What Happens to a Living Trust When One Spouse Dies?

When a married couple sets up a revocable living trust, it’s usually designed to make things easier when one spouse passes away. But many surviving spouses and family members are still left wondering: Now what?

If your spouse has died and you had a joint living trust, here’s what you need to know about what comes next.

1. The Trust Doesn’t Automatically “Do” Everything

While a trust is designed to avoid probate and streamline administration, it doesn’t handle itself. After the death of the first spouse, the surviving spouse (or a named successor trustee) needs to take several legal and financial steps to keep the trust working properly.

2. You May Need to Split or Allocate the Trust

If your trust was drafted to include estate tax planning or asset protection provisions, it may require the trust to be divided into sub-trusts—often called a Survivor’s Trust and a Bypass (or Decedent’s) Trust. This division helps preserve estate tax exemptions and protect assets for children or other beneficiaries.

Not all trusts require this split, but it’s important to review the trust with an attorney to understand your obligations.

3. Retitling Assets Is Often Required

Assets titled in the name of the joint trust may need to be retitled into the name of the survivor’s trust or split between sub-trusts. This includes bank accounts, investment accounts, real estate, and more. An experienced attorney can help guide this process and ensure compliance with the trust terms.

4. Notify Beneficiaries and Agencies

California law requires that certain notices be sent to trust beneficiaries and heirs after a death. You may also need to obtain a death certificate, file a change in ownership form with the county assessor (to preserve property tax exclusions), and notify Social Security and other institutions.

5. Tax and Legal Responsibilities Still Apply

You may need to file a final income tax return for the deceased spouse, and if applicable, an estate tax return. In some cases, a surviving spouse can make a “portability” election to preserve unused estate tax exemption for their own future estate. These are time-sensitive decisions that should be discussed with a qualified professional.

The Bottom Line:
Even with a trust in place, there are important steps to take after a spouse dies. Administering a trust correctly protects the surviving spouse, preserves tax benefits, and honors the wishes set out in the trust.

At Shafae Law, we help families across California navigate trust administration with clarity and care. If you’ve recently lost a spouse, we’re here to help you take the next steps—with compassion and legal precision.