How to keep tabs on the management of a family trust
Q: My mother died, leaving an irrevocable living trust giving my two brothers and me equal one-third shares. She put my share in a trust naming my brother as trustee. Her estate was closed as of December 2003. Does my brother legally have to provide me with an interim supplementary final accounting or a plan of distribution? A trust allows the trustee to manage and administer as he deems appropriate. Does this mean I have no legal right for the decisions on how my share of the trust is invested? If so, can I contest this issue in court? The trust states "upon the last to occur of actual retirement or attaining the age of 65 years, that the trustee shall annuitize on a monthly basis the remaining trust estate over the estimated life expectancy of grantor's son's life expectancy." What exactly does that mean?
J.M., Sneads Fla.
A: The wording on trusts is very important and without reading your actual document, Gary Altman, an attorney and certified financial planner in Rockville, Md., says he cannot precisely determine your rights and obligations. But as trustee, your brother should be providing you with periodic accounts - at least annually - to inform you of what is in the trust, how it is invested, and what was spent, Mr. Altman says.
"You really do not have any say in how it is invested," he says. But your brother holds a fiduciary obligation to you. That means that he must act in your best interest at all times. If he doesn't, then you can take him to court to enforce your rights.
When you turn 65 (assuming you are no longer "working"), he must make distributions to you based upon your life expectancy. This is a somewhat complicated calculation that's based upon the value of the trust, how long you're expected to live, and an assumption on how much the trust should earn, Altman says.
If you feel that your rights as a beneficiary are being violated, he recommends you discuss the matter with a lawyer who specializes in trusts and estates.
Q: Is there such a thing as a credit union or other banking institution where I could finance my house so that my interest payments would benefit others in need? In particular around Athens, Ohio?
C.W., via e-mail
A: Unfortunately for your purposes, there isn't a central registry of good deeds done by financial institutions. But many are involved in helping their communities. Some give money to worthwhile causes, others support employees who volunteer time at places such as a local food bank or a Habitat for Humanity home-building project.
It's up to you, then, to call financial institutions in your area and ask about their charitable endeavors. Bigger institutions, in particular, often have community outreach officers who can tell you about their charitable efforts. From there, you can decide whether they've done enough to merit your business.