Dear Newsweek, Our mother passed away last year, leaving an inheritance of approximately $300,000 to give to each of 5 siblings. Nothing has been distributed yet by the administrators, my sister and my brother, due to legal issues. These issues will be resolved within a few months.
My brother, one of the trustees, passed away recently, leaving his widow of over 70 years broke due to his spending habits. We love our sister-in-law, but she can’t handle the money and will squander it quickly, if given to her at the same time. Morally we feel she is entitled to it, but is there a way to give it to her children to give it to her in small installments or is there a way for us, surviving brothers and sisters, to create a legal entity to hold it and give it to it in increments? If she doesn’t get it the way the rest of us do, she’ll be pissed. She has SS and her small pension to live on. Their house has been refinanced several times to pay off the credit cards, so I’m afraid there is little equity in the house.
What can we do? Thank you in advance for your help.
“What should I do?” from Newsweek offers expert advice to readers. If you have a personal dilemma, let us know via firstname.lastname@example.org. We can ask experts for advice on relationships, family, friends, money and work and your story could be featured on WSID at Newsweek.
Read the trust documents and see what they say
Andrew M. Lieb, Managing Partner of Lieb at Law.
What a difficult situation and I’m sure you’re not the only one feeling stressed about something like this; Letting your parents’ money go to waste is emotionally difficult.
However, when dealing with a trust, the terms of the trust dictate what happens to the money in the trust. So there is nothing other beneficiaries can do to change who gets money from the trust, no matter how motivated you are. That said, perhaps your sister, who is the trustee, or your deceased brother’s alternate trustee, has the authority to restrict distributions in the trust documents.
Often a trustee is granted such power in the trust. You should therefore read the trust documents and see what they say. When it comes to trusts, giving legal advice without reviewing the documents is like giving medical advice on a break without first reviewing the x-ray. Good luck.
It may be possible to protect trust funds and support sister-in-law
Family Law Attorney, Sabrina Shaheen Cronin, Founder and Managing Partner of Cronin Law Firm.
Distributing the assets contained in a trust after the death of a loved one can sometimes come with a unique set of challenges, such as the predicament presented in this case. In general, a well-drafted trust document will provide instructions to trustees regarding their ability to control and distribute trust assets. For example, some trust documents will give trustees the ability to distribute assets at their reasonable discretion under the circumstances. This type of wording can give the fiduciary the power to distribute the assets to the beneficiaries as they see fit; whether in a lump sum, installment payments or an entirely separate trust designed to support beneficiaries. In the event that the trust does not contain the language conferring broad power on the trustee, but instead contains strict instructions regarding to whom the funds are to be distributed, how and when, the process of distributing assets can become more complex.
In this particular scenario, if the trust allows the trustees to distribute the funds as they see fit, it may be best to create a separate trust with the funds to be used to support their sister-in-law; however, this may subject the trust to additional scrutiny and potential litigation if it feels the need to challenge the trustees’ decisions in court. In the event that the trust document does not give the trustees such broad authority and the family genuinely believes that their sister-in-law is incompetent or unable to support herself, it may be worth consulting with an experienced trust attorney. homologation concerning obtaining guardianship over the sister-in-law. Generally, family members can apply to probate court for guardianship of those who may be unable to support or care for themselves, particularly in cases where there are demonstrable mental incapacities. . If so, an experienced probate lawyer familiar with guardianship issues would be able to help the family move forward and eventually obtain guardianship and control of the finances of the family. sister-in-law and, ultimately, inheritance. under the trust.
Another option could be for one of the sister-in-law’s children to obtain power of attorney over her finances. As long as a durable or financial power of attorney is properly drafted and executed according to state law, it could allow one of the step-sister’s children to monitor their finances and control their spending. This, of course, would have to be agreed to voluntarily by the sister-in-law and would require the assistance of an attorney experienced in estate planning.
In sum, depending on the specific provisions of the trust, as well as the laws of the state where the trust is administered, it may be possible to protect trust funds and support the sister-in-law to ensure that she is able to continue living comfortably and carefree. Either way, it’s a gesture of love and kindness for the siblings of the late brother to ensure that his surviving wife is taken care of with funds they don’t necessarily have to give him. Neil mentions that the inheritance should have been distributed a while ago. It doesn’t mention what legal issues prevented the distribution, or whether the trust provides any instructions as to whether a deceased sibling’s spouse is entitled to inherit anything. Many facts that remain unknown could have a significant impact on the outcome. Neil states that morally they all feel it is the right thing to do; and when everyone is lined up, things usually go a lot better.”