to my grandchild. Can I do that as trustee or should I add it to my will?
Estate Planning Attorney
I agree with Attorney Golde’s response for a variety of reasons. You should probably seek counsel with an estate planning or elder law attorney; however, it may help you and your attorney if you think through a few points.
1. What was the intent when the trust was established? If you created this trust, why did you do it? If it was to transfer the property to your children or grandchildren so as to exempt this property from a nursing home spend-down, you should definitely have the trust examined as to the efficacy of that plan. This is an area where the rules are constantly changing and your trust may no longer accomplish that goal.
2. Why do you want the property to go to you grandchild versus your children? This is a fairly major change in your plan. If you have important reasons for adjusting your goals, it may be an appropriate action. However, I do not believe it should be approached lightly.
3. If the property is transferred to your grandchild, how do you want the grandchild to own the property? There are advantages of holding the property in trust. There can also be disadvantages. Under some circumstances having your grandchild hold the property in trust could protect her from the claims of creditors, divorces, and remove the asset from your grandchild’s estate for estate tax purposes. None of these may be important issues, but they are potential advantages you should consider when deciding whether you want to transfer the property to the grandchild outright as opposed to leaving it in trust for the grandchild. As Attorney Golde mentioned, it is possible, particularly if your children agree, that you could simply have your grandchild become the beneficiary instead of them through a non judicial reformation. Finally even if the document does not allow you to transfer the property directly to your grandchild, it is possible that your grandchild can use the real estate without being an owner. This again may require some family agreement and cooperation; however, it may achieve your goals without requiring a distribution of an asset from a protected trust to the unprotected environment of the grandchild’s personal ownership, or the complexity of a non judicial reformation. Please consider seeking competent advice from an elder care or estate planning attorney as these issues are clearly complex.
Legal Disclaimer: The comment provided above is intended as general information and is NOT legal advice. You should consult an attorney for advice regarding your individual situation. If your question concerns Estate Planning, Business Planning, Asset Protection, Elder Law, Long Term Care Planning, or matters governed by the laws of Massachusetts or Connecticut, you may contact me for a consultation at email@example.com or 413-527-0517.
Elder Law Attorney
If you are talking about giving the house that is in the irrevocable trust to your grandchildren, that would be changing the terms of the trust. The only way of knowing if that is allowable is to actually read the document and see if you are allowed to change beneficiaries in your capacity as trustee or as settlor (if you are the one who also created the trust) or if you are allowed to remove the property from the trust. Unless the document allows you any such powers, you cannot give the property to your grandchildren without the consent of your children, which would have to be given in a "non-judicial settlement."
I strongly encourage you to take the trust document to an estate planning or elder law attorney and have it reviewed so that you know what your options may be.
E. Alexandra "Sasha" Golden is a Massachusetts lawyer. All answers are based on Massachusetts law. All answers are for educational purposes and no attorney-client relationship is formed by providing an answer to a question.
7 lawyers agree
You need to have the trust instrument reviewed by an experienced trust and estate attorney who can advis eyou what options if any exist under the trust agreement to achieve your objectives. You could include your grandchildren in your own Will.
3 lawyers agree
Estate Planning Attorney
An attorney specializing in trust and estate work would have to review the document first before giving you an accurate answer. Attorneys will often recommend irrevocable trusts for asset protection reasons. Unfortunately, one of the drawbacks for the client is that they lose significant control over assets they put into the trust. No one can know what your abilities are without reviewing the document first.
Someone should also discuss gift taxes with you. Good luck.