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LegalGround >> DIFFERENCE BETWEEN EXECUTRIX AND TRUSTEE?


4/25/10 3:27 PM
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Lurken
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SORRY BOUT CAPS.

In the matter of a family trust set up by my father. it is a living trust in the event of the loss of his physical or mental faculties. It is also set up upon his death.Upon his death I am trustee and my dear sister is executrix. Who is in mother fuckin charge at that point?

Also how are no contest clauses enforced. fact situation if one of the parties fucks with the estate. they are due $1.00 and nothing else. say if someone attempts to get my father to change his estsate to benefit themselves? Say if they do this on his death bed or while he is ill. How is the no contest clause enforced?

any help would be appreciated.
4/26/10 12:33 AM
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Fake Pie
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I don't do this but I will tell you what I vaguely remember from class.

1) Trustees administer a trust. Executors administer an estate in probate. It just depends what property is subject to what. If everything is set to go through the trust, I don't see how an executor would be involved. It may be that some property is to pass through the trust and other property through the estate in probate.

2) I believe those clauses are generally void for public policy but you should obviously check in your jurisdiction. As far as someone fucking with him on his deathbed, you would have to challenge it in court and try to show undue influence.

Just my thoughts. Like I said, I don't do this as part of my practice or anything.
4/26/10 3:19 PM
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halcyonday
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Trustee: the person/entity that administers the day-to-day administration of a trust; depending on the set-up, a trustee can have broad powers

Executrix: female person that will probate the decedent's will; anything with an "rix" suffix denotes a woman

The enforceability of a no contest (in terrorem) clause depends on the jurisdiction.
4/26/10 5:54 PM
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Lurken
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ok.

so he dies. the stocks and money are divvied up by executrix and checks are cut. the trust which is set up for health , education and welfare of grandchildren is issued a check by executrix. then the trustee calls all the shots about who gets paid for what? does that sound about right?
4/26/10 9:37 PM
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halcyonday
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He dies. The executrix will go to court, present the will, and the judge will order the executrix to start distributing the assets, as specified by the will.

The executrix will distribute Microsoft stock to A, $500 to B, the Rolex watch to C, and $100k to the trust. The trustee will manage the $100k on behalf of the beneficiaries (e.g. grandkids). Depending on how much authority the trustee has, he will make periodic payments, usually for health or education expenses, to the grandkids. Once the gradkinds reach a designated age (e.g. 18), they will have full access to whatever is left of the trust.
4/27/10 10:58 AM
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Fake Pie
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^^^That is my understanding as well.
4/27/10 6:41 PM
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Lurken
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laying it down for a simpleton. thanks.

so executrix has responsibility of finding assets. selling them or transferring ownership!

lets say we got a half million in wal mart stock. earlier issued stocks made more therefore will pay more taxes when eventually cashed out? if they are equal on face value but carry a heavier tax burden! does she have to make allowances in splitting the stock amongst the beneficiaries and the trust?
4/27/10 6:51 PM
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Lurken
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additionally

the trustee (me) has been given wide authority on distribution of the trust. I can set my own criteria for distribution. For example grandchild a is a shit bag and may ask for rent money or a new engine because they did not put oil in engine. I can say NO. Grandchild b is a promising student and will actually do well in a top tier college. I can give more to b than a. parents of child a will scream bloody murder and threaten to take me ( the trust back to court) how can they do that. Will it cost them?


will the judge make me set a criteria in writing or can I use my best judgement? Will the money have to be doled out in equal proportions or can I send the money to the grandchildren most likely to us it wisely?

What I am trying to figure out is how to disburse it. For example 1 set of grandchildren is expecting to be reimbursed for college expenses already payed for by their parents. I think that is bullshit.

4/27/10 11:06 PM
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halcyonday
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As trustee, you have a fiduciary duty to ALL beneficiaries. Thus, you cannot play favorites amongst them. You have a lot of discretion, but if you pay rent for the college-bound grandkid but not the slacker, that is one sure-fire way to face a lawsuit. Your legal fees will be paid by the trust.
4/30/10 10:44 AM
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Fake Pie
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When your questions start getting this detailed it may be worth talking to a T&E lawyer in your state. As Halcyonday said, the trust will pay your legal expenses. If people want to bitch about it, they can stop fighting over every little thing (though I wouldn't not say that to anyone).
4/30/10 9:45 PM
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Lurken
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Edited: 05/01/10 4:52 PM
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TTT
FOR SOME TRUST SPECIALISTS
5/16/10 12:33 AM
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seg
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Your questions are wide-ranging and depend very much on what the documents actually say.

Absent a compelling reason not to, most trustees try to treat all the grandkids equally unless there is a gambling problem, drug addiction, etc., where the trustee knows the money is just going to get blown.

You're not required to treat them all equally, but you can't arbitrarily play favorites either. You will have a fiduciary duty to act in their best interests. You can't just say one grandkid is an asshole so he gets no money because you don't like him.

The court is not going to give you any guidance unless one of the beneficiaries sues you. Courts don't get involved in living trust administration absent a lawsuit.

Assuming your dad is still competent, I suggest you talk to him about what he would like done after his death. It's his money after all. Ask him if he wants to reimburse the kids for their tuition, etc. Ask him to give you some written guidance you can follow. Otherwise, it sounds like you and your sister will piss it away on lawyer fees.

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