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FL: Calm before the storm

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onecaribou

Junior Member
What is the name of your state?Florida

My grandmother has recently become seriously ill and my family does not anticipate her living more than a few months. We have been told by my father that her estate is valued at over $4 million dollars (including her home) and that he has read her Will and the funds will be placed in a 'skip generational' trust upon her passing with my father and uncle receiving the income generated by the trust and my 2 siblings and I receiving the principal upon their passing.

My uncle has made it quite clear that he intends to fight the establishment of the trust to get a larger share of the estate, as he has no children to inherit part of the principal. What sort of challenges to the Will should we anticipate? My grandmother has selected her bank to work as trustee and executor. Will they defend the trust if my uncle sues? My grandmother has been of sound mind until very recently (and hasn't changed her Will since my grandfather passed a few years ago) - On what grounds could my uncle possibly sue on assuming her attorneys did a good job in crafting her Will and the Trust documents?

My uncle has also recently been discussing dissolving the trust with my sister and brother trying to win their support for an immediate distribution of the funds. My father is generally opposed to this because of the estate taxes associated with dissolving it. I'm not sure what to think.. Can getting all the heirs to agree to its dissolution dissolve a trust? Are my fathers concerns about estate taxes warranted? Will the trustee/bank allow the dissolution at all? Even if we all (miraculously) agree to dissolve it?

What are the distribution formulas that might be followed if the trust is broken and divided amongst the 2 children and 3 grandchildren?

As the eldest grandchild and the one closest to my grandmother I am really sickened by all the talk of trusts, and estates but I want to be ready to make informed decisions when the time comes. Thanks, in advance for your time and assistance.
 


Dandy Don

Senior Member
Beneficiaries CAN NOT dissolve a trust--instructions for dissolution are written into the trust or will dissolve after the distribution to beneficiaries has been made. If she is putting all of her assets into the trust, a will is not needed--distributing a trust and probating a will are 2 separate matters.

Your uncle has shown himself to be a greedy person, and someone needs to inform grandmother about his actions so that she can make a decision whether to reduce the amount she wants to leave to him or cut him off entirely. He must accept whatever amount he has been left and has no right to discuss dissolution with the beneficiaries or anyone else--if he is so concerned, why won't he discuss this with grandmother? His greed might screw up things for the other beneficiaries--if he decides to contest it is possible that lawyer fees for the trustee (to defend) could be taken from the trust, thus reducing amount left for beneficiaries.

If father has not seen the trust document and associated financial information, his opinion about estate taxes should be regarded as just that: only an opinion, although he may be correct. Only a CPA or tax accountant could determine that aspect.

She should also have her attorney place an ironclad clause in the trust disinheriting anyone who contests, and it would be even smarter for her to create a separate trust for each beneficiary that would automatically prevent/preclude any other unhappy beneficiary from contesting, since information about each trust would be private that no other beneficiary would have access to. Uncle would have no legal grounds to contest but might do it anyway just out of spite if he is unhappy with whatever amount he has been left with.

Hope grandma is using professionals (attorney and accountant) to get her trust documents and associated tax liability figured out.

DANDY DON IN OKLAHOMA ([email protected])
 
S

seniorjudge

Guest
onecaribou said:
What is the name of your state?Florida

My grandmother has recently become seriously ill and my family does not anticipate her living more than a few months. We have been told by my father that her estate is valued at over $4 million dollars (including her home) and that he has read her Will and the funds will be placed in a 'skip generational' trust upon her passing with my father and uncle receiving the income generated by the trust and my 2 siblings and I receiving the principal upon their passing.

My uncle has made it quite clear that he intends to fight the establishment of the trust to get a larger share of the estate, as he has no children to inherit part of the principal. What sort of challenges to the Will should we anticipate? My grandmother has selected her bank to work as trustee and executor. Will they defend the trust if my uncle sues? My grandmother has been of sound mind until very recently (and hasn't changed her Will since my grandfather passed a few years ago) - On what grounds could my uncle possibly sue on assuming her attorneys did a good job in crafting her Will and the Trust documents?

My uncle has also recently been discussing dissolving the trust with my sister and brother trying to win their support for an immediate distribution of the funds. My father is generally opposed to this because of the estate taxes associated with dissolving it. I'm not sure what to think.. Can getting all the heirs to agree to its dissolution dissolve a trust? Are my fathers concerns about estate taxes warranted? Will the trustee/bank allow the dissolution at all? Even if we all (miraculously) agree to dissolve it?

What are the distribution formulas that might be followed if the trust is broken and divided amongst the 2 children and 3 grandchildren?

As the eldest grandchild and the one closest to my grandmother I am really sickened by all the talk of trusts, and estates but I want to be ready to make informed decisions when the time comes. Thanks, in advance for your time and assistance.
I am assuming grandma is no longer competent: "...My grandmother has been of sound mind until very recently...."

Thus, have your dad look in the will to see if there is an in terrorem clause:

In Terrorem Clause Law and Legal Definition

In terrorem is a Latin term meaning "in fear". An in terrorem clause is a provision in a will which threatens that if anyone challenges the legality of the will or any part of it, then that person will be cut off or given only a dollar, instead of getting the full gift provided in the will. The clause is intended to deter beneficiaries from contesting the will after the maker of the will dies. However, if the will is challenged and found to be invalid (due to lack of mental capacity, undue influence or failure to have it properly executed), then such a clause is also invalid. Therefore, a person seeking to challenge the will gambles on their chances of receiving the claim sought. Putting in a claim for moneys due from an estate is not a legal challenge to the will itself and is permissible without forfeiting the gift.


http://www.uslegalforms.com/lawdigest/legal-definitions.php/US/US-IN_TERROREM_CLAUSE.htm


If there is such a clause and bad uncle contests the will, then there will be no money for him and lots more money for everyone else.

Needless to say, NOW is the time to hire a lawyer.

Step away from the computer and go do it now.
 

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