Living trust, and beneficary going to trustee

Asked almost 2 years ago - Atlantic City, NJ

my father has set up a living trust, and named one of my siblings the trustee. the sibling has been changing the beeficary status on all his assests to just her. is this legal. also at my fathers death is this sibling as trustee bound to adhere to the administer the living trust and didvide the money even thoe she was the beneficary of all the assets?

Attorney answers (3)

  1. Lawrence A Friedman

    Contributor Level 18

    2

    Lawyers agree

    Answered . Your sister did nothing wrong if she has your dad's actual or implied permission but otherwise acted completely improperly. However, since any wrong was against your dad, either your dad must seek redress or give you or someone else POA to seek redress for him. If your dad lacks capacity, you can apply for guardianship and redress. In any case as my colleague James notes, this situation likely will be messy and the messier the situation, the more likely legal fees are to climb if your sister contests your view of things. However, the longer you and your dad wait to clear things up, the worse your chances and the more it is likely to cost. I would very strongly recommend a consult with an elder law attorney. I'd be happy to work with you, but I'm up in Somerset County. Mike Weinraub, Esq. is a well known elder law attorney in Atlantic County. Michael D. Weinraub, Esq., Michael D. Weinraub, P.C., 5001 Ventnor Avenue. Ventnor, NJ 08406,
    Telephone: 609-823-4900.

    Lawrence Friedman, Bridgewater, NJ. Certified as an Elder Law Attorney by the ABA approved National Elder Law Foundation, former Chair NJ State Bar Association Elder and Disabilities Law Section, Member Board of Consultors of NJSBA Real Property, Trusts & Estates Law Section, Vice Chair Special Needs Law Section of National Academy of Elder Law Attorneys, and Master of Laws (LL.M.) in Taxation from N.Y.U. School of Law. Visit SpecialNeedsNJ.com for articles and Q&A on elder law, special needs, wills, trusts, estates, and tax. Visit SpecialNeedsNJ.com/blog and subscribe for free timely updates to be delivered to your inbox. Information on both Avvo and SpecialNeedsNJ.com does not constitute legal advice, as it is general in nature and may not apply to your situation or be subject to important changes. No attorney client relationship exists unless set forth in written engagement terms.

    Lawrence Friedman, Bridgewater, NJ. Certified as an Elder Law Attorney by the ABA approved National Elder Law... more
  2. Nicholas Anthony Giuditta III

    Contributor Level 7

    1

    Lawyer agrees

    Answered . If your sibling is the sole trustee of your dad's living trust (which to me is suspicious) then she can make such changes if your father agreed and is mentally competent. Otherwise she may be violating her responsibility as a trustee. The answer to your second question is no. If she changed the beneficiary to herself for example on a life insurance policy she gets the proceeds at dad's death and that asset passes outside of the living trust. In my experience this sounds like trouble and I would immediately contact a trust and estate attorney to at least review the situation and send a letter to your sibling.

    The answers by Nicholas Giuditta of the Law Office of Nicholas Giuditta provided in the Avvo website are for... more
  3. James P. Frederick

    Contributor Level 20

    1

    Lawyer agrees

    Answered . It sounds like you have a "messy" situation that is likely to only get worse, as this goes on. It is not clear how your sister would have any legal right to change beneficiaries on anything. Certainly, this would not be the case, as a trustee. Are you sure that your father is not the trustee until his death or incapacity?

    The trust (and its distribution provisions) control ONLY the assets titled in the trust. So if the assets pass by beneficiary designation, then those assets by-pass the trust, and would go directly to the beneficiary.

    It is possible that your sister has been acting under a Power of Attorney form and not as Trustee. In either case, her actions would appear to be a breach of fiduciary duty and would not be proper.

    If your father is still competent, then he would be in a position to put an end to this and to set things straight. If he is incapacitated, it would appear that you will need to retain an attorney and deal with this in court.

    James Frederick

    ***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ******... more

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