Special Cash gift question

[nvjeeper]

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

In my moms trust under Distributions after settlor's death it states Special cash gift. "On the settlor's death, the trustee shall make the folllowing distributions."
Does this mean i can pay my niece before i worry about paying any of her debts off, or do i have to pay off all debts before she recieves her money? The trust also has a Spendthrift Clause for this that says she shall be free from the claims of creditors and from attachments, execution, bankruptcy, and other legal process, to the maximum extent permitted by law.

 

[anteater]

Whose debts are your referring to?

 

[nvjeeper]

Whose debts are your referring to?

My moms debts

 

[curb1]

Is there a problem paying Mother's debts? Why not pay debts and then pay niece according to trust?

 

[nvjeeper]

Is there a problem paying Mother's debts? Why not pay debts and then pay niece according to trust?

As of today the debts i have discovered are more $ then what is in my mothers estate.

 

[curb1]

Niece is probably out of luck, don't you think? Any assets to sell that will produce cash?

 

[nvjeeper]

Niece is probably out of luck, don't you think? Any assets to sell that will produce cash?

I have no idea if my niece is out of luck, thats why im asking. As far as assets. All my mother had was a house that will be lucky not to have to put into a short sale, and an investment that has $150 more in it now then what she was going to give my niece

 

[anteater]

To keep yourself out of trouble, I would suggest that you consult with an attorney with trust administration experience.

Have you done any reading about administering a trust? For example, the California Probate Code - beginning at Section 15000 at this site:

http://leginfo.ca.gov/cgi-bin/calawquery?codesection=prob&codebody=&hits=20

For example:

19001. (a) Upon the death of a settlor, the property of the
deceased settlor that was subject to the power of revocation at the
time of the settlor's death is subject to the claims of creditors of
the deceased settlor's estate and to the expenses of administration
of the estate to the extent that the deceased settlor's estate is
inadequate to satisfy those claims and expenses.

(b) The deceased settlor, by appropriate direction in the trust
instrument, may direct the priority of sources of payment of debts
among subtrusts or other gifts established by the trust at the
deceased settlor's death. Notwithstanding this subdivision, no
direction by the settlor shall alter the priority of payment, from
whatever source, of the matters set forth in Section 11420 which
shall be applied to the trust as it applies to a probate estate.