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Richard
Richard, Attorney
Category: Estate Law
Satisfied Customers: 53954
Experience:  29 years of experience practicing law, including tax and estate planning.
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My wife is one of seven beneficiaries of an irrevocable trust

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My wife is one of seven beneficiaries of an irrevocable trust which closed on Dec. 15, 2012.The trust funds are invested in Stocks and Bonds and administered by a Trustee employed by the bank which has been managing the investments. My wife's share will be 1/12 of the total. She signed an agreement to receive a specific dollar amount determined by the trustee based on the fund's value at that time, about 6 weeks ago. The fund has increased in value since then. Shouldn't this result in a proportionately higher dollar amount being allotted for each beneficiary based on the same percentage value?
Thank you.
How should this be handled by the Trustee?
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good evening. Yes, all assets of the estate are to be divided among the beneficiaries of the trust. If the funds value has gone up in the interim, she is entitled to her 1/12 of the increase. There may be a bit of an additional trustee fee attributable to increased amount, but the botXXXXX XXXXXne is that this is the beneficiaries' money, not the trustee's money and is the trust assets are to be distributed in full to the beneficiaries, it all goes out. It's likely that all the trustee will require is to amend the agreement that was signed to acknowledge the increased amount.



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Customer: replied 3 years ago.

Thank you for your prompt reply. :-) I would like to ask for more on this same question. I will need to go into some detail, but I do not have the time to do so now. I will write back to you later today or tonight. Thank you.


Best regards,


Michael Dennis

You're welcome...my pleasure to be of assistance. I look forward to hearing from you later. Enjoy your day!
Customer: replied 3 years ago.

I will use some hypothetical numbers.


Value of trust on June 1st: $3,000,000.00


1/12 share value on June 1st: $250,000.00


All beneficiaries approve above figures.


DJIA falls on June 12th, trust value on June 13th is now $2,900,000.00


1/12 share value is now $241,000.00


Bank receives approval documents based on June 1st values on June 13th.


How does the bank then terminate the trust?


If new documents are required to approve the lower value and sent to the beneficiaries, the value of the fund may go up, say to $3,100.000.00


before the bank receives the approval forms from all of the beneficiaries.


The beneficiaries 1/12th shares are now worth more than the figure just approved.


So you can see what I'm getting at here. I'm sure the bank has a way of handling both of those scenarios, to prevent an endless cycle of change-approvals for higher or lower values.


This question may be best answered by the bank trustee, b/c in order to comply with federal/state regulations the above scenarios may be handled by procedures specific to that bank, as long as they stay within the law.


Please let me know if you think that may be the case. Thank you.


Best regards,


Michael Dennis




Thanks for following up. This is handled by putting the following provision in the agreement signed by the parties...

The parties acknowledge and agree that: i) the specific amount designated herein as distributable to each beneficiary is based upon the market value of trust assets as of the date of this agreement; ii) that the specific amount designated may be more or less than the actual amount to be distributed due to the market value of the trust assets fluctuating during the period from the date of this agreement and the distribution of the trust assets; and iii) that the actual amount to be distributed to each beneficiary shall such beneficiary's proportionate share of the trust assets as of the date of distribution multiplied times the aggregate value of the trust assets as of the date of distribution.
Customer: replied 3 years ago.

Thank you! That was exactly what I needed. I appreciate your time and patience. Just what I was hoping for from this service, which you may be sure I will recommend to others.


Sincerely,


Michael Dennis

You're very welcome...it's been my pleasure! I'm always here to help! And, thank you for the kind words!
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