distributin of trust assets?

[bradmootz]

My parents created a living trust in 2001. My brother and I are the sole beneficiares. The assets of the trust were divided between my brother and I. Among the assets passing to myself was a house that I had lived in and rented from my parents for over 20 years. My father passed away in 2003. My mother evicted me from the house, sold it, and allowed me to use a portion of the proceeds to buy another house worth less than half as much. My father believed that my mother either would not or could not have sold the house based on statements he made to me prior to his passing. My mother passed away in March. She used the proceeds from the sale of the house to fund my brother's profligate lifestyle. But that's another issue. My questioin is: Did my mother have the legal right to sell the house after my father died? Does any part of the trust become irrevocable apon one trustors death? My current attorney says that my mother was obligated to "fund" the trust with the proceeds of the sale.

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

 

[Dandy Don]

You will need to have your attorney look at exactly how the house was titled (was it titled in the name of the trust or perhaps in your father's and/or mother's name) to determine whether you had any rights to it. It is possible that you did have rights but if title was not properly transferred during probate then someone made a serious oversight.

 

[TrustUser]

regarding irrevocability - would depend entirely on how your trust was written. it is common to have an a/b trust, in which usually half the worth of the trust is placed in an irrevocable trust.

but it is also common not to have an a/b trust, whereby all the assets are now controlled by the surviving spouse.

 

[bradmootz]

The house was put into the Family Trust as a gift. I was to get the deed on my 55th birthday along with 25,000. Neither happened.

 

[FlyingRon]

regarding irrevocability - would depend entirely on how your trust was written. it is common to have an a/b trust, in which usually half the worth of the trust is placed in an irrevocable trust.

but it is also common not to have an a/b trust, whereby all the assets are now controlled by the surviving spouse.

A revocable trust becomes irrevocable at the death of the grantor. However, I doubt seriously that revocability is an issue here. It doesn't alter whether assets owned by the trust can be sold, just that the trust terms itself can't be canceled or altered.

 

[FlyingRon]

The house was put into the Family Trust as a gift. I was to get the deed on my 55th birthday along with 25,000. Neither happened.

You need to take all the info to a lawyer and see if the trustee was operating within the bounds of the trust. If the trust was to hold the property to you and disburse the assets (and those assets did in fact exist to disburse), then you probably have action against mom.

 

[TrustUser]

hi ron,

at least as i understood the question, the revocability could have a big deal in this case.

what was being asked was that after the death of the first spouse, are any of the assets placed in an irrevocable trust, whereby the surviving spouse has limitations on what she can do with these assets.

so in this case, when the father died, if it was an a/b trust - then certain assets would have been placed in an irrevocable trust, with limitations on what the mother could do, and where the beneficiary interest could not be changed by the mother.

 

[bradmootz]

Thank you everyone for the information. The financial planner woman hired by my father to set up the trust did not allow me to see the trust. This apparently was legal under Arizona law at the time. But once my father had passed she allowed my mother to change all the terms of the trust to my brother's benefit. My father believed the trust would be irrevocable apon either spouse's death. Do I have legal recouse against the planner?

 

[anteater]

Unless "the financial planner woman" is also an attorney, I hope that she did not create the trust. Financial planners do not practice law.

 

[nextwife]

The important question is how the house was titled at the time of death, and at the time of sale. It is unlikely the sale could have occurred (at least if there was a title company insuring the buyer and/ or lender) unless title was vested in a way that they could insure the converyance as valid. You need to establish whether the house was a trust asset at time of sale, EVER a trust asset, or mom's sole property. If hers, the trust may not have had control over that asset.

 

[FlyingRon]

I'll say it again. An in vivo trust can not be changed AFTER the grantor's death. It is revocable up to that point but irrevocable after. As trustuser aludes, the trust may provide for the transfer of assets automatically to other trusts which may be revocable. Further, even an irrevocable trust may give discretion to the trustee, they just can't change the terms, but my trust for example pretty much gives my wife (if she survives me) the assets for her support and comfort and then they go to the kids after that.

 

[curb1]

FlyingRon,

Just curious, is your wife the successor trustee for your trust? Will "your" assets be titled in her name "(if she survives me)"? At that time what prevents her from putting "your" assets into her own trust? How have you assured that "your" assets will go to your children?

 

[bradmootz]

Update

My lawyer says that the A portion of the A B Trust becomes irrevocable upon my father's passing and that while my mother may have been entitled to sell the house, the proceeds from the sale would remain as my inheritance. But she is vague about whether or not I can claim 600 thousand in annuities left to my brother. Does this make sense? In addition, in the meantime my brother has been removed as cotrustee of the trust for failure to attend to trust administration. He ignores all correspondence. We have also aquired copies of some of the checks from my mother's accounts. My mother apparently wrote several thousand dollars in checks to my brother the week before her death. This in spite of the fact that she was in a coma and on a morphine drip during the last stages of lung cancer. There is one check for five thousand dollars to my brother dated on the day after my mother died. My lawyer has not done anything for two months. She takes alot of vacations and puts everything on hold while she is gone. We have attempted to get some additional checks from the account. Some that we had already requested but were not provided and some additional that we want. The bank tells us that we need a subpoena this time. Why would that be?

 

[TrustUser]

what can be done to an asset in a trust is completely up to the trust language itself.

sometimes the trustee can have sole charge, but often the beneficiaries have a say. sometimes the beneficiaries have total control, and simply instruct the trustee.

the nature of the trustee does not change who the beneficiaries are, though. so if the house was titled to your mom as trustee of the irrevocable trust, then she could very well have been able to sell it. but as your lawyer has stated, the funds from that sale should have been placed back into an asset titled to that trust.

it does appear as if you had a typical A/B trust. what you need to find out is how the assets were distributed when your father died.

 

[Dandy Don]

And ask the bank why they want you to furnish a subpoena and have them explain their reasoning. Is there now only one trustee or is there more than one trustee handling matters?