14 Sep Can I protect my brother’s trust?

Q. My brother and I received trusts when our dad died. My brother is getting married, and I’m not crazy about his girlfriend. Can I do anything to protect the money?

A. It depends on what you mean by you “received trusts.”

If there was money that was held in trust which was paid outright to you and your brother when your father died, then the money paid to your brother is his to do with as he decides including spending it on his girlfriend/future wife, said Catherine Romania, an estate planning attorney with Whitman Stadtmauer in Florham Park.

Romania said assuming this is the case, you may want to at least encourage him to seek some expert advice concerning inherited property and marital rights.

She said inherited property that’s kept separate and apart and not co-mingled with martial property — for example, not put into joint names — is not subject to equitable distribution should the parties divorce. So simply keeping this money in a separate account in his own name could safeguard it in the case of a divorce, she said.

Another way for you to help him safeguard a significant inheritance received outright would be to ask him to come with you to consult with a financial planner.

“You would both be provided with information about investing your inherited wealth, leaving less liquid funds available for discretionary spending/waste,” she said. “If there are significant assets involved, perhaps your brother should consider entering into a premarital agreement with his fiancé before the wedding.”

Assuming the inherited funds are still being held in trust pursuant to your father’s will or other estate planning documents, then it depends on the terms of the trust and the trustee to “protect” the trust funds, Romania said.

“The trust document may direct the trustee to distribute the trust funds on certain dates or upon certain events, in which case the trustee has little choice but to do as directed,” she said. “Other times the trust document will direct that distributions are in the trustee’s discretion.”

If that is the case, Romania said you should contact the trustee to alert the trustee to any facts that might influence the trustee in making a distribution, in particular a large distribution of trust principal.

So in that case, the good news would be that any beneficiary will need to go through the trustee — like a gatekeeper — to access the money, said Stephen Craffen of Stonegate Wealth Management in Oakland.

“The trustee is guided by the wording of the trust,” Craffen said. “If you have received separate trusts, then there is likely nothing you can do about his monies.”

Finally, you do not describe your own family situation.

If both your parents are deceased and you have neither a spouse nor children, and should you die without a will or other testamentary substitute such as a trust, your brother will receive an inheritance from you outright pursuant to the intestacy statute, Romania said.

“So while you are concerned with protecting your brother’s money, be sure to seek the assistance of an estate planning attorney and financial advisor to ensure your own affairs are in order so that your death or disability does not cause further financial issues,” she said.

Email your questions to .

This story was first posted in September 2015.