Accounting for Assets of a Trust

What is the name of your state? CA
It has been 6 months since the passing of my mother-in-law. My husband is the executor of the will and successor trustee of the trust. The beneficiaries are the 4 sons. One of the sons lived with her and had joint banking accounts which were for convenience only since she was legally blind. The accounts were named in Schedule A of the trust, papers were prepared by the attorney for the banks, but the accounts were never changed as they still showed joint. The live-in son didn't take the papers to the bank perhaps but she was not able to physically do so. The live-in son transferred funds from the accounts to his personal checking account on the day she died. She was comatose for at least 3 days, but claimed she said he could do it. My husband recently made a distribution of some of the cash in banks, split the proceeds 4 ways, but deducted the "transferred funds" from the live-in. Live-in cashed the check, found an attorney and now whats a full accounting of the estate. He still lives there and will not surrender any records or cooperate. In addition he wants to be paid an hourly rate for her care. How can we do an accounting under these circumstances? In addition he is underage for the community he lives in and her will specified he could stay there 2 years and then the property be sold as long as he pays the bills. Can he be evicted if he missed one month's rent? This has cause so much pain for the family since he is so ungrateful and lived off his mother for several years now. Help!!What is the name of your state?

Has your husband at any point retained the services of a trust or probate attorney for advice/consultation?

Is the will being probated in probate court and does the will include a pour-over will/clause to retroactively claim the for the trust any items not previously covered/titled?

Has an executor's bond or trustee's bond been purchased by your husband for the will or the trust or is bond exempted by the will and/or trust?

The problem here could be that the accounts were not SPECIFICALLY TITLED in the name of the trust (whose fault that is remains to be determined, but this is something that the original trustee should have done--why wasn't it done?); just because they were listed on Schedule A is important but if the title was not specifically changed then legally the account should have remained joint and then would have automatically belonged to the live-in son after she died (under the concept of right of survivorship).

Although it was an innocent mistake done perhaps out of ignorance, your husband may have had no legal authority or basis to deduct anything from the distribution and so the live-in son may have grounds for his complaint.

Husband needs to be consulting a probate attorney to try to rectify this situation before live-in son decides to file a lawsuit.

DANDY DON IN OKLAHOMA ([email protected])

Son is also not entitled to claim fees for care he granted since he had no signed agreement to do so before the death occurred.

You will need to consult a landlord-tenant attorney to get the specifics on how to do an eviction properly--missing rent for one month may not technically be enough to get him evicted without proper notice.

Retaining an attorney

Thank you for the response. I thought the forum would send an automatic e-mail if there was a response, so sorry I didn't catch this right away. We consulted and paid for advise from the attorney who set up the will and trust. She told us we could distribute the funds and deduct the money he took. She doesn't do litigation, so we are looking for someone else to handle the case.

There is no probate court involved, there was little money (about $25k), furnishings, a car, and the co-op. We weren't told anything about getting a trustee bond. The will/trust says if anybody takes legal action the trust pays for the defense and that person is cut out of the inheritance. I'm assuming just requesting the accounting at this point is not deemed legal action but live-in is using an attorney.

Live-in went to the banks with my husband and withdrew the money to be placed in the new trust account with my husband as successor trustee. These accounts were joint and never changed to the trust probably because they did not want to mess with automatic deposits of social security and a pension from Germany. My M-in-Law was legally blind and the will/trust said his name was on the account for convenience only. So since live-in willingly withdraws the balance of the money and gives it to the trust, could he still argue that he should get all the money back as a survivor? Her intent was clear, to divide everything 4 ways, except for a car she gave live-in and the right to use the co-op contents (furniture) for 2 years after her death then everything would be sold. She wanted to give live-in 2 years to get his life together. He is on SS disability but not visibly disabled.

It is interesting that you said without a contract he can't charge for her pre-death care, yet his attorney is the one claiming he can. Also legally these co-ops can't be rented for more than 6 months per calendar year. A rental agreement has to be approved by the association. We never made an agreement because we were trying to stay below the radar and let him stay there as the mother wished. In July he will be of legal age to live there but he doesn't have the assets they require to be an owner. My husband and I backed the parents so they could buy it, pledging our assets in support. We won't do it for him, nor will we put his name on it.

This sure sounds like a big red flag for an attorney!!! I am disappointed that the original trust was not handled as completely as it could have been and that the subsequent advice may be problematic.

There appear to be 3 issues you will need to tell your attorney about:

1. Look at Probate Code Section 850 and the Heggstad case for the procedure to clear title to the Schedule A accounts. This will be your husband's defense to brother's objection to the accounting.

2. Brother will probably rely on Probate Code Section 21305 (b) (8) or file a Probate Code Section 21320 petition to test the no-contest clause.

3. Brother will need to file a creditors claim to perfect his demand for compensation. If your husband doesn't file under Probate Code Section 19000 et. seq., this means brother will need to open a probate.

Soooo helpful!

Wow! That really is helpful. Definitely is beyond what we can do ourselves, but does give us a great way to communicate with an attorney.

I did look at Schedule A again and only 3 of the bank accounts were listed. However, brother freely transfered monies from 1 of the accounts to his personal account plus to a checking account. The money was "stolen" from the account that is listed in the trust, so that should be a good thing, right?

One other question, please. All of the probate codes sited in the letter are 16060 to 16063. He appears to be relying on 16061.9 for my husband to pay his attorney fees. He also said the distribution is from the trust, not the will. I don't know what he means by that.

Lastly, my husband thinks brother wants to get him kicked off as trustee. Problem with that is the two other brothers are next in line, this brother is last. Oh and I did reread the trust and found a section that says no trust bond is needed.

Again, I sincerely appreciate the advice. I spoke to a litigation attorney and she said the cost would be extreme and it would be a shame for them to take the money from the trust. They suggested finding an attorney for just negotiating with brother's attorney to try to settle it. We really don't know what brother wants. We are really talking about $25K and a coop worth maybe $100K. Forced to pay appraisers, real estate agents, etc isn't going to leave much. Take attorney fees from that and divide 4 ways, it's not like you're going to make a killing here. 2 brothers could use the money, the other two don't need it, but will take their share out of spite now. A really sad day!

I'm not sure what 16061.9 has to do with this. You might review the probate code sections the attorney cites at www.leginfo.ca.gov to see if that will make the letter clearer.