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What has precedence, a will or a living trust? My wife's aunt has a will that states her desires for distribution of assets. Her living trust, established 20 years ago when her husband was living, distributes the assets differently that her will. At question is a condo. Her will, established recently, says 1/2 of the condo goes to one of her nieces who is caring for her. The trust says the assets are to be distributes to others. The niece is not mentioned in the trust.
Optional Information: coronado, California Already Tried: One estate lawyer tells me the trust will prevail once she dies. He will is not a pour over will. Her assets come back to the family trust upon her death and therefore 1/2 of the condo that is in her A trust returns to the family trust. Her will, demonstrating her desires now, vice 20 years ago, distributes her 1/2 of the condo differently. Which will rule?
does the will refer to the trust?
did the will occur after the trust?
in what state?
To the best of my knowledge, the will does not refer to the trust. The will was established after the trust. The trust was established 20 years ago when Aunt's husband was living. He is no longer living. The trust establishes an A and B trust upon his death but there is no recording of assets at that time. Another estate lawyer is tracking expenses she should have taken from the B trust and says those funds will be transferred from the B trust to the A trust upon Aunt's death. Another estate lawyer say that cannot happen because she did not in fact take the funds from the B trust. The B trust does not have sufficient cash to make that transfer. The condo is most of the estate. State is CA.
Am I waiting your answer, or are you waiting for something from me?
Where both the trust and will refer to the same assets, the document later in time would control. Often though the trust handles specific assets which are not referred to in the will.
Okay, I understand. In this case the will would have precedence. Can funds be transferred from the B trust to the A trust upon her death that should have been taken earlier for her health, welfare, support, etc? Can they be transferred before her death. She did not know she could do that until recently. She has an estate lawyer keeping track of what should have been transferred. But lawyer is very old.
Monies cannot be transferred from one trust to another unless the trust permits or gives the trustee such discretion.
The trust states that the surviving spouse can use the income from the trust for her health, welfare, support, etc. It also provides for invasion of principal for the same and provides for a $5000 or 5% withdrawal once a year. My confusion is one estate lawyer who is accumulating those expenses says it can be moved once the condo is sold and cash is available. Another estate lawyer says it cannot be moved because Aunt did not take it from the B trust when needed. So, can funds be moved after her death, or do they need to be moved before her death, or can they be moved at all.
I don't know if you got this.
The trust has to continue in effect as long as the trust provides for distributions to a beneficiary. The trust itself should identify when it is to end, and should not have assets moved earlier than that.
I don't understand what these words mean. Can expenses be accumulated for what Aunt could have taken from the B trust for her support over many years, and moved from the B trust to the A trust? Must that transfer be made before Aunt's death. As I understand family trusts, all the asset from the A trust come back to the family trust upon her death. Transfers would not make sense at that time if all assets are back in the family trust. However, her will distributes Trust A assets much differently, so it is important as to when and if those accumulated expenses can be transferred.
I am going to bed now. This process is too slow form me. I will come back in the morning and accept if I get an answer. Thank you for the info provided this evening.
v/r bob
I think you are making it more complicated than it should be. You have 2 trusts. Each should be followed as written. if the trustee has discretion, then it can be exercised but the trust normally outlines what the trustee can do including handling of expenses and distributions. Modifications from the trust require court order.
I understand what the trust says. The trust says the trustee can use the income, invade principal, and do the 5/5 rule (standard words). Here's the situation. The B trust has $100,000 in equities, and 1/2 of a condo worth $1.4 Million. Aunt's estate lawyer has captured what Aunt should have taken, but didn't, from the B trust for her support over the many years. That accumulates to $350,000. Since there is insufficient liquid funds in trust B to transfer that $350,000 to trust A, can that transfer take place after Aunt dies? Another estate lawyer tells me that cannot happen, because when she dies, all her assets go back to the family trust. The estate lawyer says the family trust must be modified to reflect the language in the will. See how I am confused.
If the trust calls for the money to go back to a family trust then indeed the trust would need to amended by the creator of the trust to permit monies to be moved otherwise, such as to trust A. The estate lawyer you mention appears to be correct based on what you describe but this is specific to the terms of the trusts and the family trust.
Great and thanks. XXXXX does not exist upon Aunt's death does it? I thought trust A (no paper document exists, and no ledger exists stating what was in trust A or B upon husband's death) disappears upon Aunt's death and all assets revert to the family trust. How can funds be moved to trust A, and be distributed according to Aunt's will, after she dies if trust A no longer exists at that time. See my confusion.
Trust A should have a document that governs it and that document should direct what happens to the funds when the trust ends. if the parties forgot to do so, a court application should be made to direct it. Kindly accept my answer so I get credit,
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