Elderlaw Advocates

Seven years ago my mother made a trust to take care of her needs if she became unable to do so herself. She named my brother and me as trustees.

Four years ago my brother divorced his wife and immediately remarried. He moved his new family into mom’s home and put her in a nursing home. Since then he has not bothered to pay mom’s taxes and insurance. He even cashed in our mother’s $6,000 burial fund to court his new wife and pay for his divorce. My mother’s care is covered by Med-Cal. My brother keeps a small portion of mom’s retirement income each month. Everything else goes to the nursing home. My mother has nothing.

I am fearful of confronting my brother. He is an abusive alcoholic and is impossible to reason with. Every time I try to approach him he has some crazy interpretation of why he is doing the “right thing” for mom. Please advise me of what I can expect at the time of my mother’s death, and what I can do now to protect my interests.

Katie

Dear Katie,

Your situation is disturbing. Unfortunately, it is not unique. Some children openly salivate when they are handed the keys to the larder. Your brother probably thinks he can do anything he wants to with your mother’s assets. On top of swiping your mother’s burial fund, I’m willing to bet your brother pays no rent while living in your mother’s home. He should be paying at least all of the property’s expenses, especially because your mother pays all of her income except $35 to the nursing home as her Medi-Cal share of cost.

You need to do something about this, not just to protect your share of the trust, but also to protect your mother and the other beneficiaries of the trust. As a trustee, you can be held personally responsible to the beneficiaries if you allow your co-trustee to enrich himself with trust assets.

If your mother is mentally competent and the terms of the trust allow it, she could amend the trust to remove your brother as a trustee or just simply fire him. She may also be able to revoke the trust and make a new estate plan.

If your mother has lost her mental capacity, or if she is unwilling to do anything to stop your brother, you can petition the court to remove your brother as a trustee. If you can prove what you say in your letter to the judge’s satisfaction, the court should remove him as a trustee.

On top of all that, you should also be concerned about Medi-Cal Recovery. The Department of Health Services will mail you an estate claim after your mother’s death. Anything your mother owns on her death must be used to pay off this Medi-Cal claim. This includes property held within a revocable trust.

Fortunately, there are legal ways that your mother can protect her home from Medi-Cal. You should consult with an elder law attorney to see what can be done.

Len & Rosie

Dear Len & Rosie,

I have been married for 25 years to a man who has two grown sons by a previous marriage. I have one grown daughter from my first marriage. My husband had several properties when I married him, which will go to his sons. I had enough money to pay for half of our home and half of a small business.

My husband made up a trust naming his sons as beneficiaries of all his property, except for our household furniture. Since I am a joint owner of the house and the business, he felt I would have enough to take care of myself.

Recently, I had my own revocable trust done at a trust seminar. I transferred my half of our home and our business into my trust. Now, when we receive any correspondence concerning our business, it is addressed to me as a trustee. If I am only a trustee, would that make my husband the sole owner? I don’t want to be left with nothing. The people from the seminar have left town and I don’t want to discuss this with my husband.

Merlinda

Dear Merlinda,

Once again, a trust mill strikes. These guys rolled into town, put on a fancy seminar, sold you a trust without telling you how it works, and rolled out of town, never to be heard from again. This is the kind of service you get from a trust mill that mechanically goes through the motions instead of providing authentic legal advice.

A free seminar is fine if you want some basic information about trusts. But if you decide you want a trust, you ought to sit down with a local estate planning attorney. As a consumer, you should not deal with law firms that do not return your telephone calls and answer your questions.

There are two problems with your trust. First, you do not quite understand it. There are three parties to a trust: the settlor, the trustee, and the beneficiary. You are the settlor, the person who made the trust. You are also the trustee, the person in charge of the trust. After you die, the successor trustee you named in the trust will take over. You are also the beneficiary of the trust for as long as you live.

It is alright if you get account statements mailed to you as trustee. That just means your trust is properly funded, and this is a good thing. Because you are the settlor, and also the beneficiary, your assets are still your own. You can do anything with them that you want. Your husband owns only his half of the home and the business, not your half.

The second problem, and the big one, is that if your husband dies first, you may not wind up with the home and the business. If the two of you owned the home and the business as joint tenants, and you signed documents to put your half into the trust, then you have severed the joint tenancies.

What this means is that you and your husband own the home and business as tenants in common. If you husband dies first, his half of the home and the business will not automatically go to you. Rather, it will pass by his trust, or his will, if his half is not already in his trust.

To fix this, your husband’s trust ought to say that you are to receive his half of the home and the business if he dies first. That means you will have to bring this up with him. If you do not deal with this problem now, you will have a much larger problem to deal with after your husband’s death.

Len & Rosie