trusts and wills

November 6, 2007 5:43 AM

If a person has a trust and then dies, does the executor HAVE to disperse the assets as instructed in the trust/will? What's to stop him from just keeping everything, or rearranging the distribution? I was recently left a piece of property, but I am worried the executor (my brother) will try to sell the property to pay the estate taxes rather than dipping in the brokerage account (which was left to him). Or would there be another, separate account dedicated to paying the estate taxes? My brother is not entirely honorable about these things, and the brokerage account far exceeds the value of the house. Does anyone know how much latitude he has?
posted by anonymous to law & government (11 comments total)

Dunno where you are, but here in Australia (and therefore the UK, it's from their cases a few hundred years ago that we get much of our trusts common law) he has no latitude. I believe there are criminal penalties for those who fail to execute a trust properly... otherwise how many people really would?

His only way out is to have the trust declared invalid, for which there are a number of avenues depending on its construction that may or (most likely) may not be open to him.
posted by polyglot at 5:51 AM on November 6, 2007

That sounds about right. If properly executed, a will and trust is pretty ironclad.
posted by craven_morhead at 5:53 AM on November 6, 2007

It sounds like the executor could do whatever he wanted, but there could be consequences if he were prosecuted -- maybe just by the OP.

In other words, how is this enforced?
posted by amtho at 6:03 AM on November 6, 2007

In the US, and IANAL, but in the US, nothing is distributed until the estate comes out of...oh whatever it is...that makes sure that all bills are paid and nothing outstanding left against the account.

However, AFAIK, you basically CANNOT execute a will without the assistance of a lawyer, simply because of questions like this. Definitely a question for one of those.
posted by TomMelee at 6:09 AM on November 6, 2007

The word TomMelee is looking for is "probate."
posted by Partial Law at 6:20 AM on November 6, 2007

TomMelee, is the term you are looking for probate? I also second find a lawyer to help you deal with this.
posted by lilacorlavender at 6:21 AM on November 6, 2007

While misdirecting a trust is illegal and can have repercussions, prevention is better than clean up (especially since the burden of arranging the repercussions would probably fall on you). Find a lawyer friend or a university legal clinic and ask them how this kind of thing works in your jurisdiction. Different aspects of arranging an estate are publicized in different ways - but 'public' might mean that you have to go to an office downtown and pay $5 to consult a register. It may also be possible to contest your brother's executorship or have some kind of additional supervision. If you really distrust him, it's worth looking into because a person can do a lot of harm before justice catches up.
posted by Salamandrous at 6:44 AM on November 6, 2007

Salamandrous has some good advice. It is, indeed, illegal to misdirect a trust. And, if caught in time, the perpetrator will be punished and must make restitution.

However, if your brother is unscrupulous enough and uncaring about eventually being caught and the penalties, he is in the position to really do some damage before it's discovered and cleaned up. Lawyer up now and find out how you can prevent this, because in this case an ounce of prevention will be worth many pounds of cure.

(Of course IANAL.)
posted by Rosie M. Banks at 9:23 AM on November 6, 2007

In my state, the following is true. But trust law varies widely, so it would help to be specific as to location.

1. The person in charge is not an executor; he is a trustee.
2. He is required by law to reasonably inform the beneficiaries about the trust and about the property.
3. Money that passes to him outside of probate and outside of the trust, such as the brokerage account you mention, is his and does not have to be used to pay the obligations of the deceased, but
4. If the trust does not specify otherwise, estate tax obligations are allocated according to the property that generates the liability.
posted by yclipse at 10:08 AM on November 6, 2007

Find a trusts and estates lawyer in the jurisdiction (i.e., "the state," if you're in the US) where the deceased wrote his or her will. Get a copy of the will and any other legal documents pertaining to it (trusts, etc.) before you talk to the lawyer, and bring them in.

Generally, the executor of the will has no latitude at all and must follow the will to the letter. However, the will might not be perfectly clear (in a legal sense) about the deceased's intentions. If the executor doesn't do what he should, or if what he should do isn't clear, your remedy is ultimately a lawsuit (of course, depending on your situation, it might be best to retain a lawyer but try to talk it out with your brother instead of filing a suit immediately).
posted by electric_counterpoint at 10:28 AM on November 6, 2007

Lol, ya, sorry--probate. That's the word in question.
posted by TomMelee at 12:59 PM on November 6, 2007