# Mishandling of Trust



## Grimm (Sep 5, 2012)

I hope this is okay to post here.

I want the forum's opinion on this. Be honest.



> Background Information:
> 
> The Party Cs' Irrevocable trust has appreciated since their July 2003 death. The allocation of assets was to be segregated via 75% for Party A and 25% for Party B.
> 
> ...


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## Grimm (Sep 5, 2012)

Caribou said:


> Every State is slightly different in these laws. I suggest that you hire an attorney and a CPA that are experts in this type of trust.
> 
> My mother handled a trust, she was a bookkeeper, for an employer. While I don't know all the in's and out's I do know that some trusts are a real bear to deal with and that if you screw it up you can totally mess up the trust, possibly invalidate it, and create potential tax liability.


Thank you. I have an attorney. But that is a whole mess in and of its self. I wanted to know thoughts on the document. Is it understandable? Is it fair in your eyes? Etc.


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## Grimm (Sep 5, 2012)

Caribou said:


> From my limited understanding of the situation, yes, it is fair. Unfortunately, what is fair is not necessarily the point. I trust that you and party A don't get along so that complicates things. Does your attorney have experience with this type of trust? There are different types of trusts. What is the recommendation of your attorney? Would the other party be amenable to a 3 to 1 split of accounting fees for a CPA?


There is no need to hire a CPA. The trust is in a Morgan Stanley account and by law they are to provide statements of all accounts.

Party A refuses to provide the statements and other accountings to Party B. Party A also refuses to separate the trusts. It really is a mess.

Party A is the aunt of Party B. Party B's trust transfers to their children at the time of their birth but only once the trust has been separated. Until that time it is still in Party B's name but can not be accessed by Party B without Party A's approval.

The trust is to provide an education for the children and basic necessities such as food, shelter, medical care.

Did I mention the trust was written in Florida and is being executed in New York?!


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## bkt (Oct 10, 2008)

The document is very understandable. If the reason for leaving the account alone was to let it grow so both parties benefited later on, that's fine. But that should have been put in writing and there should have been something that defines the obligations of a party if a party debited (borrowed against) the amount before the segregation of funds.

Do you know what the amount would be today if there had been no withdrawals? Base calculations of percentages on that amount. You may need to work with Morgan Stanley on that since they have records of interests rates for their product and should be able to determine that final amount.

Obviously, it's unfair for one party to withdraw funds early then still expect xx% of the remainder.


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## Sentry18 (Aug 5, 2012)

Caribou said:


> What a mess.


This summarizes my thoughts on this perfectly. I will also add that people suck. And people suck 25x more when money is involved. A friend of mine lost her grandmother and then 5 days later lost her father. The legal battle of wills, inheritances, etc. has already caused so much greed, chaos and hurt feelings that the family will probably never recover. Meanwhile they should be mourning their loves ones and aren't.

Grimm: If you are involved in this personally, I hope it all works out for the best.


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## bigg777 (Mar 18, 2013)

First of all, I am not a lawyer, my recommendation is to offer to split the $66,456.22, that is in question, 50/50 with Party A. If it is acceptable to both parties, dissolve the trust, part ways and save the fees, hassles and delays of lawyers and the courts.

Part B still walks away with approx. $385,000 and life moves forward.

Best of luck.

P.S. - Using your hypothetical rate of investment return of 10%, after 1 year Party B will have earned approx. the same amount of money lost to Party A. Litigation of situations like this can take years and cost thousands of dollars. You have to ask yourself what's more important, making a point or getting the funds and moving on with life. Remember none of the funds will be released during litigation.


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## Grimm (Sep 5, 2012)

bigg777 said:


> First of all, I am not a lawyer, my recommendation is to offer to split the $66,456.22, that is in question, 50/50 with Party A. If it is acceptable to both parties, dissolve the trust, part ways and save the fees, hassles and delays of lawyers and the courts.
> 
> Part B still walks away with approx. $385,000 and life moves forward.
> 
> ...


It is not about the amount of money owed Party B but the fact Party A refuses to segregate the 2 trusts and give any to Party B.

The monies owed Party B are to cover things like education etc. Party B wants to send their children to private school using that money. Party A refuses to even consider it.


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## TheLazyL (Jun 5, 2012)

Grimm said:


> It is not about the amount of money owed Party B but the fact Party A refuses to segregate the 2 trusts and give any to Party B.
> 
> The monies owed Party B are to cover things like education etc. Party B wants to send their children to private school using that money. Party A refuses to even consider it.


Party A wants 100%! Attorney time with hopes of breaking and with the consolation that Party A will be getting zero too.


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## Grimm (Sep 5, 2012)

Party Bs' attorney said that the only way this will be settled is to find a corporate trustee willing to handle Party Bs' small share and the 2 trusts will be segregated as per the will. Then a final accounting will be done and can be contested if any withdrawals by Party A were made.


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## bkt (Oct 10, 2008)

Grimm said:


> It is not about the amount of money owed Party B but the fact Party A refuses to segregate the 2 trusts and give any to Party B.
> 
> The monies owed Party B are to cover things like education etc. Party B wants to send their children to private school using that money. Party A refuses to even consider it.


Who is the executor of the estate and are there any legal options for either/both party to force disbursement of the funds? Does Party A have any legitimate control or authority over all the funds and decide when the segregation takes place?


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## Grimm (Sep 5, 2012)

bkt said:


> Who is the executor of the estate and are there any legal options for either/both party to force disbursement of the funds? Does Party A have any legitimate control or authority over all the funds and decide when the segregation takes place?


Party A is the executor. As such it is their job to make sure the monies is dispersed in accordance with the will and trust of Party C. The trusts are required to be in a corporate trust with a corporate trustee. The amount is below what a corporate trustee would manage. Therefore the monies can not be put in a trust.


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## Tirediron (Jul 12, 2010)

Sorry that this is happening, but it leads to an excellent prepping question. Why wait until you die to give the gift to a beneficiary.


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## TheLazyL (Jun 5, 2012)

Tirediron said:


> ... Why wait until you die to give the gift to a beneficiary.


Some parents have a hard time letting go of what took them a life time to accumulate? Dad was 10 years older then mom. He held on to their money because if he died first...he guessed right.

Now mom is hanging on to it because her with her health problems...it's security for her.

PoA on all of her accounts. Gradually moving her money from low interest bank account(s) to low risk investments in joint name(s). On a good day she's all for it and on bad days no.


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## Tirediron (Jul 12, 2010)

My parents both gave the sentimental thing to us before they passed, although some of the stuff stayed in their home until they passed, but who owned what was very clear. For instance the singer treadle sewing machine was known to be my next younger sisters, but it stayed in Mom's house until she passed as did the China cabinet that she gave to my wife.


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## terri9630 (Jun 2, 2016)

Tirediron said:


> My parents both gave the sentimental thing to us before they passed, although some of the stuff stayed in their home until they passed, but who owned what was very clear. For instance the singer treadle sewing machine was known to be my next younger sisters, but it stayed in Mom's house until she passed as did the China cabinet that she gave to my wife.


My Grandparents did the same thing. Didn't work. The only thing I received from my Grandparents is the necklace and jewelry box my grandmother insisted I take the last time I saw her and a plane ticket to the funeral. My Aunt and Uncle went through everything and sent my Grandfathers war "collection" to a museum in Arkadelphia and tossed everything else they didn't take in the dumpster/goodwill.


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## Tirediron (Jul 12, 2010)

terri9630 said:


> My Grandparents did the same thing. Didn't work. The only thing I received from my Grandparents is the necklace and jewelry box my grandmother insisted I take the last time I saw her and a plane ticket to the funeral. My Aunt and Uncle went through everything and sent my Grandfathers war "collection" to a museum in Arkadelphia and tossed everything else they didn't take in the dumpster/goodwill.


that sucks, I guess you need better relatives, probably Grimm does too


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## Grimm (Sep 5, 2012)

Tirediron said:


> that sucks, I guess you need better relatives, probably Grimm does too


When my Grandmother passed I got $5K but none of the items she wanted me to have. (Like her wedding rings or her china) My dad only got a few things because I took them from her house when I helped her move when I was 19. All my dad wanted was his father's welding machine which he has packed up in his garage and I told K he could have when my folks go. I'm an only child so I get everything when they go.


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## terri9630 (Jun 2, 2016)

Tirediron said:


> that sucks, I guess you need better relatives, probably Grimm does too


You don't get to pick your relatives... you don't have to talk to them either. My foster family is better.


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## Sentry18 (Aug 5, 2012)

My Uncle (unmarried with no kids) was a gunsmith with a large gun collection. When he passed my cousin (who all live out of state) had ravaged that collection like horny teenage boys on a $5 prostitute. His last wishes were for us each to line up by age and select one gun at a time until they were all spoken for. When I arrived at his house my cousins cars were fully loaded with guns and they were picking through everything else in his house. It was pretty pathetic. My wife and I just got back in the car and went home. My Dad had put a few guns for me in his car before I even arrived but the experience soured me so much that I didn't even pick them up for a couple years. I would rather have nothing than to witness the greed of people picking over the bones of the dead.


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## Tirediron (Jul 12, 2010)

Yeah family can be a pain, even when my Mom passed, our oldest sister couldn't leave he "organizing' compulsion alone and made it harder for my next younger sister (the executor & Mom's primary care giver) to find things.
The old ladies in the community nearly drove my mother-in-law crazy with question about, what are the kids going to do with the house? I told he that, My sister will do what ever she wants with the house it has belonged to her and her husband for years.


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## TheLazyL (Jun 5, 2012)

My Mother was name Executor of her great uncle's estate. This is all new to mom so she asked the Uncle's Attorney what she should do. Change all the locks on the house ASAP and then inventory. So that's what mom did.

Mom's side of the family is not close and rarely go out of their way to talk to each other. All of a sudden mom was the center of their attention. A few were upset that they couldn't get into the house. A few offered to help inventory, mom declined. And a few insisted that they be allowed to move into the house to "protect" the contents, again mom declined.

When the accusations started flying towards mom she arranged a meeting with the Attorney and her relation. Attorney listened to the charges and responded that all that my mom had done was on his advice and within her duties as Executor.

That didn't make the family happy but at least they stop verbally attacking mom.

During the inventory of the house mom found a notebook. In the notebook the Uncle had recorded unpaid loans that he had made to various family members. Now the reason why so many family members wanted access to the house was clear.

Mom had another family meeting. She asked if anyone had borrowed money from Uncle J? Everyone was silent. Mom opened the notebook, Brother B you borrowed $$$ on date... then each family member admitted that they had borrowed money and hadn't repaid any of the loans. They even admitted to loans that weren't written in Uncle J's notebook! Mom was the only one that hadn't borrowed money.

Then mom informed them that the amounts they owned the Estate could be legally deducted from their share of the Estate PLUS the Estate is responsible for paying mom's expenses as Executor. That didn't go over very well!

When the house sold mom had one last family meeting and passed out copies. Here is the list from the Auctioneer listing everything that was sold, what each item sold for and the total. Here is a copy of what the house and property sold for. Since mom did all of the leg work the Estate Attorney's bill was zero. The Executor's (mom) charges for labor and out of pocket expenses would be zero too. Here is the total monetary worth of the Estate. 

How did the Brothers and Sisters what to handle distribution? Deduct the outstanding loans from the individuals share or forgive the loans and divide the estate equally? After a few tears and halfhearted apologies the majority voted to forgiven the loans and divide the estate equally. Mom had the checks written and issued as per the Family's desire. The fact that mom's share took the biggest hit in the forgiving of the loans wasn't mentioned by the family.

And today? They only time mom's bothers and sisters contact her is when they want a favor, back to the pre Great Uncles death relationship.

Sometimes the worst thing you can do to a family is to leave them money!


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## terri9630 (Jun 2, 2016)

TheLazyL
Sometimes the worst thing you can do to a family is to leave them money![/QUOTE said:


> I agree. My Grandparents left money to their kids. My father paid off his house, aunt went to Ireland, uncle went to New Zealand. All I wanted was the paintings that I had done with my grandmother when I was a kid and my favorite nut cracker. The paintings had been hanging in her sewing room for 40 years. I was informed that they were crap and weren't worth anything and tossed in the dumpster. I haven't spoken to any of them since except to let my father know my sister was in the hospital a few weeks ago. Then I was his best friend for the 5 days she was there. Not a peep since she got out.


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## Sentry18 (Aug 5, 2012)

People just suck. As the good book says the LOVE of money is the root of all kinds of evil (1 Tim 6:10).


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## terri9630 (Jun 2, 2016)

Sentry18 said:


> People just suck. As the good book says the LOVE of money is the root of all kinds of evil (1 Tim 6:10).


Yep. I gave up on people years ago. I have my own family now and don't worry about the rest anymore.


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## bkt (Oct 10, 2008)

Sentry18 said:


> People just suck. As the good book says the LOVE of money is the root of all kinds of evil (1 Tim 6:10).


Permit me to stray off-course a bit here and say the desire for the _irrational_ acquisition of wealth at the expense of others is evil, but money is a pretty darn important root of good.

See:


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## Sentry18 (Aug 5, 2012)

bkt said:


> Permit me to stray off-course a bit here and say the desire for the _irrational_ acquisition of wealth at the expense of others is evil, but money is a pretty darn important root of good.
> 
> See:


In the biblical sense the "love of money" means to worship money or place the desire for money above morality or other things of true value. The money in and of itself is not inherently good or evil, it is inanimate.


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## bkt (Oct 10, 2008)

Sentry18 said:


> In the biblical sense the "love of money" means to worship money or place the desire for money above morality or other things of true value. The money in and of itself is not inherently good or evil, it is inanimate.


You're absolutely right, of course. Many people today, however, believe there is a static amount of money and those who have a lot of it must have deprived others of their due amount. The rich are always evil, according to many folks. And that's absolutely wrong.

Anyway, 'nuf of this. Back to the topic.


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## BillS (May 30, 2011)

I would have called in a lawyer a long time ago. I'd sue the party at fault for legal fees, bad faith, etc.


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## LastOutlaw (Jun 1, 2013)

I thought the executor of a will had a time limit to perform his/her duties by law.


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## Grimm (Sep 5, 2012)

Caribou said:


> In this particular case it is being held in trust for two juveniles.


Actually, no trust has been set up because the will requires a corporate trustee and the amount has fallen below what a corporate trustee will take on. When Party C passed away the amount was above this minimum but Party A refused to do her duty as executor.

I guess the Guardian Ad Litem could be called again to get involved. They are the court appointed representative for the 2 minors.


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## terri9630 (Jun 2, 2016)

Grimm said:


> Actually, no trust has been set up because the will requires a corporate trustee and the amount has fallen below what a corporate trustee will take on. When Party C passed away the amount was above this minimum but Party A refused to do her duty as executor.
> 
> I guess the Guardian Ad Litem could be called again to get involved. They are the court appointed representative for the 2 minors.


I'd call. I'd hate to see 2 kids robbed of their inheritance.


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