questioning distribution from executor

[amr1]

What is the name of your state?What is the name of your state?California

My grandfather passed away over a year and half ago. He left a substantial trust in which he left to his children (a percentage of his estate). My mother passed away 2 years ago and I beleive he felt the need to leave me and my siblings something in his trust. Opposed to a percentage of the estate, we in fact received a house in which he granted 50% ownership of the home prior to his passing and we are to receive the other 50% upon his death. The executor of the trust sold the home on our behalf. The day proceeds were to be disbursed to us it was discoved there were back taxes against the trust and our distribution was held. After discussing the situation with the trust attorney and the executor, it was determined we were entitled to receive the 50% we owned prior to his passing. We were also advised that the tax attorney on the trust was filing the back taxes and we would be receiving our money soon. Its been over 6 months. I have attempted to discuss the situation with the executor in which she advised me no one has received anything and they should be done soon. She also stated that she didn't know if we would receive anything due to the back taxes to be paid. I was essentially shocked considering each one of my grandfaters children probably received close to a 2 million each and my sisters (the grandchildren) inherited and I sold a house worth $125,000.00. How is it possible our funds we be so greatly affected considering the amount of funds his children received over us. Also, since we owned 50% of the home prior to his passing does the remainder of our distribution need to be held due to back taxes?

 

[Dandy Don]

(1) Do you have a copy of the trust? If not, you can request it by sending a certified letter to the trustee asking for a copy of it and the related accounting statement.

(2) Was the house in the trust or in the will?

(3) Did you ever receive title to the home--were your names ever added to the title, or was the house always owned by the trust?

(4) Did trustee ask your permission before home was sold?

(5) How much were the back taxes?

(6) Did grandfather have the assistance of an attorney when forming the trust or did he do everything by himself? Giving you half of the house in stages was not the best way to handle this asset.

(7) Is there a will and a trust or just a trust?

Usually in a large estate all of the assets are put into the trust in order to avoide probate. Check at the county courthouse probate court to see whether a will was ever filed, then look at all of the documents in the file to see how it was distributed. While at the courthouse, ask if trust information is kept on file there--answer will probably be "no".

The problem here is that you don't have access to the documents that show how the estate was distributed, nor do you have a copy of the estate tax return or any documentation showing the supposed "back taxes" due.

IF they are telling the trust about "back taxes" being due, then this might be an indication that the trustee of the trust (the correct term is "TRUSTEE", NOT "executor of the trust" as you stated) made improper distributions by paying too muc money (millions) to the grandfather's children/beneficiaries and didn't withhold enough money for state and federal taxes. If that was the case, then what the trustee and tax attorney should have done was to ask the beneficiaries to return some of the money THEY got to pay this tax bill, NOT use your money from the home sale to pay back taxes, since that money should go only to you.

Trustee's statement that "she didnt' know if we would receive anything" is very odd. If the taxes were paid and taken care of, then she should know without a doubt whether any money is left over or not to be distributed. So here she is not being fully honest with you, and stalling to further mislead and deceive you and hold out false hope.

It's hard to know for sure whether this was an innocent mistake by the trustee or by the tax attorney, or whether one or both of them are deliberately trying to cheat you out of your money. I would think that the tax attorney should be professional enough to know that asking you to pay the back taxes was incorrect and improper. It looks like what has happened is either incompetence or outright theft, and you were right to be suspicious. Ask the trustee to provide you with documentation showing how much the back taxes were and a copy of the check showing how much in back taxes has been paid. If they give you the brushoff or another weak excuse, it will be time to hire your own trust attorney to deal with this trustee to get exact details on wht has happened and to fight to get your money back.

Hopefully it can be done without your having to sue them. Your attorney will need to find out if this trustee has posted a trustee's bond.

Congratulations to you for being smart enough to realize that something was wrong. I somehow feel that in the end you are going to recover what is rightfully yours.

DANDY DON IN OKLAHOMA ([email protected])