QUESTION
How is it determined whether the funds remaining in the co-mingled account are from the life insurance policies or from the stock sales?
Asked on Sep 06th, 2013 on Estate Planning - California
More details to this question:
The first settler of a trust in California dies leaving life insurance proceeds to his surviving spouse as beneficiary. These assets are not held in trust and upon the death of the surviving spouse these proceeds (under $100,000) would be distributed immediately to the beneficiaries (settler’s children). The surviving spouse sells some stocks held in her survivors trust and deposits the proceeds into the same bank account with the life insurance proceeds. The stock sales proceeds would distribute under the terms of the trust after the death of the surviving spouse. The funds are now co-mingled and the surviving spouse uses this bank account to pay for all her needs.
3 ANSWERS
Taxation Law Attorney serving Glendale, CA
at
Irsfeld, Irsfeld & Younger LLP
Update Your Profile
Kit doesn't matter. Did she have the right to take funds out of her Survivor's Share or to exercise a general power of appointment over them? Probably yes. Accordingly, she removed those funds from the trust. That entire account, whether from insurance proceeds or her survivor's share now pass according to her will.
Answered on Sep 09th, 2013 at 3:33 PM
2 Awards
First if the survivor is alive, it is not time to make these valuations because she could use it all. Second, how it is distributed will be determined 100% on how she holds the account now since the assets are either hers or titled in the survivor's trust.
Answered on Sep 09th, 2013 at 3:33 PM
Trusts Attorney serving Sacramento, CA
at
Law Office of Victor Waid
Update Your Profile
The trustee needs to provide an accounting on behalf of the trust, and trace the source of an expense of the funds. So make a demand for the accounting in writing; you may have to go to court to petition for an accounting.
Answered on Sep 09th, 2013 at 1:00 PM