Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Can Siblings Amicably Alter a Will/Trust?
Old 10-24-2018, 03:17 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: LKN
Posts: 13,931
Can Siblings Amicably Alter a Will/Trust?

I’ve searched but every discussion I find is when there’s contention between siblings - not the case for us.

My Dad’s assets are all in trust and the will distribution is a 50:50 split between sister and I. But I’ve told her we can split everything, except I want her to have the house outright (she’d live in it until she decides where to relocate and buys property elsewhere, and then she’d sell Dad’s house and keep the net proceeds) contrary to the will. The house is about 1/3rd the value of the estate.

We’ll go through the attorney who wrote up the trust, will, etc. - but we’re meeting to plan this out next week so it might be nice to know our options in advance. Maybe I’m wrong, but I’m assuming coming to an agreement at the time of distribution might be cleaner than trying to gift a like amount?
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 45% equity funds / 30% bond funds / 25% cash - radically changed Nov 2018
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-24-2018, 03:21 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 8,298
I knew you could total disclaim an inheritance, but wasn't sure about a partial. Looks like you can, with details how:

https://info.legalzoom.com/disclaim-...ets-23715.html
__________________

RunningBum is offline   Reply With Quote
Old 10-24-2018, 03:22 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 2,298
Quote:
Originally Posted by Midpack View Post
Iíve searched but every discussion I find is when thereís contention between siblings - not the case for us.

My Dadís assets are all in trust and the will is a 50:50 split between sister and I. But Iíve told her we can split everything, except I want her to have the house outright (sheíd live in it until she decides where to relocate and buys property elsewhere, and then sheíd sell Dadís house and keep the net proceeds) contrary to the will. The house is about 1/3rd the value of the estate.

Weíll go through the attorney who wrote up the trust, will, etc. - but weíre meeting to plan this out next week so it might be nice to know our options in advance. Maybe Iím wrong, but Iím assuming coming to an agreement at the time of distribution might be cleaner than trying to gift a like amount?
If the assets are in the trust, does the will have any part in the distribution? What does the trust say about distribution?
bingybear is offline   Reply With Quote
Old 10-24-2018, 03:32 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Jan 2013
Posts: 2,072
I would meet with a knowledgeable trust and estate attorney that is not the attorney for the trust. The duty of the trust's attorney is to carry out the terms of the trust.
Another Reader is offline   Reply With Quote
Old 10-24-2018, 03:34 PM   #5
Recycles dryer sheets
 
Join Date: May 2018
Location: Ajijic
Posts: 155
It is your Dad's trust. It remains his decision to make any changes. Why would you and sister go to you Dad's attorney and not directly to your Dad??

Unless you are implying that your Dad is deceased, in which case I am sorry for your loss.
mexexpat is offline   Reply With Quote
Old 10-24-2018, 03:40 PM   #6
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 3,612
Cheapest and easiest thing to do is a partial disclaimer. I believe all you need to do is send a note to the executor of the estate in a timely manner specifying that you disclaim your interest in the house. The house would then pass as though you had predeceased your father; if your sister is the only other beneficiary then it would go to her.

Note that partial disclaimers are legal at the federal level but I have heard it can vary by state, so you'd want to check on if it was allowed in the state that is relevant (I'm guessing the state where the house is located, but IANAL).

Also, I don't think you can do a disclaimer if the house is disposed of via the trust; a disclaimer would only be if the house passed via his will. If the house is disposed of via the trust, there is a law you can use called TEDRA that allows you and your sister to modify the terms of the trust after your Dad passes away, but that can get quite expensive as it is a pretty specialized area of the law - I wouldn't recommend it.

If your Dad is still in command of his faculties and willing to make the change, you could ask him to write a codicil to his will. This would probably be a little more expensive than doing the disclaimer.

You could just inherit your half and then sign a quit claim deed to gift her your half of the house later. Or you could inherit your half, let her live there, sell it with her, and then gift her the proceeds. Either of these would probably eat into your unified estate/gift credit.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 10-24-2018, 04:04 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 21,567
Does the will or trust (not sure which applies here - I've seen where the will just 'points' to the trust, and the trust spells the details) specifically say each item is to be split 50-50, or just the total value?

If the house is appraised for ~ 1/3rd of the total, then just include that in her half and she gets an additional 1/6th in other value.

Or are you saying you want to give her the house, plus 50-50 of the remaining value of the estate, and want to avoid 'gifting' 50% of it to her?

-ERD50
ERD50 is offline   Reply With Quote
Old 10-24-2018, 04:15 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Posts: 2,298
Quote:
Originally Posted by ERD50 View Post
Does the will or trust (not sure which applies here -
-ERD50
If the house is in the trust, then the trust likely controls the distribution. Same with other items. It would be odd to have a trust push assets into probate. Usually kids cannot change either of these documents unless that trust has wording to allow them to make modifications.

If the parent is still alive and capable, he could change either or both most likely.
bingybear is offline   Reply With Quote
Old 10-24-2018, 05:22 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: LKN
Posts: 13,931
Quote:
Originally Posted by bingybear View Post
If the assets are in the trust, does the will have any part in the distribution? What does the trust say about distribution?
Sorry, I edited the OP, sister and I are named in the trust but Dad controls it while he’s alive. The entire estate is supposed to be split 50:50 including the house, I just want my sister to have a larger portion of the estate by giving her the house free and clear, without creating legal or tax issues if possible.

Quote:
Originally Posted by mexexpat View Post
It is your Dad's trust. It remains his decision to make any changes. Why would you and sister go to you Dad's attorney and not directly to your Dad??

Unless you are implying that your Dad is deceased, in which case I am sorry for your loss.
He is not deceased but he’s no longer mentally capable, he’s 96 yo in hospice care, I’ll leave it at that.
Quote:
Originally Posted by SecondCor521 View Post
Cheapest and easiest thing to do is a partial disclaimer. I believe all you need to do is send a note to the executor of the estate in a timely manner specifying that you disclaim your interest in the house. The house would then pass as though you had predeceased your father; if your sister is the only other beneficiary then it would go to her.

You could just inherit your half and then sign a quit claim deed to gift her your half of the house later. Or you could inherit your half, let her live there, sell it with her, and then gift her the proceeds. Either of these would probably eat into your unified estate/gift credit.
That’s one of the reasons I’m asking.

We will go through the attorney, and there won’t be any kind of dispute between my sister and I. It sounds like I’ll have to wait until we actually meet with the attorney, that might be next week.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 45% equity funds / 30% bond funds / 25% cash - radically changed Nov 2018
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-24-2018, 05:26 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 22,669
If worst came to worst: Eating into your estate credit - such a thing can be gifted (or forgiven) over a series of years without eating into any unified estate gift credit. A couple gifting to another couple could gift $60K a year.

Sorry to hear of your Dad's situation.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 10-25-2018, 12:10 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 15,294
Does the trust require that the house be distributed right away?


If not, just keep the house in trust and let your sister live in it... worry about the proceeds when the time comes for her to sell... heck, by then one of you might have passed and then nobody cares...
Texas Proud is offline   Reply With Quote
Old 10-25-2018, 06:45 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: LKN
Posts: 13,931
Quote:
Originally Posted by Texas Proud View Post
Does the trust require that the house be distributed right away?


If not, just keep the house in trust and let your sister live in it... worry about the proceeds when the time comes for her to sell... heck, by then one of you might have passed and then nobody cares...
My sister doesn’t want to live in the house (way too big) or the city it’s in. She’ll be looking to relocate to another state as soon as the house is empty and sold. We both want to “liquidate” the estate as soon as possible. We don’t want top dollar, but we don’t want to just donate or toss everything either. Someone mentioned an estate auction above, sounds better than an estate sale to me, but I haven’t found an estate auction house in that city yet - still looking.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 45% equity funds / 30% bond funds / 25% cash - radically changed Nov 2018
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-25-2018, 07:00 AM   #13
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 2,524
Maybe I am missing something but wouldn't it be very simple to accept the inheritance as written, take ownership of half the house, then quit claim your share of the house so that that you are no longer a co-owner. If memory serves, you can unilaterally quit claim the house without anyone else signing off (with possible exception of your spouse).

Technically you may need to file a federal gift tax return to document (but not tax) the amount of the gift to your sister. I suspect in many times this is not actually done.

-gauss
gauss is offline   Reply With Quote
Old 10-25-2018, 07:02 AM   #14
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 2,524
Quote:
Originally Posted by Midpack View Post
Someone mentioned an estate auction above, sounds better than an estate sale to me, but I havenít found an estate auction house in that city yet - still looking.
It is possible that this a regional thing or a amount of wealth thing. In my location and my upper-middle class circle of friends, I have only heard of estate sales.
gauss is offline   Reply With Quote
Old 10-25-2018, 07:04 AM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 6,911
Send a message via Skype™ to kcowan
Quote:
Originally Posted by Midpack View Post
He is not deceased but heís no longer mentally capable, heís 96 yo in hospice care, Iíll leave it at that...
Does anyone hold POA for him?

If all else fails, set up a multiyear gifting plan to achieve your objectives after tax.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 10-25-2018, 07:29 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: LKN
Posts: 13,931
Quote:
Originally Posted by gauss View Post
Maybe I am missing something but wouldn't it be very simple to accept the inheritance as written, take ownership of half the house, then quit claim your share of the house so that that you are no longer a co-owner. If memory serves, you can unilaterally quit claim the house without anyone else signing off (with possible exception of your spouse).

Technically you may need to file a federal gift tax return to document (but not tax) the amount of the gift to your sister. I suspect in many times this is not actually done.

-gauss
I’d never heard of a quit claim, thanks to you and others, I am looking into it. It sounds like there may be tax consequences I was trying to avoid. Sounds like we need to broach this with Dad’s attorney and see where it leads.

Fortunately there is no chance of any dispute between my sister and I. And we’ve known the attorney for many years, we trust him. I am trying to let my sister walk away with more than the trust 50:50 directive and minimize taxes to both of us, and keep taxes with assets received, sounds like I may be naive in that goal.


Quote:
Originally Posted by kcowan View Post
Does anyone hold POA for him?

If all else fails, set up a multiyear gifting plan to achieve your objectives after tax.
My sister and I are executors, with POS, medical POA, etc. Thankfully our Dad had an attorney set up the trust about 15 years ago, and thankfully he was very thorough. As far as we know, all the bases are covered.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 45% equity funds / 30% bond funds / 25% cash - radically changed Nov 2018
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 10-25-2018, 07:35 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Posts: 1,793
Quote:
Originally Posted by Midpack View Post

We will go through the attorney, and there wonít be any kind of dispute between my sister and I. It sounds like Iíll have to wait until we actually meet with the attorney, that might be next week.
I have disclaimed twice. Once, my siblings and I collectively disclaimed one of my mom's IRA's for the sole purpose of forcing it into her estate so her estate was responsible for paying the taxes. This resulted in more "net" dollars up to the Unified Tax Credit amount for each of us from her other sources.

I then disclaimed my portion of the family business stock Percentage owned by Mom that was routed to her Trust upon her death and that was to be distributed to me and my sibling when my dad passed. I disclaimed as a means of giving my daughter that stock. It did not go to the other beneficiaries.

It is my understanding that disclaiming does not force it to the other beneficiaries. It goes to your heirs. If your sister is your only heir, then disclaiming might work. If not, I'm not sure.

I'd be curious to know if there is a way to direct it to your sister. Since that was never my intention, I never looked into that. Definitely ask the estate attorney.
sheehs1 is offline   Reply With Quote
Old 10-25-2018, 07:43 AM   #18
Full time employment: Posting here.
CaliKid's Avatar
 
Join Date: Apr 2016
Location: Cali
Posts: 915
You only need to talk about "disclaimers" if people have taxable estates (over $10m). Otherwise you can do by assignments or agreements. Distribution agreements are very common after death of parents to divide the assets in some fashion that the kids want. I would use an experienced estate attorney.
__________________
______________________
Hoping to get out around September 1, 2022... I hope, I hope, I hope. Until then off to work I go....
CaliKid is offline   Reply With Quote
Old 10-25-2018, 08:09 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 21,567
Quote:
Originally Posted by Midpack View Post
... My sister and I are executors, with POS, medical POA, etc. Thankfully our Dad had an attorney set up the trust about 15 years ago, and thankfully he was very thorough. As far as we know, all the bases are covered.
So you two are the executors, and now that I understand you actually want to give your sister more than the trust states, I would take the pragmatic approach - just do it. No one else is affected.

When I was helping DW settle her father's estate, and I was questioning some of the overly detailed, specific and complicated wording in the trust with the lawyers (IIRC, it said that certain expenses, like funeral "shall be paid from the trust" - and I read that "shall" means "must" in legal docs? Some things like that.). MIL had just paid the bills, why the heck do we need to follow the trust document, what's the consequence if we don't?

Lawyer basically said "There are no Trust police". If you do not harm any beneficiary, no one will know or care. Now this would probably be different if a bank was executor, they would need to follow the letter of the law, I would think.

If the trust did split it 2/3 - 1/3, taxes would be no different than a 50-50 split, so I don't see the Feds/State getting involved either.

The only question would be if your Sister was worried that you would come back later, and claim the extra 1/6th (if I did my fractions right) must be returned to you. Then she might be in a bind. But that seems very, very unlikely (your DW is on board with this I assume).

Just do it.

-ERD50
ERD50 is offline   Reply With Quote
Old 10-25-2018, 08:14 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: LKN
Posts: 13,931
Quote:
Originally Posted by ERD50 View Post
So you two are the executors, and now that I understand you actually want to give your sister more than the trust states, I would take the pragmatic approach - just do it. No one else is affected.
Forgive my stupidity but I've never been through this. If there are no tax consequences for me, I'd be happy to do that. The estate is large enough that I'd rather not pay taxes on 1/6th the estate (my half of the house) that should go with the house, or to my sister. I want her to get the entire proceeds from the sale of the house after associated taxes. Again, I may be completely wrong.
__________________

__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 45% equity funds / 30% bond funds / 25% cash - radically changed Nov 2018
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Siblings shared financial responsibilty to widowed mother fidler4 Other topics 51 07-19-2017 11:56 AM
siblings and elderly parents Emeritus Health and Early Retirement 14 07-01-2010 09:35 PM
Will France alter Retirement Age? Probably will... mickeyd Other topics 8 05-23-2010 08:45 PM
When will gas prices alter driving habits?? janeeyre Life after FIRE 55 05-01-2007 11:40 AM

» Quick Links

 
All times are GMT -6. The time now is 10:23 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.