From Elle N@21:1/5 to All on Thu Dec 16 21:08:39 2021
Two brothers and a sister are the ultimate beneficiaries of a trust. The two brothers are starting to ask for, and receive, distributions of principal. Are there any legal grounds to divide the trust into shares, such that the two are drawing down only
Grandmother set up the trust decades ago.
Brother Ethan, brother Joe, and sister Rose are the ultimate beneficiaries of the trust. Sister Rose is myself.
Brother Joe is disabled and qualifies for various forms of welfare. He keeps his welfare benefits as long as aid is only for transportation and shelter (et cetera).
Terms of the Trust:
After grandmother dies, the siblings' father receives the income from the trust. Grandmother died years ago. The father has been receiving income from the trust since her death. With the bank-trustee fees, and distribution of income to the father, the
trust has not grown consistent with the stock market. It is dwindling, even with the stock market expansion of the last few years.
The trust permits distributions of principal to either the father or any of the siblings for health, education, maintenance and support (HEMS).
After the father dies, the trust dissolves. By my reading, the three siblings are to receive equal shares of its contents. Per capita, in other words.
Distributions To Date:
A few years ago, Brother Ethan requested a distribution from the trust to pay his health insurance premiums. The trustees agreed. Total distributions to date: around $45,000. Brother Ethan has never been able to make ends meet, despite being a licensed
professional. He has taken many "loans" from his parents. Now Ethan is old; in somewhat poor health; and heavily in debt, including, inter alia, owing $15,000 to the IRS for back taxes.
A year ago, someone crashed into disabled Brother Joe's car and totaled it. Joe requested a distribution from the trust to buy a car. The trustees agreed. Total distribution: $25,000. Brother Joe has made poor choices with money over the years. But
Brother Joe is not so disabled that a court would appoint, say, a guardian. Had Joe not made these choices, then he would not have needed this distribution.
Sister Rose has not requested nor received any distributions. Sister Rose is doing fine financially. She has always lived within her means. She never took money from her parents. There is no spouse.
The situation bothers Rose (me).
At present, Rose (myself) understands that if the father died today, then because of the distributions, Rose would receive about $23,000 less than if there were no distributions to her brothers. By Rose's reckoning, the brothers are quite a bit more
enriched, so to speak, and rewarded even, on account of their own irresponsible financial planning.
Are there any legal arguments that one could use to compel the trustees to divide the trust into shares, such that the two brothers are drawing down only their 'share,' at least until their share is depleted?