This personal situation has been escalating for years now. My mother died a few years ago of a chronic disease, which the entire family knew would curtail her life and be fatal eventually. My sister is 10 years older than I am, and is married with two young children. I am married with three young children, one of whom is my stepdaughter (oddly enough that distinction is of some importance).
There were two trusts established for both of my parents. They were created by a reputable firm and lawyers and financial advisers etc. There is like about $3 million in the two trusts, half of the assets in my dad’s trust and half in my mother’s trust, which now exists due to her being deceased.
The home my father lives in is worth close to $1 million and is included in my mother’s trust. My dad, my sister and I, and our direct descendants are the beneficiaries of my mother’s trust. My father is the co-trustee of my mother’s trust along with his lawyer.
‘I have received zero legal documents’
To this date, I have received zero legal documents or updates on the value or status of my mother’s trust to which I am the legal beneficiary. My dad is now getting remarried and he has stated he will legally press for his new wife to have the right to live in the family home until she dies or wants to love or remarries etc.
They are bizarre conditions, but the result would be she lives in the home for free for life, but pays the taxes and upkeep etc. Confused yet? I sure am!
I have expressed to my dad that I am concerned for the well being of my children as I am not wealthy, and work a normal job and do not even own a home. I have received gifts from my dad, which are generous (a few thousand dollars usually around tax season) from time to time, but have gotten zero assistance from the actual trust, which I consider to be my mother’s family trust, and the legal documents support my point.
‘He has a pension, paid health and Social Security’
My dad says that “nothing was inherited” and that it is not my money nor my kids money. He says there “may be something left for you to inherit” after he’s gone. I was shocked when he first mentioned such a possibility due to the fact that he has a pension, paid health care, and Social Security that give him a six-figure income and has barely any expenses.
He and his new wife have already traveled to France together, and apparently intend to live it up on his personal trust and their combined income.
I just want to make sure my kids have as much of a safety net for the certainly uncertain future. My dad has not responded to these concerns with any sort of acknowledgment of how precarious our situation is in my view. I find this very odd as well considering what happened with COVID-19 and the economy!
I did find a provision where, if he gets remarried without a prenuptial agreement, he cannot legally be the trustee of my mom’s trust anymore. I do not know what I would do with that information, especially considering I do not want to alienate anyone in my family. Even if I just looked at it financially, he could perhaps cut me out of his own trust and make the entire situation worse for my kids.
My sister does not respond to my concerns and says it is “dad’s money.” She does get assistance from him, and also from my aunt and uncle, and is not wealthy herself.
What on earth can I do?
Puzzled by the Apathy for Grandkids
You can email The Moneyist with any financial and ethical questions related to coronavirus at [email protected]
There are three parts to your letter: Your father’s legal obligations, your father’s lifestyle choices, and your children’s future financial security. The first should be dealt with regardless of any possible repercussions because it is your father’s duty to act in the best interest of the beneficiaries of the trust, abide by the rules of the trust and not to use the trust as a cudgel in his dealings with those beneficiaries. There are many reasons that a judge would consider removing him, including misconduct, failure to act and self dealing.
Given what you said about the provision in your mother’s trust, if your father married without a prenup, he would be effectively out as a trustee. That would be a clear violation of the rules set down and, in such a case, it would not take much to remove him. Problem solved. One word of warning: “Trustees are free to use Trust funds to defend themselves, according to Kenk Law in Philadelphia. “If not countered by an experienced attorney, the fiduciary can use procedural steps to draw out the process and increase costs.”
The second issue here — your father’s overseas trips, spending habits and relationship with his soon-to-be second wife — is your father’s business. He has a right to live his life as he pleases, and you will just torture yourself keeping tabs on his comings and goings, and passing judgement on his choices. Thirdly, your mother’s trust will provide plenty of meat and potatoes for your own circumstances and those of your children, but you are the only one who is responsible for your own financial well being and those of your kids.
Your father’s trust is gravy. It would be nice to have, sure, but you can get along fine without it, and he is under no obligation to cut back his spending to suit your needs. It’s his money, his life and his new bride. Cut those ties between your future and your father’s present. As for the trust, it’s business, even if it feels deeply personal. He breaks the rules, he’s out. He doesn’t fulfill his fiduciary duty, he’s out. If he wants to spend the rest of his days in a huff, that’s his choice. You merely have to ensure that your mother’s wishes are respected.
When you have sorted out the trustee issue, live your life and let your father live his.
Hello there, MarketWatchers. Check out the Moneyist private Facebook
group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.