Stepmother wants windfall from estate

**DavidN** · 01-11-2005, 06:36 AM

I am the successor trustee for my father's living trust. He passed away in November of 2004. He married my step mother in Feb of 2002. My father purchased a car and a computer and financed both of them in his name only. Additionally, the car is titled in his name only.

Is the estate obligated to pay off the loans? If so, who keeps the assets? Bottom line is my step mother wants the estate to pay for these items and she wants to keep them as well. By the way, she is not a beneficiary of the trust.

**Anonymous** · 01-11-2005, 04:11 PM

I am not sure what type of trust this is. Normally, the assets that are in a trust aren't part of the decedent's estate - they are the property of the trust. It is normal for an estate to pay a decedent's debts, which would include the debts for the car and computer, and for those assets to be distributed in accord with the estate plan (or pursuant to the laws of intestate succession if not governed by an estate plan). However, it would be unusual for money to be taken out of a trust to pay those debts, unless the trust provided for that to happen or the payment was otherwise required by law.

It sounds like what you may actually be suggesting is that the stepmother doesn't want the estate to pay the debts, but wants the trust to pay the debts on behalf of the estate. You will have to look to the will and trust documents to determine if that is consistent with the estate plan.

**DavidN** · 01-11-2005, 08:39 PM

The trust is a Revocable Living Trust. The trust calls for the paying of all "my legally enforcable debts." The seems reasonable and therefore I am going to pay off the debts of the computer and minivan. The question is, "who owns the assets?" The beneficiaries of the trust? My stepmother?

Furthermore my father's last will and testament states, "I give my household furnishings, personal effects, automobiles, and all other tangible personal property to the Trustee under THE <NAME> REVOCABLE LIVING TRUST, to be held in trust under the terms in effect at my death."

I think the trust pays off the debt and the trust then owns the assets, which we ultimately will sell, distribute the proceeds, and dissolve the trust.

**Anonymous** · 01-12-2005, 06:26 AM

From what you say, it sounds like the car and computer would go to the trust (unless they were otherwise distributed by the will's other provisions), and would then be distributed according to the terms of the trust. Unless there is a state law reason why that shouldn't happen, a court will typically follow the estate plan.