Elder Law - Len and Rosie


Sunk by ‘pour-over’ will?

Dear Len & Rosie,

My estranged father recently passed away. He had a trust, and my two sisters are the trustees. I was completely disinherited, with my third going to my daughter in a trust until she turns 25.

When my father refinanced his home loan ten years ago, he took the home out of the trust to get the loan but forgot to put it back in. I received a “notice of hearing” in the mail with a copy of a court petition. My sisters are asking to the court to put the home back into the trust.

Do I have any legal grounds to keep the home out of the trust so I could claim my one-third share? Also what can I do to have my sisters removed as my daughter’s trustees? I don’t feel that my daughter’s interests have been taken into consideration when decisions have been made about the trust.

Linda

Dear Linda,

When your father created his trust, he probably signed a “pour-over” will leaving his probate estate to the trustees of the trust. This way, if your father failed to fund his trust, then his will would insure that these assets would eventually wind up in the trust. A pour-over will is a safety net for people who spend thousands of dollars on a trust and forget to transfer their assets to the trust to avoid probate.

Read your father’s will: a copy is probably attached to your sister’s court petition. If it’s a pour-over will, then you have a lousy case. Even if the court denies your sisters’ petition, the trust would inherit the home anyway. The only way you could get a piece of your father’s home is if he either had no pour-over will, or if you could prove he lacked mental capacity or was the victim of undue influence when he signed his estate planning documents. This would be an uphill battle at best.

As for removing your sisters as your daughter’s trustees, this is also likely to be difficult. You have to prove more than a potential conflict of interest. You have to show that the trustees have breached the fiduciary duty they owe to your daughter. To be removed as trustees, they have to do something wrong, such as steal from your daughter, take excessive trustee fees, fail to spend trust money on your daughter’s behalf when they should, or fail to provide an accounting for the trust. And even if you succeed, it is not very likely that the court would make you your daughter’s trustee. The clear implication of your father’s estate plan is that he didn’t trust you. If your sisters were removed as trustees, the court would probably appoint a professional fiduciary as the new trustee.

Still, you should protect your daughter’s interests and keep an eye on what the trustees do. Your daughter is entitled to information about the trust, and an accounting as well. Don’t let the trustees fall asleep on the job, and if you believe the trustees are failing to provide for your daughter, see a trusts and estates attorney.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, at 707.996.4505 or Lentillem.com.


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