estate, bank accounts, investment accounts, life insurance policies payable to the trust, vehicles, business interests, and valuable personal property. Record the fair market value of each asset as of the date of death. For real estate and business interests, you may need a professional appraisal. For publicly traded investments, the closing price on the date of death is the standard reference point. These values feed the beneficiaries’ stepped-up basis, discussed below, and the accountings you owe them.
Notify the Beneficiaries
Most states require the successor trustee to notify all beneficiaries within a set period after the grantor’s death. The most common deadline, drawn from the Uniform Trust Code, is 60 days. The notice should include the trust’s existence, the grantor’s name, your identity as trustee, and the beneficiaries’ right to request a copy of the trust document and receive accountings. Prompt notice protects you from later claims that you hid information.
Pay Debts, Expenses, and Taxes First
You cannot hand out assets the moment you take over. The trust’s debts and expenses come first, and distributing assets prematurely can leave you personally liable if there isn’t enough left to cover what the trust owes.
Start with administrative costs: legal fees, accounting fees, appraisal costs, and any trustee compensation the trust document authorizes. Then address the grantor’s outstanding debts, including medical bills, credit cards, and any remaining mortgage obligations. Funeral expenses are commonly paid from trust funds as well. Tax obligations come next, covering both the grantor’s final income taxes and any trust income taxes owed.
If the trust doesn’t hold enough cash to cover these obligations, you may need to sell assets. The trust document may specify which assets to liquidate first. If it doesn’t, exercise reasonable judgment and document your reasoning.
The Grantor’s Final 1040
Someone needs to file the grantor’s final Form 1040, covering income from January 1 through the date of death. If the grantor had a surviving spouse, that spouse typically handles this. If not, it may fall to you or the executor of the grantor’s estate. Any income the trust assets earned after the date of death belongs to the trust, not to the grantor’s final return.
Trust Income Tax Return
Once the grantor dies, the trust must file its own income tax return, Form 1041, for any year in which the trust has gross income of $600 or more, has any taxable income, or has a beneficiary who is a nonresident alien.1Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 (2025) The trust’s first tax year begins the day after the grantor’s death. Income that flows through to beneficiaries is reported on Schedule K-1, which you must provide to each beneficiary so they can report that income on their own returns.
Federal Estate Tax
The federal estate tax exemption for 2026 is $15,000,000 per individual. If the grantor’s total estate, including trust assets, falls below that threshold, no federal estate tax return is required. For married couples, any unused portion of the first spouse’s exemption can transfer to the surviving spouse, effectively doubling the sheltered amount. Only estates exceeding the exemption need to file Form 706 and pay estate tax, which tops out at 40 percent. Most families will never owe federal estate tax, but some states impose their own estate or inheritance taxes at much lower thresholds.
Stepped-Up Basis
Assets held in a revocable trust at the grantor’s death receive a new tax basis equal to their fair market value on the date of death. If the grantor bought a house for $150,000 and it was worth $450,000 when they died, the beneficiary’s basis is $450,000. If the beneficiary sells the house for $460,000, they owe capital gains tax on the $10,000 gain, not on the $310,000 of appreciation during the grantor’s lifetime.
This adjustment applies to most assets in a revocable trust, including real estate, stocks, and mutual funds. It does not apply to retirement accounts like IRAs and 401(k)s, which are considered income in respect of a decedent and taxed differently. It also does not apply to assets held in irrevocable trusts where the grantor gave up all control during their lifetime. Accurate date-of-death valuations in your asset inventory are what make this benefit usable. Without documentation, beneficiaries could end up paying far more in capital gains tax than they should.
Transferring Real Estate
Real estate is the most paperwork-intensive part of the transfer, but the sequence is straightforward.
Prepare a new deed, commonly called a trustee’s deed, that transfers ownership from the trust to the named beneficiary. The deed must include a legal description of the property, which you can copy from the existing deed recorded when the property was placed into the trust. You sign the deed in your capacity as trustee, using a format like “Jane Smith, Trustee of the John Smith Living Trust, dated March 15, 2015.” The deed must be notarized, and some states also require witnesses.
Once signed and notarized, file the deed with the county recorder’s office in the county where the property sits. Recording fees vary by county but are generally modest. Some counties also require supplemental forms, such as a preliminary change of ownership report or a transfer tax declaration. Many states exempt trust-to-beneficiary transfers from real estate transfer taxes, but the rules differ, so check with the county recorder before filing.
If the property still has a mortgage, the debt follows the property. The beneficiary inherits responsibility for the payments. Federal law generally prevents lenders from calling the loan due when property passes to a relative through a trust after death, but the beneficiary should contact the lender to discuss the existing terms or explore refinancing.
Transferring Accounts, Vehicles, and Personal Property
Bank and Investment Accounts
Contact each financial institution holding trust assets. You’ll need to provide a certified death certificate, your certification of trust, and valid identification. The institution will verify your authority and then follow your instructions. Depending on the trust’s terms, you may direct the institution to retitle the account into a beneficiary’s name, transfer the holdings into the beneficiary’s own account, or liquidate the assets and issue a distribution check. Each institution has its own forms and processing time, so start early and follow up.
Vehicles
For vehicles, work with the state motor vehicle agency. Bring the death certificate, proof of your trusteeship, the current title, and any required transfer forms. The agency will reissue the title in the beneficiary’s name. Some states charge a transfer fee or require an emissions inspection, so check the specific requirements before visiting.
Untitled Personal Property
Furniture, jewelry, artwork, and household goods have no formal titles. Distribution follows the trust document’s instructions. If the trust says “divide personal property equally among my children,” you and the beneficiaries will need to agree on how to do that. Documenting the distribution with a written list signed by all parties prevents disputes later.
When an Asset Was Never Put Into the Trust
A trust only controls assets that were properly titled in the trust’s name during the grantor’s lifetime. A bank account the grantor forgot to retitle, a piece of real estate acquired after the trust was created, or a vehicle still in the grantor’s personal name is not a trust asset, no matter what the trust document says about it. You cannot transfer these out of the trust because they were never in it.
Unfunded assets must go through probate before they can be distributed. If the grantor had a pour-over will, that will directs any assets left outside the trust into the trust after probate is complete. The pour-over will does not avoid probate; it ensures the assets end up where the grantor intended once the court process finishes. If there was no pour-over will, the unfunded assets pass under the state’s intestacy laws, which may distribute them differently than the trust would have.
Some states offer a small estate affidavit process for personal property below a certain dollar threshold, which can avoid a full probate proceeding for minor assets left out. Dollar caps and procedures vary by state. If you discover significant unfunded assets, consult a probate attorney in the state where those assets are located.
Final Accounting and Closing the Trust
Before making your last distributions, prepare a final accounting for all beneficiaries. The report covers your entire period of administration and should show every asset you collected, all income earned, every expense and debt paid, and a detailed schedule of distributions. Beneficiaries are entitled to this information, and providing it transparently reduces the chance of disputes.
After making final distributions, ask each beneficiary to sign a receipt and release. By signing, the beneficiary confirms they received their full share and releases you from further claims related to the trust. Not every beneficiary will sign willingly, and you cannot force them to, but having these documents on file provides substantial protection if questions arise later. Without a signed release, a beneficiary could potentially bring a claim against you for years after the trust is closed, depending on your state’s statute of limitations.
There is no single form you file with any government agency to close a trust. Once debts are paid, taxes are filed, every asset has been retitled out of the trust’s name, and you have collected your receipts and releases, the trust ceases to exist because it no longer holds anything.