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Changing Living Trust

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jludwig75

Junior Member
What is the name of your state (only U.S. law)? OHIO

My mother and father created a revokable living trust in 2003. They were the settlers. My father passed in 2005. My mother is of bad health.

I am the sucessor trustee, then my brother.

I am going through a nasty divorce and will have to file bankrupsey. I was advised by my bankrupsey lawyer that if I receive any inheritance 180 days post filing, they bankrupsey court can take my inheritance to pay the debts.

1.) Is this true for a trust, and I will just be the sucessor trustee after my mothers death? Can they take anything since its still in a "trust"?

2.) How easy or hard is it to have my mother change the trust so that my brother is first on the sucessor trustee, then myself? Is it as simple as crossing out my name and writing his? Should I write an amendment and have it notorized?

This way if somthing does happen to my mother before the 180 days of bankrupsey filing, my brother gets the trust and I wouldnt have to give everything to the bankrupsey court.

I would like to make this change without paying any additional fees/costs.What is the name of your state (only U.S. law)?
 


FlyingRon

Senior Member
Once the person who forms the revocable trust dies, the trust becomes IRREVOCABLE.
Are there in fact more than one trust? It's uncommon to have a revocable trust in more than one name. As mother is alive, she can certainly change the trustee on HER trust. You just prepare an amendment.

However being the trustee just means you are the one who makes the decisions. It doesn't mean the stuff in the trust is YOURS. I don't think your being the trustee or switching your brother to be trustee will change things at all.

The trust determines how things are distributed from the trust. While they probably can't take the trust, they can certainly count assets that you will beneficially receive against others in the divorce settlement. Of course, once you draw assets out of the trust, they will be recoverable for judgements.

Different states have different rules as to how to protect assets from judgements, etc...
I'd check with a lawyer (one familiar with your divorce, BK, and the trust which may take some research to find) to see what the best course of action is.
 

tranquility

Senior Member
Of course, once you draw assets out of the trust, they will be recoverable for judgements.
In CA, once you have the right to withdraw assets, they can be attached. Actual distribution is not required.
 

TrustUser

Senior Member
if the trust does not have any "spendthrift provision" clause, you might want to add that.

as long as your mom is of sound mind, she can make changes. i would get the amendment notarized.
 

jludwig75

Junior Member
Hi, Thanks for your response. I have responded to each paragraph below.
Jason


QUOTE=FlyingRon;2122748]Once the person who forms the revocable trust dies, the trust becomes IRREVOCABLE.
Are there in fact more than one trust? It's uncommon to have a revocable trust in more than one name. As mother is alive, she can certainly change the trustee on HER trust. You just prepare an amendment.


The Trust was created with BOTH my mother and father as Trustee's and Settlors. Since my father passed and my mother is still living is the trust now IRREVOCABLE? You mention its uncommon to have a revocable trust in more that one name, but as my parents are married why wouldnt it be in both, I thought that would be common, not uncommon. NOW, if you are speaking of the actual trust name, IT is called (MY LAST NAME Family Revocable Trust and date) (ie. like if my last name was Smith, SMITH FAMILY REVOCABLE TRUST dated May 2, 2002)

However being the trustee just means you are the one who makes the decisions. It doesn't mean the stuff in the trust is YOURS. I don't think your being the trustee or switching your brother to be trustee will change things at all.

So what I need her to change in the trust if she can, would be whom the asses IN the trust go to, correct? I still can be the Trustee?

The trust determines how things are distributed from the trust. While they probably can't take the trust, they can certainly count assets that you will beneficially receive against others in the divorce settlement. Of course, once you draw assets out of the trust, they will be recoverable for judgements.

This means when my mom passes they can use any assets I inheret to pay back the creditors as long as she passes before 120 days of filing for chapter 7, correct?





Different states have different rules as to how to protect assets from judgements, etc...
I'd check with a lawyer (one familiar with your divorce, BK, and the trust which may take some research to find) to see what the best course of action is.[/QUOTE]
 

FlyingRon

Senior Member
The confusion here is you are using the wrong terminology. I highly recommend you get a lawyer as confused as you are.

A revocable living (aka in vivo) trust is one that is tied to a single person. Essentially when that person dies the trust becomes irrevocable and transfers the assets to the beneficiaries as stated in the trust without probate. Often, as an automatic feature of that trust a new "Family" or "Childrens" trust is created going forward.

A trust labeled "SMITH FAMILY TRUST" is not a living trust. It's a family trust.

Why they wouldn't put it in both names? Because it's not always advantageous depending on what their intents are. You can get quite involved in the trust control based on who dies first and whether you want the spouses to maintain control or direct shares directly to other beneficiaries.

Without reading ALL the trusts in play and looking at the titles on the assets, we can not say.
 

jludwig75

Junior Member
A trust labeled "SMITH FAMILY TRUST" is not a living trust. It's a family trust.

I am using the terminology outlined in the trust documents prepared by a lawyer. No where on any document does it say FAMILY TRUST, it says REVOCABLE LIVING TRUST. So, I am using the correct terminology according to the document.

If I wanted to consult a laywer and pay him more money after my parents already paid for the trust, I would not be asking this question on a fourm. You see the whole entire point of using a FREE LAW fourm , is just that, for FREE ADVISE.

Although, I appriciate you trying to awnser my question, please let somone else respond.

My Original question at hand is can my mother change this trust by self-preparing an amendment and having it notorized, so that none of the assets will fall in my hand. I do not want the court taking any assets from my inheritence, if she passes before the 180 day look back after I file chapter 7.

The confusion here is you are using the wrong terminology. I highly recommend you get a lawyer as confused as you are.

A revocable living (aka in vivo) trust is one that is tied to a single person. Essentially when that person dies the trust becomes irrevocable and transfers the assets to the beneficiaries as stated in the trust without probate. Often, as an automatic feature of that trust a new "Family" or "Childrens" trust is created going forward.

A trust labeled "SMITH FAMILY TRUST" is not a living trust. It's a family trust.

Why they wouldn't put it in both names? Because it's not always advantageous depending on what their intents are. You can get quite involved in the trust control based on who dies first and whether you want the spouses to maintain control or direct shares directly to other beneficiaries.

Without reading ALL the trusts in play and looking at the titles on the assets, we can not say.
 

Kiawah

Senior Member
You should spend a small bit of money, and get some legal advise of someone who can actually read the documents you have in detail.

If she changes the beneficiaries so you are no longer a beneficiary of her revocable trust, and your mother then dies, then the trust becomes irrevocable and you will never be (legally) entitled to any of those assets.

I think you aren't grasping some of the terminology of what that revocable trust is called while your mother is alive, and then what the irrevocable trust(s) will be called when your mother passes.
 
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