Distributions of trust, How quick?

[curb1]

Oregon. I am the trustee of my fathers living trust. There are three beneficiaries. Myself, and two brothers. For simplicity, how soon can assets be distributed? All assets are owned outright. The longer the assets are in trust seems to complicate the situation. They are rentals and cash assets. What are the problems with immediate (within a week)distribution upon death? We have been doing all of the asset management and nothing is owed on any asset within the trust and no debts are owed outside the trust. Value $1,000,000.

 

[seniorjudge]

Oregon. I am the trustee of my fathers living trust. There are three beneficiaries. Myself, and two brothers. For simplicity, how soon can assets be distributed? All assets are owned outright. The longer the assets are in trust seems to complicate the situation. They are rentals and cash assets. What are the problems with immediate (within a week)distribution upon death? We have been doing all of the asset management and nothing is owed on any asset within the trust and no debts are owed outside the trust. Value $1,000,000.

You have been posting about this since at least the year 2002.

If this trust is worth a million bucks, can y'all not hire a good trust attorney?

Is the person who made the trust dead?

In any event, the answer to your question is that the trust cannot be distributed until the statutory time for debt payment, etc. has passed; that is usually six months to a year, depending on state law.

 

[curb1]

I have posted something similar about 5 years ago. I posted it again to see if there has been a change of thought or laws, sorry. I believe the information presented five years ago was different than what you just stated. Nothing previously mentioned a "statuatory time limit for debt collection". I was told at that time there wasn't a time frame by law. Yes, the person who wrote the trust has died.

 

[seniorjudge]

I have posted something similar about 5 years ago. I posted it again to see if there has been a change of thought or laws, sorry. I believe the information presented five years ago was different than what you just stated. Nothing previously mentioned a "statuatory time limit for debt collection". I was told at that time there wasn't a time frame by law. Yes, the person who wrote the trust has died.

Then hire a good trust attorney to give you an answer!

 

[curb1]

Senior judge,

The instructions and information which came with the trust stated the following: The principal advantages of a RLT include: (i) avoiding any delay and expense of probate to distribute estate assets.

It should be a simple question, but your answer is different than what I remember. Are you sure of the answer you gave? Does anyone else have an answer?

 

[curb1]

Also, I keep seeing statements such as this concerning revocable living trusts: "At the Grantor’s death, the Successor Trustee automatically takes over, without court order pays any debts, expenses and taxes that are directed to be paid and then distributes the property to the trust beneficiaries."

I have never seen a time limit in relation to, "without court order pays any debts, expenses and taxes that are directed to be paid and then distributes the property to the trust beneficiaries."

 

[seniorjudge]

"One disadvantage of avoiding probate is that with probate, creditors of the deceased have a brief time in which to make a claim against the estate. If there is only a trust, creditors may have a much longer time to assert their claims."

www.osbar.org/_docs/public/lioa/chapter5.pdf

This is why you need a good attorney in your state.

Is this a do-it-yourself trust?

 

[tranquility]

The trustee can distribute as quickly as he wants. The trustee would be stupid to do so, as creditors who file their claims within the statutory time have a right to the money. Not only can they go after the distributions, they can also go after the trustee as he "owned" the estate. That's just normal creditors. The trustee better hope their aren't any tax liens or other tax liabilities sitting out there. The government doesn't even start to look to the beneficiaries until they bleed the trustee dry.

 

[curb1]

tranquility,
That is the answer that I wanted, and I thought was correct. There are no creditors and it wouldn't be a problem if they came after the trustee (that's me). My father owes zero and zero is owed to him. It will be so much easier to have the assets immediately transferred to the three children. Everyone gets along very well. I was thinking I would keep perhaps $20 thousand in the trust (or whatever might be necessary for state taxes) and distribute the rest. I am still open to suggestions. Thank you.

 

[tranquility]

You never know what's out there, believe me. The cost of waiting is an extra tax return, while the benefit can be huge. Most reasonable people look at the calculation and the choice is clear. At the very least, I would do a notification of beneficiaries of trust and wait for the period to challenge the trust to lapse before distribution.

For a million dollar trust, it really seems like an attorney would be worth the cost--even if all you are doing is opening up a relationship where you can ask questions when they come up.

 

[curb1]

Tranquility,
Thank you. I (successor trustee) understand what you are saying. I handle all of the taxes and bills and everything else for my father. There are three beneficiaries (I am one). I speak with the beneficiaries on a daily basis. I agree it would be prudent to run all of this by an attorney when time comes. I just have never seen any timeline for distributions. The same information will be useful for my kids when I die and they unravel my living trust.

Our families last experience with an estate attorney (Arizona) handling my uncle's living trust was a financial nightmare. He was supposed to be good and perhaps he was, but he charged over $30,000 just to distribute the assets of a living trust that he set up for my uncle. There weren't any complications and all beneficiaries were in agreement. I guess that is why I would like to be as knowledgeable as possible before hiring an attorney.