Estate question

[capriblue]

What is the name of your state? Illinois

OK, first time and not too well versed in this area, hence, the following:

My parents set up separate trusts many years ago. 6 years ago, dad died. Mom is
doing well. Four heirs, all their children, and older brother executor.

"The estate ", would consist of the trusts and any real estate holdings. But does it also
include my mother's checking account funded by her pension and social security?

 

[anteater]

What is the name of your state? Illinois

OK, first time and not too well versed in this area, hence, the following:

My parents set up separate trusts many years ago. 6 years ago, dad died. Mom is
doing well. Four heirs, all their children, and older brother executor.

"The estate ", would consist of the trusts and any real estate holdings. But does it also
include my mother's checking account funded by her pension and social security?

Some distinctions to keep in mind. In simplified terms:

1) Gross Estate - Any assets in which the deceased had an ownership interest. That would generally include revocable trusts, for example, living trusts.

2) Probate Estate - Any assets in which the decrased had an ownership interest that are not transferred to others by means of joint ownership with right of survivorship, beneficiary designations, etc. These assets are transferred to beneficiaries through the probate process, following the terms of a will or the intestate succession statutues of state law. Properly executed trusts would not be part of the probate estate since they are essentially private contracts.

Generally, irrevocable trusts are not part of either type of estate mentioned above. In an irrevocable trust, the creator of the trust generally gives up ownership of the assets. The trust becomes the owner of the assets.

So, to answer the one specific question, if your mother's checking account is owned solely by her and has no beneficiary designation, it would be part of both the gross estate and the probate estate.

 

[capriblue]

Don't understand

Thanks for the answer. Now the harder part of the question. My mother has been helping me financially reduce some credit card debt. She has written me many checks over the past two years and will probably continue for a couple more months. The amounts vary and aren't excessive. When my brother saw the first few checks, he asked me what it was for. Without getting into my life story, I felt that it was personal. Because he is the executor of their estate, he thinks he should know. "My job is to protect the estate, and some irresponsible situation you may be in is not my problem. The estates heirs should not be deprived inheritance because of your problems". Wow! That just knocked me sideways.

I'm assuming, because I didn't tell him, he's angry, whatever. There also seems to be an implication that I am taking advantage of my mother. The point is, that now he's demanding repayment of every cent to be deposited in my mothers trust. He got copies of all checks written to me by my mother and has come up with a number. A huge number. He feels that I have "mis-used" the estates trust. He has chosen some arbitrary number, and given me a "deadline" or he will begin taking "steps" After a couple of hurtful emails back and forth, I am just shocked. He now is threatening me with disinheritance.

My brother is an intelligent and what I always thought, impartial executor who would never let personal feelings impact family decisions. I can't say that is the case right now. Do I need to seek legal counsel? If my father were here, he'd be horrified.
Help!?

 

[anteater]

Uh, there is a lot there to disentangle.

What exactly is your brother's status? A Trust has a Trustee that administers the trust in accordance with the terms of the trust. An Executor is a person appointed by the court to administer the probate estate of a deceased in accordance with the terms of a will or the intestate succession statutes of state law. An executor has no legal authority until a person passes away, a probate estate is opened, and the court appoints the executor.

Who is the owner of the checking account? Is it solely in your mother's name? Or is it part of a trust - unlikely but these thngs do happen?

Since your mom is alive and well and, presumably, competent to direct her own affairs, your brother has no authority, as "executor", to do anything but huff and puff.

If your mom passes away and the brother is appointed as executor by the court, then he could try to make a stink about the payments to you. He could allege coercion or that you used undue influence on mom. (Actually, I guess he could try that now, possibly under whatever elder abuse laws exist in Illinois.) Or he could allege that they were really loans that should be repaid. Either way, the burden of proof would be his.

Probably your best course of action is to have your mom put in writing that these are gifts to you rather than loans and that they are not to be considered some sort of inheritance advancement.

 

[sherryschutz]

capri blue - estate

Before my mom passed away, she had me go down to her bank with her and put me on her account, so I could access her money, pay her bills, pay for her funeral, final bills, etc. She also said if there was any money left, I did not have to share that with my siblings.

There was not much left, about $3,000 and what I did is gave $500.00 to each of my mom's grandchildren. But I did not have to give any of that money to anyone.

Sherry

 

[capriblue]

why do things have to get ugly?

Thanks anteater!

My brother's status is successor Trustee. I guess I should probably cover my assets (so to speak) and follow your advise to get something in writing from my mother. Her checking account is not in the name of her trust. My initial post questioned that very issue, because I am being accused of misuse of potential inheritance money. I would assume that, to be the two trusts my parents chose my brother to be successor trustee of. They are the obvious trustees while alive, correct? Her daily living expenses are well covered by a healthy pension and social security. Of course she needs access to any finances as she ages and her medical and care issues increase. I feel so frustrated that he would think I would in any way put her in a situation of need due to my personal hardship. I would take out a loan if that were even a remote possibility.

Anyway, should I have this document (stating these funds as a gift not a loan, and not inheritance advancement) witnessed or notarized by a third party?

I am just amazed at what money can bring out in people. Thank you so much for the valuable advise so far...

 

[msiron]

Thanks anteater!
I feel so frustrated that he would think I would in any way put her in a situation of need due to my personal hardship. I would take out a loan if that were even a remote possibility.

Anyway, should I have this document (stating these funds as a gift not a loan, and not inheritance advancement) witnessed or notarized by a third party?

I am just amazed at what money can bring out in people. Thank you so much for the valuable advise so far...

They see you taking money from mom, getting the free ride, and they ARE NOT. Though mom can do whatever she wants with her money while she is alive, I can fully see their disgust and animosity.

I imagine your bills are in the thousands not hundreds.

 

[curb1]

Capriblue,
This is your obligation to structure this apopropriately. You say you can't believe what money does to people, but the feelings of your siblings are fully understandable. Why aren't you paying for your own credit card bills? Is there a reason why your mother would give you money, and not your siblings? Does she expect for you to pay her back?

You need to be out in the open about this so every one of the siblings knows what is taking place. You are setting yourself up for a lot of headache and legal expense if you are not transparent about this. How does the trust read as far as disbursement of assets following your mother's death? The trustee could deduct your costs if given the authority in the trust.

 

[mojo1951]

Calling Dr. Phil

I thought this was a law forum, not a soapbox for the ethics/morality police.

 

[capriblue]

just need advice

thanks mojo1951

I'd just like an answer to my posted question about needing a witness for documentation of my mother's wishes to assist me financially. The heirs to the estate will not be deprived of a cent by my mother's help. Thanks.

 

[candg918]

Dr. Phil moment

My comments are assuming Mom is competent and financially savy and based on my experience with siblings where I was the successor trustee and POA while my mom was alive and is practical rather than legal advice. (My mother had dementia so I had to walk the tightrope of managing her affairs while she was alive; the estate was a picnic compared to that.)

As for your original question, if your mom has an attorney or trusted financial advisor, I suggest that you recommend that she speak privately with them about her desires and concerns. I'm sure they have heard this all before.

I am uneasy when any child - but especially the person who eventually controls the distribution of an estate - becomes concerned about "preserving the assets" of the estate. There is the valid concern of insuring that the parent is not taken advantage of by family or outsiders but there is also the case where the parent is denied care or made to feel guilty about spending their own funds for things they want to do in order to "preserve the estate." As long as they are competent, they can do whatever they want with their finances and resources. As my FIL says: "Being of sound mind, I spent it all."

Mom's well-being is a concern. A parent may become so distressed by squabbles of their adult children to the point where his/her health is adversely affected. If the successor trustee/future executor is communicating his concerns with mom as well as with you and is in any way stressing mom over the issue, I suggest that someone outside the family needs to intervene on mom's behalf. The Illinois Department on Aging site might be a good resource for her. There may be a local United Way Agency dealing with senior citizen issues as well.

If the situation is severe (and Mom is competent), Mom may need to discuss with her attorney changing the successor trustee/executor to a non-family entity. Since having to pay for this service from the estate reduces the estate to be distributed and the size of the estate is an issue to at least one of the future beneficiaries, everyone may decide to just get along.

As I stated, this is practical not legal advice out of concern for your mother.

.

 

[curb1]

capriblue,
You have asked several questions, including "Help?". Are you planning to pay this money back to your mother? I would guess the answer is "yes". If so, you can put an end to this "soap opera" by putting the situation in writing and give the contract to the other members of the family. If your mother is gifting this money to you, you need to put that in writing (yes, get it notarized) and give it to the rest of the family. Failure to do one of the two options is asking for a family split and a sizable legal bill following death.

 

[curb1]

Also, you said, "reduce some credit card debt". Was this credit card debt from no fault of your own, or was it from reckless spending? This could make a big difference in how the rest of the family is looking at this situation. Your attitude about paying the money back is also important. There is a very good chance that your mother will need this money before her passing.

 

[tranquility]

Mojo1951 wrote:

I thought this was a law forum, not a soapbox for the ethics/morality police.

Although there aren't two seperate systems any longer, the law developed from two tracks the king and the church. The king's courts were courts of law and the church's courts were courts of equity. This happened because, even back then, people found strict following of the law wasn't fair and they needed somewhere to go to rectify that.

Modernly in the U.S., courts are both of law and of equity. When strict adherence to the law offends the ethics/morality police, the courts (in certain instances) can find in equity. The best way to determine the outcome in court is not simply to think about if something you do is "all legal like", but to think about what people were to think if all the facts were laid out. That is the value of the forum's morality police.

 

[mojo1951]

Key phrase...all of the facts

I would like to hear Mom's testimony...