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Dissolving a Trust

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JM1863

Junior Member
What is the name of your state (I'm in TX, Trust is in MS).

Background info: My grandmother wrote her will so that when she passed, a trust would be set up for my mom, me, and my sister. During probate, the lawyer had the trust set up at a bank in Mississippi. My family and I live in Texas. The fund was set up to provide for mine and my sister's educations and my mother's retirement.

Our original trust fund officer is retiring soon, so the trust has been moved to a new officer. This woman is driving my family nuts. We were never notified about the change in officers (she claims that he hasn't officially retired yet, that's why we haven't gotten notification, yet, he isn't involved in the trust anymore) nor were we kept informed about the trust's activity.

Since the trust's inception, the trust has lost almost $82,000 due to poor investment choices. I know the market's down, but if my mom's tiny little investment fund can make money with Fidelity, shouldn't these people at least be able to break even???

Also, this woman has made it almost freaking impossible to get any money out of the fund. When I wanted to pay off my student loans, she refused to let the money pass through my hands at all. She insisted on writing the check to the government herself in one lump sum. And now, she has to decide if she's going to reimburse us for money spent on school supplies. (I provided her copies of the receipts from the bookstore and she's still being wishy-washy about it.)

The fees she has been charging us are freaking ridiculous and she almost refuses to explain what they're for. My mother has asked multiple times for a balance sheet of the trust fund's activity and they just keep giving her BS and percentages. Seriously, how hard is it just to write down all the numbers for each transaction the trust has been through?

Anyways...the point of all this is that we (all the beneficiaries) have decided that we want to dissolve the trust, or at least move it to Texas and get a new trustee. My question is, how do we go about doing one or the other?

Thanks for any help or suggestions, and also for letting me vent.
 


tranquility

Senior Member
You either have to have a court determine the trust should be fully distributed or that the trustee has breached her fiduciary duties.

To do ether, you really need an attorney.
 

Kiawah

Senior Member
Trust document

And get a copy of the trust document, and read it very carefully. It should call out how trustee succession occurs, and what/who might trigger a succession.
 

JM1863

Junior Member
Thanks. :) I asked her to send me the trust document 4 days ago and she hasn't gotten back to me. (Although, in all fairness, it's only been 1 business day.)

Does the court have to be involved if we change the trustee? Also, is it going to be an issue that we might not be able to go to the hearing (if there is one) since it's in another state?
 

TrustUser

Senior Member
as kiawah stated, the trust should explain what is involved, regarding changing the trustee.

a court should never be needed.

but check to see what the trust says. hopefully the beneficiary has the final say.

although i suspect you might find the current trustee unwilling to send you the document.

hopefully one of you 3 can become the new trustee, if that is agreeable to you 3.

it would not surprise me if you need to make a trip to mississippi in order to take charge.
 

JM1863

Junior Member
That would be great if my mom could be the trustee, but that might end up being a lot of work for her. I feel like it might be easiest if she could just make it all into CD's, but if she could be trustee, I'd be ok with that.

And I SOOOO don't want to go to Mississippi. I really hope that doesn't become necessary.
 

TrustUser

Senior Member
those are 2 separate issues - 1)who is the trustee 2)what you invest in.

i suspect that having your mom be trustee would work well. you and your sister could help out.

you can certainly place all your funds in cds, or tbills, if so desired.

if you are using banks or credit unions, do it locally.

even though you dont want to, a trip to mississippi may be better sooner than later - if you want anything left in your trust account.

it is very common that one of the beneficiaries of a trust is also the trustee. so unless the document specifically does not allow this (doubtful), i see no reason why you 3 can not take over trusteeship.
 

JM1863

Junior Member
Ok, so I heard back from the trust officer. The only document involved giving any direction is apparently my grandma's will. Here's what the document says (summary of each number):

1. Exercise powers listed in MS code 91-9-107
2. This is a private trust and hereunder shall not be required to ...account to any court or obtain court approval in the exercise of any power.
3. In addition to these powers, the following ones:
4. To manage and handle all of the property as it seems best *Here's the part I find to be most relevant* to be used by it to assist my daughter in maintaining the standard of living she and her children enjoy at the time of my death. My chief concern is for the assistance, support, and comfort of my daughter and the education of my said grandchildren rather than the preservation of principal for distribution upon termination of the trust herein created. The judgement and discretion of my said trustee as to the making of such payments shall be final <-The sucky part... :(
5. To sell part of the trust
6. To retain and invest and reinvest the trust property (Which it's doing very poorly)
7. To expend whole or part of the trust for the education and comfortable support of the said beneficiaries as it's discretion seems best.
8. May help one beneficiary more than another
9. To do what is necessary for the proper handling and management of trust property or if in the best interest of the estate or beneficiaries to sell any or part of the trust.
10. None of the trust shall be liable for the debts of the beneficiaries hereunder, nor shall the same be subject to seizure by any creditor of beneficiaries. (Does this mean I can't use the trust to pay off my credit cards?)
11. If Trustee at any time resigns or is unable to act, another Trustee shall be appointed by the court which administered my estate and the successor Trustee shall administer the trust under the supervision of said court. ---Does this mean we can get a new Trustee in Texas?

And the rest isn't relevant. So...new questions: Does it sound like my mom has the right to ask for money whenever she needs it? Can we get a Trustee in Texas?

Frick...I wish the lawyer would get back to us...
 

Zigner

Senior Member, Non-Attorney
Looks like you folks need to be headed back to court...to the same court that probated the will.
 

curb1

Senior Member
You should not settle for anything less than a trustee of your choice. What is the value of the trust?

You said, "When I wanted to pay off my student loans, she refused to let the money pass through my hands at all. She insisted on writing the check to the government herself in one lump sum". There was nothing wrong with that action.

Call the attorney who set up the trust and explain your concerns.
 

tranquility

Senior Member
Shouldn't settle for anything less than the trustee of choice? Hopefully the beneficiary has the final say?

I tear my hair out at the answers sometimes. Especially from how the trust seems to have been worded, the grandmother didn't want unfettered discretion in the hands of the beneficiaries. Perhaps it was because she didn't want a present gift in lifetime--preventing a step-up in basis. Perhaps she didn't want creditors to be able to go after the entire corpus of the trust. Perhaps she didn't trust the beneficiaries' sophistication or ability to delay gratification or maybe any one of a number of things. The point is we have a legal owner who should be doing things according to the terms of the trust. Because of the way the term trust fund officer is used (and, a new one substituted in), I bet the trustee is an institution and not a person.

The OP is not going to pry out the trust from the institution's fee-soaked portfolio unless they can prove to a court that:
the trust should be fully distributed or that the trustee has breached her fiduciary duties
And, since the trustee has every incentive to keep their nifty fees and can use trust funds for defense to the action, the OP and his family:
really need an attorney
But, then, I already said that.
 

TrustUser

Senior Member
an excellent example of why you should set up a trust instead of having a will do it.

and i stick by what i said - "hopefully the beneficiaries have the final say".

so pull out some more hair.
 

tranquility

Senior Member
It just goes to show how you don't consider the ramifications of all the issues in trust law and why you so often take a person down the wrong path with your responses. Stick by all you want, but, once again you've shown a basic misunderstanding of trust law and how it works when the intent is anything more than passing property to heirs without probate.
 

TrustUser

Senior Member
just like your dumb comment about an irrevocable trust not needing to file a 1041. you kept arguing about it, without ever giving your opinion of what it does.

i know for a fact, that this is what they do. you may be able to quote an exception, but that is all.

and yet you went on and on, like you had some magic arrogant answer that you were too smart to let everyone else know.

you behave like the typical stereotype lawyer that everyone loves to hate.

you wont get any respect from me until you start showing that you deserve it. so stick with all your lawyer friends on the site.

you dont intimidate me in even the slightest of inklings.
 

TrustUser

Senior Member
it was kiawah and myself (not you), who suggested that she get a copy of the trust document, so she could see what it actually stated.

when she followed our advice, because we understood the ramifications of trust law, is when the new information came into play.

you, like a typical lawyer, just told her to see an attorney.

OUR ADVICE at least got her started in the right direction.

so next time, try to follow the ramifications of trust law, and tell someone to read the trust document, because that is the bible for their trust.

you wanna put some more boxing gloves on ? come on at me. i will hit back twice as hard, and twice as often.

you have met your match and more.
 

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