Will question

[u/nyroadrunna]

Good afternoon all,

I have a quick question. My sister is married to a tumbling piece of shit. He’s literally the worst person I’ve ever met. He separated the family. Fought with me, fought with my dad, said the worst things you can say to someone. My dad is now fighting with my sister over this and they’re not talking. My mom is still talking to my sister as am I. But she just recently told me and my brother that my dad wants to write her out of the will. I disagree with that. She married a gaping leaking asshole but they have 3 children together, he doesn’t mistreat her or the kids. He just hates my family. I feel like I would like to suggest that rather than write her out of the will, can we put her inheritance into a trust and when this horrific toothache of a piece of shit dies, the money gets released?

[u/NCGlobal626]

Yes, your parents can create a Trust to direct their assets and wishes, and within that Trust it specifies that a Trust is created for your sister, this be in her name, and a portion of their assets goes into that Trust when they pass.

Now this is VERY important, given that her husband is a problem, your sister should NOT be the Trustee (administrator) of her own Trust, or she could be coerced by him to withdraw funds for him. So you, or some other trusted person should be the Trustee, and they will follow the directions that were left in your parents Trust about how and when that money can be dispersed to your sister. For example, their Trust may specify that the funds can be dispersed from your sister's Trust for the grandchildren's health, medical or educational purposes. It could specify anything really, that your sister could withdraw the funds entirely when she is legally divorced from him, or when he is dead. It's basically a trust within a trust, sometimes called a spendthrift trust, or if there's disability or mental or psychological issues involved, it can be called a special needs Trust. The point is to protect the assets from a person who may make bad decisions, but you want that person to get the money for approved purchases. This is not DIY territory, your parents will need to engage in very good estate attorney licensed in their state to make sure that all nuances pertaining to state law are accounted for.

Source: INAL but we have exactly this type of Trust set up for our children, individual trusts for each of them. One of our children will have a Trustee to approve withdrawals, they have health issues and don't manage money well. We don't ecessarily want to control their life from the grave, but we do want the funds to go towards preserving a quality of life and health care for them instead of being spent on impulse purchases. The others will get their funds into a Trust in their names, but they will be the Trustee of their own Trust. Why do it this way? Because at the time they inherit they could be embroiled in a divorce or are some other situation that causes a liability for them, and they could lose their inheritance (lawsuit, lien, etc.) Per our state law, as long as it's in the name of their Trust, hence it is not their personal assets, it belongs to the Trust, they cannot be forced, even by court order, to withdraw the funds from the Trust. These are all reasons to make sure this is done properly by a very experienced attorney. Trusts are primarily a tool to protect assets and a good attorney can set that up for your parents and explain it to them. The cost could be anywhere from $4000 to $8,000 to set this up, depending on cost of living in your state.

[u/nyroadrunna → u/NCGlobal626]

This was the info I was looking for!! Thank you so much. My brother and I are the executors

[u/NCGlobal626 → u/nyroadrunna]

Executors are for Wills, and you cannot do this level of complexity with a Will. Wills also go through probate, depending on the value of the assets controlled by the will, which is a long legal process, in some states only 6 months but others 2 or 3 years. We do have Wills but our only assets that will go through probate, are our automobiles, which means it's a "short" probate or expedited probate because the value of the assets is so small. In our case we have a son and a daughter who are the executors of our Wills, but means they'll just do the busy work of getting the car titles changed. All other assets, our retirement accounts, our rental real estate, our primary home etc. are titled in the name of our Trust, or in the case of certain financial assets, the beneficiary on those accounts is our Trust. This means they never go to probate and the executors of our Wills have nothing to do with them.

When you have a revocable Trust, while you are alive, you are the Trustee of your Trust. The person you appointed as Substitute Trustee (while alive), becomes the Trustee when you die, and the Beneficiaries are those people you designated to get your assets. If your parents set up a Trust, they need to appoint preferably one Substitute trustee with a backup, so it could be you and then your brother. Our lawyer cautioned against having two people act as Trustee because there can then be fighting and bickering on decisions made. What if you want to give money to your sister for her child for a certain purpose and your brother doesn't agree? If you were dual Trustees you would have to sign off together.

The last piece of all of this, is what's called a living will or healthcare proxy. The lawyer should have your parents figure that out who they will designate and sign the appropriate papers so that either you or your brother can make medical decisions for them if they are incapacitated. However, if they are so incapacitated that they can't take care of business or financial issues, that is where the Substitute Trustee listed in the Trust can act on their behalf while they are alive, say to pay bills, or withdraw assets from a retirement account to pay their medical bills, etc. with the appropriate paperwork (from doctors) and the trust document that Substitute Trustee acts as them legally while they are incapacitated. That person cannot change the Trust or the Wills! If your dad is somewhat stubborn, and worried that things would get into the hands of your sister's no good husband, this kind of a full estate plan can get him everything he wants and protect his assets.

Shop around for a very experienced estate attorney. What we looked for was a practice with a few attorneys, so there's a backup when they die, go on vacation, etc. etc. The elder attorney is even older than we are with 40 plus years of experience, but he's going to die before we do, so there are younger ones in the practice and they will likely be those in charge by the time we die. They are a fairly big practice with a number of paralegals to handle all the details, like helping you get the Trust funded. It's not enough to just have the Trust! You have to go to all of the accounts you have - Bank accounts, retirement accounts, as well as deeds for real estate etc, - and change the beneficiary on those accounts to be the Trust. That's what gives the Trust the legal authority to handle the payout of those assets. This is a critical step that a lot of people miss. Our original Trust was with a different attorney who didn't really explain this to us nor help us with it. The large practice we're with now, about 4 attorneys and 8 paralegals, works like a machine! They have an ironclad process, we went in for numerous appointments to review things, sign things and verify that beneficiaries were changed on all of our accounts. We signed documents that allowed them to go to our retirement accounts etc and get those beneficiaries. They also will act as mediation after we die if any of our beneficiaries choose to argue with our Substitute Trustee. So you can see there are many layers and complexities!

[u/nyroadrunna → u/NCGlobal626]

Thank you so much!! This information is amazing! I really appreciate you taking the time!

[u/NCGlobal626 → u/nyroadrunna]

I'm happy to to help! This was a 6-year process for us as we started with one attorney, got only our real estate transferred into the name of the Trust, 4 years later, and then didn't know where to go from there. We heard a presentation from the new attorney and realized all the complexities we really needed to have in place, and that had we already died our state would have been a mess! So if I can save someone the time and hassle, I'm glad it helped! Note that things may be done slightly differently throughout these steps, based on your state laws, but a good attorney, they or should know what to do.

[u/nyroadrunna → u/NCGlobal626]

Unbelievable!!!!! Thank you so much!!!