Revoccable Trust Beneficiary

[A49er]

This is a question pertaining to a Trust in California.

My mother is named in her step fathers trust as a beneficiary and has had some issues. Her sister is the trustee/executor and they do not get a long!

She was notified of the trust via u.s. post 2 weeks after her step fathers death.

It has been 8 months and 3 weeks ago she heard through the grape vine that the house went through escrow. Since it went through escrow and it was the last thing to be dealt with my mom called her sister to get a status update.

Now she got an update on the phone and she is now waiting for a check and final accounting.

There are a few problems though...

Should the trustee have given her some sort of update over the past 8 months? The only reason the check is being sent is because she called about it.

The other problem is that the cash on hand (in the bank), life insurance and stocks and other things to do with a pension from the state were not included in the trust. There was a claus 1.5 that says these sort oft hings MAY be added to the trust and she/we thought that is the trigger to add it to the trust. With some research I found out abut a thing called a pourover will that adds all such assets to the trust upon death. There was however, no such will.

With that said and done, I did a little more research and found out that if those assets were not in fact in the trust then they must go through probate and the state will decide how the assets are to be distributed.

So now my mother is just waiting to see if she gets any real final accounting with the check from the house sale, which is doubtful.

There were in fact other assets and the trustee says there were none.

I guess the question is how can the trustee take all those assets for her self and not add them to the trust? Seems quite illegal to me.

We will be getting a lawyer at some point in the next couple weeks but I am curious about this now.

Please let me know if you have any insight!

Thank you in advance!

James

 

[anteater]

Should the trustee have given her some sort of update over the past 8 months? The only reason the check is being sent is because she called about it.

I am not seeing anything terribly suspicious or wrong here. Eight months is not a particularly long time to administer a trust that contains real estate that is to be sold. And the trustee seems to have complied with the statutory notification requirements. While it would be nice for the trustee to send brief updates, the trustee is only obligated to provide certain information at certain intervals. The CA statute is here:

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=prob&group=16001-17000&file=16060-16069

The general provision is:

16060. The trustee has a duty to keep the beneficiaries of the
trust reasonably informed of the trust and its administration.

From what you say, it seems to me that the trustee has met that standard.

The other problem is that the cash on hand (in the bank), life insurance and stocks and other things to do with a pension from the state were not included in the trust. There was a claus 1.5 that says these sort oft hings MAY be added to the trust and she/we thought that is the trigger to add it to the trust. With some research I found out abut a thing called a pourover will that adds all such assets to the trust upon death. There was however, no such will.

With that said and done, I did a little more research and found out that if those assets were not in fact in the trust then they must go through probate and the state will decide how the assets are to be distributed.

A couple things:

1) It is possible that some or all of the assets you mention had designated beneficiaries, especially the life insurance and whatever might come from the pension. Assets with designated beneficiaries would not be subject to the trust's provisions or probate/intestate succession.

2) While that provision in the trust states that other assets may be added, the trustee has no authority to simply add assets to the trust. Without a pourover will directing distribution to the trust through a probate action, the only means to get those assets into the trust would be through a legal action asserting that the stepfather really intended the assets to be part of the trust, but, for one reason or another, failed to add them - what in California is known as a "Heggstad petition." However, you don't provide any basis for believing that such a petition would be granted.

3) If the assets are not part of the trust (and assuming that a Heggstad petition would not get the assets into the trust) and without a will, then the assets would be subject to probate and distribution under intestate succession. The problem for your Mother is that stepchildren generally do not stand to inherit under intestacy. With a rather narrow exception:

6454. For the purpose of determining intestate succession by a
person or the person's issue from or through a foster parent or
stepparent, the relationship of parent and child exists between that
person and the person's foster parent or stepparent if both of the
following requirements are satisfied:
(a) The relationship began during the person's minority and
continued throughout the joint lifetimes of the person and the person'
s foster parent or stepparent.
(b) It is established by clear and convincing evidence that the
foster parent or stepparent would have adopted the person but for a
legal barrier.

You could try contacting the Superior Court of the county in which stepfather resided to try to determine if a probate case has been opened.

 

[A49er]

Thanks for the reply...

Thanks for the reply!

My mother and all the beneficiaries are step children. He had no children of his own.

I can see if each of the other assets were assigned their own beneficiary then they would be omitted from the trust. Her dad however, told her that she was in for a portion of it all. Then the trust did not list the other assets.

My mothers sister is the executor/trustee and a beneficiary. She said there was no money in the bank to be split. My mom however was very close to her step dad and knows better. So she was lied to about that which makes us suspicious among other things.

I just read about the The Heggstad case and he had the house on the trust but failed to transfer it. The fact that it was listed on the trust proves intent for it to be there.

In my moms case, her fathers intent was for her to be part of it all but it is not listed on the trust. There is really no written proof of his intent so I assume the The Heggstad petition would fail?

My moms step dad said that her sister would have to work to put everything into the trust. That didn't happen! With that said and done, how can his intent be proven?

It looks like we need to find out if each of the other assets had their own beneficiaries assigned to them. Is there a way to research assets of a family member who died and see who the beneficiary was? My mom was without a doubt supposed to be in for her percentage of the whole pot.

Thank you for your time!

 

[A49er]

tangible items

There was also a car and other tangible items that WERE listed in the trust. The other beneficiaries who were on the scene took everything from the house and the car even though the trust specifies they are to be added with a bill of sale. They were not supposed to just take everything for themselves.

There seem to be many things wrong with this in my eyes and I want to help my mom. I want to gather as many facts on my own before taking further action.

Thanks again!

 

[justalayman]

I just read about the The Heggstad case and he had the house on the trust but failed to transfer it. The fact that it was listed on the trust proves intent for it to be there.

if the house was listed in the trust assets but it was not transferred, that listing is written proof of the intent, at least enough to argue intent.

In my moms case, her fathers intent was for her to be part of it all but it is not listed on the trust. There is really no written proof of his intent so I assume the The Heggstad petition would fail?

not sure what you mean here. You believe it was the intent for her to be part of all of what?

Either she is a beneficiary of the trust or she isn't. Either she was a legatee or divisee of the will or she wasn't. Intent does not allow one to be inserted into a beneficial position like a Heggstad petition does with funding a trust.

There were in fact other assets and the trustee says there were none.

other assets that were to be where? Was your mother gifted anything in the will (if there was a will)? If not, then she would be entitled to whatever the terms of the trust say she gets. Was she given a copy of the trust? If not, then I would suggest she do so. Once she knows what was hers under the terms of the trust, then she can argue about whether she got it or not.

I can see if each of the other assets were assigned their own beneficiary then they would be omitted from the trust. Her dad however, told her that she was in for a portion of it all. Then the trust did not list the other assets.

if these other assets were not put into the trust, then they are dealt with through probate. If there was a will, then that directs the distribution. If not, the laws of intestate succession direct the distribution. So, was there a will? Was your mother named in the will? If so, she was to be given what?

I guess the question is how can the trustee take all those assets for her self and not add them to the trust? Seems quite illegal to me.

Unless the assets were listed as trust assets or there was a pour over will directing them to be placed in the trust at the death of the testator, then that is how they are not added to the trust and it is completely legal. So, these additional assets you are speaking of; were they listed as a trust asset? If not, were they directed via a will to be placed in the trust at the testator's death?

If neither apply, that is how she could not add them to the trust legally.

 

[curb1]

Sister said, "She said there was no money in the bank to be split".

If sister's name was included on the bank accounts the money could have been distributed directly to her, depending on how accounts were titled, after step father's death.

 

[A49er]

if the house was listed in the trust assets but it was not transferred, that listing is written proof of the intent, at least enough to argue intent.

not sure what you mean here. You believe it was the intent for her to be part of all of what?

Either she is a beneficiary of the trust or she isn't. Either she was a legatee or divisee of the will or she wasn't. Intent does not allow one to be inserted into a beneficial position like a Heggstad petition does with funding a trust.


other assets that were to be where? Was your mother gifted anything in the will (if there was a will)? If not, then she would be entitled to whatever the terms of the trust say she gets. Was she given a copy of the trust? If not, then I would suggest she do so. Once she knows what was hers under the terms of the trust, then she can argue about whether she got it or not.


if these other assets were not put into the trust, then they are dealt with through probate. If there was a will, then that directs the distribution. If not, the laws of intestate succession direct the distribution. So, was there a will? Was your mother named in the will? If so, she was to be given what?



Unless the assets were listed as trust assets or there was a pour over will directing them to be placed in the trust at the death of the testator, then that is how they are not added to the trust and it is completely legal. So, these additional assets you are speaking of; were they listed as a trust asset? If not, were they directed via a will to be placed in the trust at the testator's death?

If neither apply, that is how she could not add them to the trust legally.

She is in fact a beneficiary of the trust without question by anyone.

The trust listed The House, The Car and All Tangible Items In The House. These items were to be split per the percentages listed in the trust. Her Dad said to her that the house would not be much because he was still paying on it but that big payout would be with his other assets. The Pension, The cash on hand, the stocks and bonds and an insurance payoff from the city of L.A..

My mother was told she is only getting part of the house sale. All tangibles and the car were not included when they were in fact in the trust. The other beneficiaries just walked away with everything in the house and the car themselves.

There was no will or pourover will. But there were still other assets that were not listed in the trust. The Pension, The cash on hand, the stocks and bonds and an insurance payoff from the city of L.A.. There was probably a life insurance plan as well. I cannot confirm that though just yet.

Mom is the only one that was close to her step father and just sat back assuming it would all come together properly. He dad also told her that he changed the will and got all of our social security numbers and made an appointment to see his lawyer some years ago. That was the last we heard of it then he died recently and my mom got the trust mailed to her. No will just a trust.

We would really like to confirm somewhere that these other assets existed (we know they did exist just from talking to and knowing her dad) and if they had beneficiaries assigned to each of them individually. Then we can see if they in fact belonged in the trust. It is my understanding that if they were not in the trust and there was no beneficiary that those assets would in fact have to go through probate then the state would decide how they would be distributed.

We tend to think that the executor somehow was the beneficiary and not telling us or that she straight up took everything that was not on the trust. She was adamant about no probate.

Anyways, it is quite an ordeal and we will be hirign an attorney but advice here beforehand is valuable.

Please let me know what you think and thank you in advance!

 

[curb1]

The problem for mother is that if these "other assets listed "sister" as the beneficiary it will be very difficult (perhaps impossible) to retrieve them. It would not be the first time that a person listed their personal representative on their accounts with the anticipation that the personal representative would split everything evenly.

 

[justalayman]

There was no will or pourover will. But there were still other assets that were not listed in the trust. The Pension, The cash on hand, the stocks and bonds and an insurance payoff from the city of L.A.. There was probably a life insurance plan as well. I cannot confirm that though just yet.

then anything not actually listed in the trust inventory is dealt with per the laws of intestate succession. See here for the laws:

http://www.leginfo.ca.gov/cgi-bin/displaycode?section=prob&group=06001-07000&file=6400-6414




there is a section that does include the issue of a predeceased spouse.

He dad also told her that he changed the will and got all of our social security numbers and made an appointment to see his lawyer some years ago.

does your mother know the name of this attorney?

It is my understanding that if they were not in the trust and there was no beneficiary that those assets would in fact have to go through probate then the state would decide how they would be distributed.

everything is already decided by the laws in place. It's merely a matter of applying the applicable laws to any given asset or situation.

My mother was told she is only getting part of the house sale. All tangibles and the car were not included when they were in fact in the trust.

I may have missed it but did your mother receive a copy of the trust?