by iheartmacs » Sat Nov 14, 2009 11:59 pm
My mother died in 2009 after a short illness. She had made me the beneficiary of her IRA annuity in 2006, two years before my stepfather died (he was the beneficiary previous to 2006). AGI calls it an insurance policy. My step sister is the executor of our parents Living Trust and is mad because AIG would not tell her anything about the policy since she is not on it. She now says that she is going to subtract $50,000 from my share of the trust pay out because I got the insurance benefit. It was not $50,000, far less after the taxes were taken out. Can she do that?
Posted: Sun Nov 15, 2009 12:39 am Post Subject:
depends on the the way the beneficiaries have been named in the trust. By executor, I think you mean trustee. Executor/executrix is the designation given to people who oversee an estate.
Beneficiary designations trump directives in Wills, and as long as the IRA was outside of the trust, there really isn't any link between it and the trust.
Posted: Sun Nov 15, 2009 01:06 am Post Subject:
My mom and dad set up the irrevocable trust for the 7 "yours & mine" kids. Our parents were the trustees, when they died the trust was supposed to be distributed in a timely manner by my step sister, who is the executor of the trust. I took care of them for 10 years, trips to doctor, shopping, repairs to the home, 3 am trips to hospital etc. They saw the other 6 kids once a year, or less. I believe this is why my mom put me as the beneficiary for her life insurance instead of naming the trust as the beneficiary. But now my sister is planning to cut me out of the trust because I was the beneficiary of the life insurance policy.
Posted: Sun Nov 15, 2009 01:12 am Post Subject:
If you parents trust did not lay out how the payment/division was to be paid out (and that's a dang shame by the way)...and the trust gives her as trustee all the discretion, well no other way to say it other than you're screwed, and will have to play by her rules.
Why don't you (after getting a copy and reading the trust), give her copies of exactly what you received so she won't "dock" you more than what you got.
Posted: Sun Nov 15, 2009 01:40 am Post Subject:
The trust says it is to be divided 7 equal shares, "in a timely manner" I am not sure what a timely manner is, but would guess about a year. From what I have read on the internet, the insurance benefit is not considered part of the trust if my mom did not put the trust as beneficiary. I think my step sister is called the executor in the wording of the trust. The trust came to an end when the last trustee died. It is to be distributed to the beneficiaries now. She also has put the money in the stock market now. It has made some money, but I fear the stock market could crash and lose it all. Also, with it making money, there will be tax problems. It is supposed to be distributed, by the direction of the trust, not invested.
Posted: Sun Nov 15, 2009 12:24 pm Post Subject:
From what I have read on the internet, the insurance benefit is not considered part of the trust if my mom did not put the trust as beneficiary.
That is correct..If the terms of the trust say that it is to be divided in seven equal pieces, and distributed. I don't understand how she has not done that yet? And she had the decretion to invest the money?She cannot subtract what you got from your mother from your trust payment if it doesn't say that. or if it doesn't give her the decretion on the amounts to be given to each heir.
Some times I wonder why people buy life insurance !
Are you the only child of your mother listed in the trust? What do the other children/heirs thing about not having paid them yet?
If she tried to 'dock' me I'd get an attorney in a hurry, actually I'd probably already have one, and a letter sent to her.. :x
Posted: Sun Nov 15, 2009 02:09 pm Post Subject:
Thank you all for your input. My stomach is in a knot over this.
The letter saying I would be docked $50k from my benefit of the trust came yesterday, Saturday the 14th, although it was dated on the 9th. It says I have until the 25th to protest. I have written a letter of protest and will fly it by my attorney before sending it.
This move will pretty much cut me out of the trust, by the time expenses are paid and my sisters payment for being the executor. The trust also has a $1 clause that if anyone protests it or any part of it, they will only get $1. I think her deciding not to follow the instructions to pay out equal shares constitutes going against the instructions of the trust. I will see what the attorney says. I think California law is planning to take that clause away 2010, like Florida has already done.
This is not the first time she has pulled something like this, so I do have an attorney. She has essentially turned the rest of the step family against me. My brother still loves me, however. The stress has kicked in my RA and I have been treated for depression, which didnt work. I just want it to be over. That is why I did not protest her selling the family home for half the comp value.
The rest of the family live on the other side of the country. They have been out of our parents lives for a long time, actually, I am the only one who lived with them as a child. All the other kids were raised by their other parent. I tell people I have 6 brothers and sisters and I am an only child. Over the last few years my step sister would come once or twice a year, to keep an eye on their financials.
She has told everyone that I am the reason she is having so much trouble settling the estate. Her brother, my step brother, was begging to get some of the money, but he died so now his heirs will get his share.
Also, she said our parents financial adviser did not tell her she had to get a tax ID for the estate so she took all the money from that company and moved it into her "wealth management" company. I am not comfortable with her playing the stock market with our money. She was supposed to distribute it to all of us in a timely manner.
She is just mad because the insurance company would not give her any information about the policy and I would not sign a waiver to give her access to it. I think it is more about the power than the money. She likes to be in charge and I don't like being bossed around. Not a good combination.
Posted: Sun Nov 15, 2009 10:32 pm Post Subject:
I'm glad you have an attorney, and am so sorry you are having to go thru with this..
Posted: Mon Nov 16, 2009 03:56 am Post Subject:
Another public service announcement concerning proper planning so your children don't try to kill each other after you die. This happens all to often unfortunately
Posted: Mon Nov 16, 2009 12:02 pm Post Subject:
BNTRS- :lol: :lol: :lol: Oh man, that one made me nearly spit my coffee on the keyboard....sad, but true.
Posted: Tue Nov 17, 2009 04:18 am Post Subject:
Lori, you must remember some of the case I've got that were just like this; kids fighting with other kids (and step-parents) over the procedes of a life insurance policy. I get these all the time.
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