What happens to assets placed in a trust upon the grantor's death?

Assets placed in a trust upon the grantor's death are distributed according to the trust's terms, which allows for a direct transfer to the beneficiaries without the need for probate. This process is advantageous because it simplifies the distribution of the grantor's assets, ensuring that beneficiaries receive their inheritance promptly and privately, as trusts are not subject to public probate proceedings.

The trust's provisions will dictate how and when the assets are distributed, and this arrangement generally provides a level of flexibility and control for the grantor over their estate plan. By having a trust in place, the grantor can specify conditions for distribution, designate specific beneficiaries, and outline any terms that need to be fulfilled before distribution occurs, all while avoiding the complexities and delays of probate court. This aspect highlights the effectiveness of trusts in estate planning.

In contrast, the other options involve situations that do not reflect the nature of trusts. Freezing assets or reverting them to the state does not align with how trusts are intended to function, and automatic sales to pay debts would contradict the purposes of many trusts, which are designed to safeguard and manage assets for specified beneficiaries rather than to liquidate them upon the grantor's passing.