Amendment made a mess of Trust. What to do?

[curb1]

I would take a different route, that is only advisable depending on the people involved. My second action would be to "get the ducks in line" with the other beneficiaries and present this as you a laid this out. 1) that there is no chance of this working for her, and 2) this will cost $30-50,000 to litigate with both sides paying, and 3) it will tear the family apart.

Then see what her reaction is.

The first action would be to run this by an experienced attorney to see exactly where you stand legally and tell him/her what you would like to do. If you can avoid going through the whole legal process you will be thousands of dollars saved. If you do go through the process, I promise when you get done you will be saying "the only people who came out ahead in this were the attorneys".

 

[whammo77]

Right so you think your best option is to spend all of the trust's money on attorneys fees.... that is far better than working out a suitable resolution with the person you call a "crook," right? Yeah, right.

Oh no, I think it would be MUCH better to have my sister screw everyone out of everything. And if I thought there were a chance to "reason" with her, you don't think I would have already considered it?

Why is it that in every crowd there is always someone who has something totally stupid and non-helpful to say???

 

[whammo77]

After having thought about this all night, I have come to several conclusions:

1) There is no "negotiating" with my sister. Sad to say, but it is what it is. That's why she tried to hide the trust from me and tried to convince me to give up the position of trustee.
2) I have a trust that is extremely detailed and over 47 pages in depth
3) I have this stupid amendment which replaces only 3 paragraphs of the entire trust, and it is contradictory to everything included therein.

So, as was suggested by OHRoadwarrior, I am going to contact an attorney and see what our choices are. Since the amendment is completely contrary to the entire original intent of the trust, and because it causes so many contradictions and problems, it is going to have to be reviewed by the court no matter what happens (unless all parties agree to dump the amendment). It is clearly above and beyond my own power as the trustee to decide and act upon. So, once the court has reviewed it, some sort of decision will have to be made.... and that will be to either toss all of the other beneficiaries out on their ear, or to scrap the amendment and stay true to the original intent of the trust. So, the court will have to make a decision, and whatever that decision is, it is what I will stick to. Because of an extremely hefty "no contest" clause contained in the trust (which my sister has already pointed out when she was trying to bluff me into giving up the trustee position), I don't really believe this will turn into an all out legal battle. I could be wrong, but I don't think so. She and her husband like their money too much (in my own opinion and estimation) to spend $50k trying to fight the trust knowing that it flat out states that anyone who fights it loses everything and is only allowed $1. The only person allowed under the terms of the trust to question the trust is the trustee; and that is only to the extent of not understanding something and needing the court or some sort of a neutral mediator's clarification.

She had read the trust, and knew what it had in it, and DIDN'T want me to see it. That tells me that she pretty much knew her best, and possibly ONLY chance to come out on top was by getting me to give up the trustee position.

As far as blowing up the family over this.... I don't see that happening either. Divisions among the family happened a very long time ago..... so no matter how this plays out, I don't see much of anything changing.

Now then, there is always the possibility that an attorney will look at this thing and say "she doesn't have a snowball chance in hell", and if that is the case, I may go to her first and see if she wants to back down and accept the amendment as being stricken. I already think she believes that to be the case, and gave it her one last "hurrah" to try and screw everyone out of everything ..... I just don't think she knows that I know it.... But if that is what an attorney states to be the case, then I will approach her and the others and state that and see where she stands. If she backs down and is willing to sign off, then we can avoid the court and all of that mess. Looking at how everything is, I believe that is the best possible scenario. I guess we shall see tho...

And no, the trust does not provide for any beneficiary to dispute the trustee, a court's decision, the trust itself, or anything else at the expense of the trust. It only provides legal fees for the trustee.

 

[whammo77]

I don't know what you define as "a little money," but, if neither side flinches, I can see this enriching several attorneys.

I would hope not. As I have stated, the trust has a very hefty "no contest" clause. The only thing here to argue is the validity of the amendment, which even that they are not allowed to attack from a legal standpoint. The only person allowed to question the trust is the trustee, and in such case a neutral party (if that is sufficient) or the court has to look at the documents and make a determination. And even the trustee is only allowed to question "intent" when it isn't clear, or of course, ask for clarification when there is something in contrast.

Nonetheless, I am not going to play Ahab and destroy the estate to chase down the great white whale. I'm a little more intelligent than that. There IS a cost vs rewards scenario in play here.

But first things first, no matter what, because of the problems the amendment created, the trust is going to HAVE to be looked at by legal eyes. I don't have the legal authority to make the decision on my own. So we shall start there, then weigh out the options as things progress.....

 

[curb1]

Who authored the amendment? Was the amendment professionally prepared? Who authored the trust? Did the same person who authored the trust also author the amendment? Have you had a chance to have a meeting with the author of the trust?

 

[curb1]

What assets are titled with the name of the trust? Real estate? Bank accounts? Or what? Are there any assets outside the trust?

 

[whammo77]

Who authored the amendment? Was the amendment professionally prepared? Who authored the trust? Did the same person who authored the trust also author the amendment? Have you had a chance to have a meeting with the author of the trust?

A gentleman at a lawfirm here in town prepared both the original trust, as well as the amendment. I am thinking he is probably well into his 80's by now. He was well into his years last time I saw him, which had to be at least 10 years ago.

I only found out this past Thursday night that I was still to be the trustee (I had assumed my sister would have had that changed, but much to my surprise she did not). Therefore I have had a chance to speak to no one.

Everything there is to be had is titled in the trust..... cars, real estate, bank accounts, furniture, lawn equipment..... everything.... the only thing I can think of that might exist outside of the trust is one small life insurance policy..... I will have to recheck that to be sure....

 

[curb1]

1) You said, ".... since I know my mother was coerced into making the change". How solid is your knowledge that mother was "coerced"? That will not get you anywhere without some kind of evidence.

2) You need to make an appointment tomorrow with "A gentleman at a law firm here in town prepared both the original trust, as well as the amendment". You need to find out as much as you can about the circumstances for the amendment. You might find out that the amendment was made with the full blessing of mother (or not). You need to know that information. Approach him as the trustee of the trust and not as an adversary of your sister. Tell him you are interested in getting a little help about the trust. Don't be aggressive in your approach so you can let him ramble. Sometimes you can get attorneys to do this because they might be interested in billing time. Be ready to cut him off if he is not leading anywhere of interest. Tell him you are really wondering about the legality of the amendment. Let him assure you that it is "air tight" (or not). You might be able to get a sense of the legal weakness of the amendment from his response.

 

[whammo77]

1) You said, ".... since I know my mother was coerced into making the change". How solid is your knowledge that mother was "coerced"? That will not get you anywhere without some kind of evidence.

2) You need to make an appointment tomorrow with "A gentleman at a law firm here in town prepared both the original trust, as well as the amendment". You need to find out as much as you can about the circumstances for the amendment. You might find out that the amendment was made with the full blessing of mother (or not). You need to know that information. Approach him as the trustee of the trust and not as an adversary of your sister. Tell him you are interested in getting a little help about the trust. Don't be aggressive in your approach so you can let him ramble. Sometimes you can get attorneys to do this because they might be interested in billing time. Be ready to cut him off if he is not leading anywhere of interest. Tell him you are really wondering about the legality of the amendment. Let him assure you that it is "air tight" (or not). You might be able to get a sense of the legal weakness of the amendment from his response.

Oh, my knowledge is 100% solid that my mother was coerced. My sister readily admitted it in front of me, my wife, and my brother. If she hadn't opened her big mouth, all I would have is a firm suspicion. As far as proving it.... well I don't have any notarized paperwork to prove it if that's what you mean.

I know the gentleman's lawfirm is no longer in business. He closed it quite a few years ago... like 8 years ago or so. So it's a matter of whether he is still alive, able to be found, and if he is even still practicing. He had gone to another firm afterwards, if memory serves correctly. But like I say, IF he is still alive, he has to be well into his 80's...... I will see what I can do about locating him tho. If he is still alive and available, hopefully all of his faculties are still in tact. He might prove to be useful. Or, he may prove to be totally worthless. Won't know until I talk with him tho. It's certainly worth a shot!

I appreciate your input. Thanks!

 

[tranquility]

One of the powers he left me as the trustee was the right to exercise good judgment in interpreting the trust, and that whatever decision I am to make thereto is binding and not contestable. My decisions about trust matters are to be final and binding, and no one is allowed to take legal action against me or the trust, less they lose any and all benefits and be left with only ONE dollar. (The language is much more extensive than that, but that's the jist of it).

So my biggest question is, since the amendment makes such a mess of the trust, and since I know my mother was coerced into making the change, is there any way to have it stricken? Or can I simply over rule it "using my best judgement in interpreting the trust", since I believe it would be in the best interest of the original intentions and wishes of my parents, not to mention the fact the amendment makes a total mess of the trust?

I've read the whole thing and am not going to answer in detail. The only answer is to get an attorney to file in court for "clarification" of the trust. Nothing else will work and the OP is at risk no matter what other choice he makes.

There is going to be litigation over this. Period. A no contest provision is not really effective if one of the purported beneficiaries is already written out of the trust. Besides, all states have a way for a potential beneficiary to "clarify" without challenging the trust.

Here's the problem. If the OP goes with the bulk of the trust, sister will sue (With no risk other than cost of an attorney who will probably do it on contingency in hope of a quick settlement anyway.). If there is not a deal, it is certainly worth it to her to go all the way. Intentionally breaching the trust if the court were to find the 3 paragraph provision was valid, could put the OP at personal risk (not just risk to the trust) for fiduciary breach.

If the OP goes with the 3 paragraph provision, the OTHER beneficiaries can do the same thing--sue the OP for intentionally breaching the terms of the bulk of the trust. Putting the OP at personal risk of fiduciary breach. The only benefit of this path is it is the cost/benefit calculation is not as good for a beneficiary who is already getting something, just not as much as they could have.

The OP can't determine the mom made the provision under duress without more litigation. That litigation will have to be started under certain statutes to make sure the OP is not considered to be challenging the trust. It will be a separate cause of action than the clarification litigation.

OP must get an attorney. He will start litigation for clarification of the trust as trustee. The beneficiaries MAY or may not (depending on the facts) ALSO start litigation regarding the potential duress in the creation of the provision. This suit will need a very experienced attorney to make sure it is not seen as a challenge to the trust.

 

[curb1]

1) The problem you have to firm up is to keep this from being a he said/she said situation. You need to firm up the revelation that sister coerced mother. You need to put a date on it and who was there. You need to reconstruct the exact words from sister. Check to see that whoever was there recalls those exact words. Wishy-washy won't work. Expect sister to deny every thing you are saying about the coercion.

2) How many beneficiaries are listed in the trust? Are all of them "on the same page" with you, outside of "sister"? Any input from them?

3) Does the structure of the amendment look correct? Were there any witnesses? Was it notarized and dated? Were the signatures authentic? Was mother mentally stable during construction of the amendment?

 

[curb1]

Another point. When was the amendment signed/created? Was it several years ago? Was there a length of time that your mother had ample chance to rescind the action of the amendment, and didn't? If she was mentally stable during those years (between creating the amendment and death) and chose not to reverse the actions of the amendment it could be argued that she really wasn't "coerced".

Yes, you need to run this by an experienced attorney.

 

[whammo77]

tranquility:

I agree to the bulk of your response. I think you can see that I am pretty much in a catch 22. I am damned if I go with the amendment, and damned if I go with the original; without the court reviewing it and making some sort of a determination.

However, the only error in your statements is that if I go with the amendment, the other beneficiaries will not get less, they will get NOTHING. The funds from which they were to have been paid are now pledged to my sister per the amendment. The amendment failed to address the other beneficiaries, and they are therefore now left out completely.

And that is the problem; I have 47 pages which are clear, precise, detailed, and tell me to go in one specific direction. Then, I have an amendment which consists of 3 paragraphs, only specifically replaces three of the original paragraphs of the trust and nothing else, and is telling me to go in a different direction. So I have 47 pages which completely relate the intentions of the trust, and three paragraphs that only partially contradict it and leave tons of holes, incompletions, etc etc as a result. What a mess**************.

Thanks for your input!

 

[whammo77]

1) The problem you have to firm up is to keep this from being a he said/she said situation. You need to firm up the revelation that sister coerced mother. You need to put a date on it and who was there. You need to reconstruct the exact words from sister. Check to see that whoever was there recalls those exact words. Wishy-washy won't work. Expect sister to deny every thing you are saying about the coercion.

2) How many beneficiaries are listed in the trust? Are all of them "on the same page" with you, outside of "sister"? Any input from them?

3) Does the structure of the amendment look correct? Were there any witnesses? Was it notarized and dated? Were the signatures authentic? Was mother mentally stable during construction of the amendment?

When the initial coersion took place, I am quite sure it was a 1 on 1 situation, with no witnesses. Again, had my sister not admitted doing this (although in my gut I knew she had) there would be no proof at all.

I have not spoken with any of the beneficiaries whatsoever about the problems the amendment has caused. Until I can get some answers, I see no good reason to ruffle a bunch of feathers and make a bad situation worse. I feel that as the trustee, I need to properly research this problem and do my leg-work before involving any of the beneficiaries. Talking to them now, I think, COULD possibly be construed as trying to coerce, build sides, form allegiances, etc etc etc. It's my judgement thast it would be best just to keep things quiet until I can at least get some valid answers (talk to an attny).

The amendment does appear to be correctly done (and by that I mean formatted and what not), and it was signed, witnessed, and is notarized. All signatures look to be correct, and the notary stamp is real. My only concern is that I can tell it was stapled, taken apart, and then re-stapled. This could be completely innocent tho.

My mother was in her early 70's when the amendment was made. While I cannot say she was instable, her memory had gotten to the point that it wasn't the best, and more often than not she called all of us by the wrong name. Much of that dates back to a stroke she had many years before tho, but seemed to get worse as she got older. All that said, I would have to rate her as being more competent than not. But I am by no means a Dr.

And yes, there was enough time for her to have recended the amendment. I'm not completely sure she remembered what it said tho. Without going into details, what she stated to all of us (within the last few months) to be in the amendment is not what was in it at all. And therein lies another problem; even when at her best over the last 15 years, any technical type of documentation had to be read and explained to her (slowly). So if the attny errored in what he put in there, she would have most likely been none the wiser even if she read it. And since she never brought the amendment to any of us (like she would do with all other documents) no one other than the attny (to my knowledge) ever looked at it besides her.

Again, there's so much guesswork at this point.... I am trying to track down the original attny today....

 

[tranquility]

Again, there's so much guesswork at this point.... I am trying to track down the original attny today....

Why? How will his input change anything?

Heck, the only reason I would try to find the attorney is to know where he is in case the facts lead to a malpractice claim.