How can I dissolve an irrevocable family trust? What are the tax implications?: The Trustee is misusing funds in an irrevocable trust set up years ago by someone who is now deceased. I am trying to get beneficiaries/trustees to dissolve it and distribute it equally. What do I need to do and what are the tax implications? Trust was set up in Lexington, MA...I am in Portland, ME.
Scott’s answer: You generally can't. While you can request court-supervised financial reporting by the trustee, and get the trustee removed and/or sued for any misappropriation, the failure of the trustee does not generally give you the right to bypass the creator's intention that the beneficiaries not have direct access to their share of the trust, or - if the trust gives the trustee this discretion - to determine how much is allocated to each beneficiary. You need to pay an attorney to review the trust and circumstances for you to determine your next steps.
My aunt, passed away while her medicaid application was in process. Who pays her 2 month NH bill?:
My sister and I live out of state and are her only living relatives. We submitted all the necessary documents to an attorney early February, who filed the application 5 weeks later. Social Services then required a pension letter. It finally arrived today, but my aunt passed away Easter night. There is a 2 month NH bill that can be partially paid with some funds in her account. There are no other appreciable bills. She owns a small trailer that has been for sale and is not yet sold. Who pays balance of NH bill and what do we do about the trailer?
Scott’s answer: Either a next of kin or the facility (with permission) can continue processing the application, and typically elder law attorneys need to be paid in advance for medicaid applications, so he or she can continue with the filing. The only issue is that if any further documentation is needed that must be requested from a financial institution, that request will only be honored if issued by an estate fiduciary. However, if the trailer is in her name, you will need an estate fiduciary to sell that, anyways. That means the person designated under her will, or if no will, and if either you or your sister is willing to serve, then you would be the likely choice. The attorney working on the application should be in the loop on this and should be able to provide more detailed guidance.
Debt: I have a son who is part time student and employee, 28 years old. Should anything happen to me, do he incur my debt? I have educational and IRS debts. Would it be best to apply for bankruptcy so he does not incur these debts or any other debts?
Scott’s answer: Unless there are student loans of his that you were a signer on, the debts are just yours.