I've forwarded a copy of father's will XXXXX@XXXXXX.XXX. I'm still working on getting a digital copy of my mother's will, but you can consider my father's as the authority about the trusts. It's a standard Fund A/Fund B credit shelter trust, with his primary concern being minimizing estate taxes, and, to a lesser degree, keeping the money reserved specifically for his descendants. Again, the main issues at the moment are: 1) the rights of the Trustees to invade principal 2) to what extent they can invade principal 3) any proof they may need to provide to show that the invasion is for health maintenance and support 4) who, if anyone, has the right to override the Trustees decision 5) who, if anyone, could file suit against the Trustees for breach of fiduciary duty (or any other kind of complaint) 6) any other potential "trouble spots", real or implied, that might come to mind on a first readthrough (I know this is vague).
Already Tried: Since bonuses are preferred, I'll pay a bonus of $55, in addition to the original $45, for a total of $100. Again, just let me know what's fair.
Hello,I just received it. I will respond later in the day.
I also sent an abbreviated copy of my mother's will. Further info, my father passed away in August 1999, my mother In Feb 2007. Another question, my mother's will specifies perpetuity limits for the trusts. What are the limits according to law?
Hello,The Rule Against Perpetuities states that a future interest must vest within the life(s) in being at the time the interest in the property is transferred plus twenty-one years.I would like to retrieve your mother's will and respond to your questions in a few hours. However, if you need me to immediately respond, post me back and I will work on it immediately.
No need for you to respond immediately. Let me know if you need more information. Thank you!
Thank you.
Hello, I have reviewed the abbreviated wills of both of your parents. I do have some concerns, but first I want to address your main issues as expressed in your post. My response will be coming in three posts. Two posts will be sent now to allow for site space limitations and one post will be sent in a short period of time as it requires more thought.
Again, the main issues at the moment are: 1) the rights of the Trustees to invade principal The Trustee is stated to have absolute discretion to invade for what the Trustee determines to be the health, maintenance and support of a beneficiary - "and the decision of my Trustees shall be final" . The language imposes no limitation that the Trustee act in a reasonable manner. 2) to what extent they can invade principal The Trustee appears to have unlimited authority to invade provided that the invasion can be related to the health, maintenance and support of a beneficiary. 3) any proof they may need to provide to show that the invasion is for health maintenance and support It appears that only the child has the authority to challenge the decision of the Trustees. 4) who, if anyone, has the right to override the Trustees decision It appears that only the child has the authority to challenge the decision of the Trustees to invade. My answers will be qualified somewhat in the next post.
5) who, if anyone, could file suit against the Trustees for breach of fiduciary duty
It appears that only the child has the authority to challenge the decision of the Trustees. I previously had stated that a grandchild could potentially challenge the decision of the Trustees. I would like to qualify that statement after having reviewed the trust. The will indicates that the grandchild's interest does not vest until the death of the parent(s). This effectively cuts off any standing of the grandchildren to challenge the acts of the Trustees that occurred during the life of the grandchild's parent.
Issues as per first read only:
1. Spendthrift. The trust is missing a spendthrift provision that would protect the beneficiary’s interest from creditor attachment.
2. Although it is only the child that has the authority to challenge the trustee, consider the situation where:
a. The child is forced into bankruptcy by a creditor. The trustee in bankruptcy could “step into the shoes” of the child and challenge the trustee’s failure to disperse.
b. The child becomes incapacitated and the court appoints a conservator or a guardian ad litem. Again the fiduciary would be able to exercise the rights of the child.
3. Spouse. The trust continues after the child’s death to provide for the spouse until death or remarriage provided that the spouse was living with the child at the child’s time of death. Consider the following issues:
a. The spouse “lives with” a significant other (and possibly has children with that person) after the death of the child.
b. The separated spouse moves back into the house when the child is on his deathbed in order to fulfill the terms of the trust.
4. Medicaid. The trust makes no provision for Medicaid eligibility.
Please tell me how you want to continue. Thank you.
Experience: 25 years of experience helping people like you.
Thank you for your review. Your help has been invaluable; I mean it. I keep getting a message that implies that I didn't Accept your 3-part answer. Please let me know that you've been properly credited. More questions (no surprise); When you say that the child has the right to challenge the Trustee, do you mean the child that is the beneficiary of the trust? You said that the lack of a "spendthrift provision" means that the trust is open to attachment from creditors. What about if the beneficiary loses a lawsuit of some kind? Layman's redundancy: I get sued by some type of entity that's NOT a creditor, let's say a personal injury suit is filed against me, I lose, I have to pay, can they get the money from the trust? Is it protected? Since the estate lawyer and his firm are NOT listed as Trustees in the will, what is their exact role in the trust beyond bookkeeping, tax forms, calculating distributions, etc. Let me lay it out: I'll ask for a principal invasion, Brother 1 Trustee will be on my side, but will want the final "go ahead" from the estate lawyer, who will say "No, the money's not for <blank>, it's for <blank>, college education, etc." Aside from adherence to professional standards (which I respect), what interest does the estate lawyer have in defending the trust against a principal invasion? He's "prominent", our trust is an order of magnitude (perhaps two orders) _smaller_ than anything else he handles, so there's no economic incentive, which I wouldn't suspect him of anyway. Is he or his firm at risk in any way if they allow a principal invasion? I know you can't speculate on players you don't know; I just want to know if our estate lawyer has some justified legal concern in the event of a principal invasion.
Hello,Thank you very much. I did receive proper credit (45 &55 =100). Maybe you are receiving the message because I had to break the answer up into 3 parts due to site constraints.Now for the new questions.When you say that the child has the right to challenge the Trustee, do you mean the child that is the beneficiary of the trust? Yes. Child is referring to the children of your parents and grandchild is referring to the grandchildren of your parents.You said that the lack of a "spendthrift provision" means that the trust is open to attachment from creditors. What about if the beneficiary loses a lawsuit of some kind? Layman's redundancy: I get sued by some type of entity that's NOT a creditor, let's say a personal injury suit is filed against me, I lose, I have to pay, can they get the money from the trust? Is it protected? The trust is not protected and the creditor could attach your right to distributions. I was very surprised to not see a spendthrift provision as it is very standard. Think about the involuntary bankruptcy scenario that could result from a catastrophic personal injury lawsuit. Or less extreme, a personal injury action where the creditor attaches all distributions to you. I have to respond in two segments again.FLAandNYLawyer39935.079803044
Part 2 - Since the estate lawyer and his firm are NOT listed as Trustees in the will, what is their exact role in the trust beyond bookkeeping, tax forms, calculating distributions, etc. Their role is determined by the trustee. The estate lawyer may be hired or fired at the trustee's discretion. The trustee may limit or expand the attorney's duties. Let me lay it out: I'll ask for a principal invasion, Brother 1 Trustee will be on my side, but will want the final "go ahead" from the estate lawyer, who will say "No, the money's not for <blank>, it's for <blank>, college education, etc." Aside from adherence to professional standards (which I respect), what interest does the estate lawyer have in defending the trust against a principal invasion? He's "prominent", our trust is an order of magnitude (perhaps two orders) _smaller_ than anything else he handles, so there's no economic incentive, which I wouldn't suspect him of anyway. Is he or his firm at risk in any way if they allow a principal invasion? I know you can't speculate on players you don't know; I just want to know if our estate lawyer has some justified legal concern in the event of a principal invasion. You referred to the trust as a standard Fund A/Fund B credit shelter trust. However it is unique in that it does not qualify the right to invade principal with a determination that the invasion be reasonable or necessary. Perhaps the estate lawyer is thinking of this trust as a standard AB credit shelter trust.Based on this lack of qualification and my previously mentioned concerns, you could make a very strong argument that it would be prudent for the trustee to invade the principal and negligent for the attorney not to suggest an invasion.
Could you give me a standard example of spendthrift provision language that would appear in New York trusts? I just want to make sure that it's not amended to the trusts anywhere in the portions of my mother's will that I didn't include in the copy I sent to you.
Hello,Thank you very much for the accept/bonus.Your mother's will pours over to the trust created in your fathers will. Therefore a spendthrift provision in her will would not effect the trust.However here is my language:No interest in income or principal shall be alienated, encumbered or otherwise disposed of by any beneficiary while in the possession and control of the trustees, and if any of them should attempt to alienate, encumber or dispose of all or part of the income or grants of principal before the same has been delivered by the trustee, or if by reason of bankruptcy or insolvency or any attempted execution, levy, attachment or seizure of any assets remaining in the hands of the trustees under claims of creditors or otherwise, all or any part of the income or principal might fail to be enjoyed personally by any beneficiary or might vest in, or be enjoyed by, some other person, then the interest shall terminate.
Thank you for everything. You have been extremely helpful. I don't think I have any more questions at the moment, but I may be back next week. Thanks again!
Hello,It has been my pleasure. If you want to reach me,please start your post with FLAandNYLawyer. Thank you and good luck.