Re: Loophole in Trust laws ? I can hardly believe what I've learned


"kastnna" <kastnna@xxxxxxxxxxxxxx> wrote in message news:4bde6aea-1108-4191-891a-de080a1c80c9@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On Jul 1, 1:04 am, "Dave" <gasol...@xxxxxxxxxxxxx> wrote:
Let's say someone creates a trust for some beneficiaries,
then appoints a trustee, then dies without ever telling the
beneficiaries that there is a trust for them.

Why didn't the grantor tell the beneficiaries? What did the
beneficiaries think happened to the grantors estate when he/she died?

Well. in my imaginary scenario, the grantor intended to
tell the beneficiaries but died before getting around to doing so.

So, the trustee never informs the beneficiaries
about the trust and simply reaps the rewards of its
asssets, the beneficiaries never being the wiser.

Depends on how well the trust was drafted. Most competently drafted
trusts will include provisions requiring that 1) the trustee provide
annual accounting to the beneficiaries

True, but a provision is only a provision and not any kind of
guarantee will be carried out.


and 2) assets be distributed in
a particular way (e.g. all income distributed annually and split
evenly between all beneficiaries).

Yes, I have a copy of the trust and it clearly spells out
that the beneficiaries are to be notified of their withdrawal
rights.

I also have a copy of a letter to the trustee that
he signed acknowledging a deposit of 48K to the trust.
around 4 years ago. In that document it specifically
names me and states that I have the right to withdraw
1/3 of the deposit.

In the trust it states that if the beneficiary doesn't withdraw
his share of any deposits within 60 days then the beneficiary
loses the right of withdrawal.

Yet the trustee never notified me (the beneficiary) about
the deposit, let alone the very existance of the trust.
So I imagine since over 4 years has passed, so has my
withdrawal right. Yet, how could I withdraw my share
when I didn't even know that it existed?



This is what happened to me. And I really must
wonder just how many other people it
might be happening to as we spea... er, as I type !
....

You should definitely seek out an estate planning attorney. But for
the record, this is not a "loophole" in trust law. Trust law cannot
account for the criminal and civil misdeeds of individuals. This trust
broke down due to the actions (or inactions) of the attorney, the
grantor, and the trustee.

Yeah, after giving it some thought an analogy came to
mind. Let's say you give 30 bucks to someone then tell them
to distribute it to several other people. it's pretty much
between you and the person you trusted and the several
other people to see that this happens, not the laws
responsibility.

Yet, on the other hand, there seem to be a lot of statutes
and rules that govern trusts and such. So in essence
they are institutions of sorts are they not? As an institution
shouldn't it be evolved to be more protective of all
involved in it?

Not quite sure "institution" is the word I'm looking for,
but you know what I'm getting at hopefully.

Thanks
--Dave--


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