Trust amendment regarding residence

[JimPeters]

What is the name of your state ? AZ

I have just typed out an amendment I wish to add to my family trust. All my assets are included in the trust. My son is successor trustee in charge of selling my residence and allocating my assets according to the terms of the trust. The residence is fully paid for and there is more than enough money to pay for its use for a year. Here is what I wrote. I would like some advice on whether this would be legally acceptable as it is written. Thanks.


Amendment to the Peters Family Trust

I, James Peters, settlor and trustee of the Peters Family Trust, hereby amend the trust as follows:

In order to provide a reasonable transition, following my death, for my daughter M-----, who has been living with me at my residence as my primary care provider, without compensation, during my infirmity since February 2004, I hereby instruct the successor trustee, my son G-----, to reserve the residence for the use of my daughter M----- for one year beginning on the date of my death, and to postpone sale of the residence until after the year is up. Cost of the utilities, taxes, and insurance for the residence for this period shall be paid from the trust bank account at 1st ---- Bank.

 

[curb1]

Just a question, how does your son G____ feel about this? Is the son and daughter on good terms? Is there any reason that son would object? Does the trust allow for amendments to be made by you (most do)?

 

[JimPeters]

Just a question, how does your son G____ feel about this? Is the son and daughter on good terms? Is there any reason that son would object? Does the trust allow for amendments to be made by you (most do)?

Yes, the trust allows me to amend the trust. It is my concern that my son would prefer to take care of the house quickly and would exert authority to do so unless the terms of the trust state otherwise. I want to avoid a conflict between my son and daughter, which she could lose, so I want to settle the matter now.

My question is whether the amendment would hold up legally? Does an owner/trustee have a legal right to do what I have stated? It will be notarized. Here is the amendment:

I, James Peters, settlor and trustee of the Peters Family Trust, hereby amend the trust as follows:

In order to provide a reasonable transition, following my death, for my daughter M-----, who has been living with me at my residence as my primary care provider, without compensation, during my infirmity since February 2004, the successor trustee, my son G-----, shall reserve the residence for the use of my daughter M----- for one year beginning on the date of my death, and to postpone sale of the residence until after the year is up. Cost of the utilities, taxes, and insurance for the residence for this period shall be paid from the trust bank account at 1st ---- Bank.

 

[TrustUser]

personally, i think the amendment is valid. but your main concern is still there, in that your son controls the house by being the trustee.

i think a better solution would be to place the house in its own title holding trust, with its own instructions, and make your daughter the trustee.

i place all my properties in separate trusts with a trust name of that of the address of the property. since deeds are recorded documents, i dont like the idea of a trust name recorded that also owns bank accounts, etc.

 

[JimPeters]

personally, i think the amendment is valid. but your main concern is still there, in that your son controls the house by being the trustee.

i think a better solution would be to place the house in its own title holding trust, with its own instructions, and make your daughter the trustee.

i place all my properties in separate trusts with a trust name of that of the address of the property. since deeds are recorded documents, i dont like the idea of a trust name recorded that also owns bank accounts, etc.

Thanks for your reply. I can see how a whole other trust would be a good idea if the amendment I wrote is not legally binding. But I am not up to such a big project in my condition. It would mean rewriting the whole original trust and making a new one. So I am hoping it is binding.

Maybe someone can unconfuse me. Does a successor trustee have the authority to defy the terms of a trust or its amendments?

 

[TrustUser]

of course not. the trustee is the legal manager, which means he is legally obligated to carry out the instructions in the trust.

being obligated is not the same thing as it being done, though.

you are correct that a new trust would be made for the house, but i wouldnt think it would impact the isntructions in your original trust.

your original trust would still own all the other assets, with your son carrying out the instructions for those assets. your daughter would be the trustee of the trust with the house, so she would carry out those instructions.

 

[JimPeters]

of course not. the trustee is the legal manager, which means he is legally obligated to carry out the instructions in the trust.

being obligated is not the same thing as it being done, though.

you are correct that a new trust would be made for the house, but i wouldnt think it would impact the isntructions in your original trust.

your original trust would still own all the other assets, with your son carrying out the instructions for those assets. your daughter would be the trustee of the trust with the house, so she would carry out those instructions.

Thank you for clearing this up for me. If the amendment I wrote will provide my daughter the legal privilege of residing here for a year, even if my son would prefer otherwise, then that is enough for me. If it is legally binding, then I would not expect him to challenge it.

But when you say, "being obligated is not the same thing as it being done", I suppose you mean that my son could presume to tell her to leave. In that case, would my daughter need to take him to court? Or would my son need to challege the trust in court? I'm assuming he could not win legally...

 

[TrustUser]

i think most people put too much worry into things "being legally binding". unless you actually place something in your trust that is actually illegal, then expect that it is legally binding - that is the norm.

there is certainly nothing illegal about who you want to live in your house, and for how long.

i dont think your son would have any chance to win in court.

however, as trustee, he could just get rid of the amendment, and sell the house as the trustee. no one would be the wiser. you should at least give a copy of the trust and its amendment to your daughter.

but if your son has any sort of honesty within him and respect for his father, he would not go to that length - when it is obvious what you wanted.

i wish you could go the full route, so there would be no concern, but it sounds as though the amendment will give you what you want - you will never know for sure - lol.

 

[JimPeters]

i think most people put too much worry into things "being legally binding". unless you actually place something in your trust that is actually illegal, then expect that it is legally binding - that is the norm.

there is certainly nothing illegal about who you want to live in your house, and for how long.

i dont think your son would have any chance to win in court.

however, as trustee, he could just get rid of the amendment, and sell the house as the trustee. no one would be the wiser. you should at least give a copy of the trust and its amendment to your daughter.

but if your son has any sort of honesty within him and respect for his father, he would not go to that length - when it is obvious what you wanted.

i wish you could go the full route, so there would be no concern, but it sounds as though the amendment will give you what you want - you will never know for sure - lol.

Thank you for your thoughtful attention to my issues.

I expect and hope that my son will respect my wishes. But when one has power, one might feel justified in making decisions according to one's own judgment...

If I make extra copies of the trust, should they be newly signed and notarized? If the original is lost and the copy has only copied signatures and notary seals, is it still valid?

 

[TrustUser]

there is a clause in trusts that make for duplicate original copies.

and i dont want to say for sure, but i am guessing that a copy of the trust and amendment would be fine, for your daughter.

if the case goes to court, and your son gives the court a trust document dated june 1, 2008 with no amendments - and your daughter hands the court a trust document dated june 1, 2008 with an amendment dated on july 1, 2008 - i cant see any judge being stupid enough not to realize that the son did something fishy.

if i were you, i would let the son know that you gave a copy of the trust and amendment to your daughter. this should put the breaks on your son doing anything backhanded, in the first place. trustees can be put in jail for fraud, so i cant see that risk being worth waiting a year to sell the house. especially since the only chance your son would have is if your daughter decided not to prosecute - which of course may very well happen.

 

[JimPeters]

...if i were you, i would let the son know that you gave a copy of the trust and amendment to your daughter. this should put the breaks on your son doing anything backhanded, in the first place. trustees can be put in jail for fraud, so i cant see that risk being worth waiting a year to sell the house. especially since the only chance your son would have is if your daughter decided not to prosecute - which of course may very well happen.

Thank you for your help. I have a better understanding now. I will make my wishes clear in an amendment and I expect it will work out.

 

[JimPeters]

Regarding the amendment I described at the beginning of this thread, I must come back once more with what may be a critical issue.

As the trust is written (without the amendment granting my daughter use of the residence for a year), the trust would presumably be ended following the allocation of the trust assets to the beneficiaries by the successor trustee.

Does the amendment, granting my daughter use of the residence for a year, mean that the trust continues to exist for at least that year in order to fullfill my instructions?

Or do I need to write into this amendment, or in a separate amendment, that the trust will remain in existence for at least that time?