What Happens to a Trust After Death? Why It Matters for Taxes
When someone passes away, their revocable living trust usually becomes irrevocable. At that point, the trust becomes its own taxpayer—and that comes with important tax implications.
One of the most surprising? Trusts are taxed much more quickly than individuals. In fact, an irrevocable trust in 2025 reaches the highest federal tax bracket (37%) after earning just $15,650 in income. That’s a fraction of what it takes for an individual to hit the same rate.
This is why it’s so important for trustees to understand how trust income is handled after death. While we don’t provide tax advice, we regularly work alongside CPAs to help trustees administer trusts properly and avoid unexpected tax consequences. Distributing income to beneficiaries—when permitted—may shift the tax burden to individuals who are taxed at lower rates.
If you’ve recently been named as trustee or are supporting someone who has, Kaminski Law Group is here to help. We’ll guide you through the legal process of trust administration with clarity, compassion, and confidence.
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