Setting up a trust for a sister

August 11, 2010 6:55 PM

Dealing with a will gone bad- Need advice about setting up a trust for my sister, and dealing with her difficult personality.

This was me a few weeks ago, and we have come a long way since then.

Background: My father left one of my siblings out of his will, which was a great shock. Honestly, this sister always got more attention than my brother or I, she was always sort of the favorite. I have no idea why my dad did this, it was a current will. My sister who was excluded has been a more difficult family member in general, she is very different from the rest of our family... she has a difficult time when someone else gets attention, she always feels slighted and is generally negative. She was adopted by my parents when she was very young, I don't remember life without her. Committing to work or school has always been an issue for her, she has a hard time finishing what she starts. All that said, I love her dearly. I would do anything in my power to make her happy, and hope that she never finds out about the will. My brother and I have decided to split the estate three ways, despite the will. We have spoken at great length with our lawyer, and had a hearing with a probate judge. By refusing part of our inheritance, the remainder will go to her, so that it is an equal three way split. This is going to be done with total legal transparency, but my sister will not be made aware of the situation unless she challenges the will. The judge has allowed us to set up a trust for my sister, in an attempt to prevent some of her previous financial mistakes from becoming big mistakes.

The total she will receive is 260k after taxes. The trust will allow her to spend any interest how ever she wishes if she doesn't make any other withdraws on the account for the year. It will allow her to purchase a home or vehicle as long as the lawyer signs off. What are we missing here? Are there other restrictions we should be making?

And onto something a bit more petty... I'm the executor of the will, and when the three of us (my sis, my brother & I) were talking after my father passed away, my brother reminded me that I should keep track of the time that I spend working on the estate, so that I can be compensated in some small way. Since then, my sister has asked frequently how much time I'm "charging her for", suggested that I should make sure to keep a time sheet and that all time spent should be away from home so that I'm not distracted (I'm the first time mother to an infant daughter, I do tend to get distracted.). She wants to make sure that I won't be reimbursed at the same rate I would if I were working and seeing patients, which is fair.

This makes me want to scream. She has no idea what hoops I'm jumping through just to get her a part of the inheritance, so of course she doesn't' understand how hurtful this is. My sister is out of the country, so our conversations are limited, which is quite fortunate. How can I better deal with these conversations? Is there a way to help her be more generous of spirit when it comes to these things?

posted by anonymous to human relations (21 answers total)

Hope things work out for you and family. Right now my mom is sick, and I had a huge blowout with my older brother. He told me to take him out of my mother's will, which is not my decision to make. I would if it were up to me. In any case, her house will have to be put up for sale. I fully expect to be compensated for the work I'll be doing getting the house ready for sale. So keep a time sheet. That's what I plan to do. I'm charging what I'd be making at work. Who works for free? There is no way to make one more generous of spirit. My brother is holding some insane grudge from childhood.
posted by fixedgear at 7:07 PM on August 11, 2010

Is there a way to help her be more generous of spirit when it comes to these things?

Probably not, so you need to come to the conclusion that you're doing a nice thing and be happy with that. Even if she knew you might not get the gratitude, just the drama.

I didn't attend my mother's funeral, but paid for it out of kindness to some relatives. I really needed to get to grips with the idea they'd never see it that way and be comfortable with doing it anyway. The other options just lead to bitterness and resentment.

If you can talk to your brother about how unfair it all is, that's good. Just don't expect anything from her end. Also try to remind yourself she has no idea of the real situation and is reacting more appropriately than you can see with your extra knowledge.

Charge a fair rate and be honest with her about it, or you'll get all the accusations and never be able to explain why you're so hurt by them (also, never let her know in anger - bad idea).
posted by shinybaum at 7:14 PM on August 11, 2010

A good trust lawyer can add all sorts of good clauses to help your sister, so are there other expenses that you'd want the trust to be able easily fund? Education or healthcare or something? They can write that sort of thing in to give you both flexibility and protection.

It's really awesome that you guys are doing this for her and protecting her feelings. I don't think you can get her to be more generous of spirit, but I think you can protect Your feelings by not engaging her on the reimbursement issue, or telling her that it's hard work, but of course you're keeping strict account of your time (even if you're not, even if you're having to do this stuff while at work and everywhere else because you're trying to Help her), or telling her that the lawyers have it all in their hands currently -- whatever you need to do for Yourself.
posted by ldthomps at 7:22 PM on August 11, 2010

Tell her you'll charge a fair rate and that there will be a full accounting when the estate is settled. Let her know that this is no small thing and that you can be trusted, but you need to really focus on working this.
posted by SillyShepherd at 7:25 PM on August 11, 2010

It sounds like she's used to her family bending over backwards to accommodate her wants and needs, and maybe was never expected to return the favor. From your description of her, she is not behaving out of character. You're doing a nice thing out of a sense of fairness and to spare her pain, but it's not without cost to you. You are taking on the burden of a huge secret that you're planning to keep for the rest of your life. Anyway, it sounds like you made your decision, and I can understand where you're coming from, but the act will have to be it's own reward as from her point of view no one is being generous to her. Just a father's will evenly between siblings.
posted by JenMarie at 7:31 PM on August 11, 2010 [3 favorites]

Is it too obvious for her to take all the money out to buy a house then turn around and sell the house and therefore get the cash as a lump sum?
posted by fshgrl at 7:31 PM on August 11, 2010 [1 favorite]

I have known family members who were executors who did not charge but then that is a different family isn't it?
posted by leafwoman at 7:55 PM on August 11, 2010

Tell her you'll charge a fair rate and that there will be a full accounting when the estate is settled.

That's it. It's great what you're doing but a lot of being graceful has to do with being able to pull it off in the face of ungraceful situations. If she were an adult fully capable of managing her own affairs this situation would not be happening. Refer her to your brother if she needs a second opinion and make sure you stay "on message" about the line above and the rest of it is none of her business. I'm sorry this has been difficult for you. It's good that you stepped up. I agree I'd look into the whole "buy a big item then sell it" possibility/loophole as fshgrl says.
posted by jessamyn at 8:03 PM on August 11, 2010 [3 favorites]

Perhaps you can take refuge in the fact that you are doing right by your sister in such a huge way. It is not only the money. You are protecting her from a lifelong hurt that could have, would have been inflicted on her by the letter of your father's will. It's great that you and your brother have figured out a way around that.

Beyond that, I agree with SillyShepard's advice. Be all business. She'll get a full accounting, you won't charge too much, etc. If she wants to run on you can let her, but you don't need to run along with her. You have other places to be.
posted by alms at 8:07 PM on August 11, 2010

In a family of my acquaintance, a trust was set up for three siblings. As in many folk tales, there is a sensible brother, another sensible brother, and another brother.

Brothers #1 and #2 found houses, had them approved by the trustee, and the trust purchased the homes and holds the mortgages, which they are paying off.

Youngest brother found a house, same deal, and then had several failed business ventures in a row. The trust owns his house now, and he pays rent. He still has his home, but he can't sell it, and he can't borrow money against it. He isn't building equity, but the family trust is, which will eventually benefit him in some fashion.
posted by Sallyfur at 8:25 PM on August 11, 2010 [2 favorites]

I would tell her that she was not actually in the will, but that you are being nice - I think that was what your father intended, for her to realize how annoying and irresponsible he thought she was and how nice you and your brother are to her so she appreciates you more.
posted by meepmeow at 8:29 PM on August 11, 2010 [4 favorites]

For some people, a large cash windfall can lead to lots of grief, even destroy their lives. Are you sure you understand your father's motivations for making the will as he did? Before you go against his wishes, maybe you should consider whether he thought he was actually doing your sister a favor.
posted by amtho at 8:47 PM on August 11, 2010 [4 favorites]

What you and your brother have decided to do is really incredible and deeply kind. I think you are right to try and keep this a secret as best you can. There is of course no way to make her be generous of spirit. She's got her own struggles and her own problems and she has to come to that place on her own. I don't really think anybody gets there by being shamed into it.

Do the very best you can to remain fair and above board -- do your very best, and when you find yourself getting frustrated (nay, furious, I would easily spill over into furious territory) -- vent about it to someone you trust, and remind yourself that you've decided to do something deeply generous and kind, and that you must do it all of the way. Giving up your claim to 130k, and setting up a trust for her is an amazing act of kindness. Don't blow it by giving in to an urge to teach her a lesson when she pisses you off. You're nearly the entire way down the road less traveled, turning all the way back and going down the other is only going to exhaust you and prolong your frustration!

Also, did I mention what you have done is really amazing and kind? I admire you.
posted by pazazygeek at 9:44 PM on August 11, 2010 [3 favorites]

The judge has allowed us to set up a trust for my sister, in an attempt to prevent some of her previous financial mistakes from becoming big mistakes.

Correct me if I'm wrong, but it sounds like the trust is your invention, not something that's being imposed by the court. This whole scheme seems admirable in intent, but socially impractical; I'm doubting that it's going to pan out the way you hope. If your sister is inclined to check your timesheets and question the compensation you get as executor, is she not also likely to demand to see the will -- especially if she learns that her use of her inheritance is restricted in ways that yours and your brother's are not? If she does see it, she'll not only learn that she was written out of the will, but also that you and your brother assumed a parental attitude towards her, without her knowledge or consent. My guess is that she's likely to resent this mightily. Your relationships with her may never recover.

I understand that would suck to see her blow through a huge wad of cash to no good purpose, but I think you have to let go. The trust is setting you up to struggle with a burdensome secret and a sort of permanent social dissonance wherein your sister, in the best case, never understands the role you've played in her life. I just can't see this airship holding happily together for long.
posted by jon1270 at 12:12 AM on August 12, 2010 [7 favorites]

For some people, a large cash windfall can lead to lots of grief, even destroy their lives. Are you sure you understand your father's motivations for making the will as he did? Before you go against his wishes, maybe you should consider whether he thought he was actually doing your sister a favor.

Yes to this. For some people out there, a big pile of money is the last thing they need.

Are you sure your father didn't do this out of his love for her, and wanting her, perhaps, to finally grow up?

Here's the thing: some people, if they get a financial cushion of some sort, think this is license to do whatever the hell they want, which includes treating other people poorly, being ungrateful, thoughtless, and petty. Basically, some people aren't ready to handle a huge wad of cash until they've matured.

When I first read your situation I thought, oh, how terrible, to leave out a child from the will. And yes, her being an adopted child--I was thinking, that's heartless.

But it seems the way you describe your sister, she doesn't seem like she'd be able to handle this huge pile of money very well. Maybe your father knew what he was doing?

Maybe this is too late in the game, but maybe it's possible just for you and your brother to set aside the money in your accounts, and maybe give it to her when you feel she is ready or in dire need, as opposed to going through a trust? Yes, it sucks and it's going to hurt like hell when and if she finds out the truth, (and perhaps you can just fib about where the money came from), but maybe she'll be have reached a state of maturity by then where she will have an "aha" moment and understand that what your father did was, perhaps for the best.

Anyways, I apologize as this does not answer your question--I didn't see your earlier question until now.
posted by The ____ of Justice at 2:00 AM on August 12, 2010

Your questions are good questions for your lawyer to address.

Your father may have seen some things about her personality that you and your brother had not seen - until now. If she had been having financial problems, she may have gone to him, he may have helped out, it may have gone bad, the scenario may have repeated a few times. And the two of you may have had no idea.
posted by megatherium at 3:44 AM on August 12, 2010

I don't think any good can come out of keeping this arrangement a secret from her. Though my guess is that upon finding out, she will probably not be particularly grateful or appreciative once she finds out she was purposely left out of the will - she will almost definitely blame you and the other sibling, actually. But it sounds like she's been shielded from her bad decisions for her whole life, and her father was trying to stop that in a way that he wasn't able to when he was alive. And however kindly intended (and wow, what a kind, and truly generous gesture) she is again, and this time permanently, being shielded from consequences of bad choices. I don't think advising you not to do the trust now is productive, and however angry it makes her, I actually think it's the only way to give her a sum of money this large. But I would seriously consider laying everything out with her. She is an adult, she deserves the truth, no matter how painful.
posted by lemniskate at 4:20 AM on August 12, 2010 [2 favorites]

Is it possible that if she knew she was left out of the will, she might have some idea of why, even if you and your brother do not?

I think its great that you've done this, but agree that she might wonder why her use is restricted if yours is not, so I would be prepared with an answer to that.

Does she know there is a lawyer involved? I would run the time/statements through the lawyer - lawyers are used to taking the blame for things like this. Tell her the lawyer told you how much to charge and what to charge for.

Has the trust had any arrangements made for education, for either her or her future children? What about her future children generally? I think its possible (ask your lawyer!) that you could set it up so the principle goes directly to any of her children instead of to her, which might somehow avoid some of these issues (but still cause hurt if/when she finds out).

This is stressful, I am sure. Hang in there.
posted by dpx.mfx at 5:08 AM on August 12, 2010 [1 favorite]

"What are we missing here? Are there other restrictions we should be making?"

Most trusts typically allow withdrawals against the principal for healthcare and for approved educational spending (yes going to an accredited college, no going to underwater basketweaving school). If she has children (I don't recall), you may wish to allow her to withdraw for their college tuition.

I continue to think you are doing the right thing with a trust in this situation. (I was an estate lawyer before my son was born, though of course I am not your lawyer.)

"This makes me want to scream."

I believe it. People get crazy stupid about wills and focus on all kinds of peripheral issues as a vehicle for their grief/frustration/anger/giant pile of emotions relating to death and family. The best family executors I've worked with have been diligent in tracking their time and their decisions, and transparent about the time and distribution of stuff. (Like who gets the old family desk and why.) It tends to cut off the "you're unfair!" people at the knees when you are soooooooo diligent.

Emotionally, I might be like, "Sis, this is a difficult, time-consuming, and emotionally draining task. I am doing my best for our family, as I always have done. I will provide you a full accounting and I am confident you will find it fair, but if you have a dispute with me we will handle it then. You have made your point about your concerns about my fairness and the cost to the estate of having me serve as executor. While I clearly cost less than a professional executor, I have heard you and will provide an accounting, so please stop bringing it up, because at this point you're just adding to my emotional stress level and distraction." Or however that best adjusts to your family.
posted by Eyebrows McGee at 6:59 AM on August 12, 2010 [4 favorites]

No good turn goes unpunished. While what you wish to accomplish is laudable, it is doomed to failure. Let's look at the two controlling factors here:

1. Your father, for whatever reason, specifically chose to leave your sister out of the will. You do not know why and probably never will. His wishes were explicit and should be followed. Whether it will cause pain or conflict is immaterial. There are an infinite number of ways that she will find out this ugly truth. You do not want to be a party to lying to her about this. It will only create greater resentment on her part. You need, either through the probate attorney, the court or yourself to let her know specifically what the will says and what her rights under law are to protest or challenge. It won't be pretty, but it will be the truth.

2. You want to provide for her out of your respective shares of the estate. This is good. Having decided to do so and having decided that she deserves one-third of the asset value, it is then not unreasonable to set up a trust or other entity to provide for her. Do not expect her to be grateful. You are specifically judging her character, personality and maturity when you deem yourself to be more capable of managing money than her. The fact that it is true makes it no less judgmental. She will not appreciate either your judgment or the gesture that attaches to it.

She has already expressed to you her distrust of you and, perhaps, your brother. Keeping facts from her that are readily found in the public record and lying to her about the funds is not a way to help her. Further, you will have to continue to lie to her about why she has a trust and you don't, why she hasn't seen the will, why,,,,, why....etc. You are looking at on-going strife and the possibility of significant litigation.

Go back and re-read jon1270's answer. It is very good.
posted by Old Geezer at 12:17 PM on August 12, 2010 [2 favorites]

His wishes were explicit and should be followed. Whether it will cause pain or conflict is immaterial.

Pain and conflict are NOT immaterial. When someone's last wishes are going to cause more pain for the survivors and there is a way to mitigate that, it makes sense to do it.

People who make their survivors deal with this sort of fall out are weenies, in my opinion. If someone feels that strongly about their wishes they need to make it clear to all parties before they die. Death is painful enough without having to work out the deceased's personal demons/parting shots on top of it.
posted by small_ruminant at 12:54 PM on August 13, 2010