The death of a loved one can either pull a family together or cause major issues. I have seen both happen in my own life. There is just something about those deep-rooted family dynamics that can come to light when a family member dies. And, they get magnified by the emotions that come out when the death of a loved one occurs. To help others avoid disputes involving a living trust, I share my experiences below.
I have been both the beneficiary and the successor trustee for too many family members who have passed away. Most times, if the family member has taken the time to create a living trust, the inheritance process can be simple and quick to complete. If they have a poorly written plan or no plan, that is when issues begin. No matter what the circumstances are with a family, there can be challenges when the family member passes. The worst of all the scenarios is when a beneficiary and the successor trustee do not want to work together to distribute the inheritance. This is one of the most common and often-dreaded fights that occur between family members.
Copies For Everyone
When I had to handle my first successor trustee appointment, the initial thing I was told was to make copies of the trust for each beneficiary. Being who I am, I scanned the document and offered each beneficiary both a scanned and printed copy. I got them their copy within days of the death of our family member. This helped reduce any squabbling over the estate.
Retirement Accounts
Most people have retirement accounts. Those are easy for the successor trustee as beneficiaries are named to these accounts when created, and the successor trustee’s only real task is to provide the death certificate to those beneficiaries. It is up to the beneficiary of those accounts to deal with the financial institution who holds the account to collect their inheritance from them.
Dissolution of the Estate
This brings us to the hard part. The point where fighting can break out. The dissolution of the estate. Especially the handling of real estate and precious assets. As I have learned, there are so many variables in handling real estate as the successor trustee. Just to name a few:
- Is there an outstanding mortgage?
- Is there an HOA fee that needs to be paid in the interim while the estate is being distributed?
- Is a member of the family currently living in the residence?
There are a number of variables that the successor trustee typically will be weighing in handling real estate:
- Is it a good market time to sell?
- Is there a beneficiary who needs cash quickly?
- Which realtor should be used?
- Should the property be repaired/upgraded prior to selling it?
I have dealt with this scenario in my own family. It was with my only brother. And, the bickering was so bad in one case that I almost changed my email and phone number to get free of the fighting. But in the end, I had the authority granted to me as the successor trustee by our mother, to follow her directions and what she wanted to have happen. After death, a living trust becomes irrevocable, and the successor trustee has to follow the instructions of the trustor (my mother, the owner of the trust). Regardless of disputes, I was legally bound to follow mom’s beneficiary instructions. I acted in my best judgment for the benefit of the beneficiaries, while sticking with those wishes of our mother. I kept a running accounting sheet so that I could show every cent I spent out of the estate. I had estimates for the work done on the property as well as contracts for each task I paid for. I found that sending copies of these documents on a weekly basis to each beneficiary kept the arguments to a minimum.
I mentioned my older brother. He believes he knows everything better than I do, and he wanted to stir up trouble for me at every step. He even tried to pull the old “mom and dad loved me more than you” trick. I took advantage of a right I had as successor trustee and sought the approval of the other beneficiaries for my action in advance. I offered my brother an immediate buy-out of his rights. I had enough expendable cash to make an up-front payment of a percentage of the estimate of the sale of the house and created a written agreement on how the remainder would be paid after the sale of the house. Thankfully he accepted the offer and was out of my hair until the house sold. The house ended up selling for far more than the estimate before the repairs and upgrades were done. Even though my brother upset me, I still made sure that the troublemaker got his portion of the increase as well.
Our Suggestions to Avoid Family Conflict
So, to sum it all up, distributing the inheritance from a living trust always comes at a time when everyone is suffering from high emotions having lost a loved one.
- Send the beneficiaries a copy of the living trust as soon as possible. Some of the beneficiaries may also feel they could use their inheritance sooner rather than later.
- If someone is causing trouble, ask upfront about their needs. Maybe they will share the truth and the other beneficiaries can be asked for support in resolving their issues.
- Make sure to keep an organized accounting of all estate monies used for settling the estate and share it with the beneficiaries.
- Always be prepared for emotional outbursts. When a loved one passes, everyone is usually very emotional, and some may not even realize it is driving their actions.
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This area of the website is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not of the National Association of Family Services, and have not been evaluated by the National Association of Family Services for accuracy, completeness, or changes in the law.
