My mother and father never finalized their divorce. My dad remarried and passed away in 2008. There is a living trust naming me second trustee. My stepmother is sole trustee. Is there any validity to the trust?
Hello,Thank you for using JA..Do you have proof that he actually married stepmother prior to a final divorce decree being issued by the court? (i.e. a marriage certificate and marriage license issued by the clerk).Was a final divorce decree ever issued by a judge declaring them divorced?.In the trust documents, is stepmother referred to as his wife?.Is the living trust set up for both father and stepmother or is it just for father?.Who are the beneficiaries of the trust?.If you can answer each question individually, that will give me a better idea where everything stands..
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Thanks.
Barrister
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The answer to your first question and second question is they were married for 40 years. My dad never knew my mother didn't send in the final papers, he just figured he would. A final divorce decree was never issued.
Ok, if they were never legally divorced, then the second marriage to stepmother would never have been a legally valid marriage and would be "void ab initio" (void from the beginning). .So with that said, essentially stepmother would have been his roommate, not his wife for as long as they were together. If they had acquired property or assets in both their names, then they would be presumed to be owned equally. But there would have been no community property status since they were not legally married. .When they set up the trust, since they were legally just roommates, if they both put in assets into the trust, then the trust would then legally own them, not the grantors. However there is no requirement that the grantors in an AB trust be married in order for it to be valid. They can just be a couple that chooses to take advantage of the full amount of the estate tax exemption by funding the decedent's A trust with the maximum deductible amount. If the survivor and the deceased settlor are not married, the deceased settlor's assets are usually not added to the survivor's trust since the transfer won't qualify for the marital deduction.."Trust B" gives the survivor no rights or limited powers to use the assets allocated to it and is irrevocable. For a married couple, this trust contains the deceased settlor's assets, and the estate tax is calculated to the extent it exceeds the applicable exclusion. This trust is a type of bypass trust that can pass to the next generation of beneficiaries without triggering a transfer tax..So the B trust should have been funded by father's assets and is irrevocable so stepmother could not legally change it or prevent the named beneficiaries from receiving any distributions..The A trust is revocable and would be in stepmother's name. So she could change that if she chose to and leave all those assets to only her children if she wanted to..But the B trust is irrevocable upon father's death..BotXXXXX XXXXXne is that you don't have to be married to have a valid AB trust, although it wouldn't allow them to legally take the marital exemption..
Could you explain a little more regarding the b part of the trust. the last sentence in the third paragraph? What is in the B part of the trust?Would the assets in the B trust be half or is B the assets he brought to their union before they were married. They got married, he moved into her house, they moved and built a house together in the mountains. What is moved into "B" when he died? Thanks
Ok, in an AB trust situation, there is a primary trust that is established and funded with assets from two parties, usually a husband and wife. Once one party dies, the primary trust then establishes two trusts A and B. The B trust is filled with assets from the parties so that it can maximize the estate tax exemption (currently $5.12MM) and pass those assets down to the beneficiaries of the trust. It is irrevocable and can't be changed once funded. .For example if father had $4MM in his name and stepmother has $4MM, they could place those assets in the primary trust with the directions that a total of $5.12 MM go into the B trust so as to use the full estate tax exemption for father. The remaining amount would go into the A trust for the support of stepmother and presumably it would grow to a point so when she died, she would be able to exempt the maximum amount from estate taxation as well..Father could have funded the B trust entirely, with any surplus going into the A trust for stepmother, he could have funded the B trust partially with stepmother contributing some assets, or stepmother could have funded the B trust entirely. From my position there is no way to know who funded what..But since the B trust is irrevocable, any beneficiary can request a copy of the trust as well as an inventory of all assets in the trust from the trustee and she would legally have to provide it..
Could you tell me where someone would view this post? You have been great in answering my questions. Unless I know what was placed in the B part its still a mystery. I have a copy of the trust, would it say what is in it? Or how was it funded?
I am not sure what you mean by "where would someone view this post?".This is a link to the entire thread if that is what you mean:.http://www.justanswer.com/law/6vk5s-mother-father-finalized-divorce-dad.html.The trust may or may not say what is in it. If it is a B trust, it likely wouldn't have been funded until after father died. But the trustee of the trust would have a legal obligation to deliver an inventory of all the assets in the trust to any beneficiary upon written request within a "reasonable" time. Typically this is considered 10 days..So you would just write a letter, have it notarized and send it to the trustee asking that you be provided with a full inventory of all assets that are currently in the trust..