Is it correct for a beneficiary to be asked to fund a Trust?
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Is it correct for a beneficiary to be asked to fund a Trust?
My mother has passed away. I am being asked to find a Trust out of pocket so that the executor can freely use money to pay off bills and sell our mother’s house. The money he wants me to use would be coming from an account set up for me. There’s a retirement account that I am a beneficiary of. He says I have to cash out my account and then endorse the check to the Trust. This doesn’t sound right to me. What is the wisest course of action?
Asked on October 28, 2019 under Estate Planning, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
1) If a trust has insufficient funds to cover costs or expenses or debts, beneficiaries can legally be allowed to ask to contribute, but it would be voluntary for them to do so, and at a minimum, should involve the trustee sharing all relevant data with them about the trust's finances, obligations, etc. so they could decide whether to do this or not. For example, if there is a home in the trust and you will be able to live there, but there are tax or mortgage arrears, it's not illegal or unreasonble to ask you to help fund them so you can keep the home--but you wouold not have to; you could decide it's not worth it.
2) If there is sufficient funds in the trust to cover obligations, etc., then trust funds should be used for this purpose. So again, before asking for contributions, the trustee should show what money there is, where any money went, etc. so you can make an informed decision.
3) A trustee or executor has not power to change a will--none. Only the deceased can change his or her will and obviously, if he or she is deceased, that can't be done--so the will cannot be changed. This mistatement suggests that the alleged need for funds may not be legitimate, but rather that your brother may be wasting or diverting funds.
If your brother won't share the financials of the trust and/or estate with you and you are not satisfied with what is going on, then bring a legal action (lawsuit) against the trust and/or estate and the trustee/executor "for an accounting"--that is, to have the court make the trustee/executor "account for" whether he is following the directions of the will, being careful with the money and assets, not benefiting himself at the expense of the beneficiaries (i.e. you), etc. This kind of action can complex for a non-lawyer; you are advised to retain a probate lawyer to help you.
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