Issues with an amendment to a Revocable living trust, grantor deceased

[lavender100]

What is the name of your state (only U.S. law)? Michigan

I am co-successor trustee on my mother's grantor's trust. Mom has passed. She had an amendment to the trust that one of the beneficiaries amount would be reduced by 30,000.00. What happens if we do not honor the amendment? and split the proceeds equally between the beneficiaries? Can the trustee's be sued? Who would pay legal fees? Can the trustees be personal responsible and all trustees assets could be at risk? or just the amount of the fudiciary responsibility amount of the 30,000.00? Any information would be helpful and beneficial to how we proceed with the trust.

 

[tranquility]

If the grantor is deceased, I suspect we'd now call the formerly revocable living trust an irrevocable trust.

But, do you have a question?

 

[curb1]

This is not an insurmountable problem/situation. Are all beneficiaries willing to go along with what you suggest?

 

[tranquility]

What happens if we do not honor the amendment?

If a valid amendment, it is a part of the trust. A trustee (co-trustees would both be liable) who intentionally violated the terms of the trust can be subject to civil and criminal penalties. If they personally benefited, criminal penalties are far more likely and there could be a multiplication to any damages civilly more likely too.

and split the proceeds equally between the beneficiaries?

No difference. If either of the co-trustees get more then they would have gotten if the amount was properly distributed, criminal and multiplication of penalties are more likely.

Can the trustee's be sued?

Of course. They'd lose too.

Who would pay legal fees?

The trust, until the trustee lost, then the trustee will be ordered to repay the trust. That is over an above any damages to the beneficiary.

Can the trustees be personal responsible and all trustees assets could be at risk?

All trustees are....trustees...to the trust and would be responsible. The courts often allocate responsibility after the fact to the one(s) who took the actions prohibited.

or just the amount of the fudiciary responsibility amount of the 30,000.00?

Civilly, attorney fees of both sides and a trebble damages may be appropriate. (AKA $90,000) Criminally? Add in attorney fees and restitution. I believe that if they go criminal, the elements would lead to a felony conviction.

Any information would be helpful and beneficial to how we proceed with the trust.

Follow the terms of the trust. This is not a game. And, unless the one who was to receive the money disclaims it, there are also tax issues involved. (The trust wording will govern the distribution of any disclaimed amount.)

Get an attorney and run this scheme by him first. Stealing is bad, m'kay. Stealing from the dead is bad too. Why don't you want to do as your poor deceased mother wanted? She did TRUST you after all.

 

[lavender100]

If a valid amendment, it is a part of the trust. A trustee (co-trustees would both be liable) who intentionally violated the terms of the trust can be subject to civil and criminal penalties. If they personally benefited, criminal penalties are far more likely and there could be a multiplication to any damages civilly more likely too.
No difference. If either of the co-trustees get more then they would have gotten if the amount was properly distributed, criminal and multiplication of penalties are more likely.
Of course. They'd lose too.
The trust, until the trustee lost, then the trustee will be ordered to repay the trust. That is over an above any damages to the beneficiary.
All trustees are....trustees...to the trust and would be responsible. The courts often allocate responsibility after the fact to the one(s) who took the actions prohibited.
Civilly, attorney fees of both sides and a trebble damages may be appropriate. (AKA $90,000) Criminally? Add in attorney fees and restitution. I believe that if they go criminal, the elements would lead to a felony conviction.


Follow the terms of the trust. This is not a game. And, unless the one who was to receive the money disclaims it, there are also tax issues involved. (The trust wording will govern the distribution of any disclaimed amount.)

Get an attorney and run this scheme by him first. Stealing is bad, m'kay. Stealing from the dead is bad too. Why don't you want to do as your poor deceased mother wanted? She did TRUST you after all.

Thank you for your response. My mother did trust me that is why she chose me as the trustee. I am at odds with the other trustee as how to proceed. This information will certainly help in explaining why we need to follow the trust to the tee.

 

[TrustUser]

This is not an insurmountable problem/situation. Are all beneficiaries willing to go along with what you suggest?

it doesnt matter whether the beneficiaries are willing to go along with it or not.

the trustee had better live up to the instructions of the trust.

what the beneficiaries do with their assets once in their possession is their business.

 

[lavender100]

it doesnt matter whether the beneficiaries are willing to go along with it or not.

the trustee had better live up to the instructions of the trust.

what the beneficiaries do with their assets once in their possession is their business.

Thank you for your response

 

[curb1]

No, all of you are hung up on technicalities. Follow the dictates of the trust and distribute just as the trust says. As soon as the trust is closed/distributed, then the beneficiaries can settle up any way they wish (give the other beneficiary the $30,000, or whatever). This situation is not a problem, so don't make it something that it is not. This is an easy no-brainer solution.