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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Estate Law
Satisfied Customers: 118658
Experience:  Experienced in Trust and Succession Law, including Louisiana Laws
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I need to know how to handle a trust beneficiary's share of

Customer Question

Hello, I need to know how to handle a trust beneficiary's share of the trust in their estate in West Virginia. I have a document to fill out: West Virginia Estate Appraisement & NonProbate Inventory. The instructions do not make it clear where I should put the testators's share of the trust. He was able to leave specific instructions for the disposition of those assets. The trust is a generation-skippping trust.
Submitted: 1 year ago.
Category: Estate Law
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

If the property of the beneficiary who is deceased is in trust, then that property is not probated if it remains in trust, so that would be considered their non-probate inventory. WV law states that "nonprobate personal property" means all personal property which does not pass by operation of the decedent's will or by the laws of intestate descent and distribution or is otherwise not subject to administration in a decedent's estate at common law.

So this means that if the property remains in the trust and never went to the beneficiary prior to their death, then it is non-probate inventory, but if it had gone to the beneficiary before their death, it was probate inventory and that goes under the estate property.

Customer: replied 1 year ago.
To be sure I understand you correctly: since the trust NEVER went to the decedent but passes through directly to his beneficiaries upon his death the fiduciary lists the trust on West Virginia Form ET 6.02 Non-Probate inventory of the Estate.
The fiduciary then answers YES to question #3: Did the decedent make any transfers in Trust which passed to others upon his death? And puts the TOTAL Market Value on Line 3.
THEN, on Page 2 of Form ET 6.02, PART 3: Inventory of Non-probate personal property: the fiduciary writes what the trust consists of ( cash, stock, etc.) the name of the trust & the decedent's name as beneficiary of said trust.
Then the fiduciary writes: "Upon death decedent disposes of his share, as beneficiary of trust, as follows: list of specific bequests from Last Will & Testament with dollar values per bequest. Total of bequests must equal the total market value of the trust as shown in the answer to question 3, on page 1.
Is this correct? PLEASE BE VERY SPECIFIC IN YOUR REPLY.What does seem unclear, in terms of finally and ultimately settling the estate, is that the estate has bills to pay and the only assets available are from the trust...thus, the bequests will not equal the amounts that will be listed in Part 3, (on page 2 of form ET 6.02.)
There is no place on the form to list the debts that the decedent had when he died, debts that must be paid from the estate prior to any distribution of bequests.Thank you very much for your help. The fiduciary will be filing this form with the County Clerk in just a few days; thus, we need complete & accurate information.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
I need you to clarify something, the deceased was just a beneficiary of the trust and the deceased DID NOT PUT ANYTHING INTO THE TRUST, it was there and they were simply a beneficiary who died and now their share goes to the descendants?
Customer: replied 1 year ago.
that is correct. The decedent is solely a beneficiary. His parents started the trust and made it a generation-skipping trust. The decedent got only the income from interest and dividends, never principal and contributed NOTHING.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
Then your answer to 3 is NO, he did not put anything into trust and the question on page 2 is whatever actual personal property he had, not the trust, since he was just a beneficiary he did NOT OWN THE PROPERTY OR ASSETS IN THE TRUST and he never owned them.
Nothing from the trust is ever part of his estate, it is not used to pay debts. Only property he owned himself at time of death is used to pay debts and if the estate is insolvent, then all you do is notify the creditors, you do not mention the trust as IT WAS NOT HIS PROPERTY OR ASSETS, it was a generation skipping trust and it was owned by the trust, not him.
Customer: replied 1 year ago.
Thanks. That's what I thought but I wasn't able to get any helpful information from anyone in the WV governmental agencies involved. I will inform the fiduciary that this is the case for the assets of the trust. Thus, the decedent's estate consists only of any personal property, bank account in decedent's name only, and anything else the decedent owned at TOD.
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your reply.

Yes, the trust is not his trust. So nothing is listed on the estate forms about the trust, it is like it does not even exist.

Customer: replied 1 year ago.
it means nothing for the sake of the WV forms that the decedent made bequests from his share, as beneficiary to a trust. And, even though the WV government has seen the Will, with the bequests, they they will not expect to see the decedent's share of the trust listed as a non-probative asset on their form, nor a breakdown of the dollar amount of the bequests....confusing but interesting.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
It was a generation skipping trust from his parents, so really he did not need to include it in his will and he did so needlessly. But it is still not part of his estate nor did he put anything into the trust, his parents did.
Customer: replied 1 year ago.
How else could he have disposed of his share of the trust when he died, if he didn't include it in his will? Because his share didn't go automatically to just one person; he was permitted by the terms of the trust to dispose of his share however he wished; he needed to tell his heirs that they'd be getting something and he needed to tell the Trustee what to do with his share after his death.
Would it cause problems with the state of West Va. to put the information onto form ET 6.02 - Non-Probative Inventory?
Customer: replied 1 year ago.
Also, since the WVa govt has the will with these bequests listed might it not be better to include all of it in the Non-Probative section for clarity's sake?
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
It was a GENERATION SKIPPING TRUST set up by his parents, he would be the generation that was SKIPPED. He did not have to do anything the terms of the trust pass it onto his descendants for him. Even though the trust allowed him to decide who received the shares of the trust by percentage, if it was a generation skipping trust set up by his parents, it went automatically to his descendants.
It would not cause any issues putting it under non-probate assets, but he did not put anything into the trust, all he is doing is deciding the percentage that goes to his beneficiaries.