Trustee of Trust?
My mother passed away in 2000 at age 64, and my father(currently 73) set up her assests as a family trust and the attorney named my father as trustee to the family trust. Question: if my father were to pass away today, would the trust be a part of his estate since he is the trustee? i.e. how would the family trust be dealt with ? He has 5 children as beneficiaries of his estate.
Also, he moved to another city and acquired a local attorney. The new attorney stated that the trustee should be not be my father, rather it should be 1 or more of his children. ???
Any help is appreciated, and if I need to provide better info, I will.
Thanks in advance.
Russ
Permalink Submitted by Janine Janine on Mon, 2008-01-07 01:41
I don’t understand why the original attorney did not set up the family trust with a successor trustee in the event of the demise of the primary trustee (the father). I am trustee of my family trust, but we named successor trustees. In this way, I have complete control of assests during my lifetime. Assuming that Dad is competent, why should one or more of the children have control of Dad’s assets?
Janine
Permalink Submitted by Russ Wood on Mon, 2008-01-07 17:55
so what you are saying is the attorney should have set up the 5 children as successor trustees of the family trust as my father remains alive, competent, and the current trustee of the family trust.
btw, what is the estate tax exemption cap for an individual? $1million? or is it more?
RW
Permalink Submitted by Janine Janine on Mon, 2008-01-07 20:06
The current estate tax exemption is $2 million; in 2009 it goes up to 3.5 million….unless, of course, Congress legislates something different in the meantime.
I did not intend to convey that all 5 siblings should be[b] concurrent [/b]successor trustees. That could cause many conflicts in decision-making among the siblings. In my case, my oldest son is successor trustee; if something should happen to him, I have named additional successor trustees.
BTW, I am not a professional in any way. I just read a great deal, and I have attended many seminars.
Perhaps a professional would care to address RW’s questions?
Janine
Permalink Submitted by Bruce Steiner on Mon, 2008-01-07 23:58
It’s hard to know without seeing Russ’ mother’s Will exactly what she did. It sounds like she created a credit shelter trust with Russ’ father as trustee. While we generally prefer to have one or more co-trustees of the credit shelter trust together with the spouse, unless there’s some major error in his mother’s Will, the trust shouldn’t be included in his father’s estate merely because his father is the trustee.
As to who his mother should have named as trustee(s), since it was his mother’s money, it was her decision. Without knowing the details as to the family members, there’s no way to tell who she should have selected.
Russ’ father should consult with competent counsel who can give him specific advice based upon the particular situation and his objectives.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL
Permalink Submitted by Russ Wood on Tue, 2008-01-08 19:54
Thanks Bruce and Janine for your responses. Here’s more info, which I should have included in my original post.
Back in 1999 the attorney set it up this way, Mom and Dad split up the assets evenly and each created a trust of which the other spouse was trustee. Upon mom’s death in 2000 some of her assets were transferred to dad, and the remaining $675,000 remained in her estate and was filed with the IRS estate tax division. The $675k at the time was the non-taxable deduction. Her trust then became the Family Trust and became a separate taxable entity where Dad is the trustee. I need to find out if there is a successor trustee assigned to the Family Trust. And the estate tax exemption of $2mil and $3.5mil in 2009 should shelter estate taxes in this case even if the Family Trust is part of Dad’s estate.
RW
Permalink Submitted by Bruce Steiner on Tue, 2008-01-08 20:02
Read Mom’s Will. It will tell you who the successor trustee is, or how the successor trustee is to be selected. It may also give Dad the power to add an additional trustee now if he wishes to do so.