Dear Quentin,
I’m one of four siblings. Our grandfather was a frugal man who worked until he was 80. A friend of his was a stockbroker, and grandpa consulted with him in making investments. When grandpa passed we were shocked to learn he had saved several million dollars. At some point, I learned that he had left his estate to our mom, his only child, to live off the income, with the principal going to his grandchildren. That sounded like a good plan.
But then I learned, almost accidentally, that our mom had hired an attorney to create our grandfather’s trust, which recognized only two of his grandchildren, the two of our mom’s favorites, and their children. The trust doesn’t acknowledge that there are more than two grandchildren, and more great grandchildren. I don’t know if mom simply lied to the attorney, or what.
“‘I know grandpa simply trusted her word about what he was signing.’”
My grandpa was 90 when he signed the trust. He signed it at her house, not in front of an attorney. The witnesses, mom’s friends, didn’t know what the terms were either. I know grandpa simply trusted her word about what he was signing.
My grandfather was a fair and kind man who loved all of his grandchildren, probably having a stronger relationship with the two grandchildren that mom had shunned, because they lived in the same town and had regular contact with him, whereas the other two seemed not to give him a thought. When I asked mom why “my grandfather” did this, she gave transparently bogus reasons, confirming my suspicion that this was her doing.
When I looked into it I learned we could have challenged it when he died, had we known, but at the time, there was no law requiring anyone to be told there was a trust, or what the terms were. Such a law was passed subsequently, but by the time I learned what she’d done, it was too late to challenge it.
Now we have two siblings who inherited several million dollars each, and their three children inherited the same, and then two siblings who were excluded, and their two kids who also were excluded. I asked the siblings who inherited if they would share with the others. They readily acknowledge that this is not what our grandfather would have wanted, but they aren’t going to share.
It’s partially about the money, it’s a life-changing amount, but it’s more that it’s painful to realize mom left this cruel legacy for her dad. Plus, her actions have destroyed any chance her kids, or their kids, could enjoy positive relationships after she died.
Can you think of anything that might help?
Grandson
You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
Dear Grandson,
What happens next all hinges on when your grandfather died and what state you live in. The statute of limitation on contesting a trust after the settlor dies can vary widely from a matter of days (as few as 120 days in California) to several years, depending on the state. Even if your grandfather left a will, the trust would override the will as it took effect before his death. What’s more, only a person with a financial interest in the trust can contest it.
“Much like the contesting of a will, the grounds for contesting a trust often involve a claim of undue influence over the settlor (maker of the trust) or claims that the settlor was not of sound mind at the time the trust was created,” according to the law firm Landskind and Ricaforte. A trust litigation attorney will decide on whether there’s enough evidence of to proceed based on medical records, witness testimony regarding possible fraud or forgery, plus whether legal filing requirements and contract laws were adhered to, the firm adds.
Don’t be put off by no-contest clauses. ”No-contest clauses are often inserted into a trust agreement to prevent interested parties from disputing any of the trust’s provisions in a court of law,” says RMO Probate Litigation. “While no-contest clauses are a very common element in family trust documents, most states do not actually enforce them from a practical standpoint. In other words, even if there is a no-contest clause in a trust, most courts in most states will hear your case anyway.”
Too often in situations such as these, family members are taken by surprise and waste valuable time processing the enormity of one person’s actions, asking each other how this could have happened, and why someone would go to such lengths to cut people off. By the time their anger and shock wears off, it could be months or even years after the fact. The longer you wait, the more onerous it will become.
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