Estate & Trust Administration For Dummies, 2nd Edition

Chapter 15

Terminating the Trust

IN THIS CHAPTER

Making final income and principal distributions

Planning for, and preparing, the final tax return

Gazing into your crystal ball for future expenses

Wrapping up the final account

All good things must come to an end, and that includes trusts. A day will come when you’ve fulfilled all the terms of the trust and the need for it just goes away. This may happen when the income beneficiary dies or reaches a certain age, or when all the principal has been spent. Whatever the reason, when the time comes for you to terminate the trust, you don’t just get to wash your hands and say, “I’m done.” Although the end scenario isn’t difficult, you do need to follow a few rules and perform a few rituals before you can walk away from your duties as trustee.

In this chapter, we tell you what needs doing and when you need to do it. We explain how to make those final distributions, prepare that last tax return, set aside something for those contingent expenses that always seem to crop up, and finally wrap a nice bow around the whole package with your final ...