Legal workarounds for testamentary trust perceived as unfair
My mother recently passed away and her will includes a testamentary trust for a portion of the estate designated for her grandchildren. Unfortunately, the terms of this trust seem to unfairly benefit my children vs. my brother's, which is creating family drama -- so much so that extended family (cousins) designated as trustees want to refuse to get involved. My brother and I are aligned on a more equitable arrangement (with which the trustees concur) but my initial research indicates that testamentary trusts must be followed exactly.
The trust is for the benefit of five grandchildren: Two from my brother, presently age 27 and 22, and my three children, ages 17, 13, and 11. However, rather than equal distribution, the trust specifies the following (excerpting some of the exact legal language):
- for the benefit of any one or more of the living benficiaries
- for their health, and education (including room and board)
- without the necessity of equalization among them at any time
Education is more fully defined in another paragraph and largely applies to tuition, room, board, books, etc. at an accredited college, university, or trade school. The trustee has "absolute discretion" but is advised to "consider all funds or resources available to a beneficiary".
When the youngest beneficiary is 21, the trust is to be divided into two trusts (no specific split percentage is mentioned) based on children of myself and my brother, from which income is paid at the trustee's discretion to the children until the youngest of each of these two trusts reaches age 25, at which point the trust(s) terminate with equal division.
As written, the trust would seem to possibly unfairly benefit me/my children:
- My brother's children have both graduated college, and do not plan to pursue postgraduate education
- His two children's college was funded primarily through Pell Grants; they do not have student loans
- My three children do have college coming up (the first next year!) and my income precludes any significant financial assistance, but is not enough to avoid taking out loans
Obviously there's no clear cut "need" and the "absolute discretion" allows the trustee to make that judgment (which our relatives don't want to have to make.)
Everyone (my brother, myself, trustees) would love to just equally split the benefits to all five grandchildren; however, there does not seem to be a way to do that within the constraints established. Even if we "designated" 60% to be disbursed to my children and supported their college, we would have to wait 10 years until my youngest child reaches age 21 before we could "divide" the trust (100% to my brother's children, 0% to mine) to pay out to the other beneficiaries.
One thought I've had to reduce family drama is to request the trustees disburse all the funds for my own children's education and simply gift my brother's children their "share".
Are there any other legal ways of overriding the specific instructions of the will with a more equitable distribution that everyone involved (and alive) agrees with?
trusts-and-estates
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
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Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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add a comment |
My mother recently passed away and her will includes a testamentary trust for a portion of the estate designated for her grandchildren. Unfortunately, the terms of this trust seem to unfairly benefit my children vs. my brother's, which is creating family drama -- so much so that extended family (cousins) designated as trustees want to refuse to get involved. My brother and I are aligned on a more equitable arrangement (with which the trustees concur) but my initial research indicates that testamentary trusts must be followed exactly.
The trust is for the benefit of five grandchildren: Two from my brother, presently age 27 and 22, and my three children, ages 17, 13, and 11. However, rather than equal distribution, the trust specifies the following (excerpting some of the exact legal language):
- for the benefit of any one or more of the living benficiaries
- for their health, and education (including room and board)
- without the necessity of equalization among them at any time
Education is more fully defined in another paragraph and largely applies to tuition, room, board, books, etc. at an accredited college, university, or trade school. The trustee has "absolute discretion" but is advised to "consider all funds or resources available to a beneficiary".
When the youngest beneficiary is 21, the trust is to be divided into two trusts (no specific split percentage is mentioned) based on children of myself and my brother, from which income is paid at the trustee's discretion to the children until the youngest of each of these two trusts reaches age 25, at which point the trust(s) terminate with equal division.
As written, the trust would seem to possibly unfairly benefit me/my children:
- My brother's children have both graduated college, and do not plan to pursue postgraduate education
- His two children's college was funded primarily through Pell Grants; they do not have student loans
- My three children do have college coming up (the first next year!) and my income precludes any significant financial assistance, but is not enough to avoid taking out loans
Obviously there's no clear cut "need" and the "absolute discretion" allows the trustee to make that judgment (which our relatives don't want to have to make.)
Everyone (my brother, myself, trustees) would love to just equally split the benefits to all five grandchildren; however, there does not seem to be a way to do that within the constraints established. Even if we "designated" 60% to be disbursed to my children and supported their college, we would have to wait 10 years until my youngest child reaches age 21 before we could "divide" the trust (100% to my brother's children, 0% to mine) to pay out to the other beneficiaries.
One thought I've had to reduce family drama is to request the trustees disburse all the funds for my own children's education and simply gift my brother's children their "share".
Are there any other legal ways of overriding the specific instructions of the will with a more equitable distribution that everyone involved (and alive) agrees with?
trusts-and-estates
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
New contributor
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
2
Consider that your mother may have been aware that some of her grandchildren were eligible for government grants and others were not, and explicitly wanted to grant money to your children that the government would not. As written, the terms appear to create a more equitable outcome through inequitable distribution. Your children should of course not waste the trust funds, but avail themselves of any merit-based scholarships that would lessen the drain on the trust.
– Ben Voigt
Mar 31 at 6:17
2
Also note that, had your mother died before your nephews or nieces went through school, that trust would have adversely affected their eligibility for grants. Your children will now be inelgible for need-based aid due to their own resources, completely aside from your income. You should ask your brother if he considers it fair for his children (who have degrees and jobs) to be able to apply to entirety of their inheritance toward financial goals such as a home purchase, while your childrens' inheritance is (in large part and maybe even completely) seized by their respective universities.
– Ben Voigt
Mar 31 at 6:22
The answer to this question, even more than most, depends on jurisdiction. In systems derived from English common law, the testator can do what she wishes and fairness is not an issue (as in ohwilleke's good answer); in Code Napoleon systems inheritance is covered by law, which may override the testamentary documents.
– Tim Lymington
19 hours ago
add a comment |
My mother recently passed away and her will includes a testamentary trust for a portion of the estate designated for her grandchildren. Unfortunately, the terms of this trust seem to unfairly benefit my children vs. my brother's, which is creating family drama -- so much so that extended family (cousins) designated as trustees want to refuse to get involved. My brother and I are aligned on a more equitable arrangement (with which the trustees concur) but my initial research indicates that testamentary trusts must be followed exactly.
The trust is for the benefit of five grandchildren: Two from my brother, presently age 27 and 22, and my three children, ages 17, 13, and 11. However, rather than equal distribution, the trust specifies the following (excerpting some of the exact legal language):
- for the benefit of any one or more of the living benficiaries
- for their health, and education (including room and board)
- without the necessity of equalization among them at any time
Education is more fully defined in another paragraph and largely applies to tuition, room, board, books, etc. at an accredited college, university, or trade school. The trustee has "absolute discretion" but is advised to "consider all funds or resources available to a beneficiary".
When the youngest beneficiary is 21, the trust is to be divided into two trusts (no specific split percentage is mentioned) based on children of myself and my brother, from which income is paid at the trustee's discretion to the children until the youngest of each of these two trusts reaches age 25, at which point the trust(s) terminate with equal division.
As written, the trust would seem to possibly unfairly benefit me/my children:
- My brother's children have both graduated college, and do not plan to pursue postgraduate education
- His two children's college was funded primarily through Pell Grants; they do not have student loans
- My three children do have college coming up (the first next year!) and my income precludes any significant financial assistance, but is not enough to avoid taking out loans
Obviously there's no clear cut "need" and the "absolute discretion" allows the trustee to make that judgment (which our relatives don't want to have to make.)
Everyone (my brother, myself, trustees) would love to just equally split the benefits to all five grandchildren; however, there does not seem to be a way to do that within the constraints established. Even if we "designated" 60% to be disbursed to my children and supported their college, we would have to wait 10 years until my youngest child reaches age 21 before we could "divide" the trust (100% to my brother's children, 0% to mine) to pay out to the other beneficiaries.
One thought I've had to reduce family drama is to request the trustees disburse all the funds for my own children's education and simply gift my brother's children their "share".
Are there any other legal ways of overriding the specific instructions of the will with a more equitable distribution that everyone involved (and alive) agrees with?
trusts-and-estates
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
New contributor
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
My mother recently passed away and her will includes a testamentary trust for a portion of the estate designated for her grandchildren. Unfortunately, the terms of this trust seem to unfairly benefit my children vs. my brother's, which is creating family drama -- so much so that extended family (cousins) designated as trustees want to refuse to get involved. My brother and I are aligned on a more equitable arrangement (with which the trustees concur) but my initial research indicates that testamentary trusts must be followed exactly.
The trust is for the benefit of five grandchildren: Two from my brother, presently age 27 and 22, and my three children, ages 17, 13, and 11. However, rather than equal distribution, the trust specifies the following (excerpting some of the exact legal language):
- for the benefit of any one or more of the living benficiaries
- for their health, and education (including room and board)
- without the necessity of equalization among them at any time
Education is more fully defined in another paragraph and largely applies to tuition, room, board, books, etc. at an accredited college, university, or trade school. The trustee has "absolute discretion" but is advised to "consider all funds or resources available to a beneficiary".
When the youngest beneficiary is 21, the trust is to be divided into two trusts (no specific split percentage is mentioned) based on children of myself and my brother, from which income is paid at the trustee's discretion to the children until the youngest of each of these two trusts reaches age 25, at which point the trust(s) terminate with equal division.
As written, the trust would seem to possibly unfairly benefit me/my children:
- My brother's children have both graduated college, and do not plan to pursue postgraduate education
- His two children's college was funded primarily through Pell Grants; they do not have student loans
- My three children do have college coming up (the first next year!) and my income precludes any significant financial assistance, but is not enough to avoid taking out loans
Obviously there's no clear cut "need" and the "absolute discretion" allows the trustee to make that judgment (which our relatives don't want to have to make.)
Everyone (my brother, myself, trustees) would love to just equally split the benefits to all five grandchildren; however, there does not seem to be a way to do that within the constraints established. Even if we "designated" 60% to be disbursed to my children and supported their college, we would have to wait 10 years until my youngest child reaches age 21 before we could "divide" the trust (100% to my brother's children, 0% to mine) to pay out to the other beneficiaries.
One thought I've had to reduce family drama is to request the trustees disburse all the funds for my own children's education and simply gift my brother's children their "share".
Are there any other legal ways of overriding the specific instructions of the will with a more equitable distribution that everyone involved (and alive) agrees with?
trusts-and-estates
trusts-and-estates
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
New contributor
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
New contributor
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
New contributor
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
asked Mar 30 at 22:18
Daniel WiddisDaniel Widdis
1134
1134
New contributor
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Daniel Widdis is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
2
Consider that your mother may have been aware that some of her grandchildren were eligible for government grants and others were not, and explicitly wanted to grant money to your children that the government would not. As written, the terms appear to create a more equitable outcome through inequitable distribution. Your children should of course not waste the trust funds, but avail themselves of any merit-based scholarships that would lessen the drain on the trust.
– Ben Voigt
Mar 31 at 6:17
2
Also note that, had your mother died before your nephews or nieces went through school, that trust would have adversely affected their eligibility for grants. Your children will now be inelgible for need-based aid due to their own resources, completely aside from your income. You should ask your brother if he considers it fair for his children (who have degrees and jobs) to be able to apply to entirety of their inheritance toward financial goals such as a home purchase, while your childrens' inheritance is (in large part and maybe even completely) seized by their respective universities.
– Ben Voigt
Mar 31 at 6:22
The answer to this question, even more than most, depends on jurisdiction. In systems derived from English common law, the testator can do what she wishes and fairness is not an issue (as in ohwilleke's good answer); in Code Napoleon systems inheritance is covered by law, which may override the testamentary documents.
– Tim Lymington
19 hours ago
add a comment |
2
Consider that your mother may have been aware that some of her grandchildren were eligible for government grants and others were not, and explicitly wanted to grant money to your children that the government would not. As written, the terms appear to create a more equitable outcome through inequitable distribution. Your children should of course not waste the trust funds, but avail themselves of any merit-based scholarships that would lessen the drain on the trust.
– Ben Voigt
Mar 31 at 6:17
2
Also note that, had your mother died before your nephews or nieces went through school, that trust would have adversely affected their eligibility for grants. Your children will now be inelgible for need-based aid due to their own resources, completely aside from your income. You should ask your brother if he considers it fair for his children (who have degrees and jobs) to be able to apply to entirety of their inheritance toward financial goals such as a home purchase, while your childrens' inheritance is (in large part and maybe even completely) seized by their respective universities.
– Ben Voigt
Mar 31 at 6:22
The answer to this question, even more than most, depends on jurisdiction. In systems derived from English common law, the testator can do what she wishes and fairness is not an issue (as in ohwilleke's good answer); in Code Napoleon systems inheritance is covered by law, which may override the testamentary documents.
– Tim Lymington
19 hours ago
2
2
Consider that your mother may have been aware that some of her grandchildren were eligible for government grants and others were not, and explicitly wanted to grant money to your children that the government would not. As written, the terms appear to create a more equitable outcome through inequitable distribution. Your children should of course not waste the trust funds, but avail themselves of any merit-based scholarships that would lessen the drain on the trust.
– Ben Voigt
Mar 31 at 6:17
Consider that your mother may have been aware that some of her grandchildren were eligible for government grants and others were not, and explicitly wanted to grant money to your children that the government would not. As written, the terms appear to create a more equitable outcome through inequitable distribution. Your children should of course not waste the trust funds, but avail themselves of any merit-based scholarships that would lessen the drain on the trust.
– Ben Voigt
Mar 31 at 6:17
2
2
Also note that, had your mother died before your nephews or nieces went through school, that trust would have adversely affected their eligibility for grants. Your children will now be inelgible for need-based aid due to their own resources, completely aside from your income. You should ask your brother if he considers it fair for his children (who have degrees and jobs) to be able to apply to entirety of their inheritance toward financial goals such as a home purchase, while your childrens' inheritance is (in large part and maybe even completely) seized by their respective universities.
– Ben Voigt
Mar 31 at 6:22
Also note that, had your mother died before your nephews or nieces went through school, that trust would have adversely affected their eligibility for grants. Your children will now be inelgible for need-based aid due to their own resources, completely aside from your income. You should ask your brother if he considers it fair for his children (who have degrees and jobs) to be able to apply to entirety of their inheritance toward financial goals such as a home purchase, while your childrens' inheritance is (in large part and maybe even completely) seized by their respective universities.
– Ben Voigt
Mar 31 at 6:22
The answer to this question, even more than most, depends on jurisdiction. In systems derived from English common law, the testator can do what she wishes and fairness is not an issue (as in ohwilleke's good answer); in Code Napoleon systems inheritance is covered by law, which may override the testamentary documents.
– Tim Lymington
19 hours ago
The answer to this question, even more than most, depends on jurisdiction. In systems derived from English common law, the testator can do what she wishes and fairness is not an issue (as in ohwilleke's good answer); in Code Napoleon systems inheritance is covered by law, which may override the testamentary documents.
– Tim Lymington
19 hours ago
add a comment |
1 Answer
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There is no requirement that a will, or a trust created by a will, be "fair". The will could have left $500,000 in trust for one set of siblings, and $5,000 to another set. It could specifically exclude one beneficiary from some of the benefits, or specify an unequal division. That is all the choice of the testator.
As described in the question, the trust does seem likely to give greater benefits to one set of children than to their cousins. Unless there are grounds to upset the will, that is just how it is. However, the wide "absolute" discretion granted to the trustee might allow the trustee to modify this outcome, but the trustee is not allowed to simply rewrite the trust. How much the payments can be varied will depend on the exact terms of the trust. It does sound as if this trust was not worded as carefully as it might be, since it does not specify a ration when the trust is to be split.
The designated relative can decline to serve as trustee, then any specified alternate would serve, or if there is none, or none who will serve, the court would appoint a trustee.
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
add a comment |
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There is no requirement that a will, or a trust created by a will, be "fair". The will could have left $500,000 in trust for one set of siblings, and $5,000 to another set. It could specifically exclude one beneficiary from some of the benefits, or specify an unequal division. That is all the choice of the testator.
As described in the question, the trust does seem likely to give greater benefits to one set of children than to their cousins. Unless there are grounds to upset the will, that is just how it is. However, the wide "absolute" discretion granted to the trustee might allow the trustee to modify this outcome, but the trustee is not allowed to simply rewrite the trust. How much the payments can be varied will depend on the exact terms of the trust. It does sound as if this trust was not worded as carefully as it might be, since it does not specify a ration when the trust is to be split.
The designated relative can decline to serve as trustee, then any specified alternate would serve, or if there is none, or none who will serve, the court would appoint a trustee.
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
add a comment |
There is no requirement that a will, or a trust created by a will, be "fair". The will could have left $500,000 in trust for one set of siblings, and $5,000 to another set. It could specifically exclude one beneficiary from some of the benefits, or specify an unequal division. That is all the choice of the testator.
As described in the question, the trust does seem likely to give greater benefits to one set of children than to their cousins. Unless there are grounds to upset the will, that is just how it is. However, the wide "absolute" discretion granted to the trustee might allow the trustee to modify this outcome, but the trustee is not allowed to simply rewrite the trust. How much the payments can be varied will depend on the exact terms of the trust. It does sound as if this trust was not worded as carefully as it might be, since it does not specify a ration when the trust is to be split.
The designated relative can decline to serve as trustee, then any specified alternate would serve, or if there is none, or none who will serve, the court would appoint a trustee.
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
add a comment |
There is no requirement that a will, or a trust created by a will, be "fair". The will could have left $500,000 in trust for one set of siblings, and $5,000 to another set. It could specifically exclude one beneficiary from some of the benefits, or specify an unequal division. That is all the choice of the testator.
As described in the question, the trust does seem likely to give greater benefits to one set of children than to their cousins. Unless there are grounds to upset the will, that is just how it is. However, the wide "absolute" discretion granted to the trustee might allow the trustee to modify this outcome, but the trustee is not allowed to simply rewrite the trust. How much the payments can be varied will depend on the exact terms of the trust. It does sound as if this trust was not worded as carefully as it might be, since it does not specify a ration when the trust is to be split.
The designated relative can decline to serve as trustee, then any specified alternate would serve, or if there is none, or none who will serve, the court would appoint a trustee.
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
There is no requirement that a will, or a trust created by a will, be "fair". The will could have left $500,000 in trust for one set of siblings, and $5,000 to another set. It could specifically exclude one beneficiary from some of the benefits, or specify an unequal division. That is all the choice of the testator.
As described in the question, the trust does seem likely to give greater benefits to one set of children than to their cousins. Unless there are grounds to upset the will, that is just how it is. However, the wide "absolute" discretion granted to the trustee might allow the trustee to modify this outcome, but the trustee is not allowed to simply rewrite the trust. How much the payments can be varied will depend on the exact terms of the trust. It does sound as if this trust was not worded as carefully as it might be, since it does not specify a ration when the trust is to be split.
The designated relative can decline to serve as trustee, then any specified alternate would serve, or if there is none, or none who will serve, the court would appoint a trustee.
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
edited Mar 31 at 1:51
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
answered Mar 31 at 1:09
David SiegelDavid Siegel
15.9k3362
15.9k3362
add a comment |
add a comment |
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2
Consider that your mother may have been aware that some of her grandchildren were eligible for government grants and others were not, and explicitly wanted to grant money to your children that the government would not. As written, the terms appear to create a more equitable outcome through inequitable distribution. Your children should of course not waste the trust funds, but avail themselves of any merit-based scholarships that would lessen the drain on the trust.
– Ben Voigt
Mar 31 at 6:17
2
Also note that, had your mother died before your nephews or nieces went through school, that trust would have adversely affected their eligibility for grants. Your children will now be inelgible for need-based aid due to their own resources, completely aside from your income. You should ask your brother if he considers it fair for his children (who have degrees and jobs) to be able to apply to entirety of their inheritance toward financial goals such as a home purchase, while your childrens' inheritance is (in large part and maybe even completely) seized by their respective universities.
– Ben Voigt
Mar 31 at 6:22
The answer to this question, even more than most, depends on jurisdiction. In systems derived from English common law, the testator can do what she wishes and fairness is not an issue (as in ohwilleke's good answer); in Code Napoleon systems inheritance is covered by law, which may override the testamentary documents.
– Tim Lymington
19 hours ago