The estate of Martha created several irrevocable trusts n California for
the distribution of her assets to her grandchildren. I'm interested in
one of them, created for Philip. The trust has been managed by a
different grandparent, a non-professional and now getting on in age.
Under the terms of the trust, the money was reserved for paying for
education until Philip reached 25, and then he was free to use it
without restriction. Some money was used for education, but a good chunk remains. Philip is 30 now and has been getting distibutions from the
funds for, eg, buying a car and moving to Wyoming.
At this point everyone -- trustee, parents, and fiduciary -- is tired of
the thing and just wants all the assets to go to Philip
and the thing to be dissolved.
How complicated is this?
The estate of Martha created several irrevocable trusts n
California for the distribution of her assets to her
grandchildren. I'm interested in one of them, created for Philip.
The trust has been managed by a different grandparent, a
non-professional and now getting on in age.
Under the terms of the trust, the money was reserved for paying
for education until Philip reached 25, and then he was free to use
it without restriction. Some money was used for education, but a
good chunk remains. Philip is 30 now and has been getting
distibutions from the funds for, eg, buying a car and moving to
Wyoming.
At this point everyone -- trustee, parents, and fiduciary -- is
tired of the thing and just wants all the assets to go to Philip
and the thing to be dissolved.
How complicated is this?
Eli the Bearded <*@eli.users.panix.com> wrote:
The estate of Martha created several irrevocable trusts n
California for the distribution of her assets to her
grandchildren. I'm interested in one of them, created for Philip.
The trust has been managed by a different grandparent, a
non-professional and now getting on in age.
Under the terms of the trust, the money was reserved for paying
for education until Philip reached 25, and then he was free to use
it without restriction. Some money was used for education, but a
good chunk remains. Philip is 30 now and has been getting
distibutions from the funds for, eg, buying a car and moving to
Wyoming.
At this point everyone -- trustee, parents, and fiduciary -- is
tired of the thing and just wants all the assets to go to Philip
and the thing to be dissolved.
How complicated is this?
It's not complicated at all. You either get the trustee to
distribute the trust assets as the trust dictates, or you go to court
and ask a judge to force the trustee to do his job.
On 1/7/2022 8:57 PM, Eli the Bearded wrote:
The estate of Martha created several irrevocable trusts n California for
the distribution of her assets to her grandchildren. I'm interested in
one of them, created for Philip. The trust has been managed by a
different grandparent, a non-professional and now getting on in age.
Under the terms of the trust, the money was reserved for paying for
education until Philip reached 25, and then he was free to use it
without restriction. Some money was used for education, but a good chunk
remains. Philip is 30 now and has been getting distibutions from the
funds for, eg, buying a car and moving to Wyoming.
At this point everyone -- trustee, parents, and fiduciary -- is tired of
the thing and just wants all the assets to go to Philip
and the thing to be dissolved.
How complicated is this?
IANAL, but this sounds simple to me. According to what you wrote:
"the money was reserved for paying for
education until Philip reached 25, and then he was free to use it
without restriction."
So have him withdraw the remaining funds and put them into a brokerage account. Nominally this would be for investment, but once it's in the
account he can do anything he wants with it, including moving it to a
bank account for easier access.
Once the trust is empty, the trustee simply resigns. If there are
successor trustees, they resign. If the trust is well-drawn, there will
be an institution of some sort at the end of successor trustees. Whoever
ends up with it will know how to dissolve an empty trust.
Or you could pay a lawyer $500 and let him figure out the right way to
do it. But it doesn't sound too complicated to me.
Eli the Bearded <*@eli.users.panix.com> wrote:...
The estate of Martha created several irrevocable trusts n
California for the distribution of her assets to her
grandchildren. I'm interested in one of them, created for Philip.
The trust has been managed by a different grandparent, a
non-professional and now getting on in age.
At this point everyone -- trustee, parents, and fiduciary -- is
tired of the thing and just wants all the assets to go to Philip
and the thing to be dissolved.
How complicated is this?
It's not complicated at all. You either get the trustee to
distribute the trust assets as the trust dictates, or you go to court
and ask a judge to force the trustee to do his job.
Hmmm. There's no difficulty in getting the trustee to distribute all the assets. I guess where I stumble in this is: is the trust, now
penny-less, "dissolved" or does it still exist with some obligation to
file taxes or some other paperwork?
I'm dubious that moving the assets out is all it takes to end the trust. Doesn't "irrevocable" mean it is complicated?
Hmmm. There's no difficulty in getting the trustee to distribute
all the assets. I guess where I stumble in this is: is the trust,
now penny-less, "dissolved" or does it still exist with some
obligation to file taxes or some other paperwork?
I'm dubious that moving the assets out is all it takes to end the
trust. Doesn't "irrevocable" mean it is complicated?
If the trust says (words to the effect of) "Philip can draw on the
trust for education until he's 25 and then can draw on it for any
amount and for any reason at all" and both the trustee AND Philip
want to do away with it, couldn't Philip simply draw out all of
the remaining funds and put it into his own bank account and then
they dissolve the trust?
Now if Philip likes the idea of someone else handling his money
and doesn't want to pull it all out and put it elsewhere, then I
can see where maybe the trust does have to remain in place till
empty. But even then, can't the trustee go to court and basically
ask to be removed as the trustee and to have someone else take
over?
The "get the trustee to distribute the trust assets as the trust
dictates, or you go to court and ask a judge to force the trustee
to do his job" would seem to apply more to where the trustee is
denying requests by Philip or otherwise just refusing to cooperate
but there's no indication of that here.
but doesn't have to go through probate. (Probate takes about 18 months
in California)
According to Barry Gold<bgold@labcats.org>:
but doesn't have to go through probate. (Probate takes about 18 monthsYow. What takes so long?
in California)
In 2019 I probated a fairly simple will in New Jersey, all assets to charities and relatives, a trust to maintain the house for the
surviving spouse which she waived because she preferred to sell the
house and move. Our lawyer had sent the paperwork a few days ahead and
it was literally 10 minutes from the time I walked up to the desk to
the time we were done. They were very apologetic that the person who
had to sign the form was away that day so I came back the next day to
pick it up, but they would have mailed it.
What's the difference?
Eli the Bearded <*@eli.users.panix.com> wrote:
I'm dubious that moving the assets out is all it takes to end theNot necessarily. But it could be. If the beneficiary has the power to withdraw anything he wants from the trust at any time, he is the one
trust. Doesn't "irrevocable" mean it is complicated?
who is taxed on all trust income, not the trust - even if the trust is technically irrevocable. That means not complicated.
And if he does, why is this even an issue if the trustee is
cooperative?
Yow. What takes so long?
But it has another purpose: the deceased's creditors must be paid before
the estate is distributed to the legatees. ...
Barry Gold <bgold@labcats.org>:
but doesn't have to go through probate. (Probate takes about 18
months in California)
Yow. What takes so long?
In 2019 I probated a fairly simple will in New Jersey, all assets
to charities and relatives, a trust to maintain the house for the
surviving spouse which she waived because she preferred to sell
the house and move. Our lawyer had sent the paperwork a few days
ahead and it was literally 10 minutes from the time I walked up to
the desk to the time we were done. They were very apologetic that
the person who had to sign the form was away that day so I came
back the next day to pick it up, but they would have mailed it.
What's the difference?
Mike Anderson <prabbit237@gmail.com.com> wrote:
If the trust says (words to the effect of) "Philip can draw on the
trust for education until he's 25 and then can draw on it for any
amount and for any reason at all" and both the trustee AND Philip
want to do away with it, couldn't Philip simply draw out all of
the remaining funds and put it into his own bank account and then
they dissolve the trust?
Sure, if the trustee will cooperate. Why would the question have
even been asked if that were the case? It doesn't make sense to me
at all if the trustee were being cooperative. They can just do what
they want to.
Now if Philip likes the idea of someone else handling his money
and doesn't want to pull it all out and put it elsewhere, then I
can see where maybe the trust does have to remain in place till
empty. But even then, can't the trustee go to court and basically
ask to be removed as the trustee and to have someone else take
over?
If he likes the idea of someone else handling his money, the trust is
not necessary. There are investment advisors who do exactly that.
He can hire anyone to do exactly that. It doesn't have to be in a
trust.
The "get the trustee to distribute the trust assets as the trust
dictates, or you go to court and ask a judge to force the trustee
to do his job" would seem to apply more to where the trustee is
denying requests by Philip or otherwise just refusing to cooperate
but there's no indication of that here.
Sure. But again, if the trustee were cooperative, why in the world
would the question have been asked in the first place?
Stuart O. Bronstein wrote:
Mike Anderson <prabbit237@gmail.com.com> wrote:
If the trust says (words to the effect of) "Philip can draw on
the trust for education until he's 25 and then can draw on it
for any amount and for any reason at all" and both the trustee
AND Philip want to do away with it, couldn't Philip simply draw
out all of the remaining funds and put it into his own bank
account and then they dissolve the trust?
Sure, if the trustee will cooperate. Why would the question have
even been asked if that were the case? It doesn't make sense to
me at all if the trustee were being cooperative. They can just
do what they want to.
Now if Philip likes the idea of someone else handling his money
and doesn't want to pull it all out and put it elsewhere, then I
can see where maybe the trust does have to remain in place till
empty. But even then, can't the trustee go to court and
basically ask to be removed as the trustee and to have someone
else take over?
If he likes the idea of someone else handling his money, the
trust is not necessary. There are investment advisors who do
exactly that. He can hire anyone to do exactly that. It doesn't
have to be in a trust.
The "get the trustee to distribute the trust assets as the trust
dictates, or you go to court and ask a judge to force the
trustee to do his job" would seem to apply more to where the
trustee is denying requests by Philip or otherwise just refusing
to cooperate but there's no indication of that here.
Sure. But again, if the trustee were cooperative, why in the
world would the question have been asked in the first place?
"At this point everyone -- trustee, parents, and fiduciary -- is
tired of the thing and just wants all the assets to go to Philip
and the thing to be dissolved."
"...trustee...just wants all the assets to go to Philip..."
So my reading was that it's not a case of the trustee not wanting
to do his/her job but wanting to just end the whole mess and it
was more a question of "how can this be done and close it out?"
and not "how can we get the trustee to actually be a trustee?"
Mike Anderson <prabbit237@gmail.com.com> wrote:
Stuart O. Bronstein wrote:
Sure. But again, if the trustee were cooperative, why in the
world would the question have been asked in the first place?
"At this point everyone -- trustee, parents, and fiduciary -- is
tired of the thing and just wants all the assets to go to Philip
and the thing to be dissolved."
"...trustee...just wants all the assets to go to Philip..."
So my reading was that it's not a case of the trustee not wanting
to do his/her job but wanting to just end the whole mess and it
was more a question of "how can this be done and close it out?"
and not "how can we get the trustee to actually be a trustee?"
My point was, the trustee can simply disburse all the remaining
funds, make sure it is accounted for from a tax perspective, and then
it's done. Nothing formal (other than a tax return with the "final
return" box checked) is likely required.
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