Advice or experience on altering a Trust

[Zero]

Hi all, back from Vegas and a long discussion with the DW regarding the need to alter our Trust.

For background; in another thread I asked for opinions on getting out of the dog house to which entry was gained by facial expressions due to reacting to comments by my SIL at Thanksgiving dinner. Namely, he ( with premeditation and deliberate intent) deceived a collegial friend at work and passed on privately gained information in order to ingratiate himself to his senior partner. The wife has now informed me that she is of a like mind to remove the said SIL from co-executor of our Trust.

So, that leads me to again ask for experiences or advice with regard to changing an existing Trust so that I go to my scheduled appointment with good questions in hand.

1. Will the Trust need to be completely re-written or is the executor changed by a codicil?
2. Should I consider using a Trust firm as the sole executor and just pay their costs?
3. Is it possible for my daughter to be the executor even though she is the sole beneficiary?

Questions are mainly because I will be using a new attorney that I have never met before and would like to be a bit more active in making the decisions.

Thanks very much for any inputs. BTW, I saw past threads on the subject but not specifially answering these questions.

 

[Texas Proud]

I am sure the lawyers will be better at this... but some questions...

Is the trust up and running?

Who wrote the original trust? Are they still alive?

What language is there in the current trust for changing trustees? (almost all have some kind of language, or else your last lawyer was not good)

How big is the trust? (total assets)

Has anyone asked SIL to resign? Just because you are named in a trust as trustee, it does not mean you HAVE to be. She can write a letter stating she is no longer the co-trustee and be done with it.



If you can trust your daughter to be trustee for a trust she benefits... why have a trust? (might be answered with questions above)

 

[Zero]

Yes, the trust is about 4 years old and unfortunately was done while living in DC and now I'm on the other coast and never really had a good connection to the original attorney anyway.

My copy of the Trust is in my daughter's Safe Deposit Box, so I don't have direct access at the moment. But I do have a copy at my permanent residence so will read it (to see what Executorship options I have) when I get home in a few days.

If the trust were executed today it would be about $3m.

I am sure the lawyers will be better at this... but some questions...

Is the trust up and running?

Who wrote the original trust? Are they still alive?

What language is there in the current trust for changing trustees? (almost all have some kind of language, or else your last lawyer was not good)

How big is the trust? (total assets)

Has anyone asked SIL to resign? Just because you are named in a trust as trustee, it does not mean you HAVE to be. She can write a letter stating she is no longer the co-trustee and be done with it.



If you can trust your daughter to be trustee for a trust she benefits... why have a trust? (might be answered with questions above)

 

[kaneohe]

Zero........I'm a bit confused bc you are using trust and will terms in the same sentence.
I am used to: wills have codicils and executors
trusts have amendments and trustees
(same basic idea for documents, changes, people who run the show)

Perhaps you could clarify your question. Are you talking trusts or wills? I don't have any real life experience with these things but my impression is that minor changes can be taken care of w/ a minor change w/o writing a completely new document. As long as you are alive, I would think any reasonable document would allow you to remove others from power or coming to power.

And again for clarification: SIL is son-in-law? and married to daughter? If so, removing SIL and leaving daughter in power...... in principle that resolves things but in practice, SIL might still have persuasive/coercive powers over daughter? In that situation, having a 3rd party intermediary might help tho w/ extra costs/fees.

 

[Zero]

Currently I have a living Trust with me as trustee and SIL/BIL as successor trustees. I also have a Pour-Over Will that "pours" assets into the Trust.

And good point, Son-in-Law as you mention would likely be able to influence the execution of the Trust via the daughter anyway.

My sole reasons for a Trust were simply to avoid probate and those costs, and to keep it private (off court records), and avoid it being contested by any relatives feeling entitled to an inheritance.

So the key question is: Has anyone had experience with changing a Trust's "successor trustee" and/or using a Trust company as a "successor trustee".?

Is it a complete re-write, tossing the old Trust out? Or simply some amendment/codicil/"added piece of paper", whatever it's called?

Zero........I'm a bit confused bc you are using trust and will terms in the same sentence.
I am used to: wills have codicils and executors
trusts have amendments and trustees
(same basic idea for documents, changes, people who run the show)

Perhaps you could clarify your question. Are you talking trusts or wills? I don't have any real life experience with these things but my impression is that minor changes can be taken care of w/ a minor change w/o writing a completely new document. As long as you are alive, I would think any reasonable document would allow you to remove others from power or coming to power.

And again for clarification: SIL is son-in-law? and married to daughter? If so, removing SIL and leaving daughter in power...... in principle that resolves things but in practice, SIL might still have persuasive/coercive powers over daughter? In that situation, having a 3rd party intermediary might help tho w/ extra costs/fees.

 

[Caoineag]

An amendment would do what you are asking but you might want a complete rewrite anyways to catch the changes in trust laws and to make sure the trust accurately reflects your wishes...

 

[Zero]

Thanks, that is a good point, a complete rewrite would get everything up-to-date legally.

My estate will have some assets that have to be liquidated and I'm thinking a good strategy might be co-executors with one being a Trust Company.

Maybe even entirely handled by a Trust Company, which seems to be difficult to Google and find much information on except for advertisements.

Anyone have experience with a Trust used as successor Trustee?

 

[kaneohe]

An amendment would do what you are asking but you might want a complete rewrite anyways to catch the changes in trust laws and to make sure the trust accurately reflects your wishes...

I believe Caoineag is correct. Depending how current your trust is and how many times it has been previously amended, it may be easier to do the complete rewrite. FYI, I believe I have heard that there is a way to essentially gut the old trust but leave some framework in place so that you don't have to worry about placing all the assets in a new trust. Kind of like knocking the old house down but having the same address on the mailbox.

Does the trust go on "forever" after you're gone or just until assets are distributed? There seems to be a trend these days to leave assets to kids in a trust to protect against creditors, spouses in cases of divorce,etc.

 

[Zero]

I do hope I can find a way to keep the paper work down to a minimum. As I recall, the original writing involved lots of interaction between the trust department of my brokerage and the attorney. So the idea of "gutting" and remodeling is attractive.

I will know more after meeting the new attorney in January, but for now I have a Trust that ends after distribution of assets to my DD.

Having never been involved in any way with handling an estate, this is all a mystery to me, and having to place some faith in the attorney that I can describe what I want to happen and have him write it to reflect that.

Hoping that I can find (either on this forum or among friends) someone who has done the re-write before and learn a bit about possible smart moves or likewise, pitfalls.

I believe Caoineag is correct. Depending how current your trust is and how many times it has been previously amended, it may be easier to do the complete rewrite. FYI, I believe I have heard that there is a way to essentially gut the old trust but leave some framework in place so that you don't have to worry about placing all the assets in a new trust. Kind of like knocking the old house down but having the same address on the mailbox.

Does the trust go on "forever" after you're gone or just until assets are distributed? There seems to be a trend these days to leave assets to kids in a trust to protect against creditors, spouses in cases of divorce,etc.

 

[LARS]

Pardon if I am being blunt, but you suggest the estate is order of magnitude $3 million. What in the world are you screwing around for... to save a few bucks. Get a lawyer in the state where you currently reside and have he/she review the current trust with an eye toward your concerns. If they need to re-draft the trust do it, what could it possibly cost... a few thousand dollars.

 

[Martha]

I would talk to a lawyer and review your estate plan.

Does the trust get liquidated after you die? Or do you have a marital trust, where assets go into a trust when the first of you or your wife dies? If so, often the surviving spouse is the trustee of that trust. And when that spouse dies the trust may provide that the assets are liquidated and distributed to the beneficiaries. Often the beneficiary is the successor trustee after the last spouse dies and that beneficiary manages the liquidation.

But I have no idea as to your estate plan or needs so I suggest talking the issue over with an estate planning attorney.

 

[HpRyder]

Currently I have a living Trust with me as trustee and SIL/BIL as successor trustees.

So you are the Trustor and the trust is a revocable trust, meaning only you can change the trust any time you want.

Has anyone had experience with changing a Trust's "successor trustee" and/or using a Trust company as a "successor trustee".?

Yes, my recently deceased mother made a trust. She was Trustor, Trustee and Beneficiary, with me a Successor Trustee and one of several beneficiaries. As Trustee, she managed the trusts affairs for the benefit of herself (the Beneficiary). When she started having health problems, I wrote a trust amendment, which she notarized, making me CoTrustee. Thus I had the trusts permission for signatory authority for all her accounts. Unfortunately, each institution had their own form which needed notarizing to give me signatory authority for that institutions accounts. So Yes I’ve had direct hands on experience changing trusts.

Changing a successor trustee is no different from changing any term of the trust.

So, that leads me to again ask for experiences or advice with regard to changing an existing Trust so that I go to my scheduled appointment with good questions in hand.
1. Will the Trust need to be completely re-written or is the executor changed by a codicil?

No. All that is needed to modify a revocable living trust is the Trustor (you), making a notarized trust amendment, keep it with the original trust documents and notify all the affected parties.

2. Should I consider using a Trust firm as the sole executor and just pay their costs?

No, trusts have Trustees not executors. An outside firm can be quite costly and slow to do anything. The trust should have the Trustor (you) as Trustee, so they can manage the trusts affairs, for the benefit of the Beneficiary.

3. Is it possible for my daughter to be the executor even though she is the sole beneficiary?

As I explained above, trusts usually have no executor, only a Trustee. That Trustee manages the trust assets in behalf of the Beneficiary. So your daughter uses the trust assets as the trust document identifies, for her own benefit.

If you want to change either the beneficiary, the trustee or any of the trust terms, a notarized trust amendment from you the Trustor, delivered to the holder of the original trust documents will change the trust. If these changes affect institutional accounts such as banks, brokers, property title etc. you have to get with these organizations to notarize their specific forms.

Changing a trust is easy, managing a trust is easy, getting people to do what you want them to do is hard.

I hope this helps.

 

[kaneohe]

If you want to change either the beneficiary, the trustee or any of the trust terms, a notarized trust amendment from you the Trustor, delivered to the holder of the original trust documents will change the trust. If these changes affect institutional accounts such as banks, brokers, property title etc. you have to get with these organizations to notarize their specific forms.

Changing a trust is easy, managing a trust is easy, getting people to do what you want them to do is hard.

This is interesting .........I've had exactly the same problems getting banks,etc. to accept Power of Attorney forms. If I don't notarize their certification forms now, the POA might be useless if I got disabled?

 

[Zero]

Pardon if I am being blunt, but you suggest the estate is order of magnitude $3 million. What in the world are you screwing around for... to save a few bucks. Get a lawyer in the state where you currently reside and have he/she review the current trust with an eye toward your concerns. If they need to re-draft the trust do it, what could it possibly cost... a few thousand dollars.

Maybe I was not clear but, yes, I do have an appointment with an attorney in my current state, he specializes in estates.

My questions are to help me know what is possible and how it actually works in reality. Doing this so I can ask the right question in January when I meet with him.

 

[Zero]

HpRyder, thanks very much for the helpful information.

After reading your reply, I realized now that I am the Trustor, Trustee and Beneficiary while alive and that at my death (spouse has separate trust) the SIL and BIL would be co- Successor Trustees and liquidate the Trust for the successor Beneficiary, my DD.

Glad to have the benefit of your experiences to draw on. And I suspect that a couple of visits to the attorney get the changes made but I had actually forgotten the part about getting the brokerage involved. My entire Trust is currently in a single brokerage and hopefully an exchange of paperwork between them and the attorney will get this done.

As to an institution to handle the Successor Trustee role, it seems so much cleaner to go that route. In other words, should one of my current Successor Trustees predecease me, I have to rewrite. Also, who know how those individuals change with time. Just an option that I will discuss with the attorney.