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My father is a beneficiary of a trust. He is no longer receiving much income but the trust is growing. What are his options.

Philadelphia, PA |

Ever since a large bank merger/takeover, the trust seems to have shifted from generating income to building equity. His income has been reduced from $45K per year down to $17K yet the trust has grown by $300K in the past year. When he calls the bank to question, they tell him that this is the way it is supposed to be. What are his options for getting this income. He is retired and is dependent on this income.

Attorney Answers 4

Posted

It depends on the trust language and perhaps the discretion of the trustee. However if the trust indicates that "all" income should be distributed or a certain amount should be distributed, it is possible that the trust income he is receiving now is not adequate. Some of this is theoretical, but trust "income" is now usually considered different than what is "pure" income from interest and dividends. There is a law known as the uniform principal and income act (UPIA) that applies to many income beneficiaries of trusts and is designed to prevent just this situation because income beneficiaries and remainder beneficiaries can often be at odds in these situations if the investment mix is shifted from "income producing" securities (which is the norm nowadays). In sum, the UPIA sees that if the intent of a trust was to produce income, it in fact produces income but not too much or too little. This is a gross over-simplification but it might provide some guidance. If you think that your father is not being treated fairly he needs to meet with an attorney to review the trust and the law to determine if there is any recourse against the trustee.

This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/

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Posted

I agree with the points raised by my colleague. A review of the Trust and the relevant law mentioned should prove helpful to your father. He should seek legal guidance sooner than later.
Good luck to you and your father.

The information you obtain herein is not, nor is it intended to be, legal advice. It does not establish an Attorney/Client relationship. You should consult an experienced probate or estate attorney for individual advice regarding your own situation.

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Posted

I agree with my colleagues. The terms of the trust dictate your answer. This is something that your father should review with a trust attorney to determine his options.

James Frederick

***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!

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Posted

I agree with the prior responses that trust documents should be reviewed, and, meet with an attorney. The attorney may also request information from the trustee. If that does not yield sufficient answers, and it is advisable in the circumstances of this case, your dad or you if you are his power of attorney or court appointed guardian, may consider asking the court for an accounting to explore the details of thos trust administration.

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