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How long may a Trust stay active after a persons death.

Scottsdale, AZ |

For instance, if there is an operating business as part of the trust and it would mean that the beneficiaries of the trust would suffer tax consequences by closing the trust is there a time limit that the company can remain in trust and operate without interruption or sale?

Attorney Answers 4

Posted

You definitely want to have the trust reviewed, but in Arizona, we have some nice new discretionary law that could allow the trust to keep operating the business even if the trust document doesn't speak specifically about that particular business.

We could go at it from a tax-law angle or a business-law angle. One of the most important things to consider would be keeping a nice paper trail of contact with the beneficiaries to ensure that one of them cannot become upset and demand that the whole thing be shut down right away so that they can cash out and have an inheritance immediately, thereby harming everyone else when the business has to be sold. I'm involved in a situation like that currently, and although the original trust was somewhat unclear, we've been able to keep things running and keep everyone happy.

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Posted

The trust document controls here. The answers will be found by a review of the actual trust document.

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Posted

As Mr. Fromm indicated the trust document would specify what events would lead to termination of the trust. I would advise that you meet with a local trusts and estates attorney, who is also experienced with business succession, to review the key provisions of the trust.

This communication is neither a solicitation nor an offer to represent you. The information provided to you in this communication is not intended to create and does not create a lawyer-client relationship with the Law Office of Daniel A. Jimenez P.C.

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Posted

My colleagues are correct. You need to review the trust documents to determine what causes or is required to terminate the trust. Your best bet would be to have a thorough review of the trust performed by a local trust attorney.

When responding to questions posted on Avvo, I provide a general purpose response based on California law as I am licensed in California. In reviewing my response, you are specifically advised that your use of, or reliance upon any response I provide is not advisable. I do not have all relevant background details or facts related to your issue / matter, thus I am not in a position to give you legal advice. Further, your review, use of, or reliance upon my response does not establish an attorney-client relationship between us nor does it qualify as a legal consultation for any purpose. For specific advice regarding your particular circumstances, you should consult and retain local counsel.

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