Anyone here familiar with "Family Trusts"...?

[FirstLight]

There were only 4 of us in the Family...Dad, Mom, Sister and Me.

Family trust has 3 properties and stocks, savings... all to be split between sis and me.

Mom passed, Dad's now in hospice for end of life care...sis has POA.

We're trying to sell 2 of the three properties, still not sure if the third one will be continued as a family heirloom since dad built it. But the pipes broke during the horrible sierra winter and the whole downstairs was a gut job (asbestos in the floors and drywall too), upstairs will have the carpets ripped out and maybe even asbestos abatement there as well...but if we can refurbish, it would be nice for her kids to have some memories there...

We got an offer on one property and are cleaning out their house for sale this summer.

Question: Do we have to wait until ALL the properties are sold or the whole thing is liquidated before we split it? Or do we split it up as we go?
I don't see any guidelines in the Trust itself.

Is this a personal preference thing, where she and I figure it out together and come to an agreement?
I'm sure it would be best to see the lawyers and accountant to discuss this.

I don't know if it matters what State we're in, NV

I'm curious because I am hoping that if we sell the first property we can both have some personal relief sooner than later...I know we both have debt and personal stuff to handle.

We're holding onto savings and stocks as backup for Dad's care though most is covered by VA and Medicare...so at least we know he's going to be cared for (we just moved him to a new smaller group home with hospice 3x a week and we're already so RELIEVED at his level of care!)

Thanks for any input.(please be kind, I'm not asking because I wanna cash-in on my families' stuff)

If this is the wrong place to ask, let me know and I'll delete

[Phoenix61]

1. The trustee is the person who makes decisions about the trust.

So someone should be designated as the trustee. Generally, it’s husband/wife then someone else. If it’s still under your Dad you’d need to get something from his doctor saying he’s unable to make those decisions. At that point whoever is designated trustee can make those decisions. They are required to abide by the terms of trust as to who gets what.
Property in trusts can vary state by state. Florida, May it may not, recognize property in a trust. Seems to depend on who you ask.

[FirstLight]

3. Everything is supposed to be "equal" as far as I know about the financial aspect.

Sis has Power of Atty regarding medical, but she also holds the checkbook so I guess she's in charge. Dad's got end stage dementia and has been deemed unfit since Mom passed last year.

Guess we'll have to cross that bridge when we get to it...when the actual house sells we'll have to go to the lawyer etc and see what's next and decide. She may be legally holding it all, but she's being really awesome about us making decisions together...

[Phoenix61]

6. How it's divided is a different issue.

My parents had one. It was Dad and Mom then me then my brother. Royally pissed him off but..
So, my Dad passed, mom had advanced dementia. Letter from her doctor to all involved financial institutions and relevant page from the trust document and voila, I became the trustee.
It sounds like your sister is the trustee.

[PoindexterOglethorpe]

2. Consult with an attorney who does trusts in your state.

This is NOT the place to get such information.

[FirstLight]

4. ok...just wondering out loud... nt

[PoindexterOglethorpe]

5. Really, things like this are very complicated.

The state you live in does matter. You want actual professional advice here.

I know a little bit, having dealt with trusts myself, although your situation is absolutely far more complicated than anything I was up against.

[Captain Zero]

9. What Oglethorpe said.

Don't start dispensing money until you know and understand what the lawyer says.

[Rebl2]

11. I agree

If possible go to the attorney that set up the trust.

[Thunderbeast]

7. Talk to your estate lawyer

Trusts simplify the transfer of assets by avoiding lengthy probate. If you are beneficiaries of the trust (as I suspect), the document will designate if one or all of the heirs is the new trustee when the second parent dies. The heirs can manage the distribution of assets as directed by the parent's will (a separate document). Retirement accounts (IRA, 401K, and Roth IRAs can not be held by a trust.

Proceeds of IRA accounts are taxed as regular income (which can be paid by the estate before distribution). Beneficiaries generally have ten years to deplete the account (after rolling it over into their own beneficiary IRA) or be liable for a 50% penalty on un-disbursed balances.

[A HERETIC I AM]

8. I was told that if a Trust doesn't specifically prohibit something, then it's allowed.

1st, I agree with the above suggestions to speak with an attorney, preferably the one who drew up the trust for your dad (if he/she is still around) or at least that same law firm.

Do we have to wait until ALL the properties are sold or the whole thing is liquidated before we split it? Or do we split it up as we go?
I don't see any guidelines in the Trust itself.

Again, if the trust does not specify, then you wont be breaking any portion of the trust. Without reading it myself, and I am by NO MEANS a lawyer, but I can read!...if, as you say, there are no guidelines, then sure. Liquidate a portion and split the proceeds.

An estate attorney told me that a trust is just that - a trust. The Originator - the "Trustor" is hoping that his desires will be followed and the trust is a legal agreement between the involved parties that helps that along, but if you two are the only ones left......well...then there's no one to contest anything if you break the trust or go against a provision. After all, if you and your sister agree, who is going to be harmed?

B U T ...


Talk to the folks who drew it up, is what I would say.

And FWIW, it's fine to ask such questions in here, but taking specific legal and financial advice from an internet forum populated by people who are complete strangers to you is never a good idea. Same as taking medical advice. What you should hope for is basic guidance, and I think you have gotten that so far.

Best of luck, and my condolences on your loss. My dad has been gone since 2000 and mom since 2014. It's not easy, but it does sound as if your father was forward thinking, and that's good.

Take care and be careful.

[nilram]

10. It sounds like you're on good terms with your siblings

If so, that’s such a big bonus.

If this is a “Medicare-sparing“ trust, then you should thank your parents foresight. If not, then you may have to prepare for a big bill for Medicare.

Medicare-sparing trusts I think have to be irrevocable and funded five years before the date of needing Medicare. But the details do vary from to state quite a bit. With the one my partner’s mom had, he had discretion to make withdrawals while she was living, and the remainder passed to him when she passed. Their lawyer described it as a “interrupted gift” for tax purposes.

Those are pieces of the landscape of a trust that I’m familiar with, but I thoroughly agree that you need to consult with a lawyer. If not your parents (now maybe the family’s) lawyer then your own. If you have to look for your own lawyer, then besides looking for one who knows about estates, trusts, or wills, they may also describe themselves as specializing in elder law.

Wishing you every blessing in this transition.