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Changing Trustee on portion of Trust assets

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stillfat

Junior Member
What is the name of your state (only U.S. law)? Colorado is our state of residence but the Trust was signed in California.

Mother had trust and passed away in 2009. Trust assigned daughter (also co-beneficiary with brother - only children) as successor trustee. There are educational funds to be used liberally for 3 grandchildren (and remainder given to each upon age of 30). Two grandsons are sons of the brother. Four years after the mother's death, brother has asked to have functional control of the education assets of his own children. Sister contends it is too complicated to change the functional control to brother. Is that true? Is there a form that can be filled out removing sister as trustee of those educational funds which benefit his sons? Sister lives in TX and brother lives in CO.
Thank you.
 


stillfat

Junior Member
Son is named as successor trustee after her....presumably she should be able to relinquish those assets to his control.
 

curb1

Senior Member
Are the "educational benefits" equally divided at this time? Or, is it "first come, first serve" for the grandchildren?
 

TrustUser

Senior Member
most well-written trusts would allow for a trustee to appoint another trustee to manage particular assets.

this is not an uncommon situation.

perhaps one person has more experience in managing real estate, etc.

but as main trustee, the sister would at least need to feel that her brother had intentions of carrying out the trust instructions.

sometimes, parents may plan to use the money in other ways - that would certainly be a concern of mine, if i was the trustee.

i think a compromise that i might suggest (if i was the trustee) - is to dole out some amount annually to the brother, and then see how it goes. that way the brother can deal with things locally on a day to day basis. but he cant get his hands on the entire pot at any one time.
 

stillfat

Junior Member
No agreement. She has it in a bank account and has moved it around to receive better interest rates.

With regard to experience in managing funds - son's wife works for a financial planner so he has experienced advisors if he should need them. Sister worked as a financial planner but her business failed! One grandson was already in college when mother passed and the other was entering that fall. So they were on a path for their educational future. From things she has said, it is a total control issue. It hasn't strengthened the family ties at all (if that was the goal from the mother)...it has all but disintegrated ties.
 

anteater

Senior Member
No agreement. She has it in a bank account and has moved it around to receive better interest rates.

With regard to experience in managing funds - son's wife works for a financial planner so he has experienced advisors if he should need them. Sister worked as a financial planner but her business failed! One grandson was already in college when mother passed and the other was entering that fall. So they were on a path for their educational future. From things she has said, it is a total control issue. It hasn't strengthened the family ties at all (if that was the goal from the mother)...it has all but disintegrated ties.
With one of the "education beneficiaries" in college and one entering, offhand I would say that her decision to keep the funds safe is a good and defensible action. If the funds were likely to be expended 10 or 15 years in the future, some allocation to fixed income and equities would be justified. But, without further information, I see nothing wrong in the way the funds have been managed.

The son can certainly involve the courts in this in order to get his way. But, if the sister decides to defend herself, she would likely be entitled to use trust funds for legal representation.
 

stillfat

Junior Member
In August she sent a letter with regard to things to complete before closing out the corpus of the trust (leaving only the education funds), stating she was considering given brother control of his sons' education funds. That is the reason son requested. She opened the door but when he shows interest and asks for the chance to have functional control, she changes her mind. We believe she has some kind of cognitive issue. Now she is saying to be able to give son control would require formal legal documentation. Couldn't some documentation be drawn up that would separate son's sons assets from daughter's son's assets and give son control?
 

I'mTheFather

Senior Member
In August she sent a letter with regard to things to complete before closing out the corpus of the trust (leaving only the education funds), stating she was considering given brother control of his sons' education funds. That is the reason son requested. She opened the door but when he shows interest and asks for the chance to have functional control, she changes her mind. We believe she has some kind of cognitive issue. Now she is saying to be able to give son control would require formal legal documentation. Couldn't some documentation be drawn up that would separate son's sons assets from daughter's son's assets and give son control?
There certainly are some control issues at play here, but I don't attribute them to the sister.

The sister didn't change her mind. She said she was 'considering'. She stopped considering. You've already received your answer with regard to the documentation.

I wonder who you are in all this???
 

anteater

Senior Member
Now she is saying to be able to give son control would require formal legal documentation. Couldn't some documentation be drawn up that would separate son's sons assets from daughter's son's assets and give son control?
Unless the trust specifically prohibits, I'm sure that it could be done. If I were the sister, I would want every sort of CYA possible.

What happens with any funds that are not used for education expenses?

Quite frankly, I don't understand what the son wants to accomplish. Given that his sons apparently are already attending college, I have no idea what his wife's financial planning firm brings to the table. If the firm suggests anything other than keeping the funds in CD's, savings accounts, and/or a money market fund, I would be running from them.
 
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tranquility

Senior Member
The trustee is the trustee. If more than one, both are responsible for trust actions. I know of no way to have another person be in charge of a portion of the trusts assets. Now, the trustee can delegate the power to another, but will always hold the responsibility.
 

stillfat

Junior Member
Any funds not used for education, go to the grandchildren at age 30.

The financial planning firm wouldn't do anything but offer advice. They have agreed that the best place for the assets is in money markets or CDs.

With regard to "control issues," she has said straight out "I'm in total control." Perhaps some history -- set aside money from mother to son was held back and paid in chunks after sister said she could write a check, right here and now, while family was together at the memorial. Then decided that if brother didn't do what she wanted, she could pay it out in increments. She definitely has control issues.
 

LdiJ

Senior Member
The trustee is the trustee. If more than one, both are responsible for trust actions. I know of no way to have another person be in charge of a portion of the trusts assets. Now, the trustee can delegate the power to another, but will always hold the responsibility.
And, with that responsibility, is accountable to the beneficiaries as to how the funds are used. Her brother is not the beneficiary of the educational portion of the funds, his sons are. Therefore she is responsible to ensure the safety of the funds, to ensure that they are used for their education, and to ensure that any unused funds are distributed to them at age thirty.

That's a responsibility that I would take very seriously. Therefore I agree that keeping them safe and liquid is the better way at this stage of the game.
 

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