My Grandparents had a A/B Trust. He had most of his money tied in stocks. When my grandmother passed the trust was split (her part being irrevocable) with $750,000 per the document i have from the lawyer & another 720,000 went into my grandfathers sub trust. Since most of his money was in investments did he have to sell off stock to fully fund my grandmothers irrevococable trust? Or could her trust be left empty & upon his death (which recently occured), her trust would need to be fulfilled and whats left goes into his trust? Since my grandfather has now passed, & we have a statment from the broker with a total of 1.2M. Not sure if 750k needs to be sold to fulfill my grandmothers irrevocable trust first or if her account had to be funded upon her death & that 1.2M is all part of his trust.
NOTE: I was added to the trust after my grandmother died. So i am not part of her irrevocable trust. I am only part of my Grandfathers part. So now that the stock broker sent a statment for the 1.2M, i wasnt sure if my grandmothers trust needs to fulfilled with part of that 1.2 or if her trust had to have been funded with her portion upon the split?
Your numbers are significantly large enough that you need to retain counsel to advise you. The terms of trust govern, whether revocable or not.
The irrevocable trust should have its own corpus, not necessarily "cash."
Your rights under either trust will depend on the exact terms of the declaration of trust and whether your grandfather held a power of appointment and exercised it on your behalf.
Do yourself a BIG favor and consult and retain trust counsel. Your question cannot be answered in the abstract. -- Michael
My answers are for general information only. They are not legal advice. Answers assume California law. I am licensed in California, only. Answers must not be relied upon.<br> <br> Legal advice and counsel must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. <br> <br> I provide legal advice and counsel during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us.<br> <br> The communications on this website are not privileged or confidential. I assume no duty to anyone by my participation on Avvo because I have answered or commented on a question. Specifically, I assume no duty to respond to any question, comment, telephone call, or email.<br> <br> All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice or counsel in answer to any question, if you are an interested party you should promptly and personally consult an attorney licensed in the appropriate jurisdiction for advice and counsel. See, also, Avvo's terms and conditions of use, specifically item 9, incorporated by this reference.<br>
Please follow the advice of attorney Michael Daymude. How and when the assets of a trust are divided up can have adverse tax consequences, particularly if there has been a delay and the values of the assets have changed.
I am licensed to practice law only in the state of California. The answer provided above is for general information only, is not intended and should not be taken as specific legal advice and does not create an attorney client relationship with the party making the inquiry. The best way to contact me is by email at email@example.com.
Estate Planning Attorney
I agree with the prior answers, you should retain counsel to make sure its done properly. To answer on what your grandfather should have done, assuming the trust is drafted consistent with most, he needed to divide the investment accounts. The stock would not have needed to be sold, but using the other lawyer's numbers, $750,000 worth of stock needed to be put in the B trust's name. This is a general and very simplified answer, but unless the trust states otherwise, cash is not required to fund the B trust.
Also your grandfather failing to fund that trust at her death does not alleviate the requirement to do so, barring a loophole within the trust allowing for that. The trust likely still needs to be funded and the appreciation from those assets (calculated from the date your grandmother died) needs to be included in that value. It is particularly important if the beneficiaries of her trust are different than his.
As you can see there are a lot of moving parts, so you want to make sure that it is done properly. Consult an attorney to get it in order.
This answer is merely an opinion based on limited knowledge of actual facts and should in no way be deemed legal advice.