Found this forum via Google search re "revocable trust"

[bookworm1711]

I just reached a thread here from 2004 in my Google search.

I thought my question is simple:

My parents lived in Vancouver, WA. My mother died this past week on Wednesday. My father died last year in August.

They have both been under the care of a guardianship in the state of Washington.

A guardianship was required because original family lives in midwest, they moved to Washington State to enjoy better weather and to be near their brothers and sisters, and once my parents became incapacitated due to dementia (mother) and old age (father) they required special care.

My parents established a "Revocable Living Trust." Does the fact that they required the assistance of a court approved guardian via a guardianship cancel the probate avoidance benefits of the original revocable living trust?

No one is contesting a will, there remains but a small amount (relatively speaking) of money in the estate and the will stipulates precisely what each of the 4 beneficiaries is to get.

Thanks in advance should anyone here know an answer to my question.

 

[MooreBonds]

My parents established a "Revocable Living Trust." Does the fact that they required the assistance of a court approved guardian via a guardianship cancel the probate avoidance benefits of the original revocable living trust?

Greetings Bookworm.

My first response to your question would be to ask who was named as the second-in-line trustee in the Revocable Living Trust in the event that either parent became incapable of managing their trust accounts. When your mother and father reached their conditions, the RLT should have kicked in and allowed the named 2nd in line to handle the accounts set up under the RLT (although the power of attorney issue would be separate for all matters not pertaining to the RLT accounts).

If your parents didn't name someone as the trustee if they became unable to manage their affairs, then I could see the state doing what they did. And to conjure a guess as to your original question (does the state's actions effect the probate-bypass ability of a RLT), my understanding is that the RLT should still avoid probate issues - presuming that the accounts remained titled under the RLT. But, as always, I'm not giving you specific advice to follow.

I'm not trying to scare you or attack a court-appointed guardian, but there are horror stories (as with any situation) where court-appointed guardians abused their power. Are you fairly sure that there wasn't any such abuse of financial power or other shenanigans on the part of the guardian?

 

[bookworm1711]

Thank you, MooreBonds, for your helpful response to my question.

Things have been strange from the beginning:

Trusts, I understand, are not normally public documents. Yet the trust notebook my Dad kept was taken from the house before I arrived in January of 2001 to facilitate securing a guardian, if necessary. I did secure a Xerox copy from the attorney who had it, but I don't know who gave it to him--clearly not my Dad.

I was named as the Trustee, but because I live so far from Vancouver, Washington, I was too far away to be able to handle their affairs. My cousin who lives in Vancouver suggested I consult his attorney, and his attorney recommended the Guardian which we used. I personally believe that the guardian, who was also a registered nurse, was admirably suited to help my parents, and I believe she did a good job at caring for their needs. She kept them for as long as it was practicable living in their own home, which was their much expressed desire.

I don't know if there were any shenanigans, but the guardian did insist that I relinquish control of the funds in the trust and allow control to be transferred to her. I refused to relinquish the control vested in me as Trustee, suggesting instead she simply inform me of what she needed and I would comply by granting permission for her to access funds as needed. She would not agree, and she secured the action of the probate court or whatever court it is in Washington State, and the judge ordered that the funds be turned over to her. She went to the institutions where they were (banks, Edward Jones, insurance companies). Those institutions stood by me, and said I should be wary of allowing this to happen. The court came back and ordered the funds be moved regardless of whether I, as trustee, desired this or not.

I alerted the guardian that since both sides of my parents' family had lived to a great age, that she would need to take care not to spend down my parents' estate too fast or she would have no money left to work with.

Some things in the will, like sterling silver promised my wife, reached us in a very incomplete state, though it had been complete when I and my son were there in 2001. Same with a very expensive set of fine china. Same, we just learned this week, with a rosewood bedroom suite. I don't fault or accuse the guardian for these happenings, but surely the Lord Himself knows where those things are, for we did not get them (or got incomplete), and He says those responsible are in big trouble (Zechariah 5:3-5).

When the guardian told me this past week that she thought the estate would probably now go to probate, she is currently investigating what must or shall be done, I suggested to her (I am not legally trained or knowledgeable, though) that the reason my parents set up the revocable family trust and appointed me the trustee with durable power of attorney was to avoid the necessity for probate.

I would think that the guardian could simply complete any federal income tax forms for my mother for last year and this (income may be small enough from Social Security, etc. to very much limit any possible tax due), then close the estate by cutting four checks, one each for the four beneficiaries/inheritors, whatever we might be called, and be totally done with it.

Since there is no one contesting any part of the trust or will, and there are no debts owed to creditors since she has paid the bills all along and has rendered an accounting to the court and once or twice in 8 years to us, this would seem to be a simple proposition.

If the guardian did indeed, at the judge's ordering on her behalf, take the funds out of the trust, does that require this go to probate court for settlement now, contrary to the purposes of the original provisions of the revocable living trust?

If so, it would appear that revocable trusts are absolutely useless instruments providing families no protection whatsoever. Though I spent all afternoon searching on the Internet via Google, I found not a single reference to any protective effect of a revocable trust in this circumstance, a circumstance which I would suppose is very common or frequent. All references I saw to guardians were references to guardians appointed to care for minors should both parents pass away, and no references to the consequences of parents needing a guardian because of gradual incompetency due to aging and the onset of dementia. Both of my parents lived to their mid 90s.

Thank you again for responding.

 

[Martha]

This is all rather peculiar. Your parents' guardian, if they are now both dead, should have nothing to say about the trust and the probate unless as guardian she revoked the trust. It is too hard to figure out what happened from your post. It is get a lawyer time.

 

[FinanceDude]

This is all rather peculiar. Your parents' guardian, if they are now both dead, should have nothing to say about the trust and the probate unless as guardian she revoked the trust. It is too hard to figure out what happened from your post. It is get a lawyer time.

Martha, are you still taking new clients??

 

[MooreBonds]

This is all rather peculiar. Your parents' guardian, if they are now both dead, should have nothing to say about the trust and the probate unless as guardian she revoked the trust. It is too hard to figure out what happened from your post. It is get a lawyer time.

While my opinion obviously means less than a lawyer experienced in such matters ...I'd definitely agree that, based on your second post (and what limited info it had), something doesn't quite sound kosher.

The sad thing is, if you call up ANY lawyer to get involved, you can figure on at least $5k going out the window pretty quick - and easily much more than that, depending on how much research and fighting is involved (it sounds like quite a bit of research might be necessary, depending on how long the guardian was around [-]stirring up the muck [/-]with their hands in things.)

So, you'd have to look at the estate you BELIEVE your parents left behind, versus what is actually being transfered down to you, and ask yourself if you're willing to (potentially) spend more in legal fees, court costs, and aggravation with a lawyer than you could potentially recover (if anything).

It is quite sad when people abuse their power and take advantage of others. Even worse when the only 'true' remedy is to spend lots of $ to have just a chance of having your victory in court.

And you are correct - a RLT is NOT a public document. Part of the selling points of a RLT is that it is, indeed, PRIVATE, and that Joe Schmoe can't stick his nose in the probate proceedings to find out what someone's will left their estate to.

Do you have a copy of the judgment that gave the guardian control over the accounts? That judgment (hopefully) was very specific in scope and power - hopefully it only applied to your parents when they were alive.

And you are also correct in that the accounts SHOULD stay out of probate..or were the accounts retitled into the name of the guardian? If so, then you will might have to fork over probate fees to retitle everything. If the accounts have little financial value, I'd tell the guardian that she should figure it all out, since she demanded to be in control of everything.

I would like to think that the Guardian would have made an inventory of everything your parents had-both before and after they passed. Is there such an inventory? Or is it your word against hers?

 

[Brat]

Bookworm, I sent you the name of an attny in the metro area by private e-mail. He should be able to provide a to-do list so that an attorney, if not he, can determine what should be done. The trick to minimize attorney fees is to be organized and don't waste their time.

Having been through the death of a family member with a living trust getting a copy of that puppy is very important. If it was created when they lived in Vancouver, WA the attorney may be able to find who represented them. It would probably be the same attorney who prepared their wills.

 

[bookworm1711]

Thank you once again, MooreBonds, for your additional input on my questions.

I especially appreciate your comment this time regarding the possible 5k cost if I secure an attorney to assist in this matter.

The Guardian did inform us that she had made an inventory at the beginning of her Guardianship of my parents. We do not possess a copy of that inventory of belongings.

When my youngest son and I were there in 2001 I had my son take numerous photographs of the home and its contents--right down to the silverware drawer, the pictures on the walls, the furniture in the bedroom, and so forth.

I do not have a copy of the judgment that gave the guardian control over the accounts, but I distinctly recall at the time that she had said that she would decide after the death of both of my parents what should be done with any money left over, and my wife and sons seem to have gotten the distinct impression that she intended to keep it for herself.

I tend to think that was a mistaken impression, but I'm often wrong about impressions.

I was sent a notice of a hearing in the Washington court, but living so far away there is no way I could have attended the hearing. I did receive documents from the guardian's attorney containing the guardian's statements about me. I sent that attorney my response to the statements, and using reason, documented evidence, and logic, refuted her misconceptions. The judge took what I had written into account, which was nice, because I guess he did not have to. But I recall that the judge distinctly informed the guardian that the remaining funds must be distributed in accordance with the provisions of the trust (I gathered the implication that this would not be left to the guardian's discretion to do otherwise).

When I attempted to reach the judge directly (by email, I think), he told or wrote me that he could not discuss with me any matter pertaining to the case, using a Latin term I forget, but looking it up at the time, it seemed to indicate he could not talk to me without the "other side" being present.

I do have a copy of the trust, as mentioned.

The guardian told me on the telephone last week the remaining cash value of the accounts in the estate.

What surprises me is that doing an all-afternoon Google search, the most relevant discussion and information source turned out to be discussions (I distinctly reading posts by Martha from 2004) on this forum.

I still think what I am experiencing--older parents requiring the care and supervision of a guardian since no one in the family was available to provide such service--must be quite common, and I would sure like to learn what steps could have been taken, if any, to avoid defeating the purpose of the "revocable living trust."

I did read somewhere on the Internet a specific reference to Washington State with a comment that the probate system in the state is efficient and less expensive than some states, particularly New York.

I'm hoping probate can be avoided altogether, and so fulfill my parents' original wishes and plans, their purpose in carefully establishing the trust in the first place.

I've encountered the problem that the attorney who drew up the trust seems to be inaccessible--couldn't find him at Findlaw, couldn't find him on the "white pages," but, amazingly, I did find him on Facebook, but now that I sent him a brief message there, I have yet to get a response.

 

[Martha]

I would at least check into the lawyer info Brat sent to you. And get a copy of the whole guardianship court file, which should have the inventories and court orders. You can find out if the guardian revoked the trust, which would require a probate, or if the guardian changed the trustee, or did something else that none of us can guess.

The whole thing smells bad.



Certainly a lesson for the difficulty of managing things from a distance.

 

[bookworm1711]

Dear Brat,

I received your email and desire to thank you very much for sharing that information.

I spent some time this morning tracking down the contact information of the lawyer you mentioned, and learned the information, location, credentials, and email of the person.

If I do find that I need legal assistance, I most certainly intend to follow up on your suggestion.

The guardian also provided me with contact information for three attorneys in Vancouver, but my youngest son cautioned me to find an attorney who specializes in trusts, not probate. Don't know if my son is right, but it sounds reasonable, and the person you recommended in Portland clearly has experience with trusts.

I do know who prepared the original trust documents, but that person, for whatever reason, has kept fairly well hidden! As I mentioned to MooreBonds in my post 8 above, I finally found the preparer of the trust on Facebook, but though I sent him a message there, I have not yet received a response.

I had just joined Facebook that very day because one of my former students had emailed me inviting me to join her group of friends there.

 

[bookworm1711]

Martha, my family indeed would agree that the whole thing "smells bad."

But I had an interesting occurrence today: I received an email/fax from the cemetery requesting my signature, etc., authorizing proceedings.

I'm sure the guardian handled all of those matters before (as for my father's funeral last August), so I would infer from this that without question I am still the trustee, and that she is turning such matters over to me for authorization.

Just a guess, though.

Thank all of you for your responses and suggestions. They are most appreciated at this time.