Trustee has duty despite beneficiary complaints
Question: I’m the trustee of my late aunt’s living trust. She has two adult children, both in their late 40s. Neither of them, to my knowledge, has ever held a job for very long or been responsible with money. My aunt always helped support them. Following her death in April, I discovered that her trust does not give her kids the money in a lump sum. Instead they are supposed to receive monthly distributions over the next 10 years. At this point, both of them are hounding me to give them all of their money up front. I’d like to release all of the money to them just to get them off my back, and because it would be a lot more convenient than doing it monthly. What do you advise?
Answer: As trustee, you are a fiduciary. You are legally bound to carry out all the provisions of your aunt’s living trust, assuming the provisions are lawful. You are not authorized to alter any aspect of the trust. So no, you cannot give them a lump sum based on their preferences or yours.
It sounds like your aunt knew what she was doing when she decided to stretch out her children’s inheritance. She probably surmised they would not be able to handle a lump sum properly, and wanted to arrange things to protect them from themselves.
If you find the burdens Joseph Karp
The Karp Law Firm, P.A. too great, you can try to find someone else to assume the administrative responsibilities of making the distributions. You would pay that person out of the trust funds. You should also determine if your aunt named a contingent trustee and if so, see if that person would be willing to take over — although I suspect he/she would catch as much flack as you have. At this point, I suggest you meet with a boardcertified elder law or estate planning lawyer who can examine the trust and discuss possible options.
Joseph Karp, a member of the Florida and New York Bars, is a Nationally and Florida Bar Certified Elder Law Attorney and founder of The Karp Law Firm, located in Palm Beach and St. Lucie counties. The firm assists clients with wills, trusts, Medicaid and VA benefits planning, special needs planning, asset preservation, probate/trust administration and estate litigation.