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Delta-Lawyer, Attorney
Category: Estate Law
Satisfied Customers: 3546
Experience:  10 years practicing IP law and general litigation
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We have a grantor type trust that ran out of money - the

Customer Question

We have a grantor type trust that ran out of money - the bank in So Dakota "resigned as trustee" and closed our accounts.I am an individual trustee (officially the "investment trustee" ) for the family. they consider the thing closed... I am not so sure.Do I need to notify So Dakota Sec of State, or IRS, or anyone, about this?Do I need to get the beneficiaries to sign a resolution acknowledging that we have closed the trust?thanks for your help !
Submitted: 4 months ago.
Category: Estate Law
Expert:  Delta-Lawyer replied 4 months ago.

I hope this message finds you well. I am a licensed attorney with over a dozen years of experience handling matters of this nature. It is a pleasure to assist you today.

A good rule of thumb here is to notify every legal entity and/or individual that has knowledge of the trust via certified letter with a return receipt. Every trust is different because virtually every trust has its own set of beneficiaries and points of legal contact.

Most trusts do not run through a court. If this one did, you need to first notify the court that you are closing it out. Next, you must notify the beneficiaries. It is highly unusual to have to notify the IRS, unless there is a tax lien associated with the trust. The individual beneficiaries may need to tidy up with the IRS on their own personal taxes, but that responsibility is on them relative to any unpaid tax associated with the trust and their disbursements.

The secretary of state would only need notice if the trust has been filed before the Secretary of State. If it is not, then you have no legal obligation to provide notification.

I would also write the financial institution that closed the accounts and notify them of your receipt and acknowledgement of their determination. That closes their loose ends and is the professional method of handling this matter.

All contact needs to be certified with a return receipt to assure the notices are delivered and to protect you. I would keep the return receipts and copies of the documentation associated with the estate for 5 years as well to protect yourself should any litigation arise.

Please let me know if you have any other questions or concerns. Please also rate my answer positively (THREE OR MORE Stars) on the ratings bar on your end so I can receive credit for my response.

Best wishes going forward!

Expert:  Delta-Lawyer replied 4 months ago.

Did you have any additional questions?

Expert:  Delta-Lawyer replied 4 months ago.

Did you have any other questions or comments? I want to make sure you are as comfortable as possible as you move forward.

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