Mom' s wish was to remain in her own home until she died. She placed the home in a trust many years ago for this purpose. Now, she has moved in with my sibling and wishes to sell the house and divide up the money. What are the financial issues in this scenario?
If when you read it, you don't clearly understand just wtf it is, & how it interrelates to your states laws, then you need to see an atty. The one that did it originally is going to be the least expensive to do this. It is not going to be that much money.
Also just how is the trust being funded & is the funding secure? Trusts have costs, houses don't exist on air. Planned defunding to a trust to cause dissolution can be a way to end income trusts but you can't do it with property trusts. You need an atty no matter how you look at this.
If the trust is revocable, this means that as long as the person who set up the trust is alive, it can be changed or even dissolved...therefore allowing your mother to make changes at any time. If the trust is irrevocable, then no changes can be made to the trust by anyone, and the terms stand as is. When someone sets up an irrevocable trust they in effect give up their ownership rights to whatever is in the trust. Irrevocable trusts are common because they can protect assets from many of the taxes that are incurred when someone dies.
There are also many many more types of trusts...such as a qualified personal residence trust or a generation skipping trust. Do you have the trust paperwork so you can look up what type it is? You can do a google search on the type of the trust and check the laws in your state that apply.
The very best way to find out what can be done is as others have said, to contact the lawyer who set up the trust. Yes you will have to pay him for his time...they don't work for free and shouldn't have to work for free..but the information you may get could save you a lot of headaches down the road.
Angel
Meet with the lawyer, pay their fee for that don't work for free and get the advice you need.
IMCO having a GOOD elder affairs lawyer is something we all should have. We are lucky our's has a background in caregiver issues and estate planning not just "law"
Others have raised the issues to consider, including whether the trust is revocable or not, whether your mother might need to file for Medicaid in the future, whether or not if the house actually WAS funded into the trust it could be sold and the proceeds invested for potential future care for your mother, rather than being distributed now.
Do you know for sure that the house was funded into the trust? If it was, a Quit Claim Deed would have been executed from the title holders at the time to the Trust itself. If there was no such Deed, the house was never funded into the Trust.
I raise the issue of funding because I've learned that many folks think once the Trust is signed, everything is covered by it. That's not the case; assets, bonds, checking accounts, property, etc. have to be transferred legally into the trust.
If the initial documents were done ages ago that too could be an issue as firm may still be there but that atty is long gone. Nobody has a relationship.
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