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.

What to Do After Losing a Loved One: A Step-by-Step Guide

Losing a loved one is an emotional and overwhelming experience. In addition to grieving, there are important legal and financial matters that need attention. Whether you have lost a spouse, parent, or another close family member, understanding the steps to take can help ease the burden during this difficult time.

Step 1: Obtain the Death Certificate

The first legal step after a loved one’s passing is obtaining the death certificate. This document is required for many processes, including claiming life insurance, settling accounts, and handling estate matters. The funeral home or coroner typically provides copies, but you may need multiple certified copies for various institutions.

Step 2: Notify Family, Friends, and Key Contacts

Informing close family members, friends, and key contacts is crucial. You should also notify employers, social security offices (if applicable), and any other relevant parties. If your loved one had a financial advisor, attorney, or accountant, reach out to them to discuss the next steps.

Step 3: Locate the Estate Planning Documents

If your loved one had a will or trust, it’s important to locate these documents to understand their wishes for asset distribution, funeral arrangements, and other final affairs. If no estate plan exists, state intestacy laws will dictate how assets are distributed.

Step 4: Secure Assets and Protect Property

To prevent identity theft or unauthorized use, secure your loved one’s home, financial accounts, and personal belongings. This may include changing locks, notifying financial institutions, and ensuring property remains maintained and insured.

Step 5: Begin the Probate or Trust Administration Process

If your loved one had a trust, the successor trustee will manage and distribute assets according to the trust’s terms, avoiding probate. However, if assets were solely owned without a trust, the estate may need to go through probate, a court-supervised process that can take months or even years. Consulting an estate planning attorney can help clarify the next steps and expedite the process.

Step 6: Update Your Own Estate Plan

If you lost a spouse, it’s essential to review and update your own estate plan. This includes revising beneficiary designations, updating your will or trust, and ensuring your power of attorney and healthcare directive reflect your current wishes.

Final Thoughts

Losing a loved one is never easy, but understanding the necessary steps can help you navigate this challenging time with confidence. Seeking legal guidance can ensure everything is handled properly, giving you and your family peace of mind as you honor your loved one’s legacy.

Everyone Needs an Estate Plan

Everyone needs an estate plan. If you’re reading this, you’re probably aware that you–and if you’re married, your spouse–need an estate plan. But there are other people in your orbit who need an estate plan: your young adult children. Your children over the age of 18 need an estate plan, too. Yes, even the ones who still live at home, and the ones who you claim as a dependent. Or are away at college. Especially the ones who are away at college.

Anyone over the age of 18 is a legal adult. The law does not care whether that person is gainfully employed or playing video games until 3am. Reaching 18 years of age is an arbitrary measurement, and when it’s achieved, congratulations! You’re an adult! What comes with adulthood is the ability to make your own legally binding decisions… and to prohibit others from making decisions for you. Even if those “other people” are paying your bills, claiming you as a dependent, or housing you.

Consider your typical college-aged child. They are likely over the age of 18, or very close to it. They likely do not have much life experience, and base decisions on the nearterm. They may be impressionable, or easily persuaded. Or maybe they’re just a knucklehead. If, as a result of a misguided decision, they were to become incapacitated (think: hospitalized, detained by law enforcement, involved in a crisis, etc.), no one can make decisions for them without a properly executed estate plan–e.g., will, durable power of attorney, healthcare directive. Not even their parents! You see, they’re adults. Any institutions your adult child interacts with will only want to speak to your child. University administration, banks, authorities, doctors, school officials, etc., won’t listen to anyone but your adult child. They are legally prohibited from listening to third parties, even the parents of an adult.

A young adult crisis can appear anywhere. It could be a party gone wrong. It could be from spending time with that one friend of theirs that they just can’t seem to get enough of. Maybe it was a date or hangout gone wrong. If you, as a parent, want the ability to make decisions on behalf of your adult child, they must execute estate planning documents giving you that authority. Otherwise, you are at the mercy of the local court process. And if your child is away at college, that court process might be very foreign to you, operating under laws you aren’t familiar with.

Maybe your child is in a crisis because someone injured them. With a properly executed estate plan, your child could authorize you to file a lawsuit against the perpetrator on their behalf, speak to school administrators on their behalf, speak to the government on their behalf.

It doesn’t matter that your adult child doesn't “own much”. Or that they aren’t employed, or that they live at home, or live in a dorm and come home often. None of those things matter if your child is over the age of 18, and you want the ability to make decisions on their behalf in a crisis. Everyone needs an estate plan.

What Needs to Happen When Someone Dies?

After a client has designed their estate plan, the most common question we get, by an overwhelming margin, is some form of “What needs to happen when someone dies? How does someone execute this estate plan we have created?”

Notice

When someone dies, there usually isn’t an alert that goes out to your loved ones, your banks, your employer, your utility companies, your credit card companies, etc. Well, unless you’re a celebrity. But for us non-celebrities, the news of one’s death trickles out organically. Loved ones handle the deceased’s remains and any rituals–funeral, memorial, wake, spiritual ceremony, etc. Sometime from a week up to a month and a half after the death, the county produces a death certificate. With the death certificate, the decedent’s loved ones begin to notify all interested parties and organizations of the decedent’s passing.

Knowledge

When the decedent’s loved ones are emotionally and psychologically ready, they begin to piece together what they can about the decedent’s life. This will include discovering the assets and debts of the decedent, obtaining control over any digital accounts and assets (like social media and cloud accounts), as well as determining whether the decedent had an estate plan. Hopefully, the decedent alerted the people involved in their estate plan as to the location of the estate planning documents. That’s not always the case, so sometimes this step may involve a bit of a “wild goose chase” for the documents.

Administration

Once it is determined whether there is an estate plan, steps are taken to administer the estate. There are two main routes of estate administration:

Only a Will, or no estate plan

If no estate plan is discovered, or the decedent only had a will, then the decedent’s estate must go through the probate process. Read our prior post about what probate entails. Our office can be retained to assist the loved ones guide the decedent’s estate through probate if there is only a will, or no estate plan at all.

Estate plan with a living trust

If the decedent died having created an estate plan built upon a living trust, then the administration of their assets is handled privately by way of trust administration. Trust administration is often quicker and less expensive than probate administration. The person named as the successor trustee of the living trust is tasked with carrying out the terms of the trust, along with providing notices required by law, marshaling and valuing assets, paying any debts and expenses, and distributing the remaining assets following the terms of the distribution provisions of the trust.

To assist them, the successor trustee can hire an attorney (like our office, for example!) to represent them in carrying out their duties. Trust administration can differ greatly from one trust to another. Also, trust administration varies greatly whether the decedent was married and survived by a spouse versus being unmarried or the second spouse to die. Trust administration can be handled by attorneys whether or not the attorneys drafted the estate plan.

If you lost a loved one, contact us to schedule a complimentary initial consultation to figure out next steps.