Help me Understand to what Degree I am a Beneficiary in Revocable Family Trust

[acemanhattan]

What is the name of your state (Oregon)?

Hello, I was recently given a copy of a revocable family trust set up by my grandfather (now deceased) and grandmother (still living, but with dementia), and I am trying to understand how things will play out in a scenario alternative to the one most clearly laid out in the section about the Ultimate Disposition of the Trust. For context, my uncle Steve and mother Julie are still alive and co-trustees. I am Tiffany and I am now 34. My step-father, William, is a late-comer to the party.

The ultimate disposition reads, more or less, like the following:

On the death of the surviving Trustor, the remaining portion of the trust estate shall be distributed as follows:

8.1 In equal shares to the Trustors' children, Steve and Julie.

8.1.1 If Steve predeceases either Trustor, then his shares shall be transferred to Julie, provided she is surviving, and if not, then pursuant to the terms of paragraph 8.1.2.

8.1.2 If Julie has predeceased either Trustor, then her share will be held for the benefit of her daughter, Tiffany, in the trust described at paragraph 9 below.

8.2 If neither Julie, nor Steve, nor Tiffany survive the death of the survivor of the Trustors, then the estate gets distributed to some other random cousins.

Paragraph 9 just outlines how, if my mother died before my grandmother, a trust would be set up for me (Tiffany) at the event of my grandmother's death, which I would have been entitled to at 25.

So it's pretty clear to me what happens if my mother dies before my grandmother (her share of the trust goes to me), but what isn't clear to me is what (if anything) happens if my grandmother dies and then, in regular course of time, my mother dies without any sort of will in place (this is the most likely scenario). Does that section set me up as a beneficiary in any sort of meaningful way, or will her share of the trust estate just naturally go to her husband William (my step-father, a nice man, but never knew my grandfather) ?

Thanks in advance.

 

[Taxing Matters]

So it's pretty clear to me what happens if my mother dies before my grandmother (her share of the trust goes to me), but what isn't clear to me is what (if anything) happens if my grandmother dies and then, in regular course of time, my mother dies without any sort of will in place (this is the most likely scenario). Does that section set me up as a beneficiary in any sort of meaningful way, or will her share of the trust estate just naturally go to her husband William (my step-father, a nice man, but never knew my grandfather) ?

Thanks in advance.

With the caution that reading the exact language of the trust is always important to reach an accurate conclusion, from what you outlined you only get something from the trust if your mother dies before you do and then your grandmother dies. If your mother is living when your grandmother dies, she gets her share of the trust assets (and your uncle gets his share if he still lives) and the trust ends.

From there, what your mother does with her share is up to her. The only things her will affects are those assets that are part of her probate estate. Assets in trust or that pass by operation of law (property owned as joint tenants with a right of survivorship or as tenants by the entirety, or that pass via a pay on death beneficiary provision) are not part of her probate estate. If she does not have a will then the assets that are in her probate estate get distributed under the intestate succession laws of the state where the property is located. Very generally, that would mean that her estate would get split between her surviving husband and her kids.

 

[acemanhattan]

With the caution that reading the exact language of the trust is always important to reach an accurate conclusion, from what you outlined you only get something from the trust if your mother dies before you do and then your grandmother dies. If your mother is living when your grandmother dies, she gets her share of the trust assets (and your uncle gets his share if he still lives) and the trust ends.

From there, what your mother does with her share is up to her. The only things her will affects are those assets that are part of her probate estate. Assets in trust or that pass by operation of law (property owned as joint tenants with a right of survivorship or as tenants by the entirety, or that pass via a pay on death beneficiary provision) are not part of her probate estate. If she does not have a will then the assets that are in her probate estate get distributed under the intestate succession laws of the state where the property is located. Very generally, that would mean that her estate would get split between her surviving husband and her kids.

Thanks for the response.

So, to recap:
(1) If grandmother passes away while mother is alive, mother and uncle will each get half of the Trust estate (makes sense)
(2) If mother passes away while grandmother is alive, then grandmother passes away, I receive half of the trust estate (makes sense)

What happens to assets that are not in mother's probate estate (I interpret these to be assets she receives via the trust) upon her death if she doesn't have a will?

 

[LdiJ]

What is the name of your state (Oregon)?

Hello, I was recently given a copy of a revocable family trust set up by my grandfather (now deceased) and grandmother (still living, but with dementia), and I am trying to understand how things will play out in a scenario alternative to the one most clearly laid out in the section about the Ultimate Disposition of the Trust. For context, my uncle Steve and mother Julie are still alive and co-trustees. I am Tiffany and I am now 34. My step-father, William, is a late-comer to the party.

The ultimate disposition reads, more or less, like the following:

On the death of the surviving Trustor, the remaining portion of the trust estate shall be distributed as follows:

8.1 In equal shares to the Trustors' children, Steve and Julie.

8.1.1 If Steve predeceases either Trustor, then his shares shall be transferred to Julie, provided she is surviving, and if not, then pursuant to the terms of paragraph 8.1.2.

8.1.2 If Julie has predeceased either Trustor, then her share will be held for the benefit of her daughter, Tiffany, in the trust described at paragraph 9 below.

8.2 If neither Julie, nor Steve, nor Tiffany survive the death of the survivor of the Trustors, then the estate gets distributed to some other random cousins.

Paragraph 9 just outlines how, if my mother died before my grandmother, a trust would be set up for me (Tiffany) at the event of my grandmother's death, which I would have been entitled to at 25.

So it's pretty clear to me what happens if my mother dies before my grandmother (her share of the trust goes to me), but what isn't clear to me is what (if anything) happens if my grandmother dies and then, in regular course of time, my mother dies without any sort of will in place (this is the most likely scenario). Does that section set me up as a beneficiary in any sort of meaningful way, or will her share of the trust estate just naturally go to her husband William (my step-father, a nice man, but never knew my grandfather) ?

Thanks in advance.

The trust will no longer be in effect once the assets get distributed to the beneficiaries.

If your mother dies without a will or trust of her own then her estate would be divided under her state's intestate laws (assuming that she does not put the money in a joint account with her husband or otherwise put her husband on the assets.
Someone really should tell your mother that she should not put the money in a joint account or add her husband to any assets she inherits.)

If Oregon is her state then the intestate laws would give half to her husband and half to her children.

 

[Taxing Matters]

What happens to assets that are not in mother's probate estate (I interpret these to be assets she receives via the trust) upon her death if she doesn't have a will?

Once your mother receives the trust assets, they become her property just like anything else she owns. What does from there will determine the fate of those assets.

She could give them away during her lifetime. She could set up her own trust and put the assets in it, in which case that new trust determines what happens with them.If the asset is real estate or other titled property she could end up titling those assets into a form of joint ownership with someone else such that when she dies her share of that asset passes to the surviving owner. If the asset is money, she could put the money in a bank account or investment account and either (1) make that account jointly owned with someone else so that when she dies the other person becomes the sole owner of the account or (2) designate a pay on death beneficiary for that account, with the result that the named beneficiary becomes the sole owner of the account. If she does any of those things then those assets are not part of her probate estate. Her will has no effect on those assets.

Any property she has that does not do one of the things I listed in the previous paragraph end up going to her probate estate. The assets in her probate estate are distributed according to her will, if she had one when she died. If she did not have a will then the probate assets are distributed based on the intestate succession law of the state where the property is located. Under the intestate succession laws of most states, the estate is divided up between your mother’s husband (assuming she is still married to him at the time she dies and he survives her) and her descendants (kids, grand kids, etc). The share the spouse gets varies from state to state.

 

[latigo]

What is the name of your state (Oregon)?

Hello, I was recently given a copy of a revocable family trust set up by my grandfather (now deceased) and grandmother (still living, but with dementia), and I am trying to understand how things will play out in a scenario alternative to the one most clearly laid out in the section about the Ultimate Disposition of the Trust. For context, my uncle Steve and mother Julie are still alive and co-trustees. I am Tiffany and I am now 34. My step-father, William, is a late-comer to the party.

The ultimate disposition reads, more or less, like the following:

On the death of the surviving Trustor, the remaining portion of the trust estate shall be distributed as follows:

8.1 In equal shares to the Trustors' children, Steve and Julie.

8.1.1 If Steve predeceases either Trustor, then his shares shall be transferred to Julie, provided she is surviving, and if not, then pursuant to the terms of paragraph 8.1.2.

8.1.2 If Julie has predeceased either Trustor, then her share will be held for the benefit of her daughter, Tiffany, in the trust described at paragraph 9 below.

8.2 If neither Julie, nor Steve, nor Tiffany survive the death of the survivor of the Trustors, then the estate gets distributed to some other random cousins.

Paragraph 9 just outlines how, if my mother died before my grandmother, a trust would be set up for me (Tiffany) at the event of my grandmother's death, which I would have been entitled to at 25.

So it's pretty clear to me what happens if my mother dies before my grandmother (her share of the trust goes to me), but what isn't clear to me is what (if anything) happens if my grandmother dies and then, in regular course of time, my mother dies without any sort of will in place (this is the most likely scenario). Does that section set me up as a beneficiary in any sort of meaningful way, or will her share of the trust estate just naturally go to her husband William (my step-father, a nice man, but never knew my grandfather) ?

Thanks in advance.

First we need to assume that upon her death your mother's husband does not claim the surviving spouse's elective rights under Oregon Revised Statutes Section 114.600 to 114.725.

If not, and both you and your mother's husband survive her death, then all of her estate, not otherwise disposed of by will nor transferred upon her death by a self-executing instrument (e. g. property held in JTWROS, money accounts designated POD) would be distributed one half to her surviving spouse and one half to you. If she dies without a surviving spouse, then all to you.

Whether your mother's estate should include any of the corpus of the trust - that is, she survives the death of the surviving Trustor - would be of no consequence. Nor would the Trust have any significance with respect to your distribution from your mother's estate.

 

[acemanhattan]

Thank you all very much for the feedback.