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Revocable Trust

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kv50

New member
Florida

In 1997 my Mom created a Revocable Trust in the state of Florida of which I am one of 3 beneficiaries. The trust holds a significant amount of stocks. My brother is named as a Successor Trustee in the event of my mom’s passing or incapacity. In early 2022 she was diagnosed with dementia.

My question is do I have any legal right to receive regular updates as to the status of the trust which includes her brokerage and checking accounts where her dividends are deposited? My mom now lives with my sister in Georgia who controls her checking account and my brother now is controlling her brokerage account.
 


LdiJ

Senior Member
Florida

In 1997 my Mom created a Revocable Trust in the state of Florida of which I am one of 3 beneficiaries. The trust holds a significant amount of stocks. My brother is named as a Successor Trustee in the event of my mom’s passing or incapacity. In early 2022 she was diagnosed with dementia.

My question is do I have any legal right to receive regular updates as to the status of the trust which includes her brokerage and checking accounts where her dividends are deposited? My mom now lives with my sister in Georgia who controls her checking account and my brother now is controlling her brokerage account.
It is a revocable trust. That means that the monies really do still belong to the person involved because the trust can be revoked at any time to provide funding for her needs. So, until the trust becomes irrevocable (upon your mother's passing), the trust isn't necessarily funded, which means that there is not necessarily any money in the trust. Now, if her accounts are actually in the trust (in the EIN number of the trust rather than her SSN) then yes, you probably have the right to be kept informed.
 

zddoodah

Active Member
In 1997 my Mom created a Revocable Trust in the state of Florida of which I am one of 3 beneficiaries. The trust holds a significant amount of stocks. My brother is named as a Successor Trustee in the event of my mom’s passing or incapacity. In early 2022 she was diagnosed with dementia.
I'm guessing that you are a contingent beneficiary. In other words, I suspect that, as long as your mother is alive, she is the sole beneficiary of the trust and that you do not become a beneficiary until she dies. Is that correct?


My question is do I have any legal right to receive regular updates as to the status of the trust which includes her brokerage and checking accounts where her dividends are deposited?
No way to know exactly what you're entitled to without reading the trust instrument. However, contingent beneficiaries are not typically entitled to anything.


My mom now lives with my sister in Georgia who controls her checking account and my brother now is controlling her brokerage account.
Is the checking account not part of the trust estate?


It is a revocable trust. That means that the monies really do still belong to the person involved because the trust can be revoked at any time to provide funding for her needs.
The trust likely can be revoked only as long as the trustor is alive and not incompetent. Typically, once the trustor becomes incompetent, the trust becomes irrevocable.
 

LdiJ

Senior Member
I'm guessing that you are a contingent beneficiary. In other words, I suspect that, as long as your mother is alive, she is the sole beneficiary of the trust and that you do not become a beneficiary until she dies. Is that correct?




No way to know exactly what you're entitled to without reading the trust instrument. However, contingent beneficiaries are not typically entitled to anything.




Is the checking account not part of the trust estate?




The trust likely can be revoked only as long as the trustor is alive and not incompetent. Typically, once the trustor becomes incompetent, the trust becomes irrevocable.
I have never seen a revocable trust that could become irrevocable due to incompetency while I don't disagree that it may be possible. I have dealt with the taxes for hundreds of trusts over the years.
 

Taxing Matters

Overtaxed Member
It is a revocable trust. That means that the monies really do still belong to the person involved because the trust can be revoked at any time to provide funding for her needs.
That's the practical effect, not the legal effect. The assets of the trust are no longer her assets, legally speaking. Sure, the tax law ignores the revocable trust and treats the assets as still belonging to the grantor. But that's a tax rule, not a feature of trust law.

So, until the trust becomes irrevocable (upon your mother's passing), the trust isn't necessarily funded, which means that there is not necessarily any money in the trust.
That's wrong. A dry trust (one without any assets) isn't effective. The trust needs assets before it can do anything. And if the trust lacks assets when the grantor dies, then you've blown it because that trust won't have any assets and the assets you wanted distributed via the trust will still be part of your probate estate instead.

Now, if her accounts are actually in the trust (in the EIN number of the trust rather than her SSN) then yes, you probably have the right to be kept informed.
Maybe, but it depends on the applicable state law. At least some states don't require beneficiaries be informed of assets in a revocable trust recognizing that until the trust is irrevocable the beneficiary has no vested interest in the trust.
 

Taxing Matters

Overtaxed Member
I have never seen a revocable trust that could become irrevocable due to incompetency while I don't disagree that it may be possible.
If the grantor of the trust becomes incompetent, the trust as a practical matter may be irrevocable because the grantor who has the right to revoke is no longer competent to revoke the trust. You'd need to look at state trust law to determine the effect of that.
 

LdiJ

Senior Member
If the grantor of the trust becomes incompetent, the trust as a practical matter may be irrevocable because the grantor who has the right to revoke is no longer competent to revoke the trust. You'd need to look at state trust law to determine the effect of that.
So, if the funds in the originally revocable trust were needed for the nursing home care of the grantor it would not be possible for the POA to revoke the trust? Or perhaps in some states?
 

Taxing Matters

Overtaxed Member
So, if the funds in the originally revocable trust were needed for the nursing home care of the grantor it would not be possible for the POA to revoke the trust? Or perhaps in some states?
What POA? In any case, a lot depends on exactly how the trust is drafted and the particular state law. That's why I advise people against just using some form or internet site to set up their revocable living trusts. If you don't know how to set it up properly you won't know if that form or program is actually any good.
 

kv50

New member
Thank you all for the good information. Sounds like I need to consult an attorney to see what my legal rights are as a beneficiary. My biggest question is about transparency. If my mom has been deemed incapacitated by Dementia, and I am not being able to have any knowledge or access about what is going on with her investment and checking accounts by my brother who refuses to speak to me on any level and who is now handling her finances and eventually will be the executor upon my mom's death.
 

quincy

Senior Member
Thank you all for the good information. Sounds like I need to consult an attorney to see what my legal rights are as a beneficiary. My biggest question is about transparency. If my mom has been deemed incapacitated by Dementia, and I am not being able to have any knowledge or access about what is going on with her investment and checking accounts by my brother who refuses to speak to me on any level and who is now handling her finances and eventually will be the executor upon my mom's death.
Speaking with an attorney would be smart.
 

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