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  1. #1
    Join Date
    Feb 2011
    Posts
    10

    Question Estate Assets Not Suffucent to Fund Trust

    My question involves estate proceedings in the state of: Pennsylvania

    Hi, I'm in the process of trying to take this situation by the horns after 14,000.00 in attorneys fees have not. My mother resides in PA an I am in CA trying to pick up the pieces of the case in order to figure out what to do next if anything.
    I have quite a bit of general information regarding what is going on and what needs to be accomplished but I do not yet have all documents involved so please bear with me.

    In a nut shell my mothers "Good friend and companion" she resided with for almost 20 years past away in 2004. In his Will he made a bequest for 50,000.00 for her to receive directly and 100,000.00 to be deposited into a Trust that was to be managed by his surviving son. The "principle" of the trust was to be used for the expenses of her to remain living in the home that they shared before his death. Expenses meaning everything related to the house; property taxes, insurance, maintenance, upkeep, utilities pretty much everything except food. Upon her death the son receives the home.

    The opposing side has always contented that the Estates assets were not sufficient to fund the 100,000.00 and upon reading the probate documents (just today) this is correct. However with no debt to speak of at the time of his death his net worth was approaching 2 million dollars, the money was there, the question is WHY was 100,000.00 of it not designated for the Trust? Or was it??

    His 401K listed the son as the beneficiary. The son was also given or received the remainder of the assets that were to come from his previous employer (he was retired at the time of his death) which were in the neighborhood of 1.5 million dollars.

    The attorney who drew up the Will and Trust and was executor produced and e-mail (that I have not yet seen) as the sole form of evidence that the son was listed as the beneficiary with the decedents former employer. Based on this e-mail document he allowed? dispensed? (not sure how this took place) the monies to the son. To my knowledge copies of the actual documents which bore his signature held with the company to verify this to be true were never sourced.

    This is where I get confused because of my ignorance of procedures in these matters. Here come the question finally;
    1. If the son was listed as the beneficiary why would the Executor of the will need to "dispense" or "ok" or "allow" the son to collect the monies. Wouldn't they have simply came straight from the employers fund management company via a claim form?
    2. Is it possible to obtain copies of the original documents with his former employer to verify the son was the only beneficiary of those assets.?
    3. If so being that the Fund company is NOT in PA would this pose additional hurdles?

    I think that is it for now. I have to add, if the fact of the matter is he simply "forgot" or "overlooked" funding the trust that is the end of it. But given the living trust was created well before his death and given the thoroughness of the will on all other matters the likely hood that he would have "forgotten" to set aside assets sufficient to fund the 100,000.00 trusts is a stretch.

    I apologize for the length
    Thank you for any help
    J

  2. #2

    Default Re: Estate Assets Not Suffucent to Fund Trust

    HI unofornaio The $100K Trust is a Subtrust of the Trust and is a 'Support Trust'. If it was funded it will have a Tax ID Number. If it is Stale then the devisee gets 7% statutory interest on each anniversary of the Testator's Death Probate Code Section 12005 (Trust Administration Law) Look at Chp 3 of Part 4 of Division 9 (Trust Law) specifically Section 16340 (b)

    A nonprofessional Trustee is still liable for not funding the subtrusts. Probate Code Section 16003 states that the Trustee must make a good faith effort to fund the subtrusts. If the stale trust is the result of a Breach of the Trust the devisee may get 10% statutory interest Probate Code Section 9602. File for a Petition for Accounting Probate Code Section 17200 (b)(7) The Probate Court may remove the Trustee persuant to Probate Code Section 15642 and take over the Administration of the Trust Estate.


    You say 'Will and Trust' so this is a testamentary Trust vs. an inter vivos Trust?

  3. #3
    Join Date
    Feb 2011
    Posts
    10

    Default Re: Estate Assets Not Suffucent to Fund Trust

    Hi Mikectm2,

    First off thank you for replying I appreciate it, this is making me crazy.
    I am awaiting a copy of the Trust Documents that were mailed to me late last week so I do not have an exact answer at this time to your question, I apologize. However after looking up the two definitions of the trust you mention Im fairly certian it is an "Inter Vivos Trust" further more a recent court document states "Prior to his death the decedent created the (His name) Living trust on October xxx of 2002 naming his son (Name) as the trustee."
    I hope this is of help. In the mean time I will review the other info you have referred to.
    Thanks again

  4. #4

    Default Re: Estate Assets Not Suffucent to Fund Trust

    In re-reading, it looks this man (your moms companion of 20+ years) resided and died in the state of PA. i was giving you all the CA probate codes governing trust estates and trust administration. His son is the Trustee. The man passed in 2004. Your mom is still alive and resides in PA. yeah likely a Revocable inter vivos Living Trust, now an Irrevocable Trust since the Settlor passed

    Might I recommend the March 2008 Issue of Trusts and Estates magazine, specifically the article "The thrills of Trust Funding" good luck with the PA Laws

    Oh when i was talking about CA Probate Code Section 16003 i was thinking primarily of a successor Trustee "freshening" ,or funding, the "stale" subtrust left by the former Trustee IN your Case Probate Code Section 16000 states the Trustee must administer the Trust according to the terms take a look at my thread i'm on Page two now Consequences of the Late Funding of a Trust

  5. #5
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Estate Assets Not Suffucent to Fund Trust

    The opposing side has always contented that the Estates assets were not sufficient to fund the 100,000.00 and upon reading the probate documents (just today) this is correct. However with no debt to speak of at the time of his death his net worth was approaching 2 million dollars, the money was there, the question is WHY was 100,000.00 of it not designated for the Trust? Or was it??
    How are you claiming a net worth of 2 million? Was that $2M disbursed through the will to other heirs?

    In other words; what happened to the $2M




    The attorney who drew up the Will and Trust and was executor produced and e-mail (that I have not yet seen) as the sole form of evidence that the son was listed as the beneficiary with the decedents former employer. Based on this e-mail document he allowed? dispensed? (not sure how this took place) the monies to the son. To my knowledge copies of the actual documents which bore his signature held with the company to verify this to be true were never sourced.
    e-mail to whom? from whom? Why do you claim the attorney disbursed anything or allowed anything?

  6. #6
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Estate Assets Not Suffucent to Fund Trust

    401(k)'s and other such accounts with beneficiaries (that don't list the estate as beneficiary) don't count towards the estate as far as the will goes.
    Property jointly owned with survivorship rights goes to the joint owner.
    Stuff titled to/owned by some trust that's not directed to contribute to your trust has no bearing.
    Only stuff titled to the deceased counts as the estate for the will.
    It's quite possible that there is not enough in the estate despite millions of dollars of net worth.

    At this point I'll have very little in my estate when I pass. The bulk of my estate (larger than the one involved here) will transfer by means other than my will/probate.

  7. #7
    Join Date
    Feb 2011
    Posts
    10

    Default Re: Estate Assets Not Suffucent to Fund Trust

    Hi Jk,

    Please keep in mind I do not have all the facts in this matter at this time, they are coming in as we speak and Ive initiated the process to receive more.

    The son some how ended up with the close to 2mil, either directly from the company or through the Executor of the will? this is what I'm not sure of...HOW? This was comprised of a 401k, several investment accounts and stocks. I'm not positive all the investments were managed by his employer some investments my have been in a private institution (a bank)

    Who specifically the E-mail was sent from I don't not know (yet) I do know it came from a division (located out of state) of the decedents former employer, who ever manages the stocks and investments. It was sent to the attorney that drew up the will and trust documents. This same attorney was executor of the Will and Trust
    Im not sure if the attorney dispersed or allowed anything, this is part of what Im trying to find out.


    401(k)'s and other such accounts with beneficiaries (that don't list the estate as beneficiary) don't count towards the estate as far as the will goes.
    As flyingron wrote above (thanks for your input) through other research this is my understanding of procedure. However Fly.. goes on to state..

    Only stuff titled to the deceased counts as the estate for the will.
    And this is where the 100,000.00 dollar question lies. Where is the PROOF that these other assets mentioned above WERE or WERE NOT titled to the deceased. Is an e-mail really sufficient to prove this? I realize the question of "is an e-mail sufficient proof?" is ultimately a question for a court.

    What I'm trying to do here is discover these documents so myself or another may bring them in-front of the court if necessary. How to do this is what I need help with.

    Why couldn't these documents just be requested/subpeoned once I find out who holds them?

    Does the fact that the company that held at-least part of all this money (assets, investments.. what ever the term is) not in the state of PA create any unique hurdles?

    Obviously if the beneficiary of these assets is the son the matter is over.

    Assuming the son was listed as the beneficiary of these assets The issues root then lies with the fact that the Attorney that drew up the Will and Trust clearly made a mistake during the creation of these documents. I seriously doubt he can be held accountable for this.

    Thank you all for your continued input.

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