Trust Questions

The Trust is in the State of California, I live in another state. My mother recently passed away and me and my brother are the major beneficiaries of the Trust. My stepfather is the living trustor and trustee at this point. My brother and then myself become trustees in the event of his death. This is very complicated so please bare with me. I will try and spell it out concisely.

Ok, My stepfather amassed a large fortune while he was married to my mother (33 years). She was a stay at home wife. We are assuming everything is in his name. The trust states that upon the death of the first trustor the trust is to be divided into three sub trusts. Trust A, Trust B, and Trust C. One half assets of community property into the B trust.

1st question does that mean everything that was amassed during their marriage even if it's in his name only. Or is it just referring to the items listed in the trust?

2nd question, the trust was signed by my mother and stepfather and then notarized by a notary. Does California require two witness's? If so does that then make the trust invalid?
I took the trust to an out of state attorney, and he's worried about the witness's. They both have pour over wills to the trust.

We both feel that my stepfather will try and change the trust. He's already trying to liquidate assets, and he hasn't mentioned dividing it. Can he as the trustor change us as beneficiaries? Or not adhere to what is outlined in the trust? Can he rewrite it. The part about the death of the first trustor and it being divided says its irrevokable.

If the trust is valid who is responsible for making sure that he follows the outlines of the trust? Should I be getting a California attorney. This is going to make him furious but he's acting weird and talking out of both sides of his mouth. Plus I have a bad feeling.

I appreciate your time and any advice you can give me.

Thank you

This information is from me being a trustee of my Mothers trust and should not vary much from state to state.

New property or bank accounts are not automatically part of the trust unless the account was specifically opened as part of the trust.

As posted in another thread.

The trustee has several major duties:

Loyalty: The greatest duty is for the trustee to be loyal to the beneficiaries. The trustee must administer the trust solely for the benefit of the beneficiaries, and provide full disclosure of his or her dealings. The trustee must deal fairly with the beneficiaries, and not manage the trust to profit his or her own financial interests (i.e., by buying stock in a company the trustee owns).

Administration: The trustee has a positive obligation to do what is necessary for the good of the trust.

Earmark: The trustee must keep trust assets separate from all other assets, including those of the trustee, and must clearly identify those assets belonging to the trust in all dealings.

Account: The trustee must provide financial statements regarding the state of the trust.

Impartiality: The trustee must act for the benefit of the trust as a whole, and not favor one beneficiary's interests over another's.

If a trustee breaches his or her duties under the trust, the beneficiaries may sue him or her for any damages to their interests.

Actually, this is not uncommon. It happens more and more often here. Comments below assume this is a typical ABC trust. Also, your attorney will need to hire someone here if stepfather asserts he has lots of separate property, you need to go to court or you need to consult someone familiar with California law.

Question 1: Probably, but there are many questions to ask, such as, was there a prenuptual agreement that says the fortune is separate property? Did the fortune come from separate property that your stepfather brought into the marriage? The key is how he performs the division of his separate property, your mother's separate property and the community.

Question 2: There is no notary or witness requirement here.

He can revise the survivors trust, which is usually the A trust, that will hold his half of the community and his separate property. He can't revise the B and C trusts.

It's up to you to police what your stepfather does. If he doesn't want to cooperate, it could get expensive.

Calm down, chill out, and let the man do whatever he wants with his assets--it's HIS trust and you have nothing to be worried about. You will eventually get financial benefits from the trust. If he trusts you enough to name you as a potential future trustee and as current trust beneficiaries, then you need to give him time and space to manage his assets the way he wishes and don't pester him about it--if you continue to pester him, he may decide to disiniherit you completely. The man is also grieving at this time.

At some point in the future you can ask the trustee for an accounting statement for any trust that you are named as beneficiary of.

Exactly WHO are the witnesses who you say have pour over wills--are they related to the trustor or not? Are they his other children? This is something of concern that you need to discuss with your California attorney--whether it is correct/permissible or not that their pour over wills could pertain/apply to this particular trust.

DANDY DON IN OKLAHOMA ([email protected])

I agree with my learned colleague Dandy Don about not pestering him, but I disagree with the rest. If this is a typical ABC trust, your mother's half of the community and her separate property are not HIS to do with as he pleases. It's not HIS trust alone; he and your mother created it. Since they apparently used a QTIP type arrangement, they probably forsaw the possibility that since this is a blended marriage, the survivor could change his trust (A) to prefer his or her own flesh and blood, or perhaps another new spouse, with his or her assets, so they wanted to insure that the assets attributable to the first to die were sequestered in irrevocable trusts.

If you have the feeling of uncertainty, you have everything to worry about. Go about this diplomatically, but let him know at the appropriate time that you will be watching, and expect him to carry out the terms of the trust.

One more comment. From time to time, surviving spouses "forget" that this type of estate plan means that everything does not go to the surviving spouse to deal with however he or she pleases.