Estate Planning and Trust Accounts

[Sigarms]

Except the interest banks are paying.

And even if you find it the chances are it will be bought out tomorrow and all the employees "turned over".

That's what happened to our old bank 15 minutes away. The first buyout wasn't bad, but the second buyout everything changed, including the people when they "down sized" on their labor force.

Ironcially, our original bank in NC bought out my dad's bank when he lived in Pennsylvania.

I'm still trying to figure out exactly how banks "work" for your money.

My wife had convinced me that we need to start dealing with a locally "owned" credit union and in the process of transfering funds.

Our current bank we're using is on this list below. If the others are anything like the bank we're using now, I wouldn't use any of them

These Are The 15 Largest Banks In The U.S. | Bankrate

Even the smallest of these big banks has enormously deep pockets. See which firms are in the money.

www.bankrate.com

 

[2manyrocks]

Banks work to separate your money from you.

 

[ultrarunner]

It seems to me the Titled assets cause the most headaches… Real Estate, Bank Accounts, Vehicles, etc.

Grandpa’s air compressor or 1948 Farmall probably not on anyones radar as long as the heirs agree.

My personal take away just getting into this is I have dozens of titled vehicles in only my name… not worried about the parts cars, and not titled.

The Trust Lawyers selling Trusts do make it sound so simple… a person passes and the successor is already named for seamless transfer… maybe it happens for some but so far I have not heard about it from friends and coworkers.

On a side note from Fridays bank sit down when I said there are Trust Bills needing to be paid the Banker said I have enough personal funds available to cover…

Maybe if I was the only heir it would all even out… since I am not it’s just more juggling and record keeping.

 

[2manyrocks]

If the bank was doing its job properly, you wouldn't have to use your personal funds to cover for the bank's mistakes.

 

[Sigarms]

Maybe if I was the only heir it would all even out… since I am not it’s just more juggling and record keeping.

And you should be getting paid for your time. I have no doubt that is what your mother would have wanted. Any funds you cover yourself on behalf of the trust, you should be reimbursed for.

Two things come to mind reading this thread per your posts...

1 - When your mother was still alive, all assetts should have been a set up as a joint account (as some had suggested in your first post on this topic). Anything happens to your mother, the bank is out of the equation with a death certificate. One smart thing I'm grateful my father did was list me on all of his banking accounts when my mom passed away (I didn't realize this until he moved in with us). That step alone made dealing with the bank minimal when he passed with no headaches.

2- Apparently when all this was set up by your parents, your siblings thought it was your parents wishes, so they didn't want to get involved. Now they seem more attentive to the situation now your parents are no longer on this earth. Funny how that plays out with family over time.

Assuming you don't have any bums or freeloaders in the family, sell all assetts and divide according to your parents wishes. When it comes to income generating homes for rent, I'd just sell and leave the potential future issues behind trying to close out the trust ASAP.

 

[2manyrocks]

I may be wrong, but I think Ultrarunner already said the trust says no bond and no compensation. I would guess the no compensation part was included in the trust so the two siblings who aren't trustees don't feel short changed or have a basis to think the trust is benefitting Ultrarunner in some way to their detriment.

This kind of thing IMPO is a mistake in planning because 25 years of having the responsibility of administering the trust and doing all of the work associated with it deserves some compensation. If a corporate trustee had been hired, they'd have been collecting fees all these years and probably would have already hired a lawyer at the expense of the trust to handle the bank situation, too.

A similar thing can happen when the same piece of real estate is owned by multiple siblings. It seems like one will always ending up doing all the work for the others for free.

 

[Sigarms]

I would guess the no compensation part was included in the trust so the two siblings who aren't trustees don't feel short changed or have a basis to think the trust is benefitting Ultrarunner in some way to their detriment.

Being a executor actually does take time and effort, and should be compensated for. Money out of pocket to handle the trust? Comes from the trust, no if's and or butts.

What I found when I was the executor of my aunts very small assetts and personal belongings is emotions get put to the side and unless written parimeters are in place for everything and you do what you feel is right with a iron hand.

I had a cousin ask me if I was using my aunts money for personal compensation, and I shot right back at her if she want the reciepts, ask for them from the lawyer because he has them. Same cousin (cousin "A") who has a masters degree, asked my other cousin (Cousin "B", they are cousins not sisters) about both their uncle's life insurance policy (uncle has no children but cousin B is taking care of him in the assisted living). Pissed cousin B off to no end. Cousin A is a pretty smart girl, but she's more than stupid when it comes to money, and I hear now she is in severe financial hardship (even though her father left her a nice size chunk of change when he died). Cousin B knows her own personal finances and handles them well IMO. Cousin A? On her first marrigage, spent 40k on a wedding with a big band for music along with a professional portrait of herself for the wedding day. Hey, it was a great wedding, but both my wife and I thought she was an idiot for the amount of money spent.

If cousin B lived closer to us, we would have named her the executor of our own trust, but since she lives 450 miles away, I told her I didn't want to put her through it.

 

[Torvy]

I guess I wouldn't mind either way. I would rather do the work unpaid than to cause strife among my siblings. On the other side I'd rather my sister get paid to be in charge than pay someone outside the family to deal with it all.

Banks make money by making money (capital) available for people so they can build homes, businesses, buy tractors, cars, etc. Most of that comes from the margin on what they pay in interest to depositors or from borrowing from governments or other banks. They earn it by taking on collective risk and absorbing losses from ne'er-do-wells. Those margin differences are small since banks have had to add staff to meet more and more government regulation. There are something like 5-7 different government agencies that regulate banking in the US. Higher savings rates mean higher interest rates for borrowing stuff.

 

[2manyrocks]

The other thing about a corporate fiduciary is they aren't going to get mired in family drama. Probably the entire family will hate them for their fees, but they aren't family so....

 

[ultrarunner]

And you should be getting paid for your time. I have no doubt that is what your mother would have wanted. Any funds you cover yourself on behalf of the trust, you should be reimbursed for.

Two things come to mind reading this thread per your posts...

1 - When your mother was still alive, all assetts should have been a set up as a joint account (as some had suggested in your first post on this topic). Anything happens to your mother, the bank is out of the equation with a death certificate. One smart thing I'm grateful my father did was list me on all of his banking accounts when my mom passed away (I didn't realize this until he moved in with us). That step alone made dealing with the bank minimal when he passed with no headaches.

2- Apparently when all this was set up by your parents, your siblings thought it was your parents wishes, so they didn't want to get involved. Now they seem more attentive to the situation now your parents are no longer on this earth. Funny how that plays out with family over time.

Assuming you don't have any bums or freeloaders in the family, sell all assetts and divide according to your parents wishes. When it comes to income generating homes for rent, I'd just sell and leave the potential future issues behind trying to close out the trust ASAP.

The only bank accounts in question are the two trust accounts with their own Tax ID numbers.

When they were originally set up my name was on the checks with mom as Trustee and me as Successor Trustee.

The estate attorney said this is only proper if we were co trustees and since I was Successor my name had to come off.

I have all the notarized documents with mom stepping down and me formally accepting and even conservator notarized documents when mom was physically no longer to sign after being hospitalized.

As for the second part I would be the poor sibling of the group in terms of wealth.

Back in 1996 with the lawyer siblings expressed no interest saying mom/dad... you don't owe us anything, you have always worked hard so this is your time to enjoy yourselves...

After mom passed I got a call asking if there was anything left... and they were surprised there is...

It all would have been gone including Real Estate had I followed family wishes and put mom in a retirement community... which mom and her doctors were against... she is the one that walks miles everyday...

When mom in the hospital said enough of the 2-4 hour blood draws etc... I asked if she wanted to go home... she said more than anything... Doctor said prepare for 7-10 days before she passes...

I said Mom, tomorrow we go home and she cried...

That 7-10 days turned into 11 weeks and hospice at one point said we have to revaluate because she is eating on her own, on no meds, cognitive... She prayed the rosary twice daily until the last 3 days and got her wish to have one last Mother's Day...

It does surprise me siblings are open to paying whatever lawyer fees come along... dad would roll over paying $420 an hour!

 

[ultrarunner]

I may be wrong, but I think Ultrarunner already said the trust says no bond and no compensation. I would guess the no compensation part was included in the trust so the two siblings who aren't trustees don't feel short changed or have a basis to think the trust is benefitting Ultrarunner in some way to their detriment.

This kind of thing IMPO is a mistake in planning because 25 years of having the responsibility of administering the trust and doing all of the work associated with it deserves some compensation. If a corporate trustee had been hired, they'd have been collecting fees all these years and probably would have already hired a lawyer at the expense of the trust to handle the bank situation, too.

A similar thing can happen when the same piece of real estate is owned by multiple siblings. It seems like one will always ending up doing all the work for the others for free.

Very much so plus taking care of mom everyday since 2015... don't get me wrong... it was a privilege and she greatly appreciated it and we had plenty of good times... she even suffered through my cooking!

Nothing meant more to her than being able to stay in her home/church/neighborhood of 54 years... and I promised dad to look after mom the morning he passed away...

 

[2manyrocks]

Personal care from a loving family member is not something that can be bought elsewhere.

 

[Hughman]

Just curious. I understand putting real estate into a trust. Why would you ever put bank/money/investment accounts into a trust when a simple POD can be used for those?

 

[2manyrocks]

Just curious. I understand putting real estate into a trust. Why would you ever put bank/money/investment accounts into a trust when a simple POD can be used for those?

Because a trust permits both long term control of liquid assets and flexibility in their investment as well as distribution. A POD is simply going to transfer the funds directly to the beneficiary at death. In the case of a 16 yo beneficiary for example, you probably wouldn't want to just give them $250,000 at age 16. Instead, the funds could be placed in trust to be invested and reinvested by the trustee based on the trustee's assessment of proper risk/reward as time goes on, and the trustee could be given discretion as to how much money is paid out to or for the beneficiary's living expenses, medical expenses, and education. In one sense, the POD is all or nothing at once. A trust permits long term flexibility in controlling, investing and spending the funds

 

[ultrarunner]

Just curious. I understand putting real estate into a trust. Why would you ever put bank/money/investment accounts into a trust when a simple POD can be used for those?

The real estate is owned by the Trust back when Estate Tax kicked in at 600k

Having the Trust meant Estate Tax kicked in at 1.2m

Fast forward to 2023 and 10m is the current number.

 

[Sigarms]

UR, thanks for the explination, makes sense. Seems your overall issue is limited except for those two taxed accounts.

Also sounds like your siblings would have no quarrels if you got reimbursed from the trust for any money out of your own pocket.

Honestly, sounds like a great family. I just know on my end, some family were like vultures over nothing from my aunt, added I had a father disowned by his sister because he did with the "family home" what his laywer instructed him to. Both instances were not pleasant.

 

[Sigarms]

I guess I wouldn't mind either way. I would rather do the work unpaid than to cause strife among my siblings. On the other side I'd rather my sister get paid to be in charge than pay someone outside the family to deal with it all.

As long as you have sane relatives your comment makes sense. However, given some family circumstances, sometimes someone not related to you would make better sense to be the executor given some family dynamics IMO.

A sincere question... if bills need to be paid by the deceaseds executor for whatever reason, why would any loving family member be upset the least bit if a family member who was the executor got reimbursed from the trust for what they paid if it came out of their own pocket? Is there a dollar limit that is acceptable to pay out of your own pocket, say like $8,000 for a funeral that wasn't planned?

End of the day, this is a first world issue. Some people living in the US are not so fortunate that they can't even afford a proper burial for a loved one, let alone having to deal with money "left over".

 

[ultrarunner]

Always surprises along the way and always more to learn... at least for me.

I'm planning to open a new Trust Account at a different Bank Monday so as to get the checks I'm holding deposited and get the bills paid... if I like what I hear that is.

No sense depositing to any account I'm locked out of.

My boss just went through this with her mom's passing... basically as accounts were closed the funds were equally split... she said it was so much simpler/transparent that way and everyone was on the same page as it was incrementally distributed...

 

[Torvy]

My MIL had a few hundred dollars in her bank account and a worthless RV trailer. Got a deal from where she donated some parts to science and they paid her cremation costs. My BIL just thanked my wife for handling it all.

 

[2manyrocks]

Tennessee allows reimbursement of funeral expenses paid outside of the estate funds in some situations. A trust fund may provide for payment of those expenses or it may not depending on the terms of the trust.

Estate laws vary so much from state to state that competent legal advice is needed in the state where the estate is located.

Ultrarunner, I think you need to continue trying to pry your trust funds out of the bank for a bit longer. Doesn't hurt to send a certified letter or two to the branch manager recounting the situation it unfolds. If the bank continues to not respond to reasonable efforts to restore access to the trust fund accounts, you do have remedies available.