Trust question

[Zigner]

Perhaps I should ask for more. But I have the feeling it would be denied. Just today I got an email from the trust manager indicating that a request had been approved, but the trust committee feels that it's an expense that I should be able to cover with the monthly stipend disbursed to me from the trust and does not expect me to submit such requests again...the expense in question is for heating oil and while it was only a few hundred dollars, it represents over 10% of my monthly stipend. The trust has always covered this expense over the years if I submitted it...but now has decided that it will not.

The whole reason this is even an issue is that recently I suffered an extreme financial setback and am actually reliant on the trust at this point in my life.

You will need to read the terms of the trust to see what it is designed to cover.

 

[TrustUser]

you may have already said this, but do you have a copy of the trust ? what distributions are supposed to be ? who all the beneficiaries are ? etc. ?

 

[Krinkov58]

I do not have a copy of the trust. I’ve never had any dissatisfaction with how the trust was managed until it was moved to NH, and it began to lose money. After 5 years being managed by a NH branch it has almost regained the market value it had upon being transferred to NH. But I am the only living beneficiary...after my death the trust goes to Yale University. My father had 2 other kids but he disowned them and removed them from his estate long before he passed. FBO my name in the trust title. The trust is allegedly for my living expenses but I was never really reliant on it...and unfortunately on my end, wasn’t paying enough attention to the new rules they were coming up with regarding disbursements.

 

[Zigner]

I do not have a copy of the trust. I’ve never had any dissatisfaction with how the trust was managed until it was moved to NH, and it began to lose money. After 5 years being managed by a NH branch it has almost regained the market value it had upon being transferred to NH. But I am the only living beneficiary...after my death the trust goes to Yale University. My father had 2 other kids but he disowned them and removed them from his estate long before he passed. FBO my name in the trust title. The trust is allegedly for my living expenses but I was never really reliant on it...and unfortunately on my end, wasn’t paying enough attention to the new rules they were coming up with regarding disbursements.

Get a copy of the trust. Without that, you have no idea of anything.

 

[TrustUser]

i just wonder if any of the trustees have any connection to yale university ??

 

[Dandy Don]

Do you know what type of trust this is: irrevocable or revocable?

As a beneficiary, you had/have the right to request a copy of the trust in Massachusetts and New Hampshire by sending the trustee a written request. You should also ask for a copy of the trust's income tax returns for 2015 through 2019 and the law requires that the trustee respond within a "reasonable" amount of time, although that reasonable amount is not defined. And you should also ask for copies of receipts AND a more detailed explanation of specifically what the "Miscellaneous Disbursements" were. It would better if you could ask a trust attorney to write this letter on your behalf so that the trustee and the committee will be more likely to take your request seriously (if the letter was signed by just you alone the trustee and committee are probably going to "stonewall" you, as you have been told previously, and delay/ignore as long as possible).

Here is the New Hampshire law about notice to beneficiaries:

https://law.justia.com/codes/new-hampshire/2014/title-lvi/chapter-564-b/section-564-b-8-813/

After you get your copy of the trust, you truly should take it to a trust attorney (perhaps you can afford an hour or two of his time) to get your questions answered. Look at the allowable reasons that you are permitted to request money for. Did your request mention specifically that it was for heating oil? That seems like a reasonably allowable/permissible expense if the trust allows payment for general living expenses, so it's a bit odd that they denied the request. After you have seen the trust you will have a better idea of what you can ask for and perhaps what you should not ask for.

And look at it to see if it requires that a trustee's bond be obtained or whether that requirement is exempted.

There is no legal obligation for the assets in the trust to increase in value, but you can consider yourself lucky if that happens. With monthly deductions for trustee expenses and for your requests, the total balance is always going to decrease.

Please explain details about the financial setback you have experienced. What caused it? Do have employment or are you seeking employment? Do you have dependents?

 

[Taxing Matters]

Do you know what type of trust this is: irrevocable or revocable?

The trust was set up by his father. Even if the father set it up as a revocable trust, that means that the father could revoke the trust while he was alive. Once the father died, the trust becomes irrevocable. So it is really a moot point now whether it had been a revocable trust. It is not revocable as to the OP now.

As a beneficiary, you had/have the right to request a copy of the trust in Massachusetts and New Hampshire by sending the trustee a written request. You should also ask for a copy of the trust's income tax returns for 2015 through 2019 and the law requires that the trustee respond within a "reasonable" amount of time, although that reasonable amount is not defined. And you should also ask for copies of receipts AND a more detailed explanation of specifically what the "Miscellaneous Disbursements" were. It would better if you could ask a trust attorney to write this letter on your behalf so that the trustee and the committee will be more likely to take your request seriously (if the letter was signed by just you alone the trustee and committee are probably going to "stonewall" you, as you have been told previously, and delay/ignore as long as possible).

While the OP can ask for anything he wants, what he is entitled to get is an accounting of the trust, not trust returns or other information.

 

[Krinkov58]

I'm going to ask for a copy of the trust, if only as a tool to help guide future requests.

Dandy Don...it's irrevocable since my father passed in 2006. I did figure out what the "Miscellaneous Disbursements" were...it was used to pay "Federal Fiduciary Estimated Tax" ($5350.00), "State Fiduciary Estimated Tax" ($1247.00) and "Transfer to Principle, Amortization of Premium" ($0.75)...every quarter I am sent an accounting for the trust as well as market value with realized gain/loss, etc.

My request did specifically mention that it was heating oil and was accompanied by the receipt I paid for the delivery...the trust will not disburse without a receipt or a bill that they can verify. Heating oil is something I cannot claim as a monthly expense since it's delivery rate is seasonal...the trust uses what my monthly expenses were as a basis to decide my monthly stipend, and this decision is made every January. The trust has never declined a heating oil disbursement in all the previous years. But on last Thursdays meeting it decided that it feels that heating oil expenses should be covered by my monthly stipend...even though when I sent the trust my monthly expenses it did not include oil and my expenses this month for oil were over 15% of the stipend.

Interesting to hear that they are under no obligation as prior to the trust moving to NH, I was occasionally asked to go to the nearest bank branch for presentations on investments for the trust, and given little booklets showing how they planned to invest and grow the trust. They definitely gave the appearance of demonstrating that the bank was fulfilling an obligation.

I experienced two financial setbacks in the last 9 years...I completely lost everything in Hurricane Irene; my house in Leyden, MA was flooded, floated down the Green River and smashed into a bridge. I lost everything, no flood insurance and FEMA couldn't help because my town didn't join some kind of federal program. This was back before the trust moved to NH so I asked for limited help from the trust but with the intention to replace everything once I moved into a permanent house (I got a rental within a week of losing the house and stayed there for about 3 years while I worked on getting a mortgage; all of my furniture etc. in the rental came from donations and not from the trust). Once I moved to Maine in 2014, the trust moved to NH the following quarter and began nickel-and-diming every request I made to rebuild after losing literally everything I owned. And last year I lost every dime I had to an out-of-court settlement with my ex, with whom I have 2 kids...I have had full custody of both; my daughter since 2009 and my son since 2012. I asked for the trust to pay for an attorney for me to deal with my ex in court (in the past I've obviously had to take legal custody of each of our kids as well as take out restraining and trespass orders against her, which the trust did pay for prior to moving to NH), but the trust refused to even consider a request. So I settled out of court...there are no court-appointed attorneys for non-criminal cases where I live. My daughter is autistic and turned 18 in 2018, my son turned 10 last year. Both live with me. So I have dependents. And I am self-employed and I do show them proof of income whenever asked.

Does anyone know of an online source of federal and NH law regarding trusts? Case law, past decisions, that sort of thing?

 

[LdiJ]

I'm going to ask for a copy of the trust, if only as a tool to help guide future requests.

Dandy Don...it's irrevocable since my father passed in 2006. I did figure out what the "Miscellaneous Disbursements" were...it was used to pay "Federal Fiduciary Estimated Tax" ($5350.00), "State Fiduciary Estimated Tax" ($1247.00) and "Transfer to Principle, Amortization of Premium" ($0.75)...every quarter I am sent an accounting for the trust as well as market value with realized gain/loss, etc.

My request did specifically mention that it was heating oil and was accompanied by the receipt I paid for the delivery...the trust will not disburse without a receipt or a bill that they can verify. Heating oil is something I cannot claim as a monthly expense since it's delivery rate is seasonal...the trust uses what my monthly expenses were as a basis to decide my monthly stipend, and this decision is made every January. The trust has never declined a heating oil disbursement in all the previous years. But on last Thursdays meeting it decided that it feels that heating oil expenses should be covered by my monthly stipend...even though when I sent the trust my monthly expenses it did not include oil and my expenses this month for oil were over 15% of the stipend.

Interesting to hear that they are under no obligation as prior to the trust moving to NH, I was occasionally asked to go to the nearest bank branch for presentations on investments for the trust, and given little booklets showing how they planned to invest and grow the trust. They definitely gave the appearance of demonstrating that the bank was fulfilling an obligation.

I experienced two financial setbacks in the last 9 years...I completely lost everything in Hurricane Irene; my house in Leyden, MA was flooded, floated down the Green River and smashed into a bridge. I lost everything, no flood insurance and FEMA couldn't help because my town didn't join some kind of federal program. This was back before the trust moved to NH so I asked for limited help from the trust but with the intention to replace everything once I moved into a permanent house (I got a rental within a week of losing the house and stayed there for about 3 years while I worked on getting a mortgage; all of my furniture etc. in the rental came from donations and not from the trust). Once I moved to Maine in 2014, the trust moved to NH the following quarter and began nickel-and-diming every request I made to rebuild after losing literally everything I owned. And last year I lost every dime I had to an out-of-court settlement with my ex, with whom I have 2 kids...I have had full custody of both; my daughter since 2009 and my son since 2012. I asked for the trust to pay for an attorney for me to deal with my ex in court (in the past I've obviously had to take legal custody of each of our kids as well as take out restraining and trespass orders against her, which the trust did pay for prior to moving to NH), but the trust refused to even consider a request. So I settled out of court...there are no court-appointed attorneys for non-criminal cases where I live. My daughter is autistic and turned 18 in 2018, my son turned 10 last year. Both live with me. So I have dependents. And I am self-employed and I do show them proof of income whenever asked.

Does anyone know of an online source of federal and NH law regarding trusts? Case law, past decisions, that sort of thing?

Again, until you get a copy of the trust and have thoroughly read it nobody is going to be able to help you, not even an attorney, because nobody is going to know if what is going on is appropriate or not without reading the trust.

 

[Dandy Don]

Focus right now on getting the copy of the trust.

 

[ALawyer]

The situation you've described is one of the major problems with using any commercial bank or trust company. Even if the bank or trust company was terrific at the time your father selected it, and was an outstanding investment manager, and there were wonderful trust officers who your father trusted who really cared and would look after the best interests of the beneficiaries and use outstanding discretion and judgment, banks and trust companies change over time. Some merge and others are acquired. Those once terrific trust officers may retire. Other personnel changes occur and the new guys are far different from the ones originally there. Even if the trust officers remain, senior management can get greedy and put all sorts of pressures on trust officers. Services can decline (as you have seen). Most banks regard trust assets under management primarily as a great source of both fee income and investment management income to the bank and hate to part with the funds in a trust. The more assets held that are in the trust and not disbursed, the more the bank earns. Further, some banks and trust companies are or become awful money managers.

While I can easily understand the value of your portfolio dropping significantly during the Great Recession from 2008 to 2011, the stock market has gone up significantly since.

Given the amount of the trust assets, you really need to get a highly competent trust lawyer to review both the Trust -- you should really understand what it permits and what it requires. You might also want the lawyer to review the bank's handling of the Trust and its assets, and share his or her thoughts with you to determine whether anything that the Bank did -- or Bank failed to do -- is actionable and if so, what recourse or alternatives may be appropriate.

The Bank that has served as Trustee will not be eager to permit another trustee to take over its functions, as that means its revenue stream is over. Yet if a capable lawyer finds that there has been actionable mismanagement, or dereliction of duty, you'd be in a position to demand restitution and a transfer.

 

[Krinkov58]

I did get a copy of the trust and it merely names me as beneficiary if the Grantor is survived by me, and says "...the TRUSTEE shall pay to or for the benefit of said BENEFICIARY so much of the income and so much of the principle as the Trustee deems appropriate during the lifetime of the Grantor's said son" and upon my death, instructs how the trust property is to be divided upon my death. There are some caveats that I am to follow that are listed in the trust and I am following them, as it turn out.

I went through my old trust market value printouts and created a graph illustrating the growth of the trust...from the 3rd quarter in 2011 until the final quarter in 2014, the trust gained $432,530.91. In the 20 quarters since moving to NH it has gained $49,741.69. I lost all of the market value reports prior to Hurricane Irene but I did find a historical graph back to the inception of the trust that was given to me by the bank during the last presentation I got in the summer of 2014: https://www.dropbox.com/s/ldickh971kmz1ts/Photo Feb 17, 9 26 35 AM.jpg?dl=0

Here is how the trust has performed via market value from 3rd quarter 2011 until 4th quarter 2019 (pink shaded area is since the NH move):
https://www.dropbox.com/s/712q1p5nbtdqxve/trustmarketvalue.png?dl=0

 

[TrustUser]

gosh, does the trust give the trustee total say of how the funds are to be distributed to you ?? there are absolutely no guidelines ?

 

[Krinkov58]

Looks like it. There are conditions set out in the trust which I meet in full and which the trustees has never disputed, and have only periodically requested proof of which I've been happy to furnish whenever they've asked. But otherwise that is the only guiding language in the document other than "it being the Grantor's intent not to reward idleness".

 

[TrustUser]

that is a difficult situation. your dad must have felt that you needed a lot of strong love. but having that sort of trustee in charge of that much money, is a dangerous proposition. it is too bad that your dad did not have a trustworthy relative who could have served as trustee.

there should be some language in the trust as to the mechanism for selecting a new trustee ?