Division of Assets A/B trust: am I entitled to see POD proof?

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3spots
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Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Fri May 12, 2017 7:55 pm

Hi guys -

We are dividing my mother and stepfather's estate upon her passing. The division of assets lists two bank accounts as separate property "POD" which I presume means payment on death. As a trustee, I assume I am entitled to verify that the $$ amount is matched by a statement and that I can see my mom's signature on on POD form.

My stepdad's trust atty says that since it is separate property, I am not entitled to see it, and they were not even required to tell me about it.

So now that raises a red flag in my mind that there might be other accounts that they aren't telling me about. How does this work? Could my stepfather have moved community money into other bank accounts with or without POD and simply not tell anyone? Doesn't his trust atty have a fiduciary responsibility to me as trustee-and-beneficiary to ensure that he is forthcoming about all the assets?

FWIW, stepfather is not speaking to me about the trust division thus I can't ask him. Initially he was and we were in agreement about how to proceed, but as soon as I asked him for copies of the house and property appraisal he got mad and clammed up. Subsequently, his trust atty has been communicating with me.

I have contacted a trust atty per previous advice, but am still trying to salvage this and limit his involvement to review and recommendations and not litigation.

Thanks for your thoughts!


3spots

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by Dottie57 » Fri May 12, 2017 8:11 pm

Maybe you can clarfy. You say you are a trustee but only mention an estate and not a trust.

Are the accounts joint accounts or totally those of your mom? In my experience, a POD is generally done at the bank with the account holder. I am not sure how it could be faked since a drivers license or passport is required ( at my bank).

Is the estate. Going through probate? Tell the lawyer transparency always helps the work go smoother.

Be kind to your stepfather. He lost his wife.

Longdog
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by Longdog » Fri May 12, 2017 8:21 pm

I'm only speculating, but it sounds like there are multiple types of accounts in play. If you are a trustee then you are of course entitled to see the trust documents and account information for accounts titled to the trust. That doesn't mean everything is titled that way, and likely accounts with POD registration are not titled to the trust.
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by Gill » Fri May 12, 2017 8:33 pm

Are you personal representative and trustee or only trustee? If only trustee you would have no interest in assets not in the trust.
Gill

3spots
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Fri May 12, 2017 11:47 pm

I am a co-trustee with my stepdad and his daughter.

I just want to verify the value of assets and that they are divided fairly. The only way I know how to do this is to take the Division of Assets his trust atty submitted and ensure there is a backup statement for the value. As a trustee i believe it is my suty to ensure this is done. Otberwise they could type any number on that piece of paper.

My mom had ALZ and I would like to be assuured that the POD was authorized while she had her wits about her. And I would like to be assured that community income wasn't funnelled into the POD accounts while she was incapacitated her last couple years of life.

However, Gil, you raise another issue. Could part of tbeir estate be outside the trust?. Do those automatically go to the survivor trust? How do I know what all their assets are? I only have what he tells me they are. Is his trust atty working on my behalf to ensure all assets are accounted for, or just all assets in the trust?

I don't want to cause trouble, but I want to be fair, and my stepdad has already given me reason to believe he would not be fair if he can get away with it.

He also wants to change the trustee relationahip so that he and hia daughter are trustees of his trust and he and I are trustees of the B trust.

afan
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by afan » Sat May 13, 2017 6:18 am

As Gill indicated, some of your rights and responsibilities depend on whether you are the personal representative for the estate. If you are, then you need to see everything that pertains to the estate. If you are trustee, but your stepdad is the personal representative, then you only have responsibility for the trust.

If there was a will and you are either a beneficiary or trustee of a trust created under the will, then you should be able to see the will. That probably will not tell you the assets, but it would clarify the situation.

Beyond that, depending on the size of the estate and state law, the personal representative, assuming it is not you, may have to notify the beneficiaries of certain steps in settling the estate and may have to file an accounting with the probate office.

Pay on death assets would pass outside the will or trust.

If you are concerned that the spouse may have exercised undue influence on a decedent with Alzheimer's then you could have a very complicated problem on your hands. Since a spouse could quite legally give everything he/she owned to his/her spouse I would imagine courts would be reluctant to intervene in such transactions. If you could prove it happened after incapacity I suppose enough legal bills might get you somewhere. I don't know.

I have a provision in my durable power of attorney that would give my spouse the right to change certain features of my will while I am incapacitated if doing so would accomplish my goals. My spouse is also co trustee of my revocable trust. Needless to say, I completely trust my spouse. But I think it is set up so that dear spouse could move everything around after I am diagnosed with dementia and it would all be legal. At least I hope so.

Gill- what would be the OP's recourse if the husband did influence the wife to move assets into POD accounts for him while she was demented?
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by carolinaman » Sat May 13, 2017 11:33 am

As the son of the deceased, I would think you have the right to know how the will was probated. I think you need to rely on the attorney to advise you as to whether or how to pursue questions regarding POD assets. I do not think even a DPOA can change an incapacitated persons's assets to POD themselves without good cause that is documented in writing. Your step father's response to you may be because he was offended or it could be otherwise. If I were you, I would want to be confident the will is being probated correctly, even it cost some legal fees to find out.

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dm200
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by dm200 » Sat May 13, 2017 11:42 am

I am in a business that handles depository accounts.

If a bank or credit union individual (not in a trust) account had a designated POD beneficiary, and the individual owner died - then the POD beneficiary (upon proper verification of identity) would be entitled to the balance in the account. If a person is a trustee on accounts related to the deceased, being a trustee would have no rights (even information) about an individual account at all. A PoA would also be irrelevant, since that ceases at the death of the grantor.

I suppose that the executor/personal representative of the deceased's estate could request confirmation that such an individual account was not part of the deceased's estate.

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by Geologist » Sat May 13, 2017 4:56 pm

dm200 wrote:I suppose that the executor/personal representative of the deceased's estate could request confirmation that such an individual account was not part of the deceased's estate.


The executor would have not merely the right, but the obligation, to know about all such accounts because they are part of the estate for estate and inheritance tax purposes. The fact that accounts may be payable-on-death does not exclude them from the estate for those tax purposes and the executor has to know about all assets of the decedent. It is not clear to me, however, who the executor is.

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dm200
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by dm200 » Sat May 13, 2017 4:58 pm

Geologist wrote:
dm200 wrote:I suppose that the executor/personal representative of the deceased's estate could request confirmation that such an individual account was not part of the deceased's estate.

The executor would have not merely the right, but the obligation, to know about all such accounts because they are part of the estate for estate and inheritance tax purposes. The fact that accounts may be payable-on-death does not exclude them from the estate for those tax purposes and the executor has to know about all assets of the decedent. It is not clear to me, however, who the executor is.


I agree.

delamer
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by delamer » Sat May 13, 2017 5:36 pm

As you acknowledged above, you already posted about this problem in an earlier thread and got your own estate attorney as a result of advice given in that earlier thread.

I understand that attorneys are expensive. But I don't understand why you are not having your attorney communicate with your stepfather's attorney. As a lay person, you just don't speak the same langauge as the they do and it seems that you are tying yourself up in knots when some of this might be straightened out by the two attorneys. You don't even seem to know if you are only a trustee or also the personal representative of your mother's estate.

You said that you want "to limit his involvement to review and recommendations and not litigation". But why is there no middle ground where he represents you in discussions with your stepfather's representative?

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by bsteiner » Sat May 13, 2017 9:29 pm

The bank should give the executors the information as to the account since the executors will need to report it on the estate tax return. If the bank balks, the attorney for the executors will remind the bank that if they don't give the executors the information, the bank will have to file an estate tax return and report the account.

The executors can also bring a proceeding to claim the account for the estate.

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by Loandapper » Sun May 14, 2017 6:43 am

From the facts you presented, it would appear like something untoward is happening.

3spots
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Wed May 17, 2017 11:41 pm

Hi everyone -

Thanks for the considered feedback, I must not have had it set to receive notifications of postings, or I would have chimed in earlier!

I have checked the trust documentation and I, my step-dad, and his daughter are all Personal Representatives and Trustees of the trust. His daughter and I are both co-executors as well. Does this mean I do have the right to look at the estate and not just the trust, and determine what is in the trust and what is not?

I have been reluctant to get my attorney involved only because my step-dad is 93, just lost his wife, and will regard my talking to an attorney as an act of treason. I am afraid he will be so mad he will have a heart attack or stroke. However, I think we are at that point now.

His attorney has said they won't provide any information on the POD accounts as they are non-trust assets, and they confirmed this with my step-dad. I asked his attorney how I would validate that the accounts were truly POD, and whether they had a fiduciary responsibility to me and my sister (the B trust beneficiaries), and whether they had validated the assets. Here is their response:

1. As previously explained, the POD assets are not Trust assets and therefore have nothing to do with your role as a fiduciary. These accounts are owned by your father individually and he can change the ownership or beneficiary designation of these accounts at any time. The Statement of Asset Allocation does not say anything about validating the information provided, but simply states how Trust asset are being allocated among the sub-trusts.

2. We will provide guidance and assistance to the named Trustees of both Trusts, which would include you and your sister. We have met with your father and he has confirmed that we have received all the asset information and has also provided us with all the documentation that confirms ownership. This information was also provided to you previously.


That is a non-answer to me, so I will unfortunately go the attorney route tomorrow.

I don't want to contest the will/trust -- I just want to verify the assets and ensure they are fairly divided -- and I have reason to believe he will try to favor his family if he can.

PS: the trust/will has a document that says neither mom nor step-dad had any separate property. It was signed in 2014, the year my mom was removed from the trust. If there was a POD would it have had to be declared then?

afan
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by afan » Fri May 19, 2017 12:58 pm

3spots wrote:
1. As previously explained, the POD assets are not Trust assets and therefore have nothing to do with your role as a fiduciary...

2. We will provide guidance and assistance to the named Trustees of both Trusts, which would include you and your sister. We have met with your father and he has confirmed that we have received all the asset information and has also provided us with all the documentation that confirms ownership. This information was also provided to you previously.




Well, the POD assets have nothing to do with your role as TRUSTEE, since they are not part of the trust. However, they certainly have to do with your role as PERSONAL REPRESENTATIVE, since they are part of the estate. At least, so it seems to someone who is not a lawyer. I would ask them this specific question.

I suppose if there were no probate and no estate tax return due, then maybe there is nothing for the personal representative to do with the POD assets. But if the PR does not see all the assets, how can the PR determine that there is no requirement for either probate or taxes? It would seem the PR HAS to see all the assets in order to fulfill the responsibilities of the job.

These would be the requirements of the PR whether or not there is a trust and regardless of who is the trustee. You could make a try to point this out to the lawyer and see whether they start making sense.
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by Lafder » Sat May 20, 2017 9:07 am

Is it possible the "POD" accounts you are talking about were jointly held accounts, that became your step dad's when your mom passed? That would make sense if the statement that they had no separate/individually owned assets is correct, and these accounts were not owned by the trust.

It sounds like the attorney involved is saying they are outside the trust and outside anything you have control of. That sounds to me like they belong to your step dad.

As others are saying, if the accounts were titled in a way that they went to step dad, they are his now. If they were titled in a way that they went to you, the bank would let you know.

Asking for documentation of when your mom signed forms seems not worth the trouble, and as others are saying it would be very hard to prove she did not want those accounts going to her husband at this point.

It sounds like your mom set up trusts to follow her wishes and that they are in place. Yes the unknown can be so frustrating........

lafder

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by dodecahedron » Sat May 20, 2017 9:20 am

afan wrote:Well, the POD assets have nothing to do with your role as TRUSTEE, since they are not part of the trust. However, they certainly have to do with your role as PERSONAL REPRESENTATIVE, since they are part of the estate. At least, so it seems to someone who is not a lawyer. I would ask them this specific question.


If there is any possibility of federal or state estate tax returns needing to be filed, the personal representative would certainly need to know about POD assets because they are part of the gross taxable estate, even though POD assets are not part of the probate estate.

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by NotWhoYouThink » Sat May 20, 2017 10:36 am

If there is any possibility of federal or state estate tax returns needing to be filed, the personal representative would certainly need to know about POD assets because they are part of the gross taxable estate, even though POD assets are not part of the probate estate.


Yes. OP, is this the case?

Otherwise, I don't see how it is any of your business. POD accounts are by definition not owned by the trust, so your role as trustee has nothing to do with them. And POD accounts pass outside the will, so your role as executor has nothing to do with them. The beneficiary can present the bank with identification and a death certificate and the transfer takes place with no other input. The bank takes that job pretty seriously, I don't think there is any real risk that the bank paid your step dad something the POD designation didn't make him eligible for. These accounts appear to be outside your sphere of influence by design.

Now, if you suspect that your step dad transferred money from the trust to accounts outside the trust during your mother's lifetime, then that is a different problem. But if the trust allowed him to do that, then it is a relationship problem and not a legal problem.

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by afan » Sun May 21, 2017 9:03 am

If, as is common, the step dad was trustee of mom's trust and had a durable power of attorney, then he could have perfectly legally transferred money from her trust to the POD accounts.

Our estate planning is simple, one marriage and no step kids. If I become even more mentally incompetent than my kids say I am now, my spouse has complete authority to move money around as seems fit. The overall goals would be to minimize taxes, protect from lawsuits, provide for our children and grandchildren, etc. Spouse even has the authority to change certain features of my will.

Obviously, I don't envision any of those powers being used to disadvantage my children. But I would not want anyone else to be able to interfere. NB, my kids are successors to spouse as DPOA and trustee.

So, if step dad did transfer assets, he may have had complete right to do so.

I still think the Personal Representative needs to see all the assets in the estate.
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Mon May 22, 2017 1:47 pm

Thanks all! Dang, I wrote a long response and poof, I lost it!

Good input from everyone, thank you!

My parents trust has not been divided yet, we are in that process and my step-dad has submitted a division of assets. My step-dad, his daughter, and myself are all co-trustees and PR for the estate. Upon acceptance of the division, my step-dad wants to change it so that I am not a trustee on his A trust, and his daughter is not a trustee on my B trust.

The trust value is approximately $5.5M. Most of that is an income property -- so no estate taxes that I know of, but personal income taxes instead. There are pour-over wills, so I imagine any part of the estate not in the trust --- and not having it's own beneficiary -- was meant to be included in the trust.

My main concern is validating the asset value on the division of assets that they want me to sign. As long as they are verifiable, I am okay with whatever he suggests as distribution and happy to sign.

Over the past six weeks, I have repeatedly (4x) asked his attorney for backup to support the asset valuation and support the expenses before I sign. Each time I get a piece of it, but not the entire thing. So I have the property appraisals (1st and 2nd request), and the CD bank statements (3rd request). I don't have the checking/savings accounts (500k) as they are POD (4th request). I don't have all the final expenses (5th request).

In my last interaction the backup they provided for final expenses was a handwritten list in my father's hand that said simply "security deposit 10K" and "funeral 10K", etc. No invoices, just a notebook paper list. Is this normal for backup?

When I asked his attorney if they verified the assets, they said "your stepdad says he has provided a full accounting of assets."

It is the reluctance to provide backup and the insufficiency of the backup that now concerns me -- I don't understand the lack of transparency. Hence I now feel like I need to know if there are other accounts that are not in the trust and if so, is it verifiable that they shouldn't be. I am surprised to learn that no one seems to have that authority... seems like a lot of opportunity to not be fair.

3spots
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Mon May 22, 2017 1:48 pm

afan wrote:If, as is common, the step dad was trustee of mom's trust and had a durable power of attorney, then he could have perfectly legally transferred money from her trust to the POD accounts.


I''m okay with that! I just want to know that if transfers happened, it was legit!

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by afan » Mon May 22, 2017 3:07 pm

Yes, but now I am worried that there may be an estate tax return required. You say the trust is approximately $5.5M. Plus other assets plus assets not in the trust. Depending on how your mother left it, there could easily be federal estate taxes due. As PR, you are responsible for making sure the return is filed correctly and any taxes are paid.

I hope some of the lawyers will chime in, but I would not sign off without being sure I knew the size of the estate and how it was to be distributed. Without that you cannot know whether you have fulfilled your responsibilities.

A spouse can leave any amount to their spouse without estate taxes, so amounts left to your step dad outright, or perhaps in trust depending on how it was done would not count.

With an income property there is also the risk that the IRS will not accept the valuation. You would need to know the basis and reliability of the appraisal. You would want to know the total amount of the estate that could be taxable. You need to know what is going on. You have a legal responsibility. It is disappointing that the attorney is not cooperating. Did you get any kind of straight answer when you posed the question as PR, not as trustee?
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by MrsBDG » Wed May 24, 2017 4:22 pm

It sounds to me like the couple set up everything to be split between the kids and Dad is now taking advantage of the personal accounts not being in the trust to block those assets from one or both kids.
One the one hand, that could be reasonable, he could live another 7 years and need that money for his own care, or it could be one of those situations we read about where the second to die of the couple in the second marriage, passes all the assets in their control to their bio-child and cuts out the bio-child of the deceased spouse.
And at 93, he may be pretty with it, but still losing executive function, he could react harshly because he is trying to do something underhanded and feels defensive, or he could be struggling to explain it, with no nefarious motive.
I guess the question is, what is supposed to happen to those POD accounts when SDad dies? Will they be split between the two trusts? Or not? What you are really wanting to know is whether SDad is trying to shift assets under his control to his DD or not. Since things have gotten unpleasant, and since that may be his legal right to do, maybe you can just ask. Obviously, estates are often set up in a way to allow stuff like this to happen- Mom has a joint account with the bill paying sib, dies and the sib can either keep that legally or divide it with the other sibs per what Mom really wanted.

I completely understand your frustration and the niggling suspicion that happens when someone won't answer, we had an estate to settle and a sibling, with whom everyone had and still has a great relationship, was the master of not answering all the questions. There was one document that was asked for repeatedly, never got it, found it from a 3rd party source and never mentioned that, still never got it. There was nothing emotional or problematic about the document, but sib sure did not seem to want to turn it over, maybe it was lost? Who knows, but it could have precipitated a lot of frustration and angst and caused problems. Just glad we could find it at the 3rd party and not have to fight to get it. The whole refusal to answer, not even saying, "NO, I won't give it to you" but rather ignoring requests felt suspicious at a turbulent time.

Good luck working this out.

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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by bsteiner » Wed May 24, 2017 5:00 pm

afan wrote:If, as is common, the step dad was trustee of mom's trust and had a durable power of attorney, then he could have perfectly legally transferred money from her trust to the POD accounts. ....


That depends on whether the power of attorney authorized him to do that. What did the power of attorney say in that regard?

3spots
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Wed May 24, 2017 8:07 pm

afan wrote:I hope some of the lawyers will chime in, but I would not sign off without being sure I knew the size of the estate and how it was to be distributed. Without that you cannot know whether you have fulfilled your responsibilities.

With an income property there is also the risk that the IRS will not accept the valuation. You would need to know the basis and reliability of the appraisal. You would want to know the total amount of the estate that could be taxable. You need to know what is going on. You have a legal responsibility. It is disappointing that the attorney is not cooperating. Did you get any kind of straight answer when you posed the question as PR, not as trustee?


Met with my estate attorney this morning and he concurs that as PR I am obligated to know the size of the estate -- but he also pointed out that I have to depend upon step-dad to tell me that. Otherwise it is forensic search for hidden assets that cost more $$.

I had no idea that the IRS might not accept valuation -- another sticky wicket to jump into. Although I have a copy of the property appraisal and it appears VERY thorough -- I just noticed I don't have a copy of the lease, and that contributes greatly to the value of the property.

Thanks for that head's up!

3spots
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Wed May 24, 2017 8:16 pm

MrsBDG wrote:It sounds to me like the couple set up everything to be split between the kids and Dad is now taking advantage of the personal accounts not being in the trust to block those assets from one or both kids.
One the one hand, that could be reasonable, he could live another 7 years and need that money for his own care, or it could be one of those situations we read about where the second to die of the couple in the second marriage, passes all the assets in their control to their bio-child and cuts out the bio-child of the deceased spouse.

This is my main concern. When I was going through a divorce he insisted my ex was hiding money -- I doubted it, but asked what he would do in same situation if he and mom divorced -- he said he would "hide assets and lie all the way to the jailhouse steps" Sorta funny, but I think might be his character

And at 93, he may be pretty with it, but still losing executive function, he could react harshly because he is trying to do something underhanded and feels defensive, or he could be struggling to explain it, with no nefarious motive.You nailed that! He will react harshly. He prides himself on holding grudges -- seriously, he does! -- and I think I am on the receiving end

I guess the question is, what is supposed to happen to those POD accounts when SDad dies? Will they be split between the two trusts? Even though funded with community property, the POD would go to his trust and not be split



I hope it is a case of "all talk, no action" and that nothing shows up -- or that things that do show up are explained by age/careless, but not intent. As it appears I will be co-owner of the property with his daughter upon his passing, I really do not want bad blood...

3spots
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Re: Division of Assets A/B trust: am I entitled to see POD proof?

Post by 3spots » Wed May 24, 2017 8:29 pm

Everyone's insight and questions certainly made me look like a star client to my new estate attorney -- thank you.

My step-dad, his daughter and I are all co-agents for power of attorney. I hope that means that any major asset move would have required my signature.

My attorney agrees that the support documentation for the division of assets is weak. Granted, some of the dollar amounts are small ($<5k), but it is the consistent missing or incomplete documentation that has me worried. Attorney said that there are a distinct set of schedules that must be filled out whenever settling an estate and they should have been provided.

He also said that as PR, I am entitled to knowing about the complete estate -- but that I am at my step-dad's mercy to tell me what that estate consists of. If he has money in a can in the back yard -- not much I can do about it. If he has hidden assets, it will take forensic accounting ($$) to figure it out.

Of interest though, is that he said I am entitled to a complete asset accounting at the time I was made trustee (2014). He said that should have been made available to me and that I can request it. That might be enough for me to identify any major changes in assets that would red-flag if further research is needed.

So the plan forward is a letter from his office requesting full accounting/support documentation of assets from two snapshots: when I was made trustee and upon my mom's passing. He said once we got that and were satisfied with going forward I could have CPA look at the division and determine if it was fair split. If the accounting isn't forthcoming, then unfortunately, a petition to the court to request it.

(although dad wanted to give property to his daughter -- and my sis and I don't mind being paid out as we have no heirs -- the actual division of assets said the property would be split as 50% interest. He will be able to take the income from both trusts to live on -- just can't touch the principle in the B trust -- and I think he said the B trust has to pay the estate taxes on that income -- 40%! that doesn't quite seem fair but I haven't gotten that far yet, lol!)

This has been a learning experience, that's for sure.

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