Legal Question in Wills and Trusts in Arizona
I am dealing with a trust that is connected a life insurance policy.
When all of the money has been distributed is the trust done
or are there legal procedures that must be done to close out a trust?
1 Answer from Attorneys
The trust agreement should say when and how the trust is terminated. You should not distribute all of the money, without first paying the expenses of administration. You did not say that you are the trustee of the trust. Only the trustee has the right to pay the bills and expenses of trust administration, collect income and monies owed to the trust and make distributions to the beneficiaries of the trust. The trustee has a fiduciary duty owed to the beneficiaries, as well as the creditors, taxing agencies and any others with an interest in the trust estate. The trustee is entitled to hire legal counsel to lead the trustee through the correct procedures and the trust will pay for such legal counsel.