What happens to a trust's assets if the grantor passes away while the trust is still revocable?

When a grantor of a revocable trust passes away, the trust becomes irrevocable and the trustee is then responsible for managing the assets according to the terms specified in the trust document. The shift from revocable to irrevocable upon the grantor's death is a fundamental principle in trust law, reflecting the finality of the grantor's wishes. This means that while the grantor was alive, they had the ability to change or dissolve the trust at will, but upon their death, that flexibility ceases.

As a result, the trustee steps into a pivotal role and continues to manage the assets for the benefit of the designated beneficiaries. This may involve distributing the assets to beneficiaries according to the trust's instructions or managing the trust assets until specific conditions are met. The trust does not get automatically dissolved; rather, it remains in effect and becomes a tool for asset distribution and management after the grantor's passing.

Understanding the role of the trustee and the irrevocable nature of the trust after the grantor's death is crucial for both estate planning and the administration of the trust.