Can an irrevocable trust be broken?

[WhenUwishUponAstar]

I have an aunt in her second marriage and her husband had set everything up to go to his daughter who was brutally gang raped while in college and was showing no signs of being a productive citizen. However the husband is in very poor health basically a walking time bomb and my mother finally convinced my aunt to ask him to set up a trust to pay for burial expenses and to make sure their house would stay with her if he died and a small life insurance policy to help her through the initial period of grief. She did ask him and he agreed and funny enough after he did all of this his daughter met a wonderful man and is now married and has two children. She still gets most of it but at least now he won't be a burden on my aunt financially in the event of his death.

I'd ask for a life insurance policy and burial expenses at the least, but a divorce seems like the best plan and if it's being a burden that keeps her there a settlement could set her free!

 

[thumpersfriend]

Isn't it sad that it would be a better benefit to divorce? This makes me wonder ,what if my husband decided to put part of his paycheck in a trust since I am no longer working. Seems like this is a similar situation? Wouldn't half of his pension actually be hers also since they are married. I am not talking about anything he had before the marriage, only during their marriage. I definately will take her to an attorney and even pay for it, just to ease my mind and hers.

 

[septbride2002]

I think I should see a lawyer about this. As for charging rent, he will not pay anything because he has a tiny trailer in Florida that he would stay in all year instead of coming to Michigan so mom can see her family for the spring and summer. I personally can't fingure out why she stays with him except she says she doesn't want to be a burden to me. I always thought when you got married everything was 50/50. He didn't have anything when he married my mom and now he can save l.000 a month and be able to put it in a trust to keep from her. She has essential tremors where her head shakes uncontrollably but she takes care of him and all his problems. Thanks for all the advice.

Sit down with your mother one one one and tell her that this is a bigger burden then she could ever be if she divorced him. That you are worried about her constantly because of this man. The burden would be much better if you knew she is being taken care of properly.

~Amanda

 

[LittleMermaidsMom]

Thumpersfriend -

I am an attorney in Michigan, however I don't practice estate planning but am a little familiar with the laws.

Your stepfather cannot completely disinherit your mother. There are laws in place to prevent this called "dower laws". They actually favor the woman more than the man. I know this seems like discrimination, but so far the laws in Michigan have not been challenged- they are the most strongest state laws in the country that are in favor of women.

The dower laws provide that the surviving spouse will automatically get a certain portion of the estate, no matter what type of will or trust the deceased spouse had setup prior to death. I would definitely consult an estate planning attorney as soon as possible, as this is a very complicated area of law. The dower laws are in place to prevent the exact type of "disinheriting" your stepfather is trying to do.

Hope this helps. Good luck!

 

[doxdogy]

Just as everyone has advised, definitely contact an attorney first. If you feel better go by yourself and then take your mom to see the attorney. As stated by LittleMermaidsMom most states have laws to prevent this from happening. I am not sure what the law is in the state of Florida right now. But it use to be that your spouse was entitled to a certain percentage of your estate. DD's grandmother (DH's ex MIL) thinks that she can cut her husband out of her will. I think it is dead wrong to do this to the poor man. I mean when his mother passed away he bought her a brand new car with his inheritance and other niceties.

 

[battricia]

Originally posted by septbride2002
Sit down with your mother one one one and tell her that this is a bigger burden then she could ever be if she divorced him. That you are worried about her constantly because of this man. The burden would be much better if you knew she is being taken care of properly.

~Amanda

i agree with this. It sounds like it's more worrysome to you NOW with her being in this relationship than it would be without her being in the relationship. You should explain to her that you will allow her to stay in the house (if you are willing to?) if he leaves, and that you would be much more comfortable with that.


tricia.

 

[luv2nascar]

get an atty now
don't wait and let him hold on the cards
that wouldnt work in PA

 

[thumpersfriend]

Oh, I am starting to feel so much better now. I was hoping there was an attorney on the board and from Michigan too! Thank you so much. I know I can get her to go to an attorney now, she really thought there was nothing she could do. Still wish she would divorce him though! Thanks so much, I really appreciate that information. I never knew about dower laws. My mom would have a good life with us, she is adored by all of us except her husband. She still wants her independence though and I am glad about that.

 

[jennyanydots]

I concur, counselor. I haven't looked at estate and trust laws in a good number of years, but I had an excellent teacher in law shcool.

In most jurisdictions a surviving spouse can take against the estate even if the deceased spouse tries to disinherit her. if the "irrevocable" trust was created fraudulently it may not be valid. another aspect to look into -- the op says her stepfather promised to "take care of" her mother -- there may be some sort of contractual issue.

 

[thumpersfriend]

I have a call in to an estate planning attorney and hope to hear from her today. My husband thought I should leave it alone and that it was really none of my business. I sure do thank you for all your encouragement and I am going to get all the information I can to help my mother. I will let you know what the lawyer says.

 

[SC Minnie]

Tell you husband that it will be yours and his problem if he does get away with it or your mother thinks he gets away with it by just accepting she gets nothing when he does pass away. She will have to be taken care of financially by someone and it would probably be the two of you.

Good luck and keep us posted on the outcome.

 

[ripleysmom]

If the trust was set up after their marriage then I believe he needs to have her consent for it. If she has not signed anything then I do not believe that the trust is legal. The law is pretty stringent about spousal consent. Don't be surprised though if she did, in fact, sign away rights to the money.

In any case, if you do decide to consult an attorney find a very good estate planning attorney to consult with. Many trusts are not even set up correctly and can be broken. A good estate attorney should be able to tell if this is one of those.


Edited to add--

BTW if you do go to the attorney and they tell you he cannot do what has been done I would keep that information to yourself. If he knows that the trust can be broken, he may devise some other way to shelter his assets from her after his death. Leave everything as it with the knowledge that your mother will be protected.

 

[LittleMermaidsMom]

Glad to help... and like Ripleysmom said, I wouldn't let your stepfather know anything about consulting an attorney, because if he does realize his trust can be broken he may start sheltering his assests in other ways.

Your mother can also protect her assets in these ways also without your stepfather knowing, such as purchasing life insurance policies and naming her children as the beneficiaries, setting up savings accounts in her children's names and "gifting" money to her children. I believe in Michigan you are allowed to gift $10,000 per year to each child (or other person of your choosing) without worrying about it being recaptured after death. An estate planning attorney should be able to advise you the right steps to take. It's the smart thing to do now to consult an attorney, because probating an estate is very lengthy and costly, ecspecially when the courts are breaking a trust - it can take years. Also, depending on the value of the estate, it can cost ten's of thousands to probate.

Also, make sure your mother never signed a pre- or post-nuptial agreement. If she did so, she may not be able to break the trust if he had her disclaim her dower rights.

 

[thumpersfriend]

I just talked to my mom this morning and she said she never signed anything. She also said that the money he saves every month is put into a savings account with his son. So is this legal? I hate to see her scrimp and save so he will have more money to put away in his and his son's account. Thanks again for all the good advice. I told her I was on this board and she is so happy that I took an interest and I could tell by her voice she has a little more spirit already. Will still let you know what happens. That's good advice about not letting him know. If he can be sneaky so can we!

 

[my3kids]

I'm glad to hear she is at least willing to listen to an attorney. That is a big first step to take.

Let us know how it turns out.