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

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.

Philadelphia, PA -

Attorney Answers (4)

Steven M Zelinger

Steven M Zelinger

Estate Planning Attorney - Philadelphia, PA
Answered

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... more
Yvette E. Taylor-Hachoose

Yvette E. Taylor-Hachoose

Estate Planning Attorney - Morrisville, PA
Answered

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... more
Deborah B Miller

Deborah B Miller

Estate Planning Attorney - Plymouth Meeting, PA
Answered

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.

James P. Frederick

James P. Frederick

Trusts Attorney - Livonia, MI
Answered

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. ******... more

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