I have a question regarding beneficiary's gift of expected inheritance.
A testamentary Trust
was created May 15, 1999. It designated the Trustee as the sole beneficiary of the Trust. The Trustee died on October 29, 2005. The Trust instrument stated all remaining trust assets were to be distributed equally to 5 beneficiaries upon the Trustee's death.
Back to May 21, 1999...One of the five beneficiaries made a gift of his expected inheritance of 20% share in a trust property, to another beneficary. In the presence of the Trustee and affected beneficiary, the brother provided a hand written note that was approved by the Trustee on the spot. The note reads " I hereby give all of my control/or interest in the __ House to my beloved sister ___" Best of Love, ____.
On June 15, 2000, All future beneficiaries were notified of a contract for purchase of the same property between the Trust and the "beloved sister". All beneficiaries approved this contract which was then signed by the Trustee and the "beloved sister". Fast forward to October 28, 2011. At a meeting of the 5 beneficiaries, the "beloved sister" produced the hand written note from her brother in 1999. She instructed all to inspect the note, and verified what it meant. She then asked the brother if he still wished to honor this note. He affirmed, and the other 4 beneficiaries agreed.
The Trust has not been distributed to date, and is in litigation because breach and failure to distribute.
The "beloved sister" claims she a 40% reduction should be applied to her contract from October 29, 2005 to date giving her credit for her portion and the brother's portion of interest in the inherited property. When this is applied, the contract for purchase would be considered satisfied as of October 15, 2011, with an overpayment of $7400. The "beloved sister" was never informed of her rights as a beneficiary regarding options how the agreement and her own interest would be applied to her contract for purchase. Now, the "beloved sister" is the Plaintiff in litigation against the Trust and the brother denies the gift and states he was in the care of a psychiatrist and under the influence of alcohol when the "gift" was made.
Is the "beloved sister's" claim valid?
The property was placed into a contract for purchase to