What is a Testamentary Agreement and what purpose does it serve?
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You answered an earlier question for me. Thank you for your time and expertise. Parent and stepparent set up a trust but never funded it. Both are deceased. Paperwork we were given was a Testamentary Agreement, the trust and a will for each parent. After parent passed, step parent put bank accounts and other assets into own children's names so they would not become part of the estate. Got advice today, that the terms of the Testamentary Agreement were violated by stepparent. What exactly is this Testamentary Agreement and what is it's role in relation to the trust and will? Does one take precedence over another?
You are welcome. Please remember you can always request me by starting your question with "Dear XXXXX." In this context I would think that the testamentary agreement was written to prevent the parent or stepparent from unilaterally changing their will and trust documents. Essentially an agreement between the parent and stepparent that they will not make any changes to their documents or their estates as they set them up at the time of the agreement. This is done many times in second marriages such as this one to make sure that the estates stay the same after the death of the first spouse and that the joint wishes of the spouses are followed. It is intended to prevent the surviving spouse from disinheriting the deceased spouse's children.It is not a matter of which one controls but that the testamentary agreement is there to assure that the documents or the estate is not changed unless both spouses agree. It would have been violated by the surviving spouse moving assets outside their estate to avoid the agreed upon estate disposition.
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Over 14 years experience in Medicaid, Estates, Trust.
Dear XXXXX, Thank you for your response. Ok, according to the Testamentary Agreement all assets were supposed to go into the trust. However, nothing was put into the trust. There are a few things that will end up in it through probate but the bulk of the estate was given to the stepparents children by placing their names on bank accounts and as beneficiaries to other assets. We have been told several times that unfortunately since those things were done before stepparent passed, that there was nothing we could do about those assets as they are not part of the estate. Today we were told that was a violation of the terms of the testamentary agreement and that we had a right to have those assets returned and put into the trust. I am totally confused at this point.
The attorney today is completely correct. If the transfer of the assets violates the agreement then the stepparent breached the contract. Courts have frequently upheld such marital contracts. You can sue the children that received the assets for constructive trust. Essentially alleging that they are holding assets that they have no right to since the stepparent had no right to make the transfer.You were given bad advise at first or they did not see the agreement. You see the agreement is the piece of the plan that prevents those transfers. This is exactly the scenario that the agreement is made to protect against.
I made no mention of the agreement in prior questions. I thought it was just part of the trust papers and never referred to it specifically. Thank you once again. You have been very helpful.
That is why. Good luck! That sounds like pretty good news. Assuming they still have the assets and have not blown them.
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