I am a beneficiary of a Trust in which the person who created it died (my ex stepfather). He had allowed my brother to borrow against $400,000 CD's to renovate apartment.s He is now at odds with the Trustee -- he said he can bypass her in paying back the Trust, following is what he wrote- can he do this??? The time table that I outlines is still doable provided that I do not get interference from Karen. Unfortunately, Karen is going to interfere - in fact I am expecting this matter to go "legal" which, if it does, will add another 2 to 3 years to the time table. That said, I will have opportunities to bypass the Trust and the Successor Trustee and deal with the beneficiaries individually. If I do elect to bypass the Trust altogether and deal with the beneficiaries on an individual-by-individual basis, those beneficiaries that gave me their unwavering support will see their money first - closer to the originally outlined time table - and obviously those who did not give me their unwavering support will have to receive their money according to the time table force on us by Karen - about 2-1/2 to 3 years from now.
State/Country relating to question: Arizona
Nothing am totally shocked
Hi and thank you for your question.
Before I can properly answer this, can you let me know if the CDs were assets of the Trust, if you know? Thanks!
Yes the CD's were assetes of the trust of which are to go to the beneficiaries
Directly to the beneficiaries
Then the answer is very straight forward: no, he cannot bypass the trust. The money is owed to the trust, so he must repay it to the trust. He cannot repay the beneficiaries directly. There are legal reasons for this, but that's the answer. It would be like me borrowing money from you, then you die, and me saying, "No, I don't want to repay his estate, I want to pay it back to the beneficiaries." Or put another way, if I borrowed money from you, I cannot repay it to your neighbor simply because you owe your neighbor money. You would need to give me permission to do that. It doesn't work this way. He sounds like a controlling person who needs to learn lessons the hard way. I hope this helps. Please press the ACCEPT button so proper credit is provided for your answer.
Over 12 years of practical experience in Estate Planning, Trust and Probate law.
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