Is trust administration taking too long? Waiting passively could cost you.
A trust that appears straightforward at the outset may still face delays if, say, the beneficiaries are at odds with the trustee, the trustee takes longer than expected to act or certain trust properties require court approval before sale.
While the timeline for closing a trust generally is flexible, delays aren’t just inconvenient, but they can result in a significant loss of value, mounting trustee fees and even unhappy beneficiaries.
Trusts, unlike estates, are not subject to the probate process — which means their administration usually isn’t supervised by the court. This often results in trusts being administered more quickly than estates. However, the opposite also can be true.
In short, the trust creator (known as the settlor, grantor or trustor) usually has the freedom to decide how long they wish for their trust to stay active after their death.
If you’re a beneficiary frustrated by delays or concerned about potential trustee misconduct, don’t wait passively for answers. An experienced probate attorney can demand transparency, ensure the trustee is meeting their fiduciary duties, and, if necessary, take prompt legal action to protect your inheritance and assert your rights.
“It’s important to remember that not all prolonged trust administrations are problematic, as some are intentionally designed to provide ongoing financial support to beneficiaries over time,” says Shawn Kerendian, managing partner at Keystone. “However, it’s essential to be able to recognize when a trust is being wrongfully delayed or mismanaged.”
What Factors Can Extend a Trust’s Lifetime?
It’s important to understand that some trusts are intentionally designed to last for years or even decades after the settlor’s death. While certain delays in trust administration occur because of legal or logistical obstacles, other delays are built into the trust itself.
Suppose an elderly settlor with numerous children and grandchildren wants to ensure his descendants are financially supported long after he’s gone. However, he’s reluctant to give them their inheritance all at once — especially since many of them lack the financial expertise needed to manage significant wealth. His solution is to create a trust that directs the trustee to make quarterly distributions until the trust assets are depleted.
In this case, the long lifespan of the trust is intentional. Still, the trustee is legally required to make each scheduled distribution on time.
This structure is in stark contrast to that of probate estates, which operate under a strict statutory timeline. Estates are typically expected to be settled and fully distributed within 12 to 18 months of the personal representative’s appointment, with most distributions occurring all at once at the close of probate. Trusts, on the other hand, can be tailored to meet both short- and long-term goals, allowing for far greater flexibility in when and how trust beneficiaries receive their inheritances.
In the sections that follow, we’ll explore the key factors that influence how long a trust lasts after the settlor’s death.
Trust Terms
One of the most significant factors influencing how long a trust lasts after the settlor’s death is the trust’s own terms — as well as the distribution schedule they call for. The document dictates who the beneficiaries are, how and when trust distributions are to be made and under what conditions the trust will terminate.
For example, a settlor may direct the trustee to make fixed monthly, quarterly, biannual or annual payments to each beneficiary until the assets are exhausted, or until a beneficiary reaches a specific age. In other cases, the trust may be set up to last for decades, providing financial support across multiple generations.
These terms can deliberately extend the lifetime of a trust. However, even with extended timelines, trustees remain legally obligated to abide by the distribution schedule laid out in the trust document. Any deviation — such as delaying a payment that is due — could result in legal action by the beneficiaries.
Complexity of Estate
The size and complexity of a trust can also affect how long the trust remains active after a settlor’s death. If the trust holds multiple asset types — such as business interests, real estate across multiple states and valuable artwork — additional time may be required to value, manage and distribute those assets.
In addition, complex trusts often involve more moving parts, which can delay administration. For example, a trust could have outstanding debts or tax obligations that the trustee may need to resolve prior to distributing any assets. In some cases, the trustee may need to hire accountants, real estate agents or attorneys to assist with their administrative duties.
While a straightforward trust may be in a position to be closed within a year, a more intricate trust could keep the trust active for several years or even decades — particularly if it holds illiquid assets or legal challenges arise.
Experience of Trustee
A trustee who has previously managed trusts and understands the responsibilities of a trustee may be capable of moving through the administration process more quickly and efficiently than a first-time trustee. They can anticipate common issues and swiftly address them, helping to prevent unnecessary delays.
In contrast, an inexperienced trustee may require more time to learn the process, check compliance with applicable laws and consult third-party professionals. While delegating responsibilities to professionals may help compensate for the knowledge gap, doing so may still slow the administration timeline.
In some cases, the trustee’s personal availability or organizational skills could also have an impact on how quickly a trust is settled.
Fiduciary Misconduct
Fiduciary misconduct occurs when a trustee fails to fulfill their legal duties to act in the best interest of the beneficiaries. This can take many forms, such as self-dealing, making unauthorized distributions or mismanaging trust assets. Even unintentional errors, if they cause harm to the trust, may be considered a breach of fiduciary duty.
When misconduct is suspected, beneficiaries may initiate legal action to recover lost assets or remove the trustee. These disputes can substantially delay trust administration, as years could go by before a resolution is reached. Moreover, when a trustee is successfully removed, a replacement trustee may need to be appointed — and it could take time for them to get up to speed.
Trust Disputes
Trust disputes arise when beneficiaries, trustees or other interested parties disagree over the trust’s terms, distributions or the administration process itself. Even disputes over seemingly trivial details can escalate into lengthy legal battles.
Trust disputes cover a wide range of issues, including:
- Contesting a trust
- Seeking the court’s guidance on how to interpret ambiguities in a trust
- Improper revocation of a trust
- Heggstad petitions
To resolve trust disputes, mediation, arbitration or full court proceedings may be resorted to, potentially extending the trust’s duration. While litigation is ongoing, distributions and other administrative tasks may temporarily be placed on hold. This could slow the administration process and increase costs.
How Much Does It Cost to Maintain a Trust?
Unless a trustee agrees to waive their fees, maintaining a trust will cost you, but how much generally depends on the size and complexity of the trust, the nature of its assets, the experience of its trustee and how much work is required of them.
Ongoing costs, such as trustee fees, attorney fees, and accountant fees, can accumulate over time, especially for trusts that are intended to last for many years. For this reason, settlors often weigh the long-term expenses of trust management against the intended benefits when deciding how to structure their trust.
When Does a Trust End?
A trust generally ends when its purpose has been fulfilled, its assets have been fully distributed, and all financial liabilities have been settled. The terms of a trust document may outline when the trust terminates, such as after a set number of years or upon the last beneficiary’s death.
That said, certain circumstances can trigger premature termination — for example, the exhaustion of trust assets, beneficiaries unanimously consenting to the trust’s termination or a court order dissolving the trust.
If a trust has ongoing obligations, such as managing long-term investments or paying income to beneficiaries, the trust may remain active until these obligations are satisfied.
When Does an Irrevocable Trust End?
An irrevocable trust typically ends when all the conditions specified in the trust document have been met. This may happen when the trust’s assets have been fully distributed, when the last beneficiary passes away or when the trust reaches its predetermined end date.
Because irrevocable trusts, unlike revocable living trusts, are set in stone from the moment they are signed — meaning they cannot be easily changed — their duration is usually controlled by the provisions in the original trust document.
In rare cases, an irrevocable trust may be terminated early — particularly if the trust’s assets have been exhausted, its purpose has been fulfilled, or its purpose has become impractical or impossible to achieve. In general, terminating an irrevocable trust prematurely requires either court approval or unanimous consent from beneficiaries.
How Long Does It Take to Settle a Trust?
Generally, uncomplicated trusts take around six months to a year to settle, whereas ones that are complex may take several years. That said, the intricacy of the trust isn’t the only relevant factor to consider when determining trust timelines.
For example, a straightforward trust could become subject to disputes, extending its timeline significantly. A complex trust, on the other hand, may provide for the entirety of its assets to be distributed to one beneficiary all at once. Put simply, it’s impossible to know how long a trust will take to settle since all trusts are different.
Trust Duration FAQs
Still confused about how long the average trust lasts after death? Do you know what can lengthen a trust’s lifetime? Check out the frequently asked questions below for additional clarity.
If you have a specific legal issue you’d like to discuss with our firm, we recommend reaching out to us directly.
What Is California’s Rule Against Perpetuities?
California’s Rule Against Perpetuities (RAP) limits how long a trust can last — though, for most settlors, these limits are generous enough to have no impact on their post-death plans.
The rule typically limits a trust’s duration to no more than 21 years after the death of the last beneficiary or within 90 years of the trust’s creation — whichever deadline comes last. However, in practice, the length of time a trust remains open usually depends on the settlor’s intentions and how efficiently the trustee manages the trust administration.
How long can a trustee hold funds?
A trustee should hold funds for as long as is reasonably necessary to fulfill their fiduciary obligations and the trust purpose. They, however, are not entitled to withhold distributions to beneficiaries that have come due without valid cause — such as unresolved debts or disputes.
How long must trust account records be kept?
There is no set rule as to how long trust records must be kept by a trustee, and the determination is usually based in part on the complexity of the issues facing the trust.
If, for example, there are complex tax issues, it could make sense to retain records for seven years or more. Trust records may include tax filings, distribution plans, bank account statements and receipts.
Keeping records is important because trust disputes can arise even after a trust has terminated. For instance, claims of fiduciary misconduct against a trustee can usually be filed three years (or, in some cases, four years) from the date the cause of action occurred.
As such, maintaining thorough and accurate records is essential to protect both the trustee and the beneficiaries if questions or challenges emerge after the trust’s closure.
How long does a trustee own the property?
A trustee can hold title to trust property only for as long as a trust stays active.
A trust cannot be closed unless all trust property has been sold or distributed according to the trust terms. And for the trustee to sell or distribute trust property, they need to transfer title to the new owner’s name(s). This would effectively remove the trustee’s ownership interest.
How long can an estate remain open?
An estate must remain open until all debts and taxes have been paid, all administrative duties have been completed, and all assets have been distributed according to the will or intestate succession laws (if no valid will exists). On average, this process takes 12 to 18 months — though more or less time could be required depending on the size and complexity of the estate. Other factors that could extend the estate settlement timeline include substantial debts, disputes among beneficiaries, difficulty locating assets and estate disputes.
Once an estate is closed, which occurs once the probate process is completed and estate assets are fully distributed, the executor’s authority ceases.
Still have questions about trust timelines and delays?
Whether your concern is a slow-moving trustee, a complex trust or a family trust dispute, it’s important to understand your rights and options.
At Keystone Law Group, our attorneys focus exclusively on trust and estate matters, so we know how to move stalled administrations forward — and, when necessary, hold fiduciaries accountable.
If you believe a trust is being mismanaged, call us today. We’ll review your situation, explain your legal options and help you protect your inheritance.
