Living Trust Question

What is the name of your state (only U.S. law)? California
My parents have a living trust and in their trust they have their assets to be divided equally amongst their 5 daughters and if a daughter passes away then her inheritance will go to her children. My mother passed away 6 years ago. One of our sisters passed away in 2008. The remaining sisters asked our father if he would change the trust so that the remaining sisters would inherit the assets and our children would get our inheritance when we pass away. My father said he thinks his daughters should split everything equally. We called our lawyer and he said when they did their trust it was set up so that if one or the other passes then the trust can't be changed by the living spouse by adding a new spouse to the trust so it cannot be taken from the children. Our lawyer said that my mothers 1/2 could not be changed but my father could sign a "Power of Appointment" where my father's 1/2 would be divided amongst the remaining daughters, however, my mothers 1/2 would still be divided amongst the remaining daughters and the deceased mothers children. Can anyone tell me if this can be changed or not.

You said, "our children would get our inheritance when we pass away." That is an easy one. Each of the remaining sisters can pass their inheritance to whomever they wish, regardless of the trust.

You said, "One of our sisters passed away in 2008. The remaining sisters asked our father if he would change the trust so that the remaining sisters would inherit the assets." Why would you ask for that change? Did the sister who passed away have children?

We realize that we would have our own trusts and our children would inherit our assets.
We wanted the change so my fathers assets would be split between his daughters only, not the grandchildren. Yes our deceased sister has a son, whom would inherit my sister and brother-in-laws assets.
We just wanted to know if our father can make the change to his trust so his assets would be split between his daughters not the grandchildren.

Be careful what you ask for and the logic used in setting up the distribution of assets. It is possible that you could pre-decease your father, and in that case your portion of your fathers estate would go to the then alive sisters, as opposed to having your portion going to your children.

He can set up the language anyway he wants, but nobody ever really knows who will die first or last, so the trust language needs to take all possible scenarios into consideration.

is there animosity about any of the grandchildren ?

what i might suggest is the following :

keep the assets in trust after your father passes. the income or benefits derived from those assets would be shared evenly amongst all the living children.

when all the children have died, then the trust assets can be either given away to the grandchildren, or kept in trust for the grandchildren.

these grandchildren can be all given equal treatment, irregardless of parent, or each parent could stipulate who is to receive the benefit of their share when the time comes.

There is no animosity amongst the grandchildren whatsoever. Our father is 90 and we are in our late 40's early 50's and with the economy today we as the older adults feel we could use the money more than our 20's year old children. Plus each of us have trusts for our children to inherit. The husband of our deceased sister is very well off and will also get a great inheritance.
We just want to know if our father can change his trust. According to his lawyer only his 1/2 can be changed and our mother's 1/2 will be split amongst the remaining 4 children and the 5th deceased sisters son.

And what happens if the heir you are cutting out sues the rest of you?

hi bjr,

it sounds like the trust was an a/b trust, such that one portion was allocated to your mom, when she died, and the other portion to your dad.

your mom's portion would be doled out per the instructions at the time of her passing.

your father can give his assets to anyone he chooses.

your father can also create a brand new trust document with him as sole trustor, and then re-title all his assets in that trust, so as to save any confusion.

seniorjudge said:

And what happens if the heir you are cutting out sues the rest of you?

Click to expand...

Well said, sir!

What does Dad say about this?

Thank you for the advice TrustUser. I appreciate it.