12 Feb How long does it take to pay out a family trust?
Q. It has been nearly 14 years since a family member’s death and the family trust hasn’t been settled. The trust was left in place of an actual will. All parties have received their share except for the two brothers and a sister who is the executor. The brothers were to divide the estate property in half and the sister was to get $15,000. One of the brothers lives in the home. What can we do to settle this?
A. You do have rights here.
But the key will be the wording of the trust.
The administrator or executor of an estate is tasked with collecting decedent’s assets, paying debts, making distributions to the beneficiaries and then closing the estate as expeditiously as possible, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.
Romania said there are times when a trust is used as a substitute for a will such that an individual’s assets are placed in trust and the trustee pays the debts, and administers the assets in the trust in accordance with the terms of the trust during the individual’s life and upon his or her death.
“Notwithstanding that in such cases trusts are sometimes used as will substitutes, trusts are not always intended to be closed and distribution made immediately after the debts are paid as in the case of the estate,” she said. “The terms of the trust dictate the trustee’s duties with respect to the distribution of trust assets.”
If you are a beneficiary of a trust and believe the trustee is breaching his or her fiduciary duties, you should notify the trustee of the nature of the suspected breach, she said. If nothing is done to correct the situation, you may ask the court for several remedies.
First, you can ask the court to direct the trustee to take actions which you will set forth in your complaint filed with the court, Romania said.
Or you can ask the court to direct the trustee to stop taking certain actions which you will set forth in your complaint filed with the Court.
You can also ask the court to remove the trustee due to breach of fiduciary duties which you will list in your complaint filed with the court, she said.
But court intervention can be costly.
“Moreover, the trustee may ask the court to have his or her legal fees paid from the trust funds thus depleting the trust,” Romania said. “For this reason, it is usually best to try and resolve these issues before involving the court.”
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This story was originally published on Feb. 12, 2020.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.