Irrevocable House Trust vs. Will

[Taxing Matters]

Exactly, a lawyer clarified that today. The trust owns the house and I'm the trustee of the house. The Trust dictates how the proceeds of the house are to be disbursed and in what manner.

Good. That was the first thing that had needed to sort out. That the funds are in a irrevocable trust means he can't pressure your mother to change it. He'll be disappointed that the will change won't work, and I would you not tell him until your mother dies and he starts looking to collect what he thinks he's due. Normally I'd say all the family should be informed of the plans, but it would be the person making plans that ought to decide when and what her plans were. This is a situation where I think your brother's ignorance (for now) that the will won't do it will be bliss for both you and your mother. The less he stresses her out with these kinds demands is probably best, IMO.

 

[LdiJ]

UPDATE: I spoke with an attorney. He's from NJ but this House is in NY. Irrevocable Trusts are the same nation wide. The attorney looked up the recorded deed in NY City. The Trust owns the House and I am the Trustee of the Trust. I was able to look it up also and saw the wording as such. I just referred to the Trust Document. I am the Trustee and I am in charge of the Trust. The Trust dictates that I sell the house and give 50% to my sibling. It goes further to dictate that I am to put it into an account and at a minimum disburse no less than 2000.00 per month to him for X amount of years. My sibling found out and coerced my mother to change the will, which she did. The will dictates that my sibling gets his 50% upfront and not stipened. The lawyer that I spoke with explained that the will and trust act as two separate documents. The will dictates xyz and I as the trustee of the trust must follow the directions set forth in the house trust document. The monies from the house get stipened to the sibling and the other assets that are not in the trust account are given to my sibling immediately upon them become liquid.

Ok, then your brother's efforts have failed. He did not know that the will no longer controlled the house and that your mother cannot change anything at this point regarding the house. You can however, expect a fight from him after your mother passes unless someone he will believe explains to him exactly how everything works. It should not be you giving him the explanation if at all possible. Would the attorney you consulted be willing to give you a letter outlining what you discussed? Something for you to hold in reserve to show your brother later on down the road?

 

[NeonMoon]

Good. That was the first thing that had needed to sort out. That the funds are in a irrevocable trust means he can't pressure your mother to change it. He'll be disappointed that the will change won't work, and I would you not tell him until your mother dies and he starts looking to collect what he thinks he's due. Normally I'd say all the family should be informed of the plans, but it would be the person making plans that ought to decide when and what her plans were. This is a situation where I think your brother's ignorance (for now) that the will won't do it will be bliss for both you and your mother. The less he stresses her out with these kinds demands is probably best, IMO.

As far as my brother is concerned, he thinks that the current Will has voided the previous disbursement instructions and that he is getting 50% upfront. The fact that the deed is entirely a different document and the rules are entirely different is something that I will hold very closely and guarded. Yes, I will be expecting a huge fight from him.

 

[Zigner]

Are you *sure* the trust is irrevocable now? It's more common for a trust to be revocable during the grantor's lifetime, becoming irrevocable upon the grantor's death.

 

[NeonMoon]

Are you *sure* the trust is irrevocable now? It's more common for a trust to be revocable during the grantor's lifetime, becoming irrevocable upon the grantor's death.

I just pulled the trust out again and confirmed that it is an irrevocable trust.

 

[NeonMoon]

Question regarding the new will that my brother made my mother do..... Is there any clause that can be put in there stating that all other documents are null and void even though the Trust is a separate document. I think the answer is no and that the two documents have their own instructions

 

[LdiJ]

Question regarding the new will that my brother made my mother do..... Is there any clause that can be put in there stating that all other documents are null and void even though the Trust is a separate document. I think the answer is no and that the two documents have their own instructions

If the trust was not irrevocable and/or the house was not already deeded to the trust the answer to that question would be yes. Revocable trusts can be revoked/cancelled. However it is an irrevocable trust therefore the answer is no. It is not because the trust and the estate are separate entities, it is because they are separate entities AND the trust is irrevocable AND the house is already deeded to the trust.

 

[NeonMoon]

I went thru the Irrevocable Trust and there is a paragraph that reads:
""SECOND: The grantor reserves unto the Grantor, a limited Power of Appointment to change or alter the remainder beneficiaries of said Trust Estate by Will duly executed or by an instrument in writing, duly acknowledged and containing a specific reference to this Agreement. Grantor r shall not be entitled to appoint Grantor, Grantor's estate or Grantor's creditors as remainder beneficiaries. Grantor shall only be permitted to appoint a descendent of Grantor's parents etc etc. ""
Since my brother had my mother change the Will so he gets his 50% upfront, could the attorney have written something in the will that says the Trust instructions are null and void or.... is the Trust still completely separate? Am I to understand that the new Will could have been used to add other beneficiaries? I know that it's still my sibling and I.

 

[Taxing Matters]

""SECOND: The grantor reserves unto the Grantor, a limited Power of Appointment to change or alter the remainder beneficiaries of said Trust Estate by Will duly executed or by an instrument in writing, duly acknowledged and containing a specific reference to this Agreement. Grantor r shall not be entitled to appoint Grantor, Grantor's estate or Grantor's creditors as remainder beneficiaries. Grantor shall only be permitted to appoint a descendent of Grantor's parents etc etc. ""

That provision allows the grantor to change or alter who the remainder beneficiaries of the trust are. The remainder beneficiaries are those who take from the estate after all the primary beneficiaries' gifts have been paid. Typically the remainder of a trust or estate is divided equally among the remainderpersons. From your description of the trust, you and your brother are primary beneficiaries and that provision does not allow her to change who the primary beneficiaries are or what they get from the trust. Moreover, the change would have to specifically reference the trust document to be effective. I don't see that paragraph as helping your sibling get the change to receiving all his 50% immediately after your mother dies. But I also have not read the entire trust and each version of the will to sort out exactly what she's intended to do nor do I practice in that state so I don't know what the courts of that state would do when faced with whatever change your brother had her make in her will. I suggest you see a probate/trust attorney about that and provide the lawyer a copy of all the documents to review.

 

[NeonMoon]

That provision allows the grantor to change or alter who the remainder beneficiaries of the trust are. The remainder beneficiaries are those who take from the estate after all the primary beneficiaries' gifts have been paid. Typically the remainder of a trust or estate is divided equally among the remainderpersons. From your description of the trust, you and your brother are primary beneficiaries and that provision does not allow her to change who the primary beneficiaries are or what they get from the trust. Moreover, the change would have to specifically reference the trust document to be effective. I don't see that paragraph as helping your sibling get the change to receiving all his 50% immediately after your mother dies. But I also have not read the entire trust and each version of the will to sort out exactly what she's intended to do nor do I practice in that state so I don't know what the courts of that state would do when faced with whatever change your brother had her make in her will. I suggest you see a probate/trust attorney about that and provide the lawyer a copy of all the documents to review.

My brother's sole intention was to get my mother to change the will so it would read that he gets his share immediately. My mom does have cash, IRA's, liquid assets as such which would be cashed out and distributed immediately to him. As far as I know, my brother didn't get a copy of the new Will, I don't have one. We are both executors now. My brother coerced my mom into that one too. My concern is that the new will dictates something specific to the Trust and how it should be handled since the Trust is Irrevocable but... since the Trust is separate, nothing can be done to change it anyway unless my brother takes me to court but I have to consent to the change also which I won't do.

 

[LdiJ]

My brother's sole intention was to get my mother to change the will so it would read that he gets his share immediately. My mom does have cash, IRA's, liquid assets as such which would be cashed out and distributed immediately to him. As far as I know, my brother didn't get a copy of the new Will, I don't have one. We are both executors now. My brother coerced my mom into that one too. My concern is that the new will dictates something specific to the Trust and how it should be handled since the Trust is Irrevocable but... since the Trust is separate, nothing can be done to change it anyway unless my brother takes me to court but I have to consent to the change also which I won't do.

If you don't have a copy of the new will then you cannot have an attorney review it and comment. All you have to go on at this point is that the house is deeded to the trust and the trust is irrevocable. Make sure that you keep your copy of the trust in a very secure location to avoid it disappearing.

 

[NeonMoon]

If you don't have a copy of the new will then you cannot have an attorney review it and comment. All you have to go on at this point is that the house is deeded to the trust and the trust is irrevocable. Make sure that you keep your copy of the trust in a very secure location to avoid it disappearing.

It's locked up in a safe!

 

[NeonMoon]

That provision allows the grantor to change or alter who the remainder beneficiaries of the trust are. The remainder beneficiaries are those who take from the estate after all the primary beneficiaries' gifts have been paid. Typically the remainder of a trust or estate is divided equally among the remainderpersons. From your description of the trust, you and your brother are primary beneficiaries and that provision does not allow her to change who the primary beneficiaries are or what they get from the trust. Moreover, the change would have to specifically reference the trust document to be effective. I don't see that paragraph as helping your sibling get the change to receiving all his 50% immediately after your mother dies. But I also have not read the entire trust and each version of the will to sort out exactly what she's intended to do nor do I practice in that state so I don't know what the courts of that state would do when faced with whatever change your brother had her make in her will. I suggest you see a probate/trust attorney about that and provide the lawyer a copy of all the documents to review.

Just to be clear on a statement made in your response.... Can a change in the Will dictate the outcome of the Irrevocable Trust? I thought and have been told my several sources that they are two separate vehicles and each dictates the outcome. The Irrevocable Trust owns the house and I am the Trustee. The Will most likely gives my sibling 50% upfront now of all liquid assets, cash, cd's ira's etc. Please confirm

 

[Zigner]

Just to be clear on a statement made in your response.... Can a change in the Will dictate the outcome of the Irrevocable Trust? I thought and have been told my several sources that they are two separate vehicles and each dictates the outcome. The Irrevocable Trust owns the house and I am the Trustee. The Will most likely gives my sibling 50% upfront now of all liquid assets, cash, cd's ira's etc. Please confirm

The will does not control trust assets.

 

[NeonMoon]

The will does not control trust assets.

Thank you Zigner. I just find it odd that my mother's attorney didn't catch on to what my brother was trying to accomplish or even discuss w/ my mother and brother that the Will and Irrevocable Trust are two separate documents. Or, perhaps he does know and kept quiet about it and led them both to believe that the Will Document will take care of it all and disburse everything in my mother's estate at 50% entirely upfront to my brother.
Is this possible. I don't speak with my brother and my mother is not so clear at this point in her life and if she gets wind that there could be a discrepancy with what my brother forced her to do, it'll get revisited which is why I hold this huge oversight close to me and the Trust is locked up in a safe.