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Logistics for distribution from living trust ?

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TexasTom

Member
What is the name of your state (only U.S. law)? TX
Q1. My father (God rest his soul) recently passed away. For the past several years, he had been living in Arizona prior to his passing. His will and living trust documents stipulate that his estate goes into his living trust, and that distribution of the assets in his living trust gets split based on specified percentages 30/40/30 between my brother (the executor), my sister, and myself, and that such transfer goes to our individual trusts. Neither my brother, my sister, nor myself have individual trusts. Am I correct in assuming that we each need to scramble to acquire trusts in order to distribute any of the assets from our fathers estate? If so, are there "do-it-yourself trust" kits available online or elsewhere to expedite this process?
Q2. My father owned several vacation timeshares all over the US. My brother, sister, and I consider these to be liabilities and not assets. These properties have some rather hefty maintenance fees, which I have paid out of my own pocket for 2009, and intend to merely rent out to help offset the fees. Can we leave these timeshares in our fathers trust and not distribute them, since nobody wants them?
Q3. My father's trust also contains a bunch of stock and mutual funds, which took a beating over the past several months. Can we leave those instruments in place within our fathers living trust until some future date when the market recovers?
 


Dandy Don

Senior Member
Who is the trustee of the trust? If the trustee is having problems interpreting the provisions of the trust then he/she needs to consult with a local trust attorney.

The stipulation that a transfer be made to individual trusts is problematic and may not be enforceable, but your father may not have known that. Whatever the heirs receive from the trust is theirs to do with whatever they wish and they do NOT have to create a trust or put anything in it if they don't want to.

DANDY DON IN OKLAHOMA ([email protected])
 

TrustUser

Senior Member
well, i cant tell for sure without reading it, but it may be that he wanted to have his trust divided into 3 sub-trusts, for each of his 3 children.

in my opinion, this would have been a very smart thing to do, as it would still protect those assets from your creditors.

it is not at all uncommon that a living trust creates individual trusts/shares for its beneficiaries.

this gives each beneficiary control of his own assets without interfering with the other beneficiaries.
 

Dandy Don

Senior Member
So why didn't he create them? Unless there is a substantial amount of money being inherited, it won't do much good for the heirs to pay an attorney or certified estate planner the fees for setting up a trust.
 

TrustUser

Senior Member
did you read my post ?

what i said is that it is not uncommon for the living trust itself to create the individual sub-trusts.

even if it was not worded correctly, this may have been the intention.

i try to look at the obvious. i have never heard of a living trust that requires a beneficiary to create his own trust. i have heard of a living trust creating subtrusts.

so i simply took the obvious, and suggested that this may have been the intention.
 

TexasTom

Member
Response to questions

Thanks for the feedback. I sincerely appreciate the helpful information. My brother is the designated trustee. I assume that my sister and I are merely heirs rather than trustees. Up until yesterday, I did not possess my own copy of the trust documents, and neither did my brother (executor). Now that he and I have received these documents, it appears that my father's intention was merely to transfer the contents of his living trust to his three children, but the wording indicates that the transfer would be directed into our individual trusts . . . which do not currently exist. I now have to wonder if the language was intended to persuade us to acquire our own trusts, so as to insulate my fathers assets from direct acquisition by our spouses or children. In any event, our father did have a pre-paid estate planning service lined up to help my brother (executor) to manage the trust, but that pre-paid service seems to be less than helpful or competent. Just yesterday that pre-paid service finally got around to telling us that we needed to file a form SS-4 with the IRS to acquire a tax ID numebr for the trust and the estate. I think they should have informed us of this legal requirement weeks ago. In any case, I have volunteered to help my brother as best I could by managing some of the property taxes and timeshare issues. I foresee this adventure taking months to resolve.
 

curb1

Senior Member
The SS-4 to get an ID number is no problem.

Have you completed an accurate accounting of the assets? That is very important and should be done immediately so you will know what liabilities are present. Is the estate positive, or negative financially? Can you get the estate to a liquid position inside the trust, and then distribute?
 

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